Daily Prelims Notes 10 July 2024

July 10, 2024
Posted by: OptimizeIAS Team
Category: DPN

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Daily Prelims Notes

10 July 2024

Table Of Contents

1. What is a People’s Biodiversity Register?

Sub : Environment

Sec: Biodiversity

Context:

In April 2024, Bengaluru’s Biodiversity Management Committee (BMC) decided to record a century-old woodland near Manyata Tech Park in the city’s People’s Biodiversity Register (PBR).
The woodland hosts over 20 tree species and various bird species, and documenting such areas in the PBR is crucial for conservation and traditional knowledge sharing amidst rapid urbanization.

What is a People’s Biodiversity Register?

The People’s Biodiversity Register (PBR) is a repository of flora and fauna, local livelihoods, and traditional knowledge under the Biological Diversity (BD) Act, 2002.
PBRs serve as informal inventories and databases, protecting intellectual property rights and supporting conservation efforts.
Local communities, BMC members, students, teachers, and volunteers contribute to documenting local biodiversity.
National Biodiversity Authority (NBA) is a statutory body established to carry out the provisions of the Biodiversity Act 2002.

How has PBR Raised Awareness of Biodiversity?

PBRs aim to conserve biological diversity, ensure sustainable use of resources, and equitably share benefits from biological knowledge.
They document indigenous knowledge to prevent biopiracy and support local ownership claims.
Examples include villagers in Udupi realizing the economic value of non-timber forest produce and conservation efforts for Bengaluru’s Madiwala Lake.

How Can PBR be Employed to Uplift Economies?

PBRs can serve as legal evidence of traditional knowledge and help uplift Indigenous communities, though practical implementation remains limited.
For instance, medicinal plant knowledge in Tamil Nadu has not resulted in economic benefits for local residents.
The Access and Benefit Sharing (ABS) mechanism mandates sharing profits from traditional knowledge with local communities, but implementation has been inconsistent.

2. New study puts spotlight on neglected mammal, bird pollinators

Sub : Environment

Sec: Biodiversity

Context:

New research reveals that mammal and bird pollinators in India face significant threats, with hotspots and extinction risks identified.

Details:

Mammal pollinator hotspots are in the south of the Western Ghats (Kollam and Pathanamthitta in Kerala and Kanyakumari in Tamil Nadu), while bird pollinator diversity is more widespread.
An analysis of the hotspots of threatened vertebrate pollinator species- based on the IUCN Red List of conservation status of plants, animals and other organisms– shows that only mammal pollinators such as certain bats, monkeys and squirrels are currently classified as threatened in India.
The study found multiple hotspots of population declines for birds and mammal pollinators mainly in the south of Western Ghats.

Threats to Pollinators:

Human activities such as agriculture, logging, and hunting pose major threats to pollinators.
These threats have ecological and economic consequences, including reduced food production, plant extinction, and economic damage.
The study emphasizes the need for vertebrate pollinators’ protection in conservation agendas.

Importance of Bats and Mammal Pollinators:

Bats are highlighted as vital and economically important pollinators, with their decline due to inadequate protection.
Fruit-bat species (For example- the Indian flying fox, the greater short-nosed fruit bat, and Leschenault’s rousett) are crucial for pollinating and seed-dispersing economically important plants.
- Indian giant squirrel Ratufa indica and the jungle palm squirrel Funambulus tristriatus in India are endemic to the Western Ghats.
Of the 13 fruit-bat species of India, all but Latidens salimalii or Salim Ali’s fruit-bat, considered one of the three rarest bats in the world, are listed as pests or vermin under the Indian Wildlife Protection Act 1972.
Mammal pollinator species endemic to the Western Ghats, like the Indian giant squirrel, face habitat destruction and harvesting pressures.

Pollinator-Friendly Conservation Methods:

The study highlights gaps in pollinator distribution, indicating habitat fragmentation and its ecological implications.
It suggests implementing conservation methods such as establishing pollinator corridors and planting pollinator-friendly plants.
These practices are common in Europe but not yet widely implemented in India.

Significance of the Study:

This study is the first comprehensive analysis of the species richness and extinction risk of bird and mammal pollinators in India.
It fills a knowledge gap, as prior research focused primarily on insect pollinators.
The study reinforces the need for prompt conservation actions for vertebrate pollinators due to their significant ecosystem and agricultural impacts.

3. India and Russia to boost bilateral trade to $100 billion by 2030

Sub : IR

Sec: Biodiversity

Context:

India and Russia agreed to increase bilateral trade to $100 billion by 2030 and use national currencies to bypass Western sanctions.
This decision was made during the 22nd Annual Summit, the first meeting between Modi and Putin since the Ukraine war began.

Details:

Modi accepted Russia’s highest civilian honour, the Order of St. Andrew the Apostle (announced in 2019, but received now), and was invited to the “Extended BRICS” summit in Kazan in October 2024.
Putin agreed to expedite the discharge of Indians recruited by the Russian military, although this was not included in the joint statement.
The joint statement emphasized a peaceful resolution of the Ukraine conflict, appreciating mediation proposals.

Trade Target Achievability:

The $100 billion trade target is considered achievable, with current trade at around $65 billion due to India’s increased imports of discounted Russian crude oil.
- Russia-India trade grew by 66% in 2023 and 20% just in the first quarter of 2024.
This trade level would place India-Russia trade on par with India’s trade with the U.S., China, and the EU.

Cooperation and Economic Vision:

The leaders agreed on cooperation projects in Russia’s Far East and issued a joint vision statement on trade and economic cooperation.
The vision covered nine areas including the development of a “bilateral settlement system using national currencies”, ironing out customs procedures and using new connectivity routes, including the Chennai-Vladivostok maritime route and Northern Sea Route and the International North-South Transport Corridor via Iran, investments in the energy sector including nuclear energy, infrastructure development and investment promotion as “priority areas”.
Several MoUs were signed on climate change, polar research, legal arbitration, and pharmaceutical certification.
Russia agreed to open two new consulates in Kazan and Yekaterinburg for the Indian diaspora.
During the 2019 visit, Prime Minister Narendra Modi signed a Memorandum of Intent (MoI) on the ‘Development of Maritime Communications between the Port of Vladivostok and the Port of Chennai’.
The Vladivostok – Chennai route passes through the Sea of Japan, the South China Sea and Malacca Strait.
The route will bring down transport time to 12 days, almost a third of what is taken under the existing popular route that covers St Petersburg to Mumbai.
- The current maritime route, St Petersburg to Mumbai, is said to be an 8,675 nautical mile (16,000 km) one.
- Against this, the proposed Vladivostok – Chennai route is said to be 5647 nautical miles (10,500 km) long.
Costs are expected to reduce by 30%.
Significance of the new route:
- The new route would also give India access to the Far East, including countries like Mongolia, and the largest presence in the South East Asian region.
- While export from Russia could include coal, crude oil and LNG, apart from commodities like apples and kiwis.; shipments from India could include construction equipment, construction materials, and pharma, among others.

Source: TH

4. India to ratify High Seas Treaty: What is the agreement — and its significance?

Sub: Environment

Sec: Int conventions

Context:

The Indian government announced it would sign and ratify the High Seas Treaty.

High Seas Treaty:

The treaty aims to maintain ocean health, reduce pollution, and sustainably use marine biodiversity and resources.
Known as the Biodiversity Beyond National Jurisdictions (BBO) Agreement.
91 countries have signed; 8 have ratified it.
Objectives of the Treaty:

Conservation and Protection: Focuses on marine ecology conservation.
Equitable Benefit Sharing: Ensures fair sharing of benefits from marine genetic resources.
Environmental Impact Assessments (EIA): Mandates EIAs for activities potentially degrading marine ecosystems.
Capacity Building and Technology Transfer: Aids developing countries in utilizing ocean benefits while conserving them.

Scope and Legal Framework:

Applies to high seas beyond national jurisdiction (beyond 200 nautical miles or Exclusive Economic Zones).
- High seas beyond national jurisdiction constitute about 51% of the total ocean area and are considered global commons.
- They belong to no one and everyone enjoys equal rights for navigation, overflight, economic activities, scientific research, or Laying of infrastructure like undersea cables.
Governed under the broader 1982 UN Convention on the Law of the Sea (UNCLOS).
- This 1982 agreement applies to the entire ocean area– territorial as well as international waters – and lays down the broad legal framework for governance on seas.
- Among other things, defines the boundaries of territorial waters, defines the rights and duties of nations regarding activities in the seas, and addresses issues such as sovereignty, passage rights, and rights of economic usage of resources like fish, oil, minerals, or gas.
UNCLOS sets general principles but the High Seas Treaty implements specific measures for international waters.

Marine Protected Areas (MPAs):

MPAs are akin to national parks in the ocean, regulating activities for conservation.
Current MPAs mainly in territorial waters; the treaty aims to establish MPAs in the high seas.
Currently. there are 18,200 MPAs, according to the latest update of the World Database of Protected Areas, the most comprehensive catalogue of protected areas on land as well as sea. These together cover about 8% of the total ocean area. Almost 90% of this area is in territorial waters.
Part of the Kunming-Montreal Global Biodiversity Framework to restore 30% of degraded marine ecosystems by 2030.

Equitable Sharing of Benefits:

High seas host diverse organisms with potential commercial value (e.g., in drug discovery and cosmetics).
The treaty ensures benefits are shared equally, with no country having proprietary rights.
According to the treaty, mandatory ElA for any activity that can potentially damage marine ecosystems will have to be made public.
An EIA is to be carried out for activities within national jurisdictions as well if the impacts are expected on the high seas.

Ratification Process:

Ratification is the process by which a country agrees to be legally bound to the provisions of an international law.
The treaty becomes international law after 60 countries ratify it.
Ratification binds countries legally; signing shows agreement but is non-binding until ratified.
- For instance, the US signed the 1997 Kyoto Protocol, the predecessor to the 2015 Parts Agreement. However, it did not ratify it.
Different countries have varied ratification processes (legislative approval, executive decision, etc.).

Source: IE

5. What is the draft Digital Competition Bill?

Sub: Polity

Sec: Legislation in news

Context:

India’s proposed Digital Competition Bill, 2024 aims to prevent tech giants like Google, Facebook, and Amazon from engaging in anti-competitive practices.

More on news:

In February 2023, the Ministry of Corporate Affairs (MCA) constituted a Committee on Digital Competition Law (CDCL) to examine the need for a separate law on competition in digital markets.
The CDCL suggested a need to supplement the current ex-post framework under the Competition Act, 2002 with an ex-ante framework.
It laid out this ex-ante framework in the draft Digital Competition Bill.

What is an ex-ante framework?

The Competition Act, 2002 is based on an ex-post framework which means that the CCI can use its powers of enforcement only after the anti-competitive conduct has occurred.
However in the case of digital markets, the CDCL has advocated for an ex-ante competition
This means that the CCI’s enforcement powers to be supplemented such that it allows it to pre-empt and prevent digital enterprises from indulging in anti-competitive conduct in the first place.
The European Union is the only jurisdiction where a comprehensive ex-ante competition framework, under the Digital Markets Act, is currently in force.

Key provisions of India’s Digital Competition Bill, 2024.

Inspired by the EU:
- The draft Bill follows the template of the EU’s Digital Markets Act.
- It does not intend to regulate all digital enterprises, and places obligations only on those that are “dominant” in digital market segments.
Identifying Core Digital Services:
- At present, the draft Bill identifies ten ‘core digital services’ such as online search engines, social networking services, video sharing platform services etc.
- The quantitative standards for the CCI to identify dominance of digital enterprises are based on the ‘significant financial strength’ test which looks at financial parameters and ‘significant spread’ test based on the number of users in India.
- These core core digital services will be designated as Systemically Significant Digital Enterprises (SSDEs).
Provisions for SSDEs:
- The primary obligation of SSDEs is to not indulge in anti-competitive practices.
- The draft Bill prohibits SSDEs from favoring its own products on its platform over those of third parties (self-preferencing).
- It imposes restrictions on availability of third party applications and does not allow users to change default settings.
- It provides for restricting businesses users of the service from directly communicating with their end users (anti-steering) and tying or bundling of non-essential services to the service being demanded by the user.
Designation of Associate Digital Enterprises (ADE):
- If an enterprise being designated as an SSDE is part of a group, and one or more other enterprises within such a group are directly or indirectly involved in the provision of the Core Digital Service in India, the CCI may designate these enterprises as ADEs.
- Entities benefiting from data shared by a major tech group will be designated as ADEs.
- ADEs will have the same obligations as SSDEs.

6. Reducing Tariffs for Smartphone Components: Why the Industry Body is Calling for Tariff Cuts

Sub: Economy

Sec: External economy

The Indian Cellular and Electronics Association (ICEA), an industry body representing mobile and other electronics assembly and manufacturing units, has called for a reduction of tariffs on certain components for smartphones. This demand, on the surface, seems contradictory to the goal of expanding domestic production.

Reasons for Tariff Cuts

Reducing Input Costs:
- Obvious Reason: Lowering the costs for smartphone assembly units.
- Domestic Market Saturation: With domestic demand met, high component tariffs are less justified. Nearly every phone made in India is assembled domestically, with surplus units being exported.
Nature of Components:
- Complex Components: Components like Printed Circuit Boards (PCBs) and sub-assemblies are highly complex and not close to being manufactured domestically.
- High Costs for Local Assembly: Current tariffs increase the cost for local assembly operations as these components still need to be imported.
- Future Domestic Manufacturing: Domestic production of these components could take around eight years.
Economic Rationale:
- Demand and Supply Mismatch: The aggregate demand for certain inputs is much larger than the current production levels, leading to higher assembly costs.
- Domestic Pricing Strategy: High tariffs cause domestic component makers to price just below the cost of imported components. Cutting tariffs would force them to lower prices, reducing operating expenses for assembly units.

Competitive Re-Alignment

Global Competitiveness:
- Comparison with Other Countries: Countries like China, Vietnam, Thailand, and Mexico enjoy lower tariffs due to special exemptions, making their products more competitive.
- Indian Companies: For Indian companies like Micromax and Lava to compete globally, they need to use the best available technologies regardless of their origin.
Learning from China:
- Chinese Example: When China began assembling smartphones, their value addition was minimal. Today, Chinese firms contribute significantly more to manufacturing value by producing high-value components.
- Need for Scale: Increasing smartphone production and exports is crucial. This requires reducing tariffs and maintaining tariff stability.

Government Support

Production Linked Incentive Scheme:
- Subsidies: The scheme subsidizes phones that are domestically assembled, supporting the industry’s growth.

7. Note Ban, GST, COVID Cost ₹11.3 Lakh Crore and 1.6 Crore Informal Jobs

Sub: Economy

Sec: National Income

Economic Impact Overview

Cumulative Economic Loss: The cumulative impact of demonetization, GST rollout, and the COVID-19 pandemic is estimated at ₹11.3 lakh crore, equivalent to 4.3% of GDP in 2022-23, according to India Ratings and Research.
Affected Sector: The informal sector has been severely impacted by these macroeconomic shocks.

Impact on Informal Sector

Shutdowns and Job Losses: Between 2015-16 and 2022-23, 63 lakh informal enterprises shut down, resulting in the loss of approximately 1.6 crore jobs.
Gross-Value Added (GVA): In FY23, GVA by unincorporated businesses was 1.6% below FY16 levels.
Growth Rate Decline: The compounded annual growth rate (CAGR) for these enterprises was 7.4% between FY11 and FY16, but contracted by 0.2% since then.

Sectoral Data

Establishments and Employment: Non-agricultural sector establishments rose to 6.5 crore in FY23 from 5.97 crore in FY22. Employment increased to 10.96 crore from 9.79 crore workers. However, this was lower than the 11.13 crore employed in FY16.
Manufacturing Jobs: Declined to 3.06 crore in FY23 from 3.6 crore in FY16.

Real GVA of Unincorporated Firms

Manufacturing, Trade, and Other Services (MTO): The real GVA was ₹9.51 lakh crore in FY23, contributing 18.2% to India’s real MTO GVA, down from 25.7% in FY16.

Shrinkage in Informal Sector

Sectoral Shrinkage:
- Other Services and Trade: Informal sector share dropped to 32.3% and 21.2% in FY23 from 46.9% and 34.3% in FY16, respectively.
- Manufacturing: Share fell to 10.2% from 12.5% during the same period.
Overall Contribution: The unorganised sector contributes over 44% to India’s GVA and employs almost 75% of the workforce in non-agricultural enterprises.

Unincorporated Sector Enterprises (USE) Growth

Size and Growth Rate: The size of USE was ₹15.4 lakh crore in FY23, growing at a CAGR of 4.3% between FY16 and FY23, compared with a CAGR of 12.9% recorded between FY11 and FY16.

8. Why the Latest RBI Jobs Data Show a Bump Up in Employment

Sub: Economy

Sec: Inflation and employment

Significant Increase in Employment

Employment Growth: Employment growth in India jumped by nearly 6% in FY24, compared to an increase of 3.2% in FY23.
Workforce Increase: The workforce increased by approximately 4.67 crore to 64.33 crore in FY24, up from 59.67 crore in FY23.

RBI’s Data Insights

KLEMS Database: The employment growth data comes from the RBI’s India KLEMS (Capital, Labour, Energy, Material, and Services) database.
Industry Coverage: The KLEMS database covers 27 industries, providing estimates at broad sectoral levels (agriculture, manufacturing, services) and all-India levels.
Historical Data: Employment growth rates in previous years were 5.1% in FY21 and 3.3% in FY22.

Key Metrics Tracked

Metrics Included: The KLEMS database tracks various metrics, including Gross Value Added (GVA), Gross Value of Output (GVO), Labour Employment (L), Labour Quality (LQ), Capital Stock (K), Capital Composition (KQ), consumption of Energy (E), Material (M), Services (S) inputs, Labour Productivity (LP), and Total Factor Productivity (TFP).

Contrasting Perspectives

Citigroup Report:
- Skepticism on Employment Growth: Citigroup’s report suggested that even with a 7% GDP growth rate, India might struggle to create sufficient employment opportunities due to its demographic dividend.
- Unemployment and Job Quality: The report highlighted issues around the quality of jobs and possible underemployment, noting that agriculture, which accounts for 46% of all employment, contributes less than 20% of GDP.
Labour Ministry’s Rebuttal:
- Positive Employment Data: The Ministry of Labour and Employment refuted Citigroup’s claims, citing comprehensive employment data from the PLFS and RBI’s KLEMS.
- Employment Opportunities: The Ministry pointed out that more than 8 crore employment opportunities were created between 2017-18 and 2021-22, averaging over 2 crore jobs per year.
- EPFO Subscribers: Additionally, over 6.2 crore net subscribers joined the Employees’ Provident Fund Organisation (EPFO) from September 2017 to March 2024.

Implications and Observations

Growth Amid Challenges: Despite macroeconomic challenges, including the impact of demonetization, GST rollout, and the COVID-19 pandemic, the data suggests significant employment growth.
Sectoral Contributions: The agriculture, manufacturing, and services sectors have contributed differently to employment and GDP, highlighting structural issues in job creation and economic contributions.
Formalization of Economy: The rise in formalization has led to robust tax collections but has implications for the informal sector’s employment generation capabilities.