Daily Prelims Notes 21 April 2024

April 21, 2024
Posted by: OptimizeIAS Team
Category: DPN

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Daily Prelims Notes

21 April 2024

Table Of Contents

1. IRDAI removes age bar for purchasing health insurance

Subject: Economy

Sec: Msc

Context:

The Insurance Regulatory and Development Authority of India (IRDAI) has removed the age limit for purchasing health insurance policies, with effect from April 1.

Key changes:

Earlier, there was an age limit of 65 years to buy new health insurance policies. IRDAI’s latest move is aimed at bringing in extended health benefits to the elderly.
The IRDAI directive mandates health insurance providers to develop specialized policies catering to senior citizens, and to establish dedicated channels for addressing their claims and grievances.

Premiums may be higher:

The recent decision to lift the age restriction on insurance coverage is a significant advancement.
Previously, only individuals up to 65 years old were eligible for insurance, leaving senior citizens, who often need healthcare the most, without coverage.
Now, with the removal of this restriction, even the elderly can access cashless insurance benefits, though premiums for this demographic may be higher.
This change will greatly benefit those in need of medical insurance, including children, maternity cases, and senior citizens, ensuring a healthier life for many.

About Insurance Regulatory Development Authority (IRDA):

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 the establishment of an independent authority for the regulation of the Insurance sector in India.
As per the section 4 of IRDAI Act’ 1999, Insurance Regulatory and Development Authority of India has a composition of a Chairman; five whole-time members; four part-time members, all appointed by the Government of India.

2. Mauritius tightens over offshore funds

Subject: Economy

Sec :External Sector

Increased Scrutiny:

Mauritius imposes stricter scrutiny on offshore fund structures, leading to longer timelines and higher compliance burdens for India-focused funds.
Recent amendments to the India-Mauritius tax treaty and tax notices from Indian authorities to Mauritius-based funds contribute to the tighter regulatory environment.
Emerging alternatives like GIFT City may deter funds from choosing Mauritius as their jurisdiction.

Image Makeover:

Mauritius, having exited the FATF grey list in October 2021, seeks to distance itself from its reputation as a quasi-tax haven.
Enhanced KYC measures and routine audits by the Financial Services Commission aim to align with international tax norms.

Intensified Scrutiny Process:

The time required for fund setup has increased to 6-9 months due to intensified scrutiny.
Greater emphasis on beneficial owner experience, fund sources, commercial substance, and compliance measures.
Background checks on fund sponsors and managers conducted by the FSC to verify antecedents.

Challenges and Impact:

Compliance requirements lead to changes in management company pricing, driven by rising costs and scarcity of skilled talent.
Reluctance among institutional investors to provide personal information required for compliance.
Mauritius emphasizes its commitment to eliminating the tax haven image but faces challenges in dispelling this perception.

Exploring Alternatives:

Larger funds consider alternative jurisdictions like GIFT City, Singapore, and Cayman Islands due to difficulties in setting up funds in Mauritius.

GIFT City (Gujarat International Finance Tec-City):

Location:
GIFT City is situated in Gandhinagar, Gujarat, India.
It is strategically positioned to leverage the state’s infrastructure and connectivity advantages.
Components:
GIFT City comprises a multi-service Special Economic Zone (SEZ) with two main components:

India’s first International Financial Services Centre (IFSC)
An exclusive Domestic Tariff Area (DTA)

Vision:
GIFT City is envisioned as an integrated hub for financial and technology services, not only catering to India but also serving global markets.
It aims to provide a conducive environment for businesses to thrive and innovate in the fields of finance and technology.
Regulatory Framework:
The International Financial Services Centre Authority (IFSCA) serves as the unified regulator responsible for the development and regulation of financial products, services, and institutions within IFSCs in India.
It ensures a robust regulatory environment conducive to the growth of financial services in GIFT City.

3. When a dead stream springs back to life after 30 years

Subject: Geography

Sec: Mapping

Context:

In the Marayur sandal division of Idukki, a stream that had been dormant for 30 years in a tribal area has been revived thanks to an eco-restoration project led by the Forest Department from 2021 to 2024.

Details:

The area, historically grasslands with flowing streams, had suffered an ecological decline after black wattle (Acacia mearnsii) trees were introduced in 1980, followed by an invasive spread of West Indian Lantana.
The restoration efforts, supported by the United Nations Development Programme and NABARD under CAMPA, involved removing exotic species across 98 hectares to restore natural grasslands.
This initiative allowed the stream, Kammalamkudy Thodu, to flow again, now delivering 6.5 litres of water per minute, even during intense heat.
Additionally, a brushwood check dam has been built to aid wildlife hydration and the rejuvenated grasslands have attracted diverse fauna, highlighting the significant impact of grasslands on water management and ecosystem health.

What is ecological restoration?

Ecosystem restoration involves aiding the recovery of ecosystems that have been degraded or destroyed, while also preserving intact ecosystems.
This process not only enhances biodiversity but also offers numerous benefits such as improved soil fertility, increased timber and fish yields, and greater storage of greenhouse gases.
Restoration methods can vary, from active re-planting to simply reducing human pressures to allow natural recovery.
It’s not always feasible or desirable to return ecosystems to their original state due to modern needs like farmland and infrastructure.
Additionally, ecosystems need to adjust to a changing climate. From now until 2030, restoring 350 million hectares of degraded ecosystems could yield about US$9 trillion in ecosystem services and remove 13 to 26 gigatons of greenhouse gases from the atmosphere.
The financial gains from these efforts are significantly higher than the costs, making restoration far more economical compared to the costs of inaction.

Source: TH

4. Glycemic index of diets: importance beyond diabetes control

Subject: Science and tech

Sec: Health

Glycemic Index (GI):

The concept of the Glycemic Index (GI) was introduced by Prof. David Jenkins in 1981 to measure how different foods affect blood glucose levels.
- GI is a number from 0 to 100 assigned to a food, with pure glucose arbitrarily given the value of 100, which represents the relative rise in the blood glucose level two hours after consuming that food.
- The GI of a specific food depends primarily on the quantity and type of carbohydrate it contains, but is also affected by the amount of entrapment of the carbohydrate molecules within the food, the fat and protein content of the food, the amount of organic acids (or their salts) in the food, and whether it is cooked and, if so, how it is cooked.
- Foods are ranked based on how they compare to glucose or white bread (GI of 100), and categorized into low (less than 55), medium (56-69), or high (over 70) GI.
The Glycemic Load (GL) is calculated by multiplying the GI by the amount of carbohydrates consumed.
While some nutritionists caution against diets high in GI due to their link to type 2 diabetes and support low GI diets, others argue that focusing solely on GI overlooks the quality of other macronutrients like proteins and fats.
Significant research, including the international PURE study which included over 137,851 participants from 20 countries, supports the importance of GI and GL in diet.
This research found that high GI diets are associated with a higher risk of major cardiovascular events and mortality, extending the concern over high GI diets beyond diabetes to include heart health.
This is particularly relevant in regions like India and South Asia, where diets predominantly consist of high GI foods like white rice and wheat, leading to high GL and increased risks of diabetes and early-onset cardiovascular diseases.
To combat these health risks, it is recommended to shift towards lower GI diets, including foods like brown rice, legumes, fruits, and vegetables, combined with regular physical activity.
This could significantly help in reducing the incidences of diabetes and cardiovascular diseases.

5. Why are sugary processed foods harmful?

Subject: Science and tech

Sec: Health

Why is it problematic to label malt-based, sugary milk products as ‘health’ drinks?

Labeling malt-based, sugary milk products like Bournvita as ‘health’ drinks is problematic because they contain high levels of sugar, which can be misleading to consumers seeking healthy options.
A typical product contains 86.7g of carbohydrates per 100g, with 49.8g being sugars, including 37.4g of added sucrose.
Each recommended 20g serving includes nearly 10g of sugar.
The malting process, originally used in whiskey production, converts cereal starch into sugar, adding to the drink’s sugar content through naturally occurring sugars like maltose, as well as added sugars such as maltodextrin and liquid glucose.
This high sugar content poses a health risk, particularly in terms of obesity and diabetes, contradicting the ‘health’ drink label.

What is FSSAI’s stand on sugar content?

The Food Safety and Standards Authority of India (FSSAI) specifies in its 2018 regulations that only products containing less than 5g of total sugar per 100g can be marketed as ‘low on sugar’ and by extension, potentially ‘healthy.’
Products that do not meet this criterion but are still advertised as ‘health drinks’ present a concern. This is particularly troubling for children who may consume multiple servings, potentially exceeding the World Health Organization’s recommended daily sugar intake of 25 grams (about six teaspoons).
The issue is compounded in Indian households where it is common to add extra sugar to these drinks, further increasing sugar consumption.

What is the controversy over baby food?

The controversy over baby food, specifically Nestlé’s Wheat Apple Cherry Cerelac for children aged eight to 24 months, centers on its high sugar content—24 grams per 100 grams.
This level of sugar intake, primarily from ingredients like milk solids and maltodextrin, is considered harmful by experts.
The concern is that infants transitioning from breast milk, which contains the naturally less sweet sugar lactose, to these sugary foods are exposed to excessive sugar.
This can strain a baby’s pancreas, potentially leading to increased insulin production, and raising risks of future diabetes and obesity.
Additionally, ingredients like maltodextrin, which has a higher glycemic index than table sugar, can contribute to conditions like fatty liver and insulin resistance.
This issue is particularly alarming given the high rates of diabetes in India, with an estimated 101.3 million people possibly affected.

Will an FSSAI probe be enough to curb the practice of misleading labels?

The FSSAI’s draft notification from September 2022 defines high fat, sugar, salt (HFSS) foods and aims to guide consumer awareness through front-of-pack labelling.
However, the regulation remains ambiguous about whether companies are required to explicitly declare fat, sugar, and salt content on the front of packaging.
Additionally, the FSSAI proposes using ‘health rating stars’ instead of more direct warning labels.
Critics argue that health stars might confuse consumers who lack the time or expertise to interpret these ratings based on the FSSAI’s criteria for sugar and fat content. This suggests that an FSSAI probe, in its current form, may not sufficiently curb the practice of misleading labels without clearer, more direct labeling requirements.

Way forward:

The way forward in addressing misleading food labels and marketing involves revising current regulations and developing clearer definitions of ‘healthy’ and ‘unhealthy’ foods and beverages.
The existing regulations, like the Food Safety and Standards (Foods for Infant Nutrition) Regulations of 2019, permit certain sugars in infant nutrition, suggesting these rules need reconsideration to better protect consumers.
Additionally, comprehensive regulations on front-of-pack labeling and definitions of high fat, sugar, and salt foods have been proposed but have not progressed effectively.
Despite regulations that prohibit the promotion of infant foods through advertising, violations occur, including promotions by social media influencers.
Moreover, partnerships like that of Hindustan Unilever Limited with the Pune Zilla Parishad, where Horlicks is added to midday meals and branded as a health food, demonstrate the ongoing challenges in ensuring truthful health claims.

6. UK’s India Gate to commemorate role of Indian soldiers from World Wars

Subject: History

Section: world history

Context:

Brighton approved an annual event at India Gate to honor Indian soldiers in World Wars, unveiled in 1921 at Royal Pavilion.

More on news:

A local council in the seaside resort of Brighton in south-east England has approved plans for an annual multi-faith event to commemorate the role of Indian soldiers in the two World Wars at the town’s India Gate memorial from this October.
The India Gate was presented to the people of Brighton by the princes and people of India as a gesture of thanks for the care provided by the town’s hospitals and is dedicated to the use of the inhabitants of Brighton.
The local council’s Culture, Heritage, Sport, Tourism & Economic Development Committee feels an annual memorial event at the India Gate in October would be a suitable addition to the current remembrance services and would additionally recognise the commitment of Muslim and Buddhist soldiers of undivided India.

About the monument:

It was unveiled by the Maharaja of Patiala, Bhupinder Singh, on October 26, 1921.
It stands at the southern entrance of the Royal Pavilion – one of three buildings in Brighton serving as a base hospital which treated these soldiers from undivided India wounded on the Western front.
These included soldiers from the modern-day countries of India, Pakistan, Bangladesh, Nepal, Myanmar and Bhutan.
The India Gate, designed by Thomas Tyrwhitt, replaced a much lower gate that was erected by Brighton Corporation following its purchase of the Pavilion in 1850 and is described as a dome resting on four pillars in a style derived from Gujarat.
According to historical records, in World War I (1914-1918) more than 1.5 million soldiers from pre-Partition India served in the British Indian Army of the colonial era, participating in major battles such as the Battle of Neuve Chapelle, Battle of Gallipoli, and the Battle of the Somme.
In World War II (1939-1945), over 2.5 million soldiers from undivided India volunteered to serve in the British Indian Army, the largest volunteer army in history.
The Royal Pavilion Indian hospital in Brighton that cared for the wounded from these battles is also marked by the Chattri memorial, which stands on the spot where Hindus and Sikhs were cremated.
It is accompanied by a memorial maintained by the Commonwealth War Graves Commission and an annual remembrance ceremony is organized by the Chattri Memorial Group there every June.
The details of the event will be determined and delivered by a committee of community leaders, in partnership with the Brighton & Hove Museums, and supported by Brighton & Hove City Council.

About India Gate in India:

The India Gate formerly known as All India War Memorial is a war memorial located near the Kartavya path on the eastern edge of the “ceremonial axis” of New Delhi, formerly called Rajpath.
It stands as a memorial to 74,187 soldiers of the Indian Army who died between 1914 and 1921 in the First World War, in France, Flanders, Mesopotamia, Persia, East Africa, Gallipoli and elsewhere in the Near and the Far East, and the Third Anglo-Afghan War.
Designed by Sir Edwin Lutyens, the gate evokes the architectural style of the ancient Roman triumphal arches such as the Arch of Constantine in Rome, and later memorial arches; it is often compared to the Arc de Triomphe in Paris, and the Gateway of India in Mumbai.

7. Debt, fiscal challenges facing low-income countries worry IMF

Subject: IR

Sec: world history

Context:

Shareholders of the International Monetary Fund agreed on the importance of addressing challenges faced by low-income countries, many of which are facing unsustainable debt burdens.

More on news:

IMF chief Kristalina Georgieva said that the body is working on ways to support low-income countries hit hardest by high debt levels.
The IMF lowered its 2024 growth forecast for low-income countries as a group to 4.7% from an estimate of 4.9% in January.
The World Bank said half of the world’s 75 poorest countries were experiencing a widening income gap with the wealthiest economies for the first time this century in a historical reversal of development.
The IMF was working to reinforce its ability to support low-income countries hit hardest by recent shocks, including through a 50% quota share increase and by adding resources to its Poverty Reduction and Growth Trust.

Impact of high debt levels on low-income countries:

High debt levels posed a huge burden for low-income countries, including many in Sub-Saharan Africa, where countries face debt service payments of 12% on average, compared to 5% a decade ago.
High interest rates in advanced economies have lured away investments, and raised the cost of borrowing.
Some countries’ debt payments are up to 20% of revenues.
Affected countries needed to increase their domestic revenues by raising taxes, continuing to fight inflation, paring back spending and developing local capital markets.
Concerns were raised about the situation facing low-income countries last week, warning China and other emerging official creditors against free-riding by curtailing loans to low-income countries just as the IMF or multilateral development banks were pouring funds in.
Almost 40 countries saw external public debt outflows in 2022, and the flows likely worsened in 2023.

8. New FDI Policy in Satellite Business

Subject: Economy

Sec: External Sector

Increased FDI Limit

The Finance Ministry has announced a new FDI limit for satellite-related activities, allowing up to 74% FDI via the automatic route.
The new regulations are set to come into effect from April 16, providing a boost to foreign investment in the space sector.

Sectoral Guidelines:

The investee entities will be subject to sectoral guidelines issued by the Department of Space, ensuring compliance with regulations and standards.
Amended Policy for Space Sector:
In February, the government approved an amendment to the FDI policy for the space sector, permitting 100% FDI.
Satellite manufacturing & operation, satellite data products, and ground segment & user segment can now receive FDI up to 74% under the automatic route.
Government Approval Route:
Beyond the 74% limit, the government route will be applicable for FDI in satellite-related activities.
Certain sub-sectors, such as launch vehicles and associated systems or sub-systems, have specific FDI thresholds and approval routes.
Liberalized FDI Thresholds:
The liberalized entry routes aim to attract potential investors to Indian companies in the space sector, aligning with the Indian Space Policy 2023.
Definition of Satellite-Related Activities:
The notification provides definitions for various satellite-related activities, including satellite manufacturing and operation, satellite data products, ground segment, user segment, launch vehicles, creation of spaceports, and manufacturing of components and systems.
Facilitating End-to-End Satellite Operations:
The policy covers end-to-end activities related to satellites, including manufacturing, operation, data products, ground infrastructure, and user terminals, providing a comprehensive framework for satellite operations.

Indian Space Policy 2023

The Indian Space Policy 2023 aims to enable, encourage, and develop a flourishing commercial presence in space, recognizing the critical role of the private sector in the space economy.

Key highlights of the policy:

Creation of Entities:

InSPACe (Indian National Space Promotion and Authorization Centre): This entity serves as a single window clearance and authorization agency for various space activities, facilitating private sector participation. It also shares technologies, products, processes, and best practices with non-government entities (NGEs) and government companies.
New Space India Limited (NSIL): Responsible for commercializing space technologies and platforms developed through public expenditure, as well as manufacturing, leasing, or procuring space components and technologies from the private or public sector.
Department of Space: Provides overall policy guidelines and acts as the nodal department for implementing space technologies. It also coordinates international cooperation and resolves disputes arising from space activities.
Rationalizing ISRO’s Role:
ISRO will transition out of manufacturing operational space systems and focus on R&D in advanced technology. Mature systems will be transferred to industries for commercial usage, allowing ISRO to concentrate on cutting-edge research and long-term projects.
Private Sector’s Role:
NGEs (including the private sector) are allowed to undertake end-to-end activities in the space sector, including the establishment and operation of space objects, ground-based assets, and related services such as communication, remote sensing, and navigation.
NGEs can design and operate launch vehicles, establish infrastructure, make filings with the International Telecommunication Union (ITU), and engage in commercial recovery of asteroid resources.
The private sector’s involvement spans satellite ownership, communication services, remote sensing data dissemination, and space transportation.

9. Key Highlights of India’s Oil Import Scenario

Subject: Economy

Sec: External Sector

Reduction in Import Bill:
India’s crude oil import bill witnessed a significant decline of 16% in the fiscal year ended March 31, attributed to lower international prices.
Despite importing a similar volume of crude oil as the previous fiscal year, India paid $132.4 billion for imports in FY24, compared to $157.5 billion in FY23.
Continued Dependence on Overseas Suppliers:
Despite the reduction in import bill, India’s dependency on overseas suppliers reached a new high.
Import dependence for crude oil surged to 87.7% in FY24, up from 87.4% in the previous fiscal year, highlighting the nation’s heavy reliance on imports to meet its energy needs.
Stagnant Domestic Production:
India’s domestic crude oil production remained nearly unchanged at 29.4 million tonnes in FY24.
This stagnation in domestic production contributes to the country’s increasing reliance on imported oil.
Import of Petroleum Products and LNG:
Apart from crude oil, India imported petroleum products like LPG, spending $23.4 billion on 48.1 million tonnes of imports.
Additionally, the country imported 30.91 billion cubic meters of LNG, costing $13.3 billion, in FY24.
The import of LNG experienced a decrease compared to the previous fiscal year due to the price shock caused by geopolitical events.
Net Import Bill and Trade Balance:
Petroleum imports accounted for 25.1% of India’s gross imports, while petroleum exports represented 12% of the country’s gross exports in FY24.
Rising Fuel Consumption:
India’s fuel consumption witnessed a notable increase of 4.6% to a record 233.3 million tonnes in FY23.
This upward trend in fuel consumption reflects the country’s growing energy demand and economic activity.
Surplus Refining Capacity:
Despite challenges in crude oil production, India maintains surplus refining capacity, enabling the export of petroleum products like diesel.
This surplus capacity enhances India’s position in the global refining industry, contributing to its energy security strategy.

10. India in favour of ‘regulating’, not banning, single-use plastic

Subject: Environment

Sec: Pollution

Context: Ahead of week-long negotiations involving 192 countries that are expected to begin in Toronto, Canada, next week on getting the globe to progress on eliminating plastic pollution, India is in favour of “regulating”, and not eliminating, single-use plastic, according to an analysis of various countries’ public negotiating positions by the Centre for Science and Environment (CSE), a not-for-profit based in New Delhi.

Details:

In 2022, India brought into effect the Plastic Waste Management Amendment Rules (2021) that banned 19 categories of ‘single-use plastics’

Single Use Plastics

Single-use plastics, or disposable plastics, are used only once before they are thrown away or recycled.
Plastic is so cheap and convenient that it has replaced all other materials from the packaging industry but it takes hundreds of years to disintegrate.
If we look at the data, out of46 million tonnes of plastic waste generated every year in our country, 43% is single use plastic.
Further, Petroleum-based plastic is non biodegradable and usually goes into a landfill where it is buried or it gets into the water and finds its way into the ocean.
The Prime Minister of India was also conferred the “champions of the earth” award by the United Nations Environment Programme (UNEP) in 2018 for pledging to eliminate all single-use plastic by 2022.
These are defined as disposable goods that are made with plastic but are generally use-and-throw after a single use and include plastic cups, spoons, earbuds, decorative thermocol, wrapping or packaging fillm used to cover sweet boxes and cigarette packets, and plastic cutlery. It, however, does not include plastic bottles – even those less than 200 ml— and multi-layered packaging boxes (such as milk cartons).

Plastic Waste Management Amendment Rules, 2021

Plastic Waste Management Amendment Rules, 2021 amend the 2016 rules.
The manufacture, import, stocking, distribution, sale and use of the identified single-use plastic will be prohibited with effect from the 1st July, 2022.
The ban will not apply to commodities made of compostable plastic.
For banning other plastic commodities in the future, other than those that have been listed in this notification, the government has given industry ten years from the date of notification for compliance.
The permitted thickness of the plastic bags, currently 50 microns, will be increased to 75 microns from 30th September, 2021, and to 120 microns from the 31st December, 2022.
Plastic bags with higher thickness are more easily handled as waste and have higher recyclability.
Currently, the Plastic Waste Management Rules, 2016, prohibits manufacture, import, stocking, distribution, sale and use of carry bags and plastic sheets less than 50 microns in thickness in the country.
The Central Pollution Control Board, along with state pollution bodies, will monitor the ban, identify violations, and impose penalties already prescribed under the Environmental Protection Act, 1986.
The plastic packaging waste, which is not covered under the phase out of identified single use plastic items, shall be collected and managed in an environmentally sustainable way through the Extended Producer Responsibility (EPR) of the Producer, importer and Brand owner (PIBO), as per Plastic Waste Management Rules, 2016.