Daily Prelims Notes 13 August 2024

August 13, 2024
Posted by: OptimizeIAS Team
Category: DPN

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Daily Prelims Notes

13 August 2024

Table Of Contents

1. As the world warms, more ACs are sold, heating up the globe further

Sub: Env

Sec: climate change

Context:

A recent analysis by the International Energy Agency (IEA) reveals that the average consumer in India, like those in Australia, the U.S., China, Japan, and Europe, tends to buy the least efficient air conditioner (AC) available in the market.
Although the range of efficiency in AC units is narrower in India compared to other countries, consumers globally purchase units that are about half as efficient as the best available options.

Barriers to Efficiency:

Cost Factor: The main deterrent to purchasing efficient AC units is their higher upfront cost.
In India, a 3-star rated AC unit costs approximately ₹29,000, whereas a 5-star unit costs around ₹36,000, influencing consumers to opt for less efficient models despite their long-term cost-effectiveness.

Growing Demand and Environmental Impact:

The number of AC units globally is expected to triple by 2050, rising from two billion in 2022 to over 5.5 billion.
- China and India will account for more than 45% of the global AC units by 2050.
Rising global temperatures and increased incomes in hot countries drive higher AC demand. In regions like India and Indonesia, AC becomes a priority for those who can afford it.
In 2022, “space cooling” used about 2,100 terawatt-hours (TWh) of electricity, constituting roughly 7% of the global electricity consumption of 29,000 TWh.
AC usage resulted in approximately one billion tonnes of CO₂ emissions in 2022, which is about 2.7% of total CO₂ emissions from fossil fuels and industry.
- When considering the greenhouse gases from refrigerants, the emissions from ACs increase to 3.2% of all greenhouse gas emissions in 2022.

Mitigating Extreme Heat:

Despite the environmental concerns, air conditioning significantly improves living conditions during heat waves.
According to the 2021 Lancet Countdown report, AC usage helped prevent nearly 200,000 premature deaths in 2019 by making extreme heat more bearable.

2. After breaking free, why the world’s largest iceberg is stuck spinning in circles

Sub: Geo

Sec: Hydrology

Context:

For over three decades, the world’s largest iceberg, A23a, was trapped in the Antarctic, measuring about 1,500 square miles in area and over 1,000 feet deep.
It broke free in 2020 and began a slow drift towards the Southern Ocean.
Currently, A23a is spinning in place near the South Orkney Islands, about 375 miles northeast of the Antarctic Peninsula, stuck in a vortex above a seamount.

About A23a iceberg:

A23a originated from A23, one of three massive icebergs calved from the Filchner Ice Shelf in 1986. It remained lodged in the Weddell Sea until 2020.
Freed in December 2020, A23a began moving out of Antarctic waters but was caught in a Taylor column, a type of ocean current formed around underwater mountains.

The Phenomenon of Spinning:

Taylor Column: A23a is caught over a seamount about 62 miles wide and 3,280 feet high, causing it to rotate slowly in place.
This stagnation, caused by the current’s flow diverging around the seamount, creates a cylinder of water that spins the iceberg counterclockwise.

Impact and Implications:

Marine Environment: If A23a remains in the vortex for a long time, it could significantly melt, affecting plankton and other marine organisms in the area.
Global Sea Levels: Melting icebergs like A23a, which come from floating ice shelves, do not directly contribute to sea level rise because they are already in the ocean. However, the degradation of ice shelves could increase the vulnerability of Antarctic glaciers to warming.

Observations and Future Outlook:

The British Antarctic Survey began observing A23a’s spinning motion in April 2021.
It is unknown how long the iceberg will continue to spin in place, as similar phenomena have previously lasted for several years.

Source: IE

3. Why Odisha is facing a potato crisis, with prices as high as Rs 60 per kg

Sub: Geo

Sec: Eco Geo

Context:

Odisha is experiencing a severe potato shortage, with prices rising to Rs 55-60/kg over the past four weeks.

Causes of the Crisis:

In mid-July, the West Bengal government banned potato exports to stabilize prices within its state.
West Bengal faced a 20% decrease in potato production due to unseasonal rains, leading to a shortage.
Odisha heavily relies on West Bengal, which is India’s second-largest potato producer, for 90% of its potato supply. Odisha’s own production is limited to 3 lakh metric tons annually, against a demand of over 13 lakh metric tons.

Previous Efforts and Challenges:

Failed Potato Mission: Launched in 2015 to increase local production, the mission failed due to inadequate cold storage and poor market linkages, leading to minimal growth in production and distress sales.
Cold Storage Issues: Out of 133 cold storage facilities in Odisha, only 36 are operational.

About Potato crop:

Potato is a temperate crop grown under subtropical conditions in India.
It was introduced in India by Portuguese sailors during the early 17th century and its cultivation was spread to North India by the British.
The potato can be grown almost on any type of soil except saline and alkaline soils.
The vegetative growth of the plant is best at a temperature of 24°C while tuber development is favoured at 20°C. Hence, potato is grown as a summer crop in the hills and as a winter crop in the tropical and subtropical regions.
China is the largest producer in the world followed by India and Russia.
In India: Uttar Pradesh followed by West Bengal.

Source: IE

4. Japan issues its first-ever ‘megaquake advisory’: What does it mean?

Sub: Geo

Sec: Geomorphology

Japan’s First “Megaquake Advisory” Issued Following Earthquake

Event: A 7.1-magnitude earthquake struck southern Japan on Thursday, August 8, prompting the Japan Meteorological Agency to issue its first-ever “megaquake advisory.”
Advisory Details: The advisory highlighted an increased likelihood of strong shaking and large tsunamis, particularly along the Nankai Trough, a subduction zone along Japan’s southwest Pacific coast. However, it did not predict a specific major earthquake.

About the Nankai Trough:

It is a “subduction zone” between two tectonic plates in the Pacific Ocean, where massive earthquakes have hit in the past.
This underwater subduction zone (nearly 900 km long) where the Eurasian Plate collides with the Philippine Sea Plate, pushing the latter under the former and into the Earth’s mantle.
Location: It runs from Shizuoka, west of Tokyo, to the southern tip of Kyushu Island.
- It has been the site of destructive quakes of magnitude eight or nine every century or two.
These so-called “megathrust quakes”, which often occur in pairs, have been known to unleash dangerous tsunamis along Japan’s southern coast.
Historical Context: Known for causing megaquakes (magnitude >8), the trough experiences significant earthquakes every 100-150 years. The last twin earthquakes occurred in 1944 and 1946.

Source: IE

5. Terrestrial water storage loss for 7 basins on Tibetan Plateau overestimated by 10%: Study

Sub: Geo

Sec: Hydrology

Overestimation of Terrestrial Water Storage Loss on the Tibetan Plateau

Recent research has revealed significant overestimation of terrestrial water storage (TWS) loss in the Tibetan Plateau’s major headwater basins, with errors reaching up to 50.8% in the Indus River basin and 77.6% in the Yarkant River basin.

Key Findings

Terrestrial water storage (TWS) includes water in ice caps, glaciers, snow cover, soil moisture, groundwater, surface water bodies, and biomass.
The study shows that neglecting sediment transport in these estimates leads to an average overestimation of TWS loss by 10.1% across the Tibetan Plateau’s seven headwater basins.
This overestimation equates to the annual water needs of an additional 0.62 million people in surrounding areas.
Long-term observations from 2002-2017 indicate that sediment transport contributes 0.35 gigatonnes per year (Gt yr−1) to the total terrestrial mass storage (TMS) decrease of 3.85 Gt yr−1.

Basins and Erosion:

Studied Basins: The research focused on the Yarlung Tsangpo, Nujiang, Yangtze, Indus, Yellow, Lancang, and Yarkant rivers.
Erosion Rates: Soil erosion is particularly high in the western, northern, and southern regions of the Tibetan Plateau, with rates up to 39.1 Mg ha−1 yr−1 in the Indus basin and 34.7 Mg ha−1 yr−1 in the Yarkant basin.
Southeast TP Basins: Moderate erosion rates in southeast TP basins ranged from 0.007 Gt yr−1 to 0.177 Gt yr−1.

Implications

Regional Hydrological Cycle: The Tibetan Plateau, known as the ‘water tower of Asia,’ is crucial for the headwaters of more than 10 large Asian rivers. Changes in TWS can affect water availability for nearly 2 billion people downstream.
Climate Adaptation: Improved accuracy in TWS estimation aids in climate adaptation and sustainable water resource management.
Future Risks: Increased runoff and sediment fluxes from high mountain Asia could double by 2050 under extreme climate change scenarios, impacting hydropower, food security, and the environment.

Source: DTE

6. Talks begin in Montreal on digital sequence information of biodiversity

Sub: Env

Sec: Biodiversity

Context:

Ad Hoc Open-ended Working Group on Benefit-sharing from the Use of Digital Sequence Information on Genetic Resources meeting– Montreal, Canada.
Formed at the 2022 COP15 for the Convention on Biological Diversity (CBD).

Digital Sequence Information (DSI) on Genetic Resources:

Digital sequence information (DSI) is a term used in the context of certain international policy fora, particularly the Convention on Biological Diversity, to refer to data derived from genetic resources.
DSI refers to data from DNA or RNA that can be stored digitally.
The term is generally agreed to include nucleic acid sequence data and may be construed to include other data types derived from or linked to genetic resources, including, for example, protein sequence data.
The exact scope of this term is an aspect of ongoing policy discussions.
DSI is crucial to research in a wide range of contexts, including public health, medicine, biodiversity, plant and animal breeding, and evolution research.
The Nagoya Protocol, a component of the Convention on Biological Diversity, establishes a right for countries to regulate, and to share in benefits derived from, their nation’s genetic resources by arranging Access and Benefit Sharing Agreements with users.

Key Issues and Challenges:

Despite the CBD’s efforts, benefit-sharing has been ineffective, even with the Nagoya Protocol implemented in 2014.
Current Challenges:
- Existing public databases for DSI were established before CBD’s adoption in 1992 and lack accountability to CBD or its Parties.
- Databases do not verify the legitimacy or the permission for DSI sourced from countries of origin, allowing anonymous and unrestricted access.
- The US, not being a party to the CBD or Nagoya Protocol, is not bound by their rules.

Convention on Biological Diversity (CBD):

The Convention on Biological Diversity (CBD), a legally binding treaty to conserve biodiversity has been in force since 1993. It has 3 main objectives:
- The conservation of biological diversity.
- The sustainable use of the components of biological diversity.
- The fair and equitable sharing of the benefits arising out of the utilization of genetic resources.
Nearly all countries have ratified it (notably, the US has signed but not ratified).
The CBD Secretariat is based in Montreal, Canada and it operates under the United Nations Environment Programme.
The Parties (Countries) under Convention of Biodiversity (CBD), meet at regular intervals and these meetings are called Conference of Parties (COP).
In 2000, a supplementary agreement to the Convention known as the Cartagena Protocol on Biosafety was adopted. It came into force on 11th September 2003.
- The Protocol seeks to protect biological diversity from the potential risks posed by living modified organisms resulting from modern biotechnology.
The Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (ABS) was adopted in 2010 in Nagoya, Japan at COP10. It entered into force on 12th October 2014.
- It not only applies to genetic resources that are covered by the CBD, and to the benefits arising from their utilization but also covers traditional knowledge (TK) associated with genetic resources that are covered by the CBD and the benefits arising from its utilization.
Along with the Nagoya Protocol on Genetic Resources, the COP-10 also adopted a ten-year framework for action by all countries to save biodiversity.
Officially known as “Strategic Plan for Biodiversity 2011-2020”, it provided a set of 20 ambitious yet achievable targets collectively known as the Aichi Targets for biodiversity.
India enacted Biological Diversity Act in 2002 for giving effect to the provisions of the CBD.

Source: DTE

7. Fiscal consolidation

Sub: Eco

Sec: Fiscal Policy

Context: In a bid to provide maximum flexibility to growth, the government has tweaked its approach to fiscal consolidation. It no longer wants to fix a fiscal deficit target

New approach: Government wants to focus more on reducing debt and thereby the fiscal deceit

What is Fiscal consolidation?

It implies reduction in debt accumulation and fiscal deficit. Governments undertake different policies to achieve fiscal consolidation.

Better targeting of government subsidies and extending Direct Benefit Transfer scheme for more subsidies.
Improving efficiency of tax administration by eliminating evasion of tax, increasing tax compliance, reducing tax avoidance, etc.
Enhancing tax GDP ratio by widening the tax base and minimizing tax concessions and exemptions also improves tax revenues.
Higher economic growth rate will help the government to get higher tax revenues as well. Augmentation of tax revenue is necessary to bring fiscal consolidation as there are limitations for reducing government expenditure in India.

Why we need Fiscal consolidation?

Governments need to live within their means. But with the ability to print money and borrow at will, they often spend more than what they earn, causing fiscal deficit. So, that’s the difference between revenue and spending (shown as a percentage of gross domestic product). Having a high fiscal deficit is not good economics. It causes inflation to rise and hurts economic growth as it forces interest rates to remain high. Fiscal consolidation is the process of controlling the fiscal deficit by ensuring that expenditure does not significantly exceed revenue. Most governments do this by setting a legally mandated target

How did we get to the 3% target for India?

The Fiscal Responsibility and Budget Management Act, 2003, mandates the Union government to keep the fiscal deficit below 3% of its gross domestic product.

More than two decades after the law came into effect and for reasons both within and beyond its control, the Centre has not been able to meet this target even once. In FY19, the deficit came down to 3.4% but the pandemic that followed pushed it up to 9.2% in FY21. The Modi government has been aggressively reducing it ever since. In FY24 it managed to reduce it to 5.6%. The target for FY25 is set at 4.9% and in FY26 it is expected to be below 4.5%.

Fiscal Responsibility and Budget Management Act

It was enacted in August 2003.
It aims to make the Central government responsible for ensuring inter-generational equity in fiscal management and long-term macro-economic stability.
The Act envisages the setting of limits on the Central government’s debt and deficits.
It aims to limit the fiscal deficit to 3% of the GDP.
To ensure that the States too are financially prudent, the 12th Finance Commission’s recommendations in 2004 linked debt relief to States with their enactment of similar laws.
The States have since enacted their own respective Financial Responsibility Legislation, which sets the same 3% of Gross State Domestic Product (GSDP) cap on their annual budget deficits.
It also mandates greater transparency in fiscal operations of the Central government and the conduct of fiscal policy in a medium-term framework.
The Budget of the Union government includes a Medium Term Fiscal Policy Statement that specifies the annual revenue and fiscal deficit goals over a three-year horizon.
The rules for implementing the Act were notified in July 2004. The rules were amended in 2018, and most recently to the setting of a target of 3.1% for March 2023.
The NK Singh committee (set up in 2016) recommended that the government should target a fiscal deficit of 3% of the GDP in years up to March 31, 2020 cut it to 2.8% in 2020-21 and to 2.5% by 2023.

Escape Clause:

Under Section 4(2) of the Act, the Centre can exceed the annual fiscal deficit target citing certain grounds. They are ,
National security, war
National calamity
Collapse of agriculture
Structural reforms
Decline in real output growth of a quarter by at least three percentage points below the average of the previous four quarters.
The lockdown could cause severe contraction in economic output and the COVID-19 pandemic could be considered as a national calamity.
Also, the government has already made the use of escape clause this year.

Is there a change in approach?

Next cabinet secretary T.V. Somanathan has said the Centre is no longer committed to a 3% fiscal deficit target. He said that after FY26 (by when it would be below 4.5%) the target will be dynamic and set in a manner the government’s debt-to-GDP (an unsustainable 58.2% in FY24) is on a declining trend. This, the Centre feels, will provide more flexibility for growth by making enough resources available. A fast-growing economy like India, he argued, can afford a higher fiscal deficit and still reduce debt.

So is the 3% target sacrosanct?

The government says there is no scientific basis to the 3% target. A slightly higher deficit would actually help the economy grow faster. It will also provide the Centre with enough fire power when a crisis such as the pandemic strikes. Post-covid, it spent heavily on infrastructure to revive growth. But many economists say a deficit that is higher than 3% will increase India’s borrowings at a time when savings are declining. This will push up interest rates, hurt private investment and slow economic growth.

8. Japanese Investors’ sell Foreign Bond

Sub: Eco

Sec: External sector

Net Selling of Foreign Bonds:
- Japanese investors were net sellers of foreign bonds for the second consecutive month in July.
The primary reason was declining bond yields in the United States, driven by rising expectations of an imminent rate cut by the U.S. Federal Reserve aimed at supporting the slowing American economy.

What are bond yields?

Bond yields are returns you get when you buy a bond from the secondary market.
Bond yields and prices move in opposite fashion — when bond prices rise, yields fall, and vice versa.
But when the returns are higher, you would want to drop equities and flock to bonds.

Reasons for fall in bond yields?

The major factors affecting the yield is the monetary policy of the Reserve Bank of India, especially the course of interest rates, the fiscal position of the government and its borrowing programme, global markets, economy, and inflation.
A fall in interest rates makes bond prices rise, and bond yields fall and vice-versa.
Bond yields are inversely proportional to equity returns: when bond yields decline, equity markets tend to outperform, and when yields rise, equity market returns tend to falter
Substantial Outflow of Investments:
- According to Japan’s Ministry of Finance, Japanese investors offloaded 1.49 trillion yen ($10.12 billion) in long-term overseas bonds.
- This followed a more significant net disposal of 3.35 trillion yen in the previous month.
- In addition, they shed approximately 17 billion yen in short-term instruments.
Shift in Investment towards Foreign Equities:
- Despite the sell-off in bonds, domestic investors bought a net 724.2 billion yen in foreign equities in July.
- This marked a reversal after two consecutive months of net selling.
Barclays’ Analysis:
- Barclays noted that the recent inflows into foreign equities continue the trend of significant purchases by investment trusts since the beginning of the year.
- This trend is likely driven by new Nippon Individual Savings Account (NISA) flows and a cessation of substantial sales by trust accounts due to the Japanese yen’s appreciation and a stalled equity rally.
Significant Purchases by Investment Trusts:
- Investment trust management companies made a significant net purchase of 1.14 trillion yen in overseas equities, the largest monthly net purchase since January of this year.
Contrasting Moves by Banks and Insurers:
- Conversely, banks and life insurers were net sellers of overseas stocks, with banks selling 466.4 billion yen and life insurers selling 15.2 billion yen worth of overseas equities.

9. Price Instability in Ethiopia due to Forex Reforms

Sub: Eco

Sec: External sector

Impact of Flexible Exchange Rate Policy:
- Ethiopia’s government implemented a flexible exchange rate policy last month, leading to the Ethiopian birr losing 60% of its value against the dollar.
- This significant devaluation has resulted in spiraling inflation and increased anxiety among consumers as they face higher prices for basic commodities.
Businesses Struggling with Inflation:
- Businesses in Addis Ababa, including hotels and supermarkets, are struggling to keep up with the rapid inflation.
- Price updates have become frequent—sometimes occurring daily or even hourly—as businesses adjust to the changing market conditions.
- Supermarkets are hoarding products in warehouses and selling only small quantities to avoid punishment by city authorities.
Government Crackdown on Hoarding:
- In response to the crisis, the Addis Ababa City Trade Bureau has been cracking down on businesses accused of hoarding.
- More than 3,000 stores have been closed across the country for this reason.
- Police have raided warehouses, confiscating large quantities of goods like 800,000 liters of edible oil, which were then distributed at previous prices through local cooperatives.
Historic Exchange Rate Policy Change:
- The government’s decision to allow commercial banks to set foreign exchange prices and permit non-bank entities to operate foreign exchange bureaus is considered a historic shift.
- Previously, the government had fixed the price of foreign currencies, leading to the flourishing of a black market.
IMF’s Involvement:
- The International Monetary Fund (IMF) approved a four-year credit facility worth $3.4 billion to support Ethiopia’s reforms.
- An initial disbursement of $1 billion was made to address urgent needs.
- IMF Managing Director Kristalina Georgieva called the reforms a “landmark moment for Ethiopia”.
Challenges with Essential Commodities:
- Ethiopia, which imports many essential goods, is struggling to cope with the new policy’s impact.
- Although authorities imported 14 million liters of edible oil to help ease the situation, this has been insufficient given the rising prices of other essential goods.
Impact on Fixed-Income Earners:
- Those with fixed incomes are expected to be the most affected by the floating of the birr.
- Getachew T. Alemu, a public policy specialist, warned that the situation could worsen unless cautious policy actions are taken.
Government Inconsistencies:
- Despite the government’s crackdown on price speculators, it has raised the price of passports from 2,000 to 5,000 birr, adding to the financial burden on citizens.
- This price hike has shocked individuals like Almaz Teferi, who was saving to obtain a passport in hopes of finding work abroad.

10. Inflation Trends in July

Sub: Eco

Sec: Inflation

Dramatic Drop in Inflation:
- Inflation in India’s consumer prices dropped significantly from 5.1% in June to a 59-month low of 3.54% in July.
- The food price rise moderated to a 13-month low of 5.4% from a six-month high of 9.4% in June.
Base Effect Impact:
- The reduction in inflation was largely due to the base effect from last July, when retail inflation was at 7.4% and the food index was up 11.5%.
- Despite the lower inflation rate, there wasn’t much tangible relief for consumers, as overall prices still increased by 1.4% over June, with food prices rising by 2.8%.
Core Inflation Rise:
- Core inflation (excluding food and energy prices) rose to 3.4%-3.5% in July, up from 3.1% in June.
Urban vs. Rural Inflation:
Urban Inflation:
- Inflation for urban consumers dropped to just under 3% in July, from 4.4% in June.
Rural Inflation:
- Rural consumers experienced a relatively higher price rise of 4.1%, down from 5.7% in June.
Food Inflation:
- Food price rise in rural areas was 5.9% compared to 4.6% in urban areas in July.
Lowest Inflation Since September 2019:
- July’s inflation rate is the lowest since September 2019, and the first time since then that it has fallen below the 4% median target set by the Reserve Bank of India (RBI).
RBI’s Inflation Projection:
- The RBI recently raised its inflation projection for the July to September quarter to 4.4%, indicating that price rises are expected to regain momentum in the coming months.
Vegetable Inflation:
- Vegetable inflation recorded the biggest drop, falling to 6.8% in July from 29.3% in June.
Economists’ Concerns:
- While the Ministry of Statistics and Programme Implementation noted declines across all groups of the Consumer Price Index (CPI), including significant drops in vegetables, fruits, and spices, economists highlighted that some pain points still remain.

11. SEBI Board’s Code on Conflict of Interest

Sub: Eco

Sec: Capital Market

Background:
- Hindenburg Research accused SEBI Chairperson Madhabi Puri Buch of having a stake in offshore entities linked to the Adani money siphoning scandal.
- Buch and her husband clarified that the investment was made before her tenure at SEBI, and all necessary disclosures were followed.
Definition of Conflict of Interest:
- Conflict of Interest refers to any personal interest or association of a board member that could influence the Board’s decision on a matter, as perceived by an independent third party.
Key Areas Requiring Disclosure:
- Transactions in Shares:
  - Board members must disclose their and their family’s (spouse, dependent children under 18) shareholdings within 15 days of assuming office.
  - Updates are required annually within 15 days after the fiscal year ends.
  - Substantial transactions (over 5,000 shares or ₹1 lakh in value) must be disclosed within 15 days of the transaction.
  - Members are prohibited from dealing in shares based on unpublished price-sensitive information.
- Outside Private Activities:
  - Members are not allowed to hold any other office of profit or engage in professional activities that result in financial gain.
- Acceptance of Gifts:
  - Members cannot accept gifts from regulated entities, except small tokens valued under ₹1,000.
  - Any gift over this amount must be handed over to SEBI’s General Services Department.
- Miscellaneous Situations:
  - Members must disclose any post, employment, or fiduciary positions held in the last five years with a regulated entity.
  - Disclosures are also required for any significant personal or financial relationships with a regulated entity and any honorary positions held.
- Procedure for Managing Conflict of Interest:
  - Disclosures:
    - Members are required to disclose conflicts of interest at the earliest possible opportunity.
    - If uncertain, members must seek determination from the Chairperson. If the Chairperson has doubts about their own conflict of interest, they must seek the Board’s determination.
- Recusals:
  - If a conflict of interest is confirmed, the member must refrain from participating in the matter.
  - No exceptions: Members are strictly prohibited from hearing or deciding on matters where they have a conflict of interest.
- Public Disclosure:
  - Confidentiality:
    - Information disclosed under the Code is to be kept confidential unless required for managing conflicts, disciplinary proceedings, or by legal/regulatory obligations.
    - The public can submit evidence to the Board Secretary if they suspect a conflict of interest involving a board member.

The framework ensures that SEBI operates with integrity and transparency, maintaining public confidence in its decisions.

Securities and Exchange Board of India Act, 1992

The Securities and Exchange Board of India Act, 1992 is a significant piece of legislation that established the Securities and Exchange Board of India (SEBI) as the regulatory authority for the securities market in India.

The Act was enacted by the Parliament of India and came into force on April 30, 1992. It provides SEBI with statutory powers to regulate and oversee various aspects of the securities market. Not only this, the Act protects the interests of investors and promotes the development and integrity of the securities market.

Role of SEBI in the Indian Financial Market

Here are a few of the key roles and functions of SEBI:

Regulatory Functions: SEBI is tasked with regulating and supervising various segments of the securities market, including stock exchanges, stockbrokers, depository participants, mutual funds, portfolio managers, investment advisers, credit rating agencies, and other market intermediaries. The Act empowers SEBI to formulate regulations, issue guidelines, and prescribe codes of conduct to govern the conduct of market participants.
Investor Protection: The Act aims to protect the interests of investors by requiring issuers of securities to make accurate and timely disclosures, promoting transparency and fairness in the securities market, and prohibiting fraudulent and unfair trade practices. SEBI is authorized to take measures to prevent market manipulation, insider trading, and other market abuses.
Enforcement Powers: SEBI is vested with enforcement powers to investigate violations of securities laws and regulations, conduct inquiries and inspections, impose penalties and sanctions on offenders, and initiate legal proceedings against individuals and entities found guilty of market misconduct.
Market Development: The Act empowers SEBI to promote the development and expansion of the securities market in India by introducing new products and services, facilitating capital formation, encouraging innovation and technological advancements, and attracting domestic and foreign investments.
Appeals and Adjudication: The Act provides for the establishment of the Securities Appellate Tribunal (SAT) as an appellate authority to hear appeals against SEBI’s orders and decisions. SAT has the power to adjudicate disputes related to securities laws and regulations.
Investor Education and Awareness: SEBI undertakes initiatives to educate investors about the risks and opportunities associated with investing in the securities market. It conducts investor awareness programs, disseminates investor education materials, and provides guidance on prudent investment practices, risk management, and regulatory compliance. SEBI aims to empower investors with knowledge and skills to make informed investment decisions and protect themselves from fraud and misconduct.

12. NASA’s Sunita Williams and Barry Wilmore could be stuck in Space till 2025

Sub: Science and Tech

Sec: Space

Context:

Astronauts Sunita Williams and Butch Wilmore may be cooped up in ISS till February 2025 due to glitches in the Boeing spacecraft that took them to space.

What are the issues with Boeing Starliner?

A helium leak was detected in the propulsion system before launch, but was not considered serious enough to abandon the journey. It developed two more similar leaks on its way
The issue has not been resolved so far.
This spacecraft has made two trips to the ISS earlier but this was the first time it was carrying astronauts.

What happens now?

If Starliner aircraft’s issues aren’t fixed soon, they may have to wait until February 2025 to return.
A SpaceX mission scheduled for September 2024 could bring them back, but this would mean reducing the returning crew from four to two astronauts.

Can the ISS accommodate them?

ISS usually hosts seven astronauts. It is large enough to accommodate more astronauts, if required.
The facility is bigger than a typical six-bedroom apartment in the US, according to NASA.
It has six sleeping quarters, two bathrooms, and even a gym. When visiting spacecraft attach themselves, additional space is created.
Cargo spaceships routinely make trips to the ISS, carrying essential supplies and attending to maintenance requirements.
The cargo spacecraft, however, cannot be used to bring back Williams and Wilmore as they are not equipped with the special capsules that can house humans in space.

Have astronauts stayed in space for a long duration?

Spending nine to 10 months in space is quite a long time but not unusual. Several astronauts have remained in space far longer than that.
The current record is held by Russian cosmonaut Valeri Polyakov, who spent 438 days at the Mir space station between January 1994 and March 1995.
Williams and Wilmore are likely to spend more than 250 days by the time they return.

What happens to the human body in space?

According to reports, due to the longer exposure to microgravity on the ISS, astronauts might experience several health-related issues such as :
- bone density reduction
- muscle quality deterioration
- vision-related issues
- a higher risk of cancer due to DNA damage
- Low gravity impacts brain fluids and extended stays can potentially alter brain structure.
- Extended stays can also increase the risk of heart disease.
This is why space exploration missions are kept short, not lasting more than a few weeks.

International Space Station (ISS)

The ISS is a manmade space station or artificial satellite that is habitable for humans in space.
It orbiting Earth at a distance of about 400 km (low earth orbit), is continuously manned and has never been without an astronaut since November 2000.
The astronauts onboard the space station conduct various experiments.
The ISS was developed and built by five space agencies namely, NASA (USA), Roscosmos (Russia), European Space Agency (ESA-Europe), JAXA (Japan) and the Canadian Space Agency (CSA-Canada).

13. Mpox: WHO calls for vaccine candidates as dangerous clade targeting children spreads widely

Sub: Science and Tech

Sec: Health

Context:

Ahead of an emergency meeting to discuss the spread of mpox (earlier called monkeypox) within and outside the Democratic Republic of the Congo, the WHO has called for vaccine candidates for fast approval and distribution.
The meeting will take a call on whether the latest mpox outbreak is a public health emergency of international concern (PHEIC) – WHO’s most serious alarm.

Details

WHO invited pharmaceutical companies to submit dossiers for emergency use listing (EUL).
The strategy is used in times of public health emergencies like pandemics to make the authorisation of new and critical medicines and vaccines simpler. It also facilitates distribution of such resources through global initiatives.

Outbreak:

Nearly 27,000 cases have been reported in the DRC and 1,100 people, many of them children have succumbed to the infection since the infection began in 2022-23.
Since last September, the contagion spread to nine neighbouring countries, including Burundi, Kenya, Rwanda and Uganda, where the disease was reported for the first time.
The mpox caseload has increased 160 per cent in 2024, according to the African Centres for Disease Control and Prevention.

What is Mpox?

Mpox is a viral zoonotic disease caused by the monkeypox virus which was first recorded in humans in 1970 in the Democratic Republic of the Congo (DRC).
There are two known types (clades) of mpox virus: clade I and clade II
Mpox can be transmitted to humans through physical contact with someone who is infectious, with contaminated materials, or with infected animals.
There are no specific treatments for Mpox virus infection.
In 2022, the disease was declared a global emergency after it spread to some 70 countries. The emergency was withdrawn in 2023.

New clade of the virus

The new clade of the virus – Ib – that emerged in the DRC late last year has been observed to be much deadlier than the other variants.
Moreover, the disease has now been affecting children disproportionately.
While the initial spread was seemingly through sexual contact, the epidemiology of the disease rapidly shifted to affect children under 15 years who constitute over 60 per cent of all cases and 80 per cent of all deaths, with the largest case fatality rate in children aged less than one year.

Emergency use listing (EUL)

The WHO Emergency Use Listing Procedure (EUL) is a risk-based procedure for assessing and listing unlicensed vaccines, therapeutics and in vitro diagnostics with the ultimate aim of expediting the availability of these products to people affected by a public health emergency.
Granting of an EUL will accelerate vaccine access particularly for those lower-income countries which have not yet issued their own national regulatory approval.
The EUL also enables partners including Gavi and UNICEF to procure vaccines for distribution.