Daily Prelims Notes 2 June 2022

June 2, 2022
Posted by: OptimizeIAS Team
Category: DPN

Daily Prelims Notes

2 June 2022

Table Of Contents

1. Orders of constitutional courts would prevail over statutory tribunals: SC

Subject: Polity

Section: Judiciary

Context: The Supreme Court on Wednesday set aside a National Green Tribunal (NGT) order prohibiting construction work at Rushikonda hills in Visakhapatnam, saying orders of constitutional courts would prevail over statutory tribunals

Concept:

The Supreme Court said the NGT is subordinate to the high court in so far as territorial jurisdiction is concerned. The conflicting orders passed by the NGT and the High Court would lead to an anomalous situation. The authorities would be faced with difficulty as to which orders to follow. In such a case, orders from the Constitutional Court would prevail over statutory tribunals.

Supreme Court on Tribunals in L Chandra Kumar case:

The constitutional safeguards which ensure the independence of the Judges of the superior judiciary are not available to the Judges of the subordinate judiciary or to those who man Tribunals created by ordinary legislations. Consequently, Judges of the latter category can never be considered full and effective substitutes for the superior judiciary in discharging the function of constitutional interpretation. We, therefore, hold that the power of judicial review over legislative action vested in the High Courts under Articles 226 and in this Court under Article 32 of the Constitution is an integral and essential feature of the Constitution, constituting part of its basic structure. Ordinarily, therefore, the power of High Courts and the Supreme Court to test the constitutional validity of legislations can never be ousted or excluded.

Tribunals have been created both as substitutes to High Courts and as subordinate to High Courts .In the former case, appeals from the decisions of Tribunals (such as the Securities Appellate Tribunal) lie directly with the Supreme Court. In the latter case (such as the Appellate Board under the Copyright Act, 1957), appeals are heard by the corresponding High Court.

Tribunal is a quasi-judicial institution that is set up to deal with problems such as resolving administrative or tax-related disputes.
It performs a number of functions like adjudicating disputes, determining rights between contesting parties, making an administrative decision, reviewing an existing administrative decision and so forth.
A Tribunal, generally, is any person or institution having an authority to judge, adjudicate on, or to determine claims or disputes – whether or not it is called a tribunal in its title.

Tribunals were not part of the original constitution; it was incorporated in the Indian Constitution by 42^ndAmendment Act, 1976.
Article 323-Adeals with Administrative Tribunals.
Article 323-Bdeals with tribunals for other matters.
Under Article 323 B, the Parliament and the state legislatures are authorised to provide for the establishment of tribunals for the adjudication of disputes relating to the following matters:
- Taxation
- Foreign exchange, import and export
- Industrial and labour
- Land reforms
- Ceiling on urban property
- Elections to Parliament and state legislatures
- Food stuff
- Rent and tenancy rights
Articles 323 A and 323 B differ in the following three aspects:
While Article 323 A contemplates the establishment of tribunals for public service matters only, Article 323 B contemplates the establishment of tribunals for certain other matters (mentioned above).
While tribunals under Article 323 A can be established only by Parliament, tribunals under Article 323 B can be established both by Parliament and state legislatures with respect to matters falling within their legislative competence.
Under Article 323 A, only one tribunal for the Centre and one for each state or two or more states may be established. There is no question of the hierarchy of tribunals, whereas under Article 323 B a hierarchy of tribunals may be created.

Central Administrative Tribunal

It has jurisdiction to deal with service matters pertaining to the Central Government employees or of any Union Territory, or local or other government under the control of the Government of India, or of a corporation owned or controlled by the Central Government.
The CAT was set-up on 1 November 1985.
It has 17 regular benches, 15 of which operate at the principal seats of High Courts and the remaining two at Jaipur and Lucknow.
These Benches also hold circuit sittings at other seats of High Courts. The tribunal consists of a Chairman, Vice-Chairman and Members.
The Members are drawn, both from judicial as well as administrative streams so as to give the Tribunal the benefit of expertise both in legal and administrative spheres.
The appeals against the orders of an Administrative Tribunal shall lie before the Division Bench of the concerned High Court.

State Administrative Tribunal

Article 323 B empowers the state legislatures to set up tribunals for various matters like levy, assessment, collection and enforcement of any of the tax matters connected with land reforms covered by Article 31A.

2. Streaming analytics platform Coralogix gets $142 million in Series D round

Subject: Economy

Section: Indian Economy

Context:

The Series D round is a little complicated compared to the previous ones. Although most organizations finish raising money in the previous round, there are some reasons an organization may choose a Series D round:

THE POSITIVE

If an organization discovers a new opportunity to expand before going for an IPO, it may look to boost its chances. It’s quite common for organizations to raise their values through a Series D round before going public. Alternatively, organizations that want to stay private for longer may also look for Series D funding.

THE NEGATIVE

If an organization fails to meet the expectations it had laid out after completing the previous round, it may hit a down round. It’s when an organization raises money at a lower valuation than the previous round. A down round devalues the stock and, at the same time, gives the organization an opportunity to push through tricky times. Mostly, it has a bad effect on the organization as it loses morale, stock value and credibility.

A Series D round is typically funded by venture capitalists. Very few startups reach this round, and the valuation and the amount raised varies.

Series A Funding

Once a business has developed a track record (an established user base, consistent revenue figures, or some other key performance indicator), that company may opt for Series A funding in order to further optimize its user base and product offerings.
In this round, it’s important to have a plan for developing a business model that will generate long-term profit.
Series A rounds raise approximately $2 million to $15 million
Investors are looking for companies with great ideas as well as a strong strategy for turning that idea into a successful, money-making business. The investors involved in the Series A round come from more traditional venture capital firms.
It’s also common for investors to take part in a somewhat more political process. It’s common for a few venture capital firms to lead the pack. In fact, a single investor may serve as an “anchor.” Once a company has secured a first investor, it may find that it’s easier to attract additional investors as well.
Angel investors also invest at this stage, but they tend to have much less influence in this funding round than they did in the seed funding stage.

Series B Funding

Series B rounds are all about taking businesses to the next level, past the development stage.
Investors help start-ups get there by expanding market reach. Companies that have gone through seed and Series A funding rounds have already developed substantial user bases and have proven to investors that they are prepared for success on a larger scale.
It is used in bulking up on business development, sales, advertising, tech, support, and employees costs a firm a few pennies.
The average estimated capital raised in a Series B round is $33 million
Series B appears similar to Series A in terms of the processes and key players.
The difference with Series B is the addition of a new wave of other venture capital firms that specialize in later-stage investing.

Series C Funding

Businesses that make it to Series C funding sessions are already quite successful.
These companies look for additional funding in order to help them develop new products, expand into new markets, or even to acquire other companies.
In Series C rounds, investors inject capital into the meat of successful businesses, in an effort to receive more than double that amount back. Series C funding is focused on scaling the company, growing as quickly and as successfully as possible.
Series C funding could be used to buy another company.
In Series C, groups such as hedge funds, investment banks, private equity firms, and large secondary market groups accompany the type of investors mentioned above.
Companies that do continue with Series D funding tend to either do so because they are in search of a final push before an IPO or, alternatively, because they have not yet been able to achieve the goals they set out to accomplish during Series C funding.

3. The Turing test

Subject: Science and Tech

Section: Computers

A test to determine whether machines can impersonate human beings
The Turing test, named after British mathematician Alan Turing, was a concept proposed to test if a machine could deceive a person into thinking it was human.
The hypothesis Turing proposed that an objective way to test for intelligence in machines is to have a computer perform a task in the same way a real person would.
What Turing proposed was the equivalent of a ‘party game’ wherein a man and woman would go into separate rooms and answer, in writing, questions posed by guests.
The aim of the game was for the man and the woman to convince the guests that they were the other.
Passing the Turing test would mean that computers were able to convince people they were human.

The results

Since then, at various points, machines have superﬁcially passed the test.
The earliest was a program called ELIZA, created at the Massachusetts Institute of Technology by Joseph Weizenbaum in the 1960s. ELIZA, was a chatbot modeled on a psychotherapist.
The Loebner Prize is a competition that has provided a platform for practical Turing tests. A panel of judges awarded prizes for the program that came closest to imitating human like conversation.

4. Why Neptune and Uranus appear in different shades of blue

Subject: Science and Tech

Section: Space

Neptune and Uranus have much in common — they have similar masses, sizes, and atmospheric compositions — yet their appearances are in different shades of blue.
At visible wavelengths, Neptune is a rich, deep azure hue, while Uranus is a distinctly pale shade of cyan.
Reason:
- Haze around Uranus is thicker than that around Neptune: Uranus’s stagnant, sluggish atmosphere and makes it appear a lighter tone than Neptune
  - There are three aerosol layers in the atmospheres of Neptune and Uranus.
  - The key layer that affects the colours is the middle layer, which is a layer of haze particles that is thicker on Uranus than on Neptune.
  - Methane ice condenses onto the particles in this layer, pulling the particles deeper into the atmosphere.
  - Because Neptune has a more active, turbulent atmosphere than Uranus does,thus Neptune’s atmosphere is more efficient at churning up methane particles into the haze layer.
  - This removes more of the haze and keeps Neptune’s haze layer thinner than it is on Uranus, with the result that the blue colour of Neptune looks stronger.

5. PM CARES scheme for children who lost parents to Covid

Subject: Polity

Section: Governance

Recently, Prime Minister Narendra Modi released benefits like scholarships and health insurance under the PM CARES for Children scheme to support children who lost their parents due to coronavirus during the pandemic.

PM CARES for Children

Launched in May 2021 to ensure rehabilitation and education of children who lost caregivers to Covid between March 11, 2020, when Covid-19 was declared as a pandemic by the WHO, and February 28, 2022.
The scheme applies to children who have lost both parents or a surviving parent or legal guardians/adoptive parents, to ensure their rehabilitation and education.
Funded by PM Cares and with MoWCD at its nodal agency in the Centre, the scheme will provide a monthly stipend to each child from the age of 18 years, and a lump sum amount of Rs 10 lakh on attaining the age of 23.
The benefits also include an annual scholarship of Rs 20,000 for school students and monthly financial support of Rs 4,000 for daily needs.
Health coverage will be given through the Ayushman Card, and counseling through the Samvad helpline for psychological and emotional help.
Different guidelines have been mentioned for the care of children under different age brackets.
- Till six years of age, children will receive support from Anganwadi services for supplementary nutrition, pre-school education.
- For children below 10 years of age, admission shall be provided in any nearest school – government/government-aided school/KendriyaVidyalayas (KVs)/ private schools – as a day scholar.
- In private schools, tuition fees will be exempted along with other schemes under the Samagra Shiksha Abhiyan.
- Additionally, the scheme will help place the orphaned children either in the care of relatives and family, or with Child Care Institutions (CCIs), or in a Sainik School, Navodaya Vidyalaya, or other residential schools.

Process to select beneficiaries

Child Welfare Committees (constituted by the state governments under the Juvenile Justice Act) have been tasked with gathering facts about each case and recommending the child as a beneficiary to the District Magistrate (DM).
The DM will then accept or reject the application and if accepted, the relevant bank accounts will be opened.
Aadhaar registration of eligible children is needed to receive support under the scheme, and if the same is unavailable the DM has to facilitate it.
National Commission for Protection of Child Rights (NCPCR) setup “Bal Swaraj” portal, where data of the orphaned children was uploaded.
According to the government’s data, 1.53 lakh children were orphaned due to Covid-19.

6. US sending artillery rockets to Ukraine

Subject: Science and Tech

Section: Defence

As the fighting in eastern Ukraine turns into an artillery duel, the Pentagon announced that it would send its most advanced artillery rocket launcher and munitions to the Ukrainian military in the hope of giving it an edge over Russia.

Artillery rocket

An artillery rocket is a weapon that is typically propelled by a solid-fuel motor and can carry a variety of warheads.
The latest model of these launchers developed by the US is the HIMARS, for High Mobility Artillery Rocket System based on wheeled trucks and Guide Multiple Launch Rocket System (GMLRS).

Difference between a rocket and a missile

Generally the word “rocket” is used in a military context to refer to relatively inexpensive unguided weapons powered by solid-fuel motors, while “missile” is generally shorthand for “guided missiles,” more expensive and complicated weapons that use movable fins to steer themselves to their targets and can fly much farther.
The Pentagon has already sent short-range, inexpensive and unguided anti-tank weapons that are classified as rockets to Ukraine, like the AT-4, and the longer-range Javelin, which is a guided missile.
However, these new weapons to be sent to Ukraine are “guided rockets” which are often older rocket designs upgraded to have guidance systems and movable fins on their nose to steer them.
The explosive power of these rockets is more than 10 times that of howitzers.
Howitzers like the M777 can fire at a rate of about two to three rounds per minute. The GMLRS rockets can be fired singly or in a ripple of all six in just seconds, rivaling the power of an airstrike dropping guided bombs.

7. RBI Recurring payment mandate and SaaS

Subject: Economy

Section: Monetary Policy

Context:

Seven months after the Reserve Bank of India’s rule on recurring payment, small businesses and start-ups are still facing issues regarding timely payments to vendors.

RBI Recurring payment mandate:

As per RBI’s directive, there will be no automatic recurring payment for several services like utility bills, DTH, recharge of phone and OTT because additional factor of authentication (AFA) will become mandatory onwards.

Under new directives, banks will have to inform the customers using subscription-based recurring payments via credit or debit cards in advance regarding the recurring payments due. Transactions will not be automatic but will be done after the customer has authenticated it.

Customers are required to follow a one-time registration process. After this process, further transactions can be performed without any additional factor authentication. Customers can provide the validity period for future transactions, while registering for the process.

Objective:

RBI had made additional factor of authentication (AFA) mandatory with the objective of making digital payments in India safe and secure. It also seeks to protect customers from fraudulent transactions.

New norms will not impact any standing instructions that have been registered using bank accounts for mutual funds, SIPs, equated monthly instalments for loans.

Alternative payment method:

Software as Service (SaaS)-

SaaS is a method of software delivery. The advantage behind this method of delivery is that data can be accessed with an internet connection, web browser in any device at any location. In this type of model, vendors host and maintain servers and databases. The main difference between SaaS Delivery and On-premise model is that SaaS deployments won’t require extensive hardware and the payment type is through a subscription model, no need to pay the entire cost upfront.

Some of the most famous examples of SaaS are:

Amazon Web Services (AWS) – It is a subsidiary of Amazon. It provides around 150 services and has more than a million subscribers. AWS is even used by streaming companies like Netflix, defence organizations like the US Navy, and the world’s most famous space organisation NASA.
Dropbox – Files stored in Dropbox can be accessed from any device, from any location at any time.
Google Apps – Google drive enables employees to access files from any location from any device.
Salesforce – It is a Customer Relationship Management (CRM) tool, enabling employees of organizations to access the required information from any device at any location.
SAP Cloud Platform – Launched by SAP in 2012
Microsoft Azure – Launched by Microsoft in 2010.

8. MCA new rule

Subject: Economy

Section: Indian economy

Context:

The Ministry of Corporate Affair has announced a new rule to strengthen the checks and balances against opportunistic takeover of Indian companies by entities in countries with which India shares its land border.

Details:

It has mandated that the inbound mergers in India involving entities incorporated in countries where India shares its land border should file an additional declaration to the National Company Law Tribunal (NCLT) that all necessary approvals under FEMA have been obtained regarding the transactions involving compromise, arrangement, merger or demerger.

Earlier policy change towards countries sharing land border with India :

An entity of a country, which shares a land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route.

A transfer of ownership in an FDI deal that benefits any country that shares a border with India will also need government approval.

India shares land borders with Pakistan, Afghanistan, China, Nepal, Bhutan, Bangladesh and Myanmar.

Concept:

The National Company Law Tribunal or NCLT is a quasi-judicial body in India adjudicating issues concerning companies in the country. It was formed on June 1, 2016, as per the provisions of the Companies Act 2013 (Section 408) by the Indian government

NCLT was formed based on the recommendations of the Justice Eradi Committee that was related to insolvency and winding up of companies in India. Decisions taken by the NCLT can be appealed to the National Company Law Appellate Tribunal (NCLAT). The decisions of the NCLAT can be appealed to the Supreme Court on a point of law.

NCLT Functions

All proceedings under the Companies Act such as arbitration, arrangements, compromise, reconstruction, and winding up of the company will be disposed of by the Tribunal.
The NCLT is also the Adjudicating Authority for insolvency proceedings under the Insolvency and Bankruptcy Code, 2016.
In the above-mentioned subjects, no civil court will have jurisdiction.
The NCLT has the authority to dispose of cases pending before the Board for Industrial and Financial Reconstruction (BIFR), as well as those pending under the Sick Industrial Companies (Special Provisions) Act, 1985.
Also to take up those cases pending before the Appellate Authority for Industrial and Financial Reconstruction.
It can also take up cases relating to the oppression and mismanagement of a company.

9. WTO on Public Stockholding

Subject: Economy

Section: External Sector

Context:

Economy

A total of nearly 80 members from various Organisations including the G-33 group have submitted a joint proposal at the WTO regarding public stock holding based on a fair way of calculating subsidies with a current external reference price instead of an ancient one.

Concept:

Public stockholding programmes are used by some governments to purchase, stockpile and distribute food to people in need. While food security is a legitimate policy objective, some stockholding programmes are considered to distort trade when they involve purchases from farmers at prices fixed by the governments, known as “supported” or “administered” prices.

At the 2013 Bali Ministerial Conference, ministers agreed that, on an interim basis, public stockholding programmes in developing countries would not be challenged legally even if a country’s agreed limits for trade-distorting domestic support were breached. They also agreed to negotiate a permanent solution to this issue.

A decision on public stockholding taken at the 2015 Nairobi Ministerial Conference reaffirmed this commitment and encouraged WTO members to make all concerted efforts to agree on a permanent solution. Currently, public distribution programmes of developing countries are included under trade-distorting Amber Box measures that attract reduction commitments of WTO which is capped at 10% of value of total production based on 1986-88 prices.

Issue?

According to the present rules under the Agreement on Agriculture (AoA), subsidies given to the farmer, calculated as the excess of MSP over its international price, also known as External Reference Price (ERP), plus subsidy on inputs, are clubbed as aggregate measurement of support (AMS).

One big problem is that the ERP is pegged to the base period of 1986–1988 without any adjustments for inflation which gives an inflated AMS.

Amber box subsidy:

WTO’s Agreement on Agriculture (AoA) classifies domestic support or subsidies given by the government to farmers into different categories. An important type of subsidies or supports is Aggregate Measurement of Support (AMS). The AMS represents trade distorting domestic support and is referred to as the “amber box”.

The AMS means annual level of support (subsidies) expressed in monetary terms, provided for an agricultural product in favour of the producers (product specific) of the basic agricultural product and non-product specific support provided in favour of agricultural producers in general.

The Aggregate Measurement of Support consists of two parts—product-specific subsidies and non-product specific subsidies.

Product-specific subsidy refers to the total level of support provided for each individual agricultural commodity. For example wheat AMS is the subsidy given specifically to wheat.
Non-product specific subsidy, on the other hand, refers to the total level of support given to the agricultural sector as a whole, i.e., subsidies on inputs such as fertilizers, electricity, irrigation, seeds, credit etc. Usually, these non-product subsidies are given to all crops.

Subsidy provided through price support in the case of a specific product like wheat is measured by taking the difference between the price given to the domestic producers during procurement (by the government)and a specified fixed external reference price (world market price set by the WTO) of that product. Multiplying this gap by the quantity of production eligible to receive the administered price gives the specific subsidy for that product. If domestic prices are lower than the world reference price, then AMS turns out to be negative for that particular product.

As per the WTO norms, the AMS can be given up to 10 % of a country’s agricultural GDP in the case of developing countries. On the other hand, the limit is 5% for a developed economy. This limit is called the de minimis level of support.

Peace Clause

It was agreed to at the WTO’s Bali Ministerial meeting in December 2013 that allowed developing countries to breach subsidy limits on food crops subject to certain conditions being met related to notifications on the PSH programmes and food security.

10. Cabinet allows co-operatives to procure through GeM platform

Context: The Union Cabinet has given its approval for expanding the mandate of the government’s online public procurement platform, Government e-Market (GeM), by allowing procurement by co-operatives

Concept :

The GeM would be the national public procurement portal and will be registered as Section 8 Company for providing procurement of goods and services required by central and state government organizations. It will provide an end-to-end online marketplace for central and state government ministries and departments for procurement of common use goods & services in a transparent and efficient manner.

It provides the tools of e-bidding, reverse e-auction and demand aggregation to facilitate the government users achieve the best value for their money.
All the administrative Ministries/ Departments have instructed their CPSEs having any product or service which may be purchased by any Government department, to register themselves and their authorised resellers on GeM portal as sellers for such products/services,
many of the CPSEs are still not registered on GeM as sellers.
Procurement As per General Financial Rules (GFRs), 2017, it is manor sold by Government/PSUs besides reforming DGS&D (Directorate General of Supplies and Goods).
the finance minister in his Budget speech of FY2016-17, announced setting up of a technology driven platform to facilitate procurement of goods and services by various ministries and government agencies.
Absence of CPSEs on GeM as sellers reduces competition and deprives the Government buyers the opportunities to get competitive prices. Simultaneously, CPSEs may also be losing business opportunities arising from Government buyers.

11. IRDAI allows launch of insurance products without prior approval

Subject: Polity

Section: Governance

Context: In a significant move, the Insurance Regulatory and Development Authority of India (IRDAI) has permitted general and standalone health insurers to launch products without prior approval

IRDAI

Insurance Regulatory Development Authority (IRDA) is a statutory body set up by the IRDA Act, 1999.
It is an autonomous and apex body which has the responsibility to regulate and control the Insurance sector in India.
Insurance Regulatory Development Authority (IRDA) was established after the recommendations of Malhotra Committee report of 1994. The committee had recommended for the establishment of an independent authority for the regulation of Insurance sector in India.
As per the section 4 of IRDAI Act’ 1999, Insurance Regulatory and Development Authority of India has composition of a Chairman; five whole-time members; four part-time members, all appointed by the Government of India.