Daily Prelims Notes 10 November 2020

November 10, 2020
Posted by: OptimizeIAS Team
Category: DPN

Table Of Contents

Subject: Economics

Context : The Centre must mount an aggressive programme of capital expenditure to the tune of about 2 per cent of GDP to pull the economy, top economist and public policy thinker C. Rangarajan, said.

Concept :

Capital expenditures

Capital expenditures are the ones that create some liability/asset for the government. These include loans to public enterprises, loans to States, Union Territories and foreign governments and acquisition of valuables.
They are long-term investments of huge amount of money for acquiring long-term assets like manufacturing equipment. Such assets acquired provide income-generating value over a period of years.
Hence, the cost of such assets is recovered through year-by-year depreciation over the productive life of the asset. In essence, the expenditure which is done for initiating current, as well as the future economic benefit, is actually capital expenditure.

Examples of capital expenditures

Purchase of factory and building.
Purchase of machine, furniture, motor vehicle, office equipment etc.
Cost of goodwill, trademarks, patents, copy right, patterns and designs.
Expenditure on installation of plant and machinery and other office equipment.
Additions or extension of existing fixed assets.
Structural improvement or alterations as to fixed assets which increase their life or earning capacity. For example: Conversion of handloom to powerloom.
Development expenses in case of mines and plantations.

Money Multiplier Effect :

Money multiplier is a term in monetary Economics that is a phenomenon of creating money in the economy in the form of credit creation, based on the fractional reserve banking system.
Money multiplier is also known as the monetary multiplier. It is the maximum limit to which money supply can be affected by bringing about changes in the amount of money deposits.
Money multiplier effect is seen in commercial banks as they accept deposits and after keeping a certain amount as a reserve, distribute the money as loans for injecting liquidity in the economy.
The amount of money that should be kept by commercial banks in their reserve for withdrawal purposes by the customers is referred to as the reserve ratio or required reserve ratio or cash reserve ratio.
Mathematically, money multiplier formula can be represented as

Money Multiplier = 1/ r

Where r = Required reserve ratio or cash reserve ratio

It means that if the reserve ratio is higher, then the money multiplier will be lower and the banks need to keep more reserves. As a result, they will not be able to lend more money to individuals and businesses.
Similarly, a lower reserve ratio results in a higher money multiplier which allows a lesser amount of money to be kept as a reserve and more lending opportunities to the public.

2. PM KUSUM

Subject : Govt Schemes

Context : The Ministry of New and Renewable Energy has issued an order for the scale-up and expansion of the PM-KUSUM Scheme. The target now is to achieve enhanced solar capacity of 30.8 gigawatt (GW) by 2022.

Concept :

Kisan urja Suraksha evam Utthan Mahabhiyan (KUSUM) is a farmer-oriented solar power scheme that will allow setting up grid-connected solar plants in rural areas and off-grid solar pumps.
This scheme is implemented by Ministry of new and renewable energy.
Under the scheme, the government plans to incentivise farmers to run solar farm, water pumps and use barren land for generating power for extra income up to Rs 60,000 per acre every year.
It aims at boosting farmers‘ income by allowing them to sell additional power to the grid through solar plants.
It’s previous target is to set up 25,750 megawatts (MW) solar capacity by 2022 to power irrigation pumps.
It comprises of three components:
Setting up of 10,000 MW of decentralised ground / stilt-mounted grid-connected solar or other renewable energy based power plants
Installation of 17.5 lakh standalone solar agriculture pumps
Solarisation of 10 lakh grid-connected agriculture pumps
Subsidy for buying solar pumps: 30% central + 30% state government +bank loans for 30% of the cost(If farmer needs).

3. ELECTRICITY DISTRIBUTION COMPANIES (DISCOMs)

Subject : Economy

Context : The Ministry of Power, Government of India issued a notification to cover all the Electricity Distribution Companies (DISCOMs) under the preview of the Energy Conservation (EC) Act, 2001.

Concept :

The notification was formulated in consultation with Bureau of Energy Efficiency (BEE).
According to it, all entities having issued distribution license by State/Joint Electricity Regulatory Commission under the Electricity Act, 2003 (36 of 2003)” are notified as Designated Consumers (DCs).
After this notification, all the DISCOMs will be governed under the various provisions of EC Act, such as Appointment of Energy Manager, Energy Accounting & Auditing etc. for each DISCOMs.
Earlier, the DISCOMs whose annual energy losses were equal to or above 1000 MU were only covered as DCs. Now with this notification, the number of DISCOMs covered under the EC Act will increase from 44 to 102.

Bureau of Energy Efficiency

Bureau of Energy Efficiency (BEE) is a statutory body under the Ministry of Power, Government of India.
It assists in developing policies and strategies with the primary objective of reducing the energy intensity of the Indian economy.

4. SCHEME FOR INTEGRATED COLD CHAIN & VALUE ADDITION

Subject : Govt Schemes

Context : Government has approved 21 projects, leveraging investment worth 443 crore rupees supported with a grant of 189 crore rupees under the Scheme for Integrated Cold Chain and Value Addition.

Concept :

The objective of the scheme is to provide integrated cold chain, preservation and value addition infrastructure facilities without any break, from the farm gate to the consumer in order to reduce post-harvest losses of horticulture and non-horticulture agri-produce.
Integrated cold chain and value addition infrastructure projects can be set up by Partnership/ Proprietorship Firms, Companies, Corporations, Cooperatives, Self Help Groups (SHGs), Farmer Producer Organizations (FPOs), NGOs, Central/State PSUs, etc. with business interest in cold chain solutions and also by those who manage supply chain.

Components of the scheme

The scheme allows flexibility in project planning with special emphasis on the creation of cold chain infrastructure at farm level. The scheme will have the following project components:
Farm Level Infrastructure, which may include processing center, situated in the catchment area of the targeted produce
Distribution hub: This shall have a modern multi-product, multi-temperature cold storage.
Refrigerated vans/ refrigerated trucks/ insulated vans/mobile insulated tankers.
Irradiation facility.

Significance

These Integrated Cold Chain projects will not only provide a big boost to the growth of food processing infrastructure in the concerned states but also help in providing better prices to farmers and is a step towards doubling of farmers’ income.
The infrastructure will also reduce wastage of perishables, add value to the agricultural produce and create huge employment opportunities, especially in rural areas.

5. RABI CROPS

Subject : Agriculture

Context : Rabi sowing has crossed 100 lakh ha. Abundant monsoon rains boost prospects and also coverage of wheat and pulses rises.

Concept :

Rabi crops or Rabi harvest are agricultural crops sown in winter and harvested in the spring in the South Asia.
The term is derived from the Arabic word for “spring”, which is used in the Indian subcontinent, where it is the spring harvest (also known as the “winter crop”).
The rabi crops are sown around mid-November, after the monsoon rains are over, and harvesting begins in April/May.
The crops are grown either with rainwater that has percolated into the ground, or with irrigation.

Some important Rabi Crops are:

Barley
Gram
Rapeseed
Mustard
Oat
Wheat

6. TYPES OF VACCINE

Subject : Science & tech

Context : Pfizer has reported that its vaccine, BNT162b2, has been more than 90 per cent effective in late-stage trials.

Concept :

This is a vaccine that was developed using mRNA technology — it makes use of the messenger RNA molecules that tell cells what proteins to build. The mRNA, in this case, is coded to tell the cells to recreate the spike protein of the novel coronavirus.

Types of Vaccine :

Inactivated Vaccines

Active pathogens are grown in large numbers and then killed either by a chemical or heat. Although the pathogen is killed, or made to lose its reproduction capacity, various parts of the pathogen are intact. E.g The antigen (the chemical structure) that is recognised by the immune system is left unimpaired.
When this dead microbe is introduced in the body, the immune system is tricked to respond by producing antibodies against specific antigens still left intact, without knowing that the pathogen is defective.
As the pathogen is dead, it cannot reproduce nor cause even a mild disease. Thus, it is safe to administer to even people with lesser immunity, like the old and those who have comorbidity.
Inactivated polio vaccine and the rabies vaccine are made this way.

Live-attenuated vaccines

Live vaccines use a weakened (or attenuated) form of the germ that causes a disease.
Because these vaccines are so similar to the natural infection that they help prevent, they create a strong and long-lasting immune response.
Just one or two doses of most live vaccines can give you a lifetime of protection against a germ and the disease it causes.
The limitation of this approach is that these vaccines usually cannot be given to people with weakened immune systems
Live vaccines are used against: Measles, mumps, rubella (MMR combined vaccine), Rotavirus, Smallpox among others.

Subunit, recombinant, polysaccharide, and conjugate vaccines

They use specific pieces of the germ — like its protein, sugar, or capsid (a casing around the germ). They give a very strong immune response.
They can also be used on people with weakened immune systems and long-term health problems.
These vaccines are used to protect against: Hib (Haemophilus influenzae type b) disease, Hepatitis B, HPV (Human papillomavirus), Pneumococcal disease among others.

Toxoid vaccines

Toxoid vaccines use a toxin made by the germ that causes a disease. Toxoid vaccines are used to protect against: Diphtheria, Tetanus.

7. 15th FC REPORT SUBMITTED

Subject : Polity

Context : The Fifteenth Finance Commission (XVFC) led by Chairman N K Singh, submitted its Report for the period 2021-22 to 2025-26 to the President of India.

Concept :

As per the terms of reference (ToR), the Commission was mandated to give its recommendations for five years from 2021-22 to 2025-26 by 30 October, 2020.
Last year, the Commission had submitted its report containing recommendations for the year 2020-21 which was accepted by the Union Government and tabled in the Parliament on 30 January 2020.
The Report will be available in the public domain once it is tabled in the Parliament by the Union Government.

Terms of reference (ToR):

The Commission was asked to give its recommendations on many unique and wide-ranging issues in its terms of reference.
Apart from the vertical and horizontal tax devolution, local government grants, disaster management grant, the Commission was also asked to examine and recommend performance incentives for States in many areas like power sector, adoption of DBT, solid waste management etc.
The Commission was also asked to examine whether a separate mechanism for funding of defence and internal security ought to be set up and if so how such a mechanism could be operationalised.

8. COMPETITION COMMISSION

Subject : National Organisations

Context : Google will be probed by India’s Competition Commission for allegedly ‘abusing dominance’ to push its payments app.

Concept :

Competition Commission of India

Competition Commission of India is a statutory body responsible for enforcing the objectives of the Competition Act, 2002.
CCI has been established by the Central Government with effect from 14th October 2003.
Composition: A Chairperson and 6 Members appointed by the Central Government.
Duty of the Commission:

To eliminate practices having adverse effects on competition.

Promote and sustain competition.

Protect the interests of consumers.

Ensure freedom of trade in the markets of India.

The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.

The Competition Act

The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, follows the philosophy of modern competition laws.
The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.

9. NATIONAL GREEN TRIBUNAL

Subject : National Organisation

Context : National Green Tribunal restricts use of firecrackers for all festivals this year.

Concept :

The National Green Tribunal (NGT) is a specialized body that was formed under the NGT Act, 2010 for effective and expeditious disposal of cases that are related to the protection and conservation of the environment, forests, and other natural resources.
India has become the third country in the world after Australia and New Zealand, for setting up a specialized environmental tribunal and also the first developing country to do so.
The National Green Tribunal has a total of five places of sittings namely: Bhopal, Pune, New Delhi, Kolkata, and Chennai, amongst which, New Delhi is the Principal place of sitting.

Objectives of National Green Tribunal (NGT)

Effective and expeditious disposal of cases that are related to the protection and conservation of the environment, forests, and other natural resources.
To give relief and compensations for any damages caused to persons and properties.
To handle various environmental disputes that involve multi-disciplinary issues.

Structure of NGT

The National Green Tribunal (NGT) comprises three major bodies namely: the Chairperson, the Judicial Members, and the Expert Members. Also, there should be a minimum of 10 and a maximum of 20 fulltime Judicial as well as Expert members in the NGT.
All these members are required to hold the office for five years and are not eligible for reappointment. The Chairperson of the National Green Tribunal (NGT) is appointed by the Central Government of India in accordance with the Chief Justice of India.
A Selection Committee is formed by the central government of India for the appointment of Judicial Members and Expert Members.

Powers of NGT

NGT provides a way for the evolution of environmental jurisprudence through the development of an alternative dispute resolution mechanism.
It helps in the reduction of the litigation burden on environmental matters in the higher courts.
NGT provides a faster solution for various environment-related disputes that are less formal and less expensive.
It curbs environment-damaging activities. NGT ensures the strict observation of the Environment Impact Assessment process.
NGT provides reliefs and compensations for any damages caused to persons and properties.
The National Green Tribunal resolves various civil cases under the following seven laws that are related to the environment:

Water Act (Prevention and Control of Pollution), 1974

Water Cess Act (Prevention and Control of Pollution), 1977

Forest Act (Conservation), 1980

Air Act (Prevention and Control of Pollution), 1981

Environment (Protection) Act, 1986

Public Liability Insurance Act, 1991

Biological Diversity Act, 2002.

10. GM FREE CERTIFICATE

Subject : Agriculture

Context : US, Australia, Brazil question India’s proposal for mandatory GM-free certification for food imports.

Concept :

The importers will need to declare that the product is ‘of non-GM origin, does not contain genetically modified organism, and is also not genetically modified’.
It aims to ensure that only non-GM food crops are imported into India.
The FSSAI needs to gear up by taking up widespread testing and also taking the assistance of alert citizens and by acting on complaints related to suspected GMO.

Food Safety and Standards Authority of India (FSSAI)

It is an autonomous body established under the Ministry of Health & Family Welfare, Government of India.
It has been established under the Food Safety and Standards Act, 2006 which is a consolidating statute related to food safety and regulation in India.
It is responsible for protecting and promoting public health through the regulation and supervision of food safety.
The Ministry of Health & Family Welfare is the Administrative Ministry of Food Safety and Standards Authority of India.

11. NATIONAL AGRICULTURE EDUCATION POLICY

Subject : Education

Context : A six-member committee of Vice-Chancellors has been asked to submit a draft policy document to the Agriculture Ministry next month, according to R.C. Agarwal, Deputy Director General for Education, at the Indian Council of Agricultural Research.

Concept :

Proposals :

The first National Agricultural Education Policy is set to bring academic credit banks and degree programmes with multiple entry and exit options to the 74 universities focussed on crop sciences, fisheries, veterinary and dairy training and research.
The Student READY (Rural Entrepreneurship Awareness Development Yojana) programme requires all students to undertake a six-month internship, usually in their fourth year, to gain hands-on training, rural awareness, industry experience, research expertise and entrepreneurship skills.
The Deans Committee, responsible for creating consensus on changes in the undergraduate curriculum about once in 10 years, is likely to be called to meet in three to four months to ensure that such adaptations are possible.