Daily Prelims Notes 19 March 2024

March 19, 2024
Posted by: OptimizeIAS Team
Category: DPN

No Comments

Daily Prelims Notes

19 March 2024

Table Of Contents

1. VSSC, ISRO develop the multi-purpose app SAKHI to assist the Gaganyaan crew

Subject: Science and tech

Section: Space

About Space-borne Assistant and Knowledge Hub for Crew Interaction (SAKHI) App:

Developed by: Vikram Sarabhai Space Centre (VSSC), the Indian Space Research Organisation (ISRO) facility at Thumba in Thiruvananthapuram.
Purpose of the App: A multi-purpose app that will help astronauts on the Gaganyaan space flight mission carry out a range of tasks such as looking up vital technical information or communicating with one another.
- It will also monitor the health of the astronauts, help them stay connected with Earth and even alert them about their dietary schedules.

Vikram Sarabhai Space Centre (VSSC):

VSSC is a major space research centre of the Indian Space Research Organisation (ISRO), focusing on rockets and space vehicles for India’s satellite programme. It is located in Trivandrum, in the Indian state of Kerala.
The centre had its beginnings as the Thumba Equatorial Rocket Launching Station (TERLS) in 1962. It was renamed in honour of Vikram Sarabhai, often regarded as the father of the Indian space program.
VSSC is an entirely indigenous facility working on the development of sounding rockets, the Rohini and Menaka launchers, and SLV, ASLV, PSLV, GSLV and GSLV Mk III families of launch vehicles.

Gaganyaan Mission:

The Gaganyaan Mission is India’s ongoing project to send a 3-day manned mission to the Low Earth Orbit (LEO) of 400 km with a crew of 3 members and bring them safely back to Earth.
As part of this program, two unmanned missions and one manned mission are approved by the Government of India.
The first manned spaceflight is expected to take place in 2024. The success of the Gaganyaan Mission will put India in the elite group of nations (US, Russia, and China) having human space flight capability.
Objectives of Gaganyaan Mission
- To undertake human space flights: Its immediate aim is to demonstrate indigenous capability to undertake human space flights.
- Space exploration: In the long run, it will lay the foundation for a sustained Indian human space exploration programme.

2. Star-rating for state environment bodies not operational yet, Ministry tells NGT

Subject: Environment

Section: Environment law and body

Context:

The Environment Ministry’s plan to implement a star-rating system to evaluate states based on their efficiency in granting environmental clearances for industrial or infrastructure projects is yet to be launched.

Details:

This update was provided to the National Green Tribunal’s (NGT) Chennai bench, where the proposal is being challenged. The delay is due to ongoing efforts to upgrade and operationalize the website that would facilitate the ranking of State Environment Impact Assessment Authorities (SEIAAs).

About the Star-rating system:

Introduced in January 2022.
The star-rating system intends to rank SEIAAs based on their promptness in issuing environmental clearances, with points awarded on a scale of 0 to 7 based on the clearance time.
The initiative is part of efforts to improve ‘ease of doing business’, following a Cabinet Secretary-led meeting in November 2021.
SEIAAs issue clearances based on recommendations from Expert Appraisal Committees, which assess the environmental impact of proposed projects.

Arguments against the star-rating system:

The star-rating system was challenged by Meenava Thanthai K R Selvaraj Kumar Meenavar Nala Sangam, a Tamil Nadu-based organization advocating for fishermen’s rights.
The challengers argue that the system could undermine the thoroughness of the environmental impact assessment process and contravene the Environment Impact Assessment (EIA) notification of 2006, which demands detailed scrutiny of project impacts.

Arguments in favour:

The Ministry, in its defense, stated that the order is administrative, aimed at enhancing efficiency without altering the procedural or timeline requirements of the EIA notification of 2006.

What is Environmental Impact Assessment (EIA)?

Defined by the UN Environment Programme (UNEP) as an analytical process that evaluates the potential environmental consequences of implementing a project.
Aims to incorporate environmental considerations into decision-making processes for projects.

EIA in India:

In India, the EIA process is mandatory for 39 categories of projects requiring an environmental clearance (EC).
The EIA notification was first established in 1994 under the Environment (Protection) Act of 1986.
This Act mandates environmental clearance for both the expansion and modernization of existing projects, as well as for the establishment of new projects.

Stages:

The environmental clearance process comprises four stages, namely, Screening; Scoping; Public Consultation and Appraisal.
The Expert Appraisal Committee (EAC) is a multi-disciplinary sectoral appraisal committee, whose primary role is to give recommendations to the MoEFCC on project proposals after considering the potential impacts of the project.
Based on these recommendations, the MoEFCC either rejects the proposal or grants a clearance with conditions which would mitigate the impacts or compensate for the same.

Rules that Govern the EIA Process:

To decentralize the process of project clearance, the EIA Notification 2006 has categorized the projects into Category ‘A’ and Category ‘B’ based on their impact potential.

3. Spring season ‘disappearing’ in many States, shows study

Subject: Geography

Section: Climatology

Context:

A 50-year study of meteorological data across Indian states and territories reveals a significant warming trend, particularly affecting the winter and spring seasons.

Details of research findings:

Researchers from Climate Trends analyzed average monthly temperatures from 1970 to the present, covering 33 states and union territories, to examine the impact of global warming.
They found that every region experienced ‘net warming’ during winter, with Manipur registering the highest increase of 2.3°C and Delhi the lowest at 0.2°C.
Winter was identified as the fastest warming season in 12 regions, closely followed by autumn in 13 regions.
Distinct regional patterns emerged, with southern India experiencing substantial warming in December and January, while the northern regions showed weaker warming or even cooling during these months.
However, all areas warmed in February, with the northern regions experiencing a stark contrast between the cooler January temperatures and much warmer conditions in February, suggesting an abrupt transition to warmer weather that traditionally occurs in March.
Significantly, Rajasthan and eight other states and territories recorded a warming difference of more than 2°C between January and February, supporting observations that spring feels markedly shorter in many parts of India.
The study also linked the observed warming trends and reduced winter rainfall in northern India to changes in Western Disturbances and jet stream patterns, which are crucial for bringing moisture to the region during winter.

Source: TH

4. Vaccine for dengue may be out in markets by mid-2026, says IIL

Subject: Science and tech

Section: Health

Context:

Indian Immunologicals Limited (IIL), a subsidiary of the National Dairy Development Board, has completed the first phase of clinical trials for a dengue vaccine, which focused on assessing safety.

Details:

The vaccine’s efficacy will be tested in the upcoming second and third phases of trials, with a commercial release anticipated by mid-2026.
The development of the dengue vaccine involved sourcing virus strains from the National Institute of Virology.
Besides dengue, IIL is working on vaccines for the Zika virus and Kyasanur Forest Disease (KFD), a tick-borne viral disease primarily confined to Karnataka and its border regions.
The Indian Council of Medical Research (ICMR) has agreed to support the clinical trials for the Zika vaccine financially and is in discussions with IIL about co-developing the KFD vaccine.
Additionally, IIL launched a Hepatitis A vaccine named Havisure in January of this year, which has been well received in the market.

Dengue:

Dengue is a vector-borne disease transmitted by the bite of an infected female Aedes Aegypti mosquito.
- This mosquito also transmits chikungunya, yellow fever and Zika infection.
- Aedesaegypti is a daytime feeder. The peak biting periods are early in the morning and in the evening before dusk.
There are 4 serotypes of the virus that causes dengue. These are known as DEN-1, DEN-2, DEN-3, DEN-4.
The symptoms of the disease will begin anywhere between three to fourteen days after the initial infection.
The symptoms include: High fever, Headache, Vomiting, Muscle and joint pains, Skin Rash
Diagnosis of dengue infection is done with a blood test.
There is no vaccine or specific medication for dengue fever. Patients should seek medical advice, rest and drink plenty of fluids.
Dengue cannot be spread directly from person to person. However, a person infected and suffering from dengue fever can infect other mosquitoes.
Most cases occur in tropical areas of the world, including the Indian subcontinent, Southeast Asia, Southern China, Taiwan, the Pacific Islands, the Caribbean, Mexico, Africa, Central and South America.
WHO estimates 39 crore dengue virus infections per year, of which 9.6 crore show symptoms.

Kyasanur Forest Disease (KFD):

Also known as monkey fever, it is a tick-borne viral disease affecting monkeys and humans.
Identified in 1957 in Karnataka, India’s Kyasanur Forest.
Transmission through the bite of infected ticks or contact with blood/tissues of infected animals. Rare person-to-person transmission.
Symptoms include high fever, headache, muscle pain, vomiting, and can progress to hemorrhagic fever and neurological complications.
No specific treatment; prevention focuses on reducing tick exposure, wearing protective clothing, and using tick repellents.
A vaccine is available for high-risk individuals like forest and healthcare workers.
Control measures involve surveillance, prompt diagnosis, treatment, and tick population control via habitat modification and acaricides.
Endemic to parts of India (Karnataka, Maharashtra, Kerala, Tamil Nadu, Goa) with reports in Sri Lanka and Malaysia.

Indian Immunologicals Limited (IIL):

IIL is a subsidiary of the National Dairy Development Board, based in Hyderabad, Telangana, India.
Registered as a Public Limited Company under the Companies Act, 1956, by the Ministry of Corporate Affairs (MCA Services).
Established in 1982 by the National Dairy Development Board.
Known for developing vaccines for both veterinary and human use, including those for foot-and-mouth disease, rabies, bacterial infections, canine diseases, hepatitis, measles, MMR, and DPT.
Major supplier of DPT, TT, and hepatitis B vaccines to India’s Universal Immunization Programme.
Operates three vaccine manufacturing facilities in India: one in Gachibowli-Hyderabad for vaccine production, one in Karakapatla-Hyderabad for animal health formulations and human vaccines, and one in Ooty for the human anti-rabies vaccine “Abhayrab”.
Has a subsidiary in New Zealand, Pristine Biologicals Ltd, involved in serum production for vaccine manufacturing.
Launched the measles and rubella vaccine ‘Mabella’ for children on 25 November 2023, developed in partnership with Polyvac Institute of Vietnam, marking the 25th anniversary of the Human Biologicals Institute (HBI) division in Udhagamandalam (Ooty), Tamil Nadu.

Source: TH

5. Warming up to climate change: Why do global sea surface temperatures matter?

Subject: Environment

Section: Climate change

Context:

The average global sea surface temperature (SST) for February 2024 stood at 21.06 degree Celsius, the highest ever in a dataset that goes back to 1979.

More on news:

The previous record of 20.98 degree Celsius was set in August 2023.
Almost 90 per cent of the extra heat trapped by greenhouse gasses has been absorbed by the oceans, making them steadily warmer over the decades.
Between 1982 and 2016, such heat waves have doubled in frequency and have become longer and more intense, according to a 2021 study by the UN’s Intergovernmental Panel on Climate Change (IPCC).
In 2023, the concentration of GHG reached the highest levels ever recorded in the atmosphere, according to C3S.

Graphical Representation of the sea surface temperatures:

Since March 2023, the average daily SST has been off the charts.
While the orange line shows 2023’s temperatures, other gray lines track temperatures of previous years.
The solid back line represents where we are so far in 2024 and it is way above any other previous year, including 2023.

Why are the oceans getting warmer?

Carbon dioxide, methane, ozone, and nitrous oxide are some of the notable GHGs, which essentially trap heat in the atmosphere and contribute to global warming.
As a result, the average global temperature has risen at least 1.2 degree Celsius above pre-industrial times.
Almost 90 per cent of the extra heat trapped by GHGs has been absorbed by the oceans, making them steadily warmer over the decades.
Apart from global warming, there are other factors which have led to a spike in ocean temperatures.
For instance, El Niño — a weather pattern that refers to an abnormal warming of surface waters in the equatorial Pacific Ocean — has contributed to both ocean warming and rising global surface temperatures.
There is also less dust blowing off the Sahara Desert recently due to weaker-than-average winds.
The dust forms a “giant umbrella that shades” the Atlantic water and reduces ocean temperatures.
But now, the umbrella has partially folded and more of the Sun is beating down on the ocean.

Why are rising sea surface temperatures a cause of worry?

Higher ocean temperatures can have irreversible consequences for marine ecosystems.
Warmer oceans lead to an increase in ocean stratification — the natural separation of an ocean’s water into horizontal layers by density, with warmer, lighter, less salty, and nutrient-poor water layering on top of heavier, colder, saltier, nutrient-rich water.
The rise in temperatures, however, has made it harder for water layers to mix with each other. Due to this, oceans are able to absorb less carbon dioxide from the atmosphere and the oxygen absorbed isn’t able to mix properly with cooler ocean waters below, threatening the survival of marine life.
Nutrients are also not able to travel up to the surface of the oceans from below.
This could threaten the population of phytoplankton , single-celled plants that thrive on the ocean surface and are the base of several marine food webs.
Phytoplankton are eaten by zooplankton, which are consumed by other marine animals such as crabs, fish, and sea stars.
If The phytoplankton population plummets, there could be a collapse of marine ecosystems.
Warmer oceans cause marine heat waves (MHWs), which occur when the surface temperature of a particular region of the sea rises to 3 or 4 degree Celsius above the average temperature for at least five days.
MHWs are devastating for marine ecosystems as they contribute to coral bleaching, which reduces the reproductivity of corals and makes them more vulnerable to life-threatening diseases. They also impact the migration pattern of aquatic animals.
Higher ocean temperatures may also result in more frequent and more intense storms like hurricanes and cyclones.
Warmer temperatures lead to a higher rate of evaporation as well as the transfer of heat from the oceans to the air.
When storms travel across hot oceans, they gather more water vapor and heat.
This results in more powerful winds, heavier rainfall, and more flooding when storms reach the land — meaning heightened devastation for humans.

6. EX TIGER TRIUMPH – 24

Subject: Science and tech

Section: Defence

Context:

In consonance with the established partnership between India and the US, a bilateral tri-Service Humanitarian Assistance and Disaster Relief (HADR) Exercise between both countries, Tiger Triumph – 24, is scheduled on the Eastern Seaboard from 18 to 31 Mar 24.

More on news:

The Harbour Phase is scheduled from 18 to 25 Mar 24.
Personnel from both navies would participate in Training Visits, Subject Matter Expert Exchanges, Sports Events and Social interactions.
On completion of the Harbour Phase, the ships, with the troops embarked, would sail for the Sea Phase and undertake Maritime, Amphibious and HADR operations in accordance with injected situations.

Participants:

Indian Navy Ships with integral helicopters and landing crafts embarked, Indian Navy aircraft, Indian Army personnel and vehicles and Indian Air Force aircraft and helicopters along with the Rapid Action Medical Team (RAMT) would be participating in the exercise.
The US would be represented by US Navy Ships with embarked troops of the US Marine Corps and US Army.

Aim of the Exercise:

The exercise is aimed at developing interoperability for conducting HADR operations and refine Standard Operating Procedures (SOPs) to enable rapid and smooth coordination between forces of both countries.

About Eastern Seaboard:

The East Coast of the United States, also known as the Eastern Seaboard, the Atlantic Coast, and the Atlantic Seaboard, is the region encompassing the coastline where the Eastern United States meets the Atlantic Ocean.
The Thirteen Colonies, which formed the United States in 1776 were located on this coast, and it has played an important role in the development of the United States.
The region is generally understood to include the U.S. states that border the
- Atlantic Ocean: Connecticut, Delaware, Florida, Georgia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia, as well as the federal capital of Washington, D.C., and
- non-coastline states: Pennsylvania, Vermont, and West Virginia

7. Axis Bank to support Tata Memorial-supported National Cancer Grid with ₹100 crore contribution

Subject: Science and tech

Section: Health

Context:

Axis Bank extends support to the National Cancer Grid and Tata Memorial Centre and contributes Rs. 100 crores towards enhancing research, innovation and digital health adoption in oncology.

More on news:

The collaboration will focus on improving cancer care access and quality, with a National Cancer Teleconsultation Network to help patients
A national tumor biobank and cancer teleconsultation network are among the projects that will be supported by a ₹100 crore contribution towards the National Cancer Grid (NCG), from Axis Bank.
The aim is to improve cancer care and research, in terms of access and digital adoption.

Memorandum of Understanding:

The bank said it would support the setting up of projects such as the National Tumor Biobank, National Cancer Teleconsultation Network, and Oncology-specific Electronic Medical Records (EMRs).
This will help standardize systems across the NCG-affiliated centers and help patients who will not need to travel for follow-ups across States.
The initiatives will also align with the adoption of the Centre’s Ayushman Bharat Digital Mission (ABDM) across the country.
It would help establish Clinical Decision Support Solutions to standardize cancer care by building evidence based clinical protocols into digital solutions.

Key initiatives:

Improving Cancer Access and Quality:

The National Cancer Teleconsultation Network will be established to help patients diagnosed with cancer to get expert opinions.
Clinical Decision Support Solutions will standardize cancer care by building evidence based clinical protocols.

Advancing Cancer Research and Innovation:

National Tumor Biobank, a central component of the initiative will establish a repository of tumor tissues,blood,radiology and pathway images with clinical annotation from all over the country.
A National Cancer Digital Registry will emphasize on rare cancer and exceptional responders.

Enabling Digital Capacity Building:

Oncology Specific Electronic Medical Records will be deployed in several NCGnetwork hospitals to enhance clinical data management.
Virtual Skills gap will be set up to reduce skills gap in medical and para medical professionals.

8. Election Commission introduces vote-from-home for citizens aged 85 and above

Subject: Polity

Section: Elections

Context:

Senior citizens who are above 85 years and persons with disabilities can opt for postal ballots and cast their votes from homes.

More on news:

There are 81,87,999 senior citizen electors above 85 years and 2,18,442 electors above 100 years in the country, as on March 10.

Votes from homes:

The Election Commission of India (ECI) for the first time made available the facility of vote-from-home (VfH) through postal ballot for two different types of voters — persons aged 85 years and above, and persons with disabilities (PwD).
The facility can also be availed by persons with more than 40 percent disability.
Two polling officials, accompanied by a videographer and a security person, will visit the voter’s home and enable them to vote in a postal ballot.
Voters will be informed in advance about the date and approximate time of visit of election officials by an SMS to the mobile number mentioned in the application.

Two visits

If the elector is not present at the given address during the first visit under VfH, the polling team will inform about the schedule of their second visit.
If they are not present even on the second visit, a further visit will not be entertained.
Moreover, those absent during VfH will completely lose the opportunity to vote (through both VfH and EVM).

Form 12D

Form 12D is a letter informing the Assistant Returning Officer that he or she is not in a position to go to the polling station to vote.
The voters in the two categories must file Form 12 D with the Election Commission within five days of the release of the poll notification.
The Union Law Ministry amended the Conduct of Elections Rules-1961 to change the definition of senior citizens who are eligible to choose the postal ballot facility from those “above 80 years” to those “above 85 years”.

Fresh tussle with Governor: Why Tamil Nadu has moved SC to have a minister reinstated

Context:

The Supreme Court on Monday agreed to hear a plea by Tamil Nadu seeking its intervention in reinstating K Ponmudy, a senior leader of the ruling Dravida Munnetra Kazhagam (DMK), as a minister.

More on news:

TN Governor Ravi refused to reinstate K Ponmudy, whose conviction was stayed by the Supreme Court in a disproportionate assets case earlier.

In December last year, Ponmudy was disqualified after the Madras High Court convicted him in a disproportionate assets case.

The disqualification:

The Madras High Court on December 19 last year overturned a trial court verdict acquitting Ponmudy and his wife in a disproportionate assets case.
The HC convicted the former minister and his wife and awarded them a three-year jail term, along with a fine of Rs 50 lakh.
This decision by the High Court triggered Section 8(3) of The Representation of the People Act, 1951.

Section 8(3) of The Representation of the People Act, 1951:

A person convicted of any offense and sentenced to imprisonment for not less than two years shall be disqualified from the date of such conviction and shall continue to be disqualified for a further period of six years after his release.

Stay of the conviction:

On March 11, a Supreme Court Bench comprising Justices Abhay Oka and Ujjal Bhuyan, however, stayed the conviction and the sentence.
The grant of stay by the SC essentially means that Ponmudy’s conviction is put in abeyance, or is suspended pending a final decision.

Larger tussle between Tamil Nadu govt and governor

Article 164 (1) of the Constitution states that the Chief Minister shall be appointed by the Governor and “the other Ministers shall be appointed by the Governor on the advice of the Chief Minister, and the Ministers shall hold office during the pleasure of the Governor”.

Disqualification of MP/MLAs:

Legal provisions regarding the disqualification of MPs/MLAs

Disqualification of a lawmaker is prescribed in three situations.
First is through the Articles 102(1) and 191(1) for disqualification of a member of Parliament and a member of the Legislative Assembly respectively.
The grounds here include holding an office of profit, being of unsound mind or insolvent or not having valid citizenship.
The second prescription of disqualification is in the Tenth Schedule of the Constitution.
This provides for the disqualification of the members on grounds of defection.
The third prescription is under The Representation of The People Act (RPA), 1951.
This law provides for disqualification for conviction in criminal cases.

Under Representation of The People Act, 1951

There are several provisions that deal with disqualification under the RPA.
Section 8 of the RPA deals with disqualification for conviction of offenses.
Section 8(1) of the act includes specific offenses such as promoting enmity between two groups, bribery, and undue influence or personation at an election.
Section 8(2) lists offenses that deal with hoarding or profiteering, adulteration of food or drugs and for conviction and sentence of at least six months for an offense under any provisions of the Dowry Prohibition Act.
Section 8(3) disqualifies a convicted person who has been sentenced to imprisonment for not less than two years.
He is disqualified from the date of such conviction and shall continue to be disqualified for a further period of six years since his release.
Section 9 deals with disqualification for dismissal for corruption or disloyalty, and for entering into government contracts while being a lawmaker.
Section 10 deals with disqualification for failure to lodge an account of election expenses.
Section 11 of the act deals with disqualification for corrupt practices.

9. Mauritius: Shifting Perspectives on Taxation and Investment

Subject: Economy

Section: Fiscal Policy

From Tax Haven to Gateway

Reform Initiatives:
- Mauritius, historically seen as a tax haven, has undertaken substantial reforms.
- Initiatives such as signing the Multilateral Instrument, abolishing the deemed foreign tax credit, and amending the Income Tax Act have reshaped its financial landscape.
Eliminating Tax Haven Image:
- Mauritius no longer fits the tax haven mold.
- Stricter regulations and transparency measures have been put in place to dispel this perception.
Gateway for Indian Investors:
- Mauritius aims to position itself as a gateway for Indian companies venturing into African markets.
- Trade agreements with 34 out of 54 African nations offer a secure investment environment for funds flowing into Africa via Mauritius.

Recent Developments and Assurance

India Business Mission:
- India Business Mission included visits to key cities, highlighting the investment potential in Mauritius.
Transparency and Compliance:
- Mauritius asserts its compliance with international standards on Anti-Money Laundering and Counter Terrorism Financing.
- The absence of shell companies and a robust regulatory framework support this claim.
International Recognition:
- The Mauritius International Financial Centre (MIFC) has received positive assessments from international bodies like the IMF, World Bank, and OECD.
- Compliance with OECD guidelines affirms Mauritius’ adherence to international tax regulations.

Financial Sector Assurance

Legislative Amendments:
- Recent legislative changes include the abolition of Global Business category 2 companies.
- The deemed foreign tax credit regime has been entirely removed, aligning with global financial standards.
Fiscal Regime Evaluation:
- The Organisation for Economic Co-operation and Development (OECD) conditions for defining tax havens do not apply to Mauritius.
- The country demonstrates compliance and transparency in its fiscal practices.
MIFC: A Global Hub:
- The MIFC, under the Economic Development Board Mauritius, serves as a hub for international banks, legal firms, and investment entities.
- It provides a conducive environment for global financial operations.

Investment Strategy for Africa

Risk Mitigation:
- Indian investors to utilize Mauritius as a strategic base for African operations.
- Direct investments in African nations may pose risks due to legal uncertainties.
Safety Through Agreements:
- Routing investments through Mauritius ensures safety, backed by trade agreements with multiple African countries.
- This strategy offers protection against potential changes in local laws and safeguards investments.
Success Stories:
- Companies like Huawei have leveraged Mauritius as a starting point for African market entry.
- The approach has resulted in sustainable growth and minimized risks for businesses operating in the region.

In summary, Mauritius’ transformation from a perceived tax haven to a trusted financial gateway presents significant opportunities for Indian investors eyeing the African market. The country’s commitment to transparency, compliance, and strategic partnerships ensures a secure and favorable environment for international investments. Through Mauritius, Indian companies can access diverse African markets while mitigating potential risks and maximizing growth potential.

Tax Haven:

A tax haven refers to a country or jurisdiction that offers foreign businesses and individuals minimal or no tax liability. It provides a politically and economically stable environment with favorable tax laws, secrecy, and confidentiality.

Characteristics:

Low or No Taxation: Tax havens often impose minimal or no taxes on income, capital gains, inheritance, or corporate profits.
Secrecy: They offer confidentiality and limited disclosure of financial information, protecting the identity of investors.
Stable Environment: Political and economic stability is crucial to attract foreign investments seeking safe harbors.

Purpose:

Businesses and individuals use tax havens to legally reduce their tax obligations.
They facilitate tax planning, asset protection, and wealth management strategies.

Anti-Money Laundering (AML):

AML refers to a set of laws, regulations, and procedures designed to prevent the illegal generation of income through criminal activities. It aims to detect and deter the process of making illegal funds appear legitimate (“money laundering”).

Objectives:

Detection: Identify and monitor financial transactions to detect suspicious activities.
Prevention: Implement measures to prevent criminals from using financial systems to launder money.
Compliance: Ensure financial institutions adhere to AML laws by implementing robust internal controls.

Key Components:

Customer Due Diligence (CDD): Verify the identity of customers and assess the risks associated with their transactions.
Transaction Monitoring: Monitor transactions for unusual patterns or activities that may indicate money laundering.
Reporting Requirements: Oblige financial institutions to report suspicious transactions to regulatory authorities.

Counter Terrorism Financing (CFT):

CFT focuses on preventing terrorist organizations from raising, moving, and using funds for illicit activities.

It complements AML efforts by targeting financial resources that support terrorism.

Objectives:

Disruption: Disrupt the financial networks and funding sources of terrorist organizations.
Prevention: Implement measures to prevent the use of legitimate financial systems for terrorist financing.
Intelligence Sharing: Enhance cooperation between financial institutions, law enforcement, and intelligence agencies.

In summary, tax havens offer favorable tax environments, while AML/CFT frameworks aim to safeguard the financial system from illicit activities.

Compliance with AML/CFT regulations is essential to maintain financial integrity and prevent misuse of financial systems for criminal purposes.

Money Laundering: Overview and Methods

Money laundering is the process of disguising the origins of money obtained through criminal activities, making it appear as if it comes from legitimate sources.

Criminal activities that generate illicit funds include financial fraud, drug trafficking, arms dealing, corruption, and terrorist financing.

Process of Money Laundering:

Placement (Step 1):
- Involves the initial entry of “dirty money” into the legitimate financial system.
- Criminals deposit cash obtained from illegal activities into banks, casinos, or other financial institutions.
Layering (Step 2):
- Conceals the source of the illicit funds through a series of complex transactions and layers.
- Money is moved through various accounts, countries, or financial instruments to obscure its origin.
Integration (Step 3):
- The final stage where laundered money is reintroduced into the economy.
- Criminals can use the now “clean” money for legitimate investments, purchases, or financial transactions.

Common Methods of Money Laundering:

Smurfing:
- Involves breaking down large amounts of illicit cash into smaller, less conspicuous sums.
- These smaller amounts are then deposited into bank accounts by multiple individuals (smurfs) to avoid suspicion.
Shell Companies:
- Entities with no genuine business operations used to funnel illicit funds.
- Criminals create fake invoices and financial records to make transactions appear legitimate.
Offshore Banks:
- Utilization of banks in countries with strict bank secrecy laws.
- Countries such as the Bahamas, Panama, or Singapore offer anonymity and confidentiality for account holders.
Hawala:
- A traditional and informal value transfer system used in many parts of the world.
- Operates without physical movement of money, relying on trusted networks of brokers or dealers.
Electronic Money Laundering (EML):
- Occurs through online platforms like auctions, gambling websites, or virtual gaming sites.
- Cryptocurrencies such as Bitcoin have emerged as a new frontier for money laundering due to their pseudo-anonymous nature.
- The 2015 Paris attacks were partially funded using bitcoins, highlighting the use of cryptocurrencies for illicit activities.

10. Impact of Election Schedule on Nifty and Bank Nifty Options

Subject: Economy

Section: Financial market

Historical Timing and Current Scenario:
- Previous election results of 2009, 20014 and 2019 were announced in May.
- Election Commission announced a seven-phase schedule from April 19 to June 1, with counting on June 4.
Market Reaction and Option Prices:
- Today, sharp decline in option prices for Nifty50 and Bank Nifty May contracts across: Both call and put options (in-the-money and out-of-the-money).
- Many traders unwinding positions built on expectations of May results, adjusting options.
Analyst Insights and Market Strategies:
- Traders had created short strangles at 21000 and 24000 strikes for both June and December expiries in 2024.
- Open interest buildup indicates a preference for strategies during market uncertainty.
- Recent sideways movement affecting premiums on both sides of options.
- India’s Volatility Index (VIX) closed higher at 13.59 today, down from recent peak of 15.
Conclusion:
- Swift adjustment in options market due to unexpected shift in election results date to June.
- Traders using strategies like strangle and straddle to navigate uncertain market conditions.

India’s Volatility Index (VIX):

India’s Volatility Index, commonly known as VIX, is a measure of market volatility. It is also referred to as the “fear index” as it gauges investor sentiment and market uncertainty.

Calculation:

VIX is calculated based on the prices of Nifty 50 Index options. It measures the expected volatility in the Nifty 50 Index over the next 30 days.

Interpretation:

Higher VIX values indicate higher expected volatility and uncertainty in the market.
Lower VIX values suggest lower expected volatility and a more stable market.

Usage:

Investors and traders use VIX to assess market risk.
It helps in making decisions on portfolio allocation and hedging strategies.

Straddle:

A straddle is an options strategy where an investor buys an equal number of call and put options with the same expiration date and the same strike price.

Objective:

The goal of a straddle is to profit from a significant price movement in the underlying stock, regardless of the direction (up or down).

Usage:

Used when the investor anticipates a major price movement but is uncertain about the direction.
Provides protection against potential losses in either direction.

Risk:

The risk for a straddle is limited to the total premium paid for both the call and put options.
Losses occur if the stock price remains relatively stable without a significant move in either direction.

Strangle:

A strangle is an options strategy where an investor buys an equal number of out-of-the-money call and put options with different strike prices but the same expiration date.

Objective: The objective of a strangle is also to profit from a significant price movement in the underlying stock, regardless of the direction.

Usage: Used when the investor expects a substantial price movement but is uncertain about the direction. Provides a wider profit range compared to a straddle due to the different strike prices.

Risk: The risk for a strangle is limited to the total premium paid for both the call and put options. Losses occur if the stock price remains within the range of the two strike prices at expiration.

In brief:

Both straddles and strangles allow investors to benefit from significant price movements in a stock, regardless of direction.
Straddles are beneficial when the direction of the stock price movement is unclear, providing protection in either scenario.
Strangles are useful when the investor anticipates a significant movement but is unsure about the direction, offering a wider profit potential.
Investors should consider the risks involved, including the total premium paid for the options, and understand the potential tax implications of options trading gains and losses.
Strangle involves out-of-the-money options, offering potentially higher profits with greater risk.
Straddle involves at-the-money options, offering a balanced risk-reward profile.

About Nifty:

NIFTY is a market index introduced by the National Stock Exchange (NSE). The name Nifty is a blend of “National Stock Exchange” and “Fifty,” coined by NSE.

Establishment:

Introduced in 1996 under the name CNX Nifty.
Renamed as Nifty 50 in 2015.

Benchmark Index:

NIFTY 50 is the flagship and benchmark-based index of NSE.
Represents the performance of the 50 largest and most actively traded stocks listed on the NSE.

Composition:

Consists of 50 largest companies from various sectors.
Represents diverse sectors of the Indian economy.

Market Indicator:

Reflects stock market trends and economic conditions.
Often used as a barometer of the Indian equity market.

Comparison:

One of the two main stock market indices in India.
The other is SENSEX, a product of the Bombay Stock Exchange (BSE).

11. Simplifying Claims Settlement: IEPFA’s Initiative

Subject: Economy

Section: Capital and money market

The Investor Education and Protection Fund Authority (IEPFA) has launched an initiative to enhance the investor experience and streamline the claims settlement process.

Purpose of Initiative:
- Aimed at simplifying, expediting, and streamlining the claims settlement process.
- Intends to reimagine the refund process under the Companies Act, 2013.
Objective:
- Ensure a seamless and efficient mechanism for claiming refunds from the IEPF Authority.
- Enhance investor satisfaction and ease of access to refund
Invitation for Comments:
- Stakeholders, including investors and industry participants, invited to provide feedback.
- Comments sought on improving the claims settlement process.
Amendments aims at: –
- Enhanced Efficiency: Aim to create a more efficient and responsive system for investor refunds.
- Transparent Process: IEPFA seeks to ensure transparency and ease of access to refund mechanisms.
- Stakeholder Engagement: Investors and industry participants encouraged to contribute ideas for process improvement.

Investor Education and Protection Fund Authority (IEPFA)

The Investor Education and Protection Fund Authority (IEPFA) is a regulatory body established in 2016 under the provisions of the Section 125 of Companies Act, 2013. Entrusted with the responsibility of administering the Investor Education Protection Fund (IEPF).

Functions:

Administers the Investor Education Protection Fund (IEPF), which includes making refunds of shares, unclaimed dividends, and matured deposits/debentures to investors.
Promotes investor awareness and education through various initiatives.

Nodal Ministry:

Operates under the Ministry of Corporate Affairs, Government of India.

Key Facts about the Investor Education Protection Fund (IEPF)

Establishment:
- Established under the provisions of Companies Act, 2013.
Crediting of Amounts:
- The following amounts remaining unpaid and unclaimed for seven years are credited to the IEPF:
  - Amounts in unpaid dividend accounts of companies.
  - Application money received by companies for allotment of securities and due for refund.
  - Matured deposits and debentures with companies.
- Grants and Donations:
  - Receives grants and donations from the Central Government, State Governments, companies, or other institutions for the Fund’s purposes.
- Investments:
  - The Fund invests the amounts received, and the interest or other income earned from these investments contributes to the Fund.

The IEPFA plays a vital role in safeguarding the interests of investors and promoting investor education and awareness. It ensures that unclaimed funds are utilized for the benefit of investors and fosters transparency and accountability in the corporate sector.