Daily Prelims Notes 14 January 2023

January 14, 2023
Posted by: OptimizeIAS Team
Category: DPN

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Daily Prelims Notes

14 January 2023

Table Of Contents

1. Daily Heat stress more dangerous to corals than ocean acidification

Subject: Environment

Section: Climate change

Context:

Global Coral Reef Monitoring Network (GCRMN) has released a report on the status of coral reefs across the world.

Concept :

Research details:

Global warming poses a more significant threat to coral growth and reef accretion than ocean acidification (OA), according to a new study.
As temperatures rise, mass coral bleaching events and infectious disease outbreaks are becoming more frequent.
Carbon dioxide absorbed into the ocean from the atmosphere has already begun to reduce calcification rates in reef-building and reef-associated organisms by altering seawater chemistry through decreases in pH.

About the Global Coral Reef Monitoring Network (GCRMN):

The Global Coral Reef Monitoring Network (GCRMN) is an operational network of the International Coral Reef Initiative (ICRI) in 1995 aiming to provide the best available scientific information on the status and trends of coral reef ecosystems for their conservation and management.
The GCRMN is a global network of scientists, managers and organisations that monitor the condition of coral reefs throughout the world, operating through 10 regional nodes.

International Coral Reef Initiative (ICRI):

The International Coral Reef Initiative (ICRI) is an informal partnership between Nations and organizations which strives to preserve coral reefs and related ecosystems around the world.

GCRMN is an implementing arm of ICRI, supporting its efforts by working through a global network to strengthen the provision of the best available scientific information on, and communication of, the status and trends of coral reef ecosystems, for their conservation and management.

2. Marriage of minor girls : SC to check legality of personal laws

Subject: Polity

Section: Constitutional framework

Concept:

The Supreme Court decided to examine whether girls as young as 15 years can enter into wedlock on the basis of custom or personal law when such marriages constitute an offence in statutory law.
The Kerala High Court had recently observed that provisions of POCSO would apply if the bride or groom was a minor, irrespective of the validity or otherwise of the marriage.
Sc issued a formal notice on the petition filed by the National Commission for Protection of Child Rights (NCPCR) against a recent order of the Punjab and Haryana High Court that a girl, on attaining puberty or the age of 15 years and above, could be married on the basis of Muslim personal law, irrespective of the provisions of Protection of Children from Sexual Offences Act.
Separate petition has been filed by the National Commission for Women (NCW) and National Commission for protection of Child Rights (NCPCR) to make the minimum age of marriage for Muslim women on par with persons belonging to other faith.
It has been argued that the different ages for marriage violated the fundamental rights of equality (Article 14), protection against discrimination (Article 15), and dignity of life (Article 21) of citizens and went against India’s commitment under the convention on elimination of all forms of discrimination against women (CEDAW).

Article 139A

The SC has power under Article 139A to transfer to itself, cases involving the same or substantially the same questions of law pending before two or more high courts.

Current Laws Related to Marriage in India:

For Hindus, the Hindu Marriage Act, 1955, sets 18 years as the minimum age of marriage for the bride and 21 years as the minimum age for the groom.
However, child marriages are not illegal even though they can be declared void at the request of the minor in the marriage.
In Islam, the marriage of a minor who has attained puberty or 15 years is considered valid, while they still minor.
The Special Marriage Act, 1954 and the Prohibition of Child Marriage Act, 2006 also prescribe 18 and 21 years as the minimum age of consent for marriage for women and men respectively.

3. Kollam is India’s first Constitution literate district

Subject: Polity

Section: Constitutional Framework

Concept:

Kollam will be officially declared India’s first Constitution literate district by Chief Minister Pinarayi Vijayan and the authorities say the constitution literacy campaign will continue even after that.

The Citizen Constitution Literacy campaign

The campaign is launched to educate the residents of the Kollam district of Kerela about the basics of constitution.
It aims to make Kollam district a constitutionally literate district.
Over seven lakh families in the district will be educated on the basic principles of the Constitution as part of The Citizen Constitution Literacy Campaign.
The campaign is jointly organised by the Kollam district panchayat, District Planning Committee, and the Kerala Institute of Local Administration (KILA).
The first of its kind initiative in the State, the target is to declare Kollam a totally Constitution literate district.
Though the document clearly defines the rights and responsibilities of each citizen, very few are clearly aware of it even after 72 years.
As part of the campaign, the entire population of Kollam above the age of 10 is briefed on the preamble of the Constitution and the historical background of the document, its basic principles, fundamental rights of citizens, and legal remedies.
Around 20 to 25 individuals from each municipality and 10 to 15 persons from each grama panchayat is selected for training and they are called as senators.
Squads of trained senators is formed and they offer two to three sessions for each family.
Special handbooks for the students is prepared and distributed through educational institutions.

Constitution Literacy

A sound understanding of the Constitution and how it simultaneously defines and limits our government in order to establish a nation in which our rights are protected.
Constitutional Literacy simply put means knowledge and education on and about the Constitution and the laws set in place for citizens of a nation.

What is a Constitution?

A constitution is a body of fundamental principles according to which a state is constituted or governed. It is the document or set of documents that has a set of rules and principles which as the basis of society is accepted by all. It reflects the ideals of a society shared by all and defines nature of social, legal and political system in a “STATE”.

4. SEBI mulls framework for market making to deepen bond markets

Subject: Economy

Section: Capital markets

Concept:

With over 98 per cent of corporate bonds being private placements, leading to a shallow secondary market, Sebi is planning to come out with a framework for market-making to help markets become more vibrant and funds cheaper, a Sebi member said.
In this regard, Sebi is exploring a market-making framework that’ll be applicable to every listed issuer who has issued non-convertible debt and has outstanding privately issued NCDs of Rs 500 crore ore more.
The central bank data also show that as much as 80 per cent of issuances in FY22 were AAA-rated, and 15 per cent were AA-rates, leaving just 5 per cent for high-yielding junk papers, which is one of the reasons for low trading volume or lack of liquidity in the secondary market.

G-Sec vs Corporate bonds

The current outstanding stock of government securities is Rs 84.71 lakh crore across 100 instruments as of June 2022 while trading volume in G-Secs was Rs 126.6 lakh crore in FY22 which is about seven-times of the trading in corporate bonds.

Corporate bonds

Most companies prefer issuing debt instruments to raise capital for their operation because debt is a safer option as it doesn’t affect the shareholders of the company directly.
Corporate bonds or debentures provide companies with an economical alternative to raise funds.
Any company can issue corporate bonds, which are also called Non-Convertible Debentures (NCDs).
When we purchase a bond, the company is borrowing money from us.
The company repays the principal after the maturity period as mentioned in the agreement.
The buyer will receive the interest (fixed income) – known as the coupon.
Corporate bonds tend to pay a higher yield than Government bonds since corporate bonds have default risk, while Treasuries are guaranteed if held to maturity.
Bond yield is the return an investor realizes on a bond.

Primary and Secondary market

The primary market is where securities are created, while the secondary market is where those securities are traded by investors.
In the primary market, companies sell new stocks and bonds to the public for the first time, such as with an initial public offering (IPO).
The secondary market is basically the stock market and refers to the New York Stock Exchange, the Nasdaq, and other exchanges worldwide.

Challenges in corporate bond market

The Indian corporate bond market has been ‘small’ in size despite many structural reforms.
Further, the Indian bond market has been dominated by sovereign bonds and the corporate bond market has had a smaller share (27 per cent) during the last decade.
Persistent supply as well as demand side issues like crowding out by government securities, private placement, higher interest rates, information asymmetry, etc.
The recent credit defaults of NBFCs may spill over to the banking sector and hurt the corporate bond market.
Financial illiteracy: According to a survey, over 76 per cent of adults in India do not even understand the basic financial concepts like interest rate, inflation, and exchange rate.
Though some of the people are financially literate, they are not necessarily digitally savvy.
The Indian corporate bond market is dominated by a few institutional investors and professional fund managers.
Further, it is mainly concentrated in the financial services sector (72.1 per cent) rather than the manufacturing sector.
Liquidity crunch: Over 90 per cent of the trading in the secondary market takes place in respect of the corporate bonds with ‘AA’ rating and above.
The first rating for a bond is a AAA while the second highest is AA. This is followed by an A-rating. Anything that falls in the A-class is considered to be high quality, which means the debt issuer has a very strong likelihood of meeting its financial obligations.
Also, insurance and pension funds hold the bonds till maturity. As a result, the market is shallow, with the absence of market makers, lack of liquidity, and consequent pricing anomalies.

5. Don’t need to revise 4 per cent inflation target, focus remains on core CPI: RBI Governor

Subject: Economics

Section: Inflation and Unemployment

Context:

RBI does not feel there is a need to revise the inflation target 4 per cent
RBI recently admitted that core inflation has remained sticky at over 6 per cent which is “definitely a concern” and he said that the RBI’s focus continues to be core inflation.
The headline inflation eased to one-year low of 5.72 per cent in December from 5.88 per cent the previous month. The core inflation stood at 6.31 per cent.
According to data from the Statistics Ministry, a total of 23 States and Union Territories have shown higher rural retail inflation than the urban inflation.

Concept:

Headline Inflation

Headline inflation is the raw inflation figure reported through the Consumer Price Index (CPI) that is released monthly by the Bureau of Labor Statistics.
Headline inflation is not adjusted to remove highly volatile figures, including those that can shift regardless of economic conditions.
Headline inflation is often closely related to shifts in the cost of living, which provides useful information to consumers within the marketplace.
The headline figure is not adjusted for seasonality or for the often-volatile elements of food and energy prices, which are removed in the core Consumer Price Index (CPI).

Core Inflation

Core inflation is the change in the costs of goods and services but does not include those from the food and energy sectors.
This measure of inflation excludes these items because their prices are much more volatile.
It is most often calculated using the consumer price index (CPI), which is a measure of prices for goods and services.

Consumer Price Index/ Retail Inflation:

Retail prices of goods and services: When we talk about the rate of inflation, it often refers to the rate of inflation based on the consumer price index (CPI).
The CPI tracks the change in retail prices of goods and services which households purchase for their daily consumption.
The Consumer Price Index is a comprehensive measure used for estimation of price changes in a basket of goods and services representative of consumption expenditure in an economy.
It is one of the most important statistics for an economy and is generally based on the weighted average of the prices of commodities and gives an idea of the cost of living.
The percentage change in this index over a period of time gives the amount of inflation over that specific period, i.e., the increase in prices of a representative basket of goods consumed.

Categories of CPI:

At the national level, there are four Consumer Price Index (CPI) numbers. These are:
CPI for Industrial Workers (IW) – Base Year 2016
CPI for Agricultural Labourers (AL) and CPI for Rural Labourers (RL) – Base Year 1986-87
CPI (Rural/Urban/combined) – Base Year 2012
While the first three are compiled and released by the Labour Bureau in the Ministry of Labour, the fourth one is released by the NSO in the Ministry of Statistics and Programme Implementation.

6. ‘Aarogya Maitri’ project to provide medical supplies to developing nations in crisis

Subject: International Relations

Section: India’s foreign policy

Concept:

Prime Minister Narendra Modi has announced a new ‘Aarogya Maitri’ project under which India will provide essential medical supplies to any developing country affected by natural disasters or humanitarian crisis.
India will also establish a ‘Global-South Center of Excellence’ to undertake research on development solutions or best-practices of any developing nation, which can be scaled and implemented in other members of the Global South.
India will also institute ‘Global-South Scholarships’ for students from developing countries to pursue higher education in India.
PM Modi also suggested a Global South Young Diplomats Forum that will help connect youthful officers to the Foreign Ministries.
Pm also said that during the Covid pandemic, India’s Vaccine Maitri initiative supplied made-in-India vaccines to over 100 nations.

‘Vaccine Maitri’ Initiative

It is an initiative by the Ministry of External Affairs.
This is a humanitarian initiative taken by the government of India to supply the COVID-19 vaccine to foreign countries.
It has strengthened India’s image as the first responder in emergency situations.

7. CCI can get around quorum by applying ‘doctrine of necessity’: Experts

Subject: Polity

Section: Constitution framework

Concept:

With the Competition Commission of India (CCI) continuing to be headless and quorum-less for the last three months, putting approval of M&A deals on hold and potentially derailing PE/ VC and FDI flows, legal experts have suggested that CCI invoke ‘doctrine of necessity’ to overcome the requirement of quorum.
As per the Competition Act, 2002, CCI can transact its business through meetings provided the quorum of such meetings has to be a minimum of three members.
Currently, CCI only has two members and the senior most member is also acting as Chairperson.

Doctrine of Necessity

The doctrine of necessity is the basis on which extra-constitutional actions by administrative authority, which are designed to restore order or attain power on the pretext of stability, are considered to be lawful even if such an action contravenes established constitution, laws, norms, or conventions.
This doctrine is originated from the writings of the medieval jurist Henry de Bracton, and similar justifications for this kind of extra-legal action have been advanced by more recent legal authorities.
However, the said doctrine can only be invoked in certain situations wherein if the doctrine is not invoked, then it would lead to the total termination of the matter thereby causing greater harm.
Further, the said doctrine cannot be applied in every case, i.e., the Hon’ble Supreme Court stated that the said doctrine can only be invoked in case of absolute necessity.

8. Local bodies must find own revenue sources: TN Finance Commission

Subject: Polity

Section : Local Government and 5^th and 6^th Schedule

Concept:

The Sixth State Finance Commission constituted to review the financial position of rural and urban local bodies, has recommended 14 key reforms for the civic bodies to be implemented before June 2024 with the support of the respective departments.
The state government has accepted 11 of these recommendations.
If these reforms are not implemented by the due date, the annual quantum of Special Grants to be administered at the state level should be reduced by 20% from 2024-25 onwards, the Commission said.

Constitutional Provisions

The state finance commissions were added by 73rd and 74th constitutional amendment acts.
They have been enshrined in article 243-I and 243-Y in Part IX A and IX B and are constituted by Governor every five years.
Their Primary concern is to suggest ways and means to strengthen the institutions of local governance. (Panchayati raj institutions and Urban local bodies)
They recommend principles and methodology as regards the devolution of funds to PRI’s and ULB’s.
Their recommendations are not binding.
The recommendations of the state finance commissions include:
The distribution between the State and the local bodies of the net proceeds of the taxes, duties, tolls and fees leviable by the State.
Determination of the taxes, duties, tolls and fees levied or appropriated by the local bodies.
The grants-in-aid to the local bodies from the Consolidated Fund of the State.
Measures needed to improve the financial position of the local bodies.
The governor is required to place every recommendation made by the SFC and actions taken by the state governments on it before the state legislature.

Concerns:

States have not been setting up their SFCs regularly as mandated.
They are not submitting the reports in time, lacking the proficiency.
They have huge task of considering large number of local governments.
They face a crucial problem of reliable data.
SFCs and local governments are seen to be of inferior constitutional status than the Union FC.