DAILY PRELIMS NOTES 28 JANUARY 2025
- January 28, 2025
- Posted by: OptimizeIAS Team
- Category: DPN
DAILY PRELIMS NOTES
28 JANUARY 2025
1. Government Begins Search for Successor to SEBI Chairperson Madhabi Puri Buch
Sub : Eco
Sec: Capital Market
Why in News?
- The Government of India has started the process of appointing a new SEBI (Securities and Exchange Board of India) chairperson, as Madhabi Puri Buch’s tenure ends on February 28, 2025.
Context and Key Highlights
- Application Process and Timeline:
- The Department of Economic Affairs (Finance Ministry) initiated the search for a new SEBI chairperson.
- Key Developments During Buch’s Tenure:
- Firsts:
- Buch was the first woman and first private sector professional to head SEBI.
- Reforms Led:
- Faster equity settlements.
- Enhanced FPI (Foreign Portfolio Investor) disclosures.
- Expanded mutual fund penetration.
- Controversies:
- Faced allegations of conflict of interest linked to investments in offshore entities allegedly connected to the Adani Group.
Process for the appointment of the SEBI chief
- The government has established the Financial Sector Regulatory Appointment Search Committee (FSRASC) to recommend candidates for board-level positions of financial sector regulatory bodies like SEBI.
- Leadership: The committee is chaired by the Cabinet Secretary.
- The committee invites applications for the position and shortlists the candidate.
- FSRASC has the authority to recommend individuals who haven’t applied, based on merit.
- The shortlisted candidates are interviewed by a panel that includes:
- The Economic Affairs Secretary.
- Three external experts with domain knowledge.
- Based on interviews and deliberations, the FSRASC forwards its recommendations to the Appointments Committee of the Cabinet (ACC).
- The ACC, headed by the Prime Minister, makes the final decision.
Tenure and Terms
- As per the SEBI Act, the SEBI chairman is appointed for:
- A maximum tenure of five years or until the age of 65 years, whichever is earlier.
- Typically, the initial tenure is three years, with the possibility of a two-year extension based on performance.
- Eligibility Criteria:
- Candidates must possess “high integrity, eminence, and reputation”.
- Age: Preferably above 50 years.
- Experience: Over 25 years in relevant fields such as law, finance, economics, or accountancy.
- Must demonstrate capacity to address securities market challenges and not have any conflicting financial interests.
2. RBI Unveils Measures to Inject ₹1.5 Trillion Liquidity Amid Speculations of Imminent Rate Cut
Sub: Eco
Sec: Monetary Policy
Why in News?
- The Reserve Bank of India (RBI) has announced a series of liquidity-enhancing measures worth ₹1.5 trillion to address a persistent liquidity deficit in the banking system, fuelling market expectations of a rate cut in the upcoming monetary policy on February 7, 2025.
Context and Key Measures:
- Rising Liquidity Crunch:
- System-wide liquidity deficit peaked to ₹2.39 trillion on average in the fortnight ending January 24, 2025.
- Liquidity crunch driven by tightened banking regulations and elevated cash demands.
- Liquidity-Infusion Announcements:
- Open Market Operations (OMO):
- RBI will purchase ₹60,000 crore of government securities in three tranches of ₹20,000 crore each on January 30, February 13, and February 20.
- 56-Day Variable Rate Repo Auction:
- Scheduled on February 7, worth ₹50,000 crore to provide short-term liquidity.
- Dollar/Rupee Swap Auction:
- RBI will conduct a $5 billion swap auction on January 31 for six months, targeting forex reserves and rupee stability.
- Forex Challenges:
- RBI sold $130 billion since October to defend the rupee, yet the currency slid to ₹87/$1 in mid-January from ₹83.75/$1 in October.
- Liquidity measures aim to reduce forex market volatility and stabilize the rupee.
- Market Sentiments:
- Market analysts view these steps as a prelude to a repo rate cut on February 7.
- Current repo rate stands unchanged at 6.5% since February 2023.
- Analysts highlight RBI’s increasing confidence in inflation management and addressing banking liquidity needs.
- Challenges to OMO Effectiveness:
- Banks may not effectively participate in OMOs due to regulatory liquidity coverage ratio (LCR) requirements.
- Insurers and provident funds benefit more from OMOs but contribute limited direct liquidity to the banking system.
- OMOs could reduce government bond yields without proportionally boosting liquidity for banks.
Open Market Operations (OMO)
OMOs are tools used by a central bank (e.g., the Reserve Bank of India, RBI) to control liquidity in the economy by buying or selling government securities in the open market.
Objective: To regulate money supply and influence interest rates.
- Buying securities: Adds liquidity to the banking system.
- Selling securities: Drains liquidity from the banking system.
Frequency: Conducted on a daily or periodic basis, depending on market conditions.
Impact: Helps manage inflation, stabilize the currency, and control borrowing costs.
Variable Rate Repo Auction
A monetary tool where the central bank lends money to commercial banks at a variable interest rate, determined through an auction process.
Purpose: To manage short-term liquidity in the banking system.
Key Features:
- Repo Rate: The interest rate at which the central bank lends to banks against government securities.
- Variable Rate: Unlike a fixed repo rate, the rate is determined through competitive bidding during the auction.
- Impact: Helps fine-tune liquidity and ensures banks meet their short-term cash requirements.
Dollar/Rupee Swap
A tool used by the central bank to manage liquidity and stabilize the currency by swapping U.S. dollars for Indian rupees or vice versa.
Mechanism:
- The central bank buys or sells dollars in exchange for rupees in the forex market.
- In a Buy/Sell Swap, the central bank buys dollars from banks and promises to sell them back at a later date.
- In a Sell/Buy Swap, the central bank sells dollars and commits to buying them back later.
Objective:
- Stabilize the rupee in case of volatility.
- Manage foreign exchange reserves.
- Provide rupee liquidity or absorb excess liquidity.
Impact: Influences exchange rates, manages liquidity, and provides a mechanism for hedging foreign exchange risks.
Liquidity Coverage Ratio (LCR)
Liquidity Coverage Ratio (LCR) is a key financial metric introduced under the Basel III framework by the Basel Committee on Banking Supervision (BCBS). It aims to ensure that banks have sufficient high-quality liquid assets (HQLA) to survive a 30-day period of significant stress.
3. India’s Foundational AI Strategy Sparks Debate Amid Deepseek’s Global Rise
Sub: Sci
Sec: Awareness in IT
Why in News?
Deepseek, a Chinese AI foundational model, has achieved rapid global adoption, sparking debates on India’s approach to AI development.
The collaboration between India’s AionOS and Deepseek highlights India’s reliance on leveraging existing models rather than creating its own foundational AI models.
Context:
- Deepseek’s Success:
- Developed in China, Deepseek rivals OpenAI’s ChatGPT in performance, despite limited access to advanced GPUs and processors.
- Its rapid adoption includes global partnerships and success on app store fronts, even in the U.S.
- India’s Current AI Approach:
- Indian companies focus on leveraging open-source AI models and downstream applications instead of investing in expensive foundational models.
- The BHASHINI initiative aims to develop AI-based local language solutions to improve linguistic accessibility across India.
- AionOS-Deepseek Collaboration:
- AionOS, a Gurugram-based firm, partnered with Deepseek to establish an AI centre of excellence in Indonesia in collaboration with Indosat.
- This initiative focuses on Indonesia, with no direct plans for similar efforts in India.
Challenges:
- High costs for developing foundational AI models.
- Limited computing and infrastructure in India, leading to dependency on foreign resources.
- Competing with nations like China and the U.S., which dominate foundational AI development.
What is DeepSeek?
DeepSeek is a Chinese artificial intelligence (AI) company that has recently garnered significant attention for its rapid advancements and disruptive impact on the global tech industry.
Background and Foundation: Founded in 2023 by Liang Wenfeng, DeepSeek is based in Hangzhou, China. The company operates as an AI research lab dedicated to pursuing Artificial General Intelligence (AGI) and is solely funded by the Chinese hedge fund High-Flyer. DeepSeek focuses on developing open-source large language models (LLMs) and has committed to open-sourcing all its models.
Key Developments and Models
DeepSeek-V3: Released in December 2024, this model achieved a significant breakthrough in inference speed over previous models and topped the leaderboard among open-source models. It rivals the most advanced closed-source models globally.
DeepSeek-R1: Launched in January 2025, the R1 model matched the performance of OpenAI’s leading models on several math and reasoning metrics, despite being developed at a fraction of the cost. This model’s release led to significant disruptions in the tech industry, including a substantial sell-off in U.S. tech stocks.
BHASHINI (Bharatiya Bhasha Interface) initiative
The BHASHINI (Bharatiya Bhasha Interface) initiative is a project by the Government of India under the Ministry of Electronics and Information Technology (MeitY).
It aims to leverage Artificial Intelligence (AI) and Natural Language Processing (NLP) to make Indian languages accessible across digital platforms, promoting inclusivity and reducing the language barrier in technology usage.
4. Supreme Court Bench passes order on burial of Chhattisgarh pastor
Sub : Polity
Sec: Constitution
Context: -Two judges on a Division Bench of the Supreme Court were unable on Monday (January 27, 2025) to reach a consensus on the place of burial of the body of a pastor lying in a morgue in Chhattisgarh for over three weeks since his death on January 7
Noting the body had been lying in the mortuary for three weeks and deserved a dignified funeral, the Bench finally directed the body to be buried at the designated Christian graveyard in Karkapal at the earliest using court’s extraordinary powers under Article 142 of the Constitution .
Constitutional Angles:
- Right to Dignity under Article 21
- Justice Nagarathna emphasized that the right to dignity extends even after death.
- Prolonged denial of burial violated the deceased’s and family’s fundamental rights under Article 21.
- Right to Equality under Article 14
- Denial of a designated Christian graveyard by the local panchayat was deemed discriminatory.
- This violated equality before law and equal protection of laws, principles enshrined in Article 14.
- Usage of Article 142
- Justices Nagarathna and Sharma employed the top court’s extraordinary powers under Article 142 of the Constitution to bring a quietus to the case.
- Principle of Secularism and Fraternity
- Justice Nagarathna criticized the gram panchayat for undermining secularism, a basic feature of the Constitution.
- Secularism, together with the concept of fraternity, as envisaged under our Constitution, is a reflection of harmony between all religious faiths leading to common brotherhood and unity of the social fabric in the country.
About Article 142:
- Extraordinary Powers of the Supreme Court:Provides the Court with broad powers to ensure “complete justice” in cases where the ordinary application of law may not suffice.
- Binding Nature:Decisions under Article 142 are binding and enforceable across India.
- Scope:Applies to all cases or matters pending before the Court.
- Purpose:The powers are discretionary and exercised to bridge gaps where statutory law or precedent may fall short.
Landmark Cases:
- Visakha v. State of Rajasthan (1997): Laid down guidelines for sexual harassment at the workplace in the absence of existing legislation.
- Babri Masjid Demolition Case (2019): Used Article 142 to resolve the Ayodhya dispute by ensuring equitable distribution of land between the parties.
- MC Mehta v. Union of India, the Court has used Article 142 to enforce measures for environmental protection.
5. JPC rejects all amendments to Waqf Bill made by Opposition
Sub: Polity
Sec: Parliament
Context: Amidst the Opposition’s complaint that its voice was not heard, the Joint Parliamentary Committee (JPC) on the Waqf (Amendment) Bill accepted 32 out of the more than 500 amendments moved, after a vote.
Key Features of the Waqf (Amendment) Bill, 2024:
- Renaming the Act: The Waqf Act, 1995, is renamed as the Unified Waqf Management, Empowerment, Efficiency, and Development Act, 1995, to emphasize efficient management, empowerment, and development of Waqf boards and properties.
- Formation of Waqf:
- Only Muslims practicing Islam for five years can declare waqf, and they must own the property.
- Removes waqf by user.
- Waqf-alal-aulad (endowment when the line of succession ends )cannot deny inheritance rights, including those of women heirs.
- Government Property as Waqf: Government property identified as waqf will cease to be so. Ownership disputes will be resolved by the Collector, who will submit a report to the state government and update revenue records.
- Determining Waqf Property: The Waqf Board’s power to determine if a property is waqf is removed.
- Waqf Surveys: Collectors will now conduct waqf surveys under state revenue laws, replacing Survey Commissioners.
- Central Waqf Council:
- The Council, chaired by the Union Minister, will include two non-Muslim members. MPs, judges, and eminent persons need not be Muslims.
- Muslim members will include representatives of Muslim organizations, Islamic scholars, and Waqf Board chairpersons, with at least two being women.
- Waqf Boards:
- State governments will nominate Board members (MPs, MLAs, MLCs, Bar Council members), who need not be Muslims.
- Boards must include: (i) two non-Muslim members, (ii) one member each from Shias, Sunnis, and Muslim backward classes, and (iii) representatives of Bohra and Agakhani communities, if applicable.
- At least two Muslim members must be women.
- Tribunals:
- Tribunal chairs must be current or former District Court judges. Other members will include an officer of the rank of joint secretary to the state government.
- Appeals against Tribunal decisions may now be filed in the High Court within 90 days.
- Powers of Central Government:
- The central government will oversee waqf registration, accounts publication, and Board proceedings.
- Audits can be conducted by the CAG or designated officers.
- Separate Waqf Boards: Separate waqf boards may be established for Sunni, Shia, Bohra, and Agakhani sects based on property or income thresholds.
Joint Parliamentary Committee (JPC)
What is a JPC?
- A Joint Parliamentary Committee (JPC) is an ad hoc committee constituted by the Indian Parliament to examine specific issues or bills that require detailed scrutiny.
- It comprises members from both the Lok Sabha and the Rajya Sabha.
Purpose of JPCs:
JPCs are established for:
- Legislative Scrutiny: To examine specific bills, as in the case of the Waqf (Amendment) Bill, 2024.
- Investigative Role: To probe specific issues, especially those involving public interest or controversies.
- The mandate of a JPC depends on the motion constituting it. This need not be limited to the scrutiny of government finances
- JPC recommendations have persuasive value but the committee cannot force the government to take any action on the basis of its report.
- The government may decide to launch fresh investigations on the basis of a JPC report. However, the discretion to do so rests entirely with the government.
- The government is required to report on the follow-up action taken on the basis of the recommendations of the JPC and other committees.
- The committees then submit ‘Action Taken Reports’ in Parliament on the basis of the government’s reply.
- These reports can be discussed in Parliament and the government can be questioned on the basis of the same.
- The government can disagree with the JPC’s findings and refuse to take such action.
Significant JPCs in the Past:
- Bofors Scandal (1987):
- Investigated allegations of kickbacks in the purchase of Bofors guns.
- Harshad Mehta Securities Scam (1992):
- Probed irregularities in the stock market.
- Ketan Parekh Stock Market Scam (2001):
- Investigated another stock market scam involving manipulation.
- 2G Spectrum Scam (2011):
- Investigated irregularities in the allocation of 2G spectrum.
- JPC on Personal Data Protection Bill (2021):
- Examined the Personal Data Protection Bill, which aimed to regulate data privacy.
6. Impact of Coal Dust on Vegetation in Odisha
Sub : Env
Sec :Pollution
Why in News
- A recent study highlights how coal dust from mining operations in Jharsuguda, Odisha, adversely affects vegetation by reducing carbon absorption and increasing carbon dioxide emissions. This could contribute to global warming and disrupt local ecosystems. The study, combining satellite data and fieldwork, offers new insights into tackling dust pollution near mining areas.
Historical Context:
- In 1900, coal deposits were discovered in Jharsuguda during railway construction by the Bengal Nagpur Railway under British rule.
- The first coal mine in Jharsuguda was established in 1909.
- Today, the region produces over 15 million tonnes of coal annually.
- India ranks second globally in coal production and consumption, behind China.
Coal:
- Coal is a sedimentary, organic rock which is flammable composed primarily of carbon along with other elements such as hydrogen, sulphur, oxygen, and nitrogen.
- It is used mainly in the generation of thermal power and smelting of iron ore.
- Also called black gold.
Types Of Coal:
- On the basis of carbon content and order of formation:
- PEAT– 40% CARBON (NE)
- LIGNITE– 40-60% CARBON – Low Quality – Brown in colour- found in Neyveli in TN.
- BITUMINOUS– 60-80% CARBON. It is soft coal. In India, much of the coal comes under this category.
- ANTHRACITE– 80-90% CARBON. It is mainly found in the district of Reasi in the state of Jammu and Kashmir.
- On the basis of usage:
- Coking coal– High carbon content, less moisture, less sulphur, less ash. It forms coke when heated in the absence of air. It is used in the iron and steel industry to make pig iron.
- Non-Coking coal– It is used in the thermal power plants to generate power. Sulphur content is high and hence cannot be used in iron and steel industry.
- On the basis of origin:
- Gondwana Coal- old-[250 million years old]: The most important Gondwana coal in India are found exclusively in peninsular plateau especially in Damodar, Godavari,Mahanadi and Sone valley
- Jharia (JH) is the largest coal field in India followed by Raniganj (WB).
- Other important coal mining centre are: Singrauli– MP, Korba- CH, Talcher and Rampur- Odisha, Singareni– Telangana, Chanda-Wardha– MH, Pandur– AP
- Tertiary coal fields [15 – 60 million years old]: Tertiary coal occurs in Assam, Meghalaya, Arunachal Pradesh and Nagaland
- Gondwana Coal- old-[250 million years old]: The most important Gondwana coal in India are found exclusively in peninsular plateau especially in Damodar, Godavari,Mahanadi and Sone valley
Impact of Coal Dust on Vegetation:
- Most coal mines in Jharsuguda are open-cast, where surface layers of soil and rocks are removed to access coal.
- While cost-effective, this process releases significant dust into the air, polluting the environment.
- Dust settles on leaves, clogging stomata—tiny pores that regulate the exchange of carbon dioxide, oxygen, and water vapour.
- Clogged stomata hinder photosynthesis and disrupt temperature regulation in plants.
- Research shows that dust reduces carbon absorption by 2-3 grams per square meter of leaf area.
Research Methodology:
- Use of Satellite Data: Researchers from the University of Southampton (UK) and NIT Rourkela employed satellite data to study the extent of dust pollution.
- Satellites used:
- Landsat-8 and Landsat-9 (launched by NASA and the US Geological Survey).
- Sentinel-2 (European Space Agency).
- Planet Scope (Planet Labs).
- Satellite images capture light reflected by leaves at various wavelengths. Dust on leaves alters this reflection, enabling researchers to estimate the amount of dust deposition.
Solutions to Mitigate Dust Pollution:
- Satellite-based methods provide a cost-effective and efficient tool for tracking dust pollution near coal mines.
- Identifying hotspots can enable authorities to implement preventive measures.
- Use of water sprays to suppress dust.
- Installation of dust barriers around mining areas.
- Adoption of stringent regulations to minimize emissions.
7. Trump’s focus on American greatness puts spotlight on little-known panel
Sub : IR
Sec: Places in news
Context:
- President Donald Trump, soon after taking office, issued an executive order to celebrate American greatness by recognizing significant historical contributions.
- This included changing the name of North America’s tallest peak from Denali back to Mount McKinley, honouring President William McKinley.
- He also directed the U.S. Interior Department to collaborate with Alaska Natives and others to name landmarks reflecting their history and culture.
U.S. Board on Geographic Names:
- Established in 1890 by President Benjamin Harrison to resolve confusion about geographic landmarks as settlers expanded westward post-Civil War.
- President Theodore Roosevelt further strengthened the board’s role in 1906 by making it responsible for standardizing geographic names across the federal government.
- The board was dissolved in 1934 by President Franklin Roosevelt, transferring its duties to the U.S. Interior Department.
- After World War II, Congress reinstated the board to ensure consistent naming across federal agencies.
Role and Composition of the Board:
- The Board consists of representatives from several federal agencies, including the Department of the Interior, Commerce Department, the U.S. Postal Service. Even the CIA plays a role when the board considers place names beyond U.S. borders.
- The board’s members are appointed for two-year terms and work together to decide on place names that reflect the nation’s history and culture.
- The board’s policies emphasize that geographic names reflect both the indigenous history and the evolving demographic landscape of the United States.
- The Board has been active in removing derogatory terms from geographic names, especially those related to marginalized communities.
Process of Geographic renaming:
- Any individual, government agency, or organization can propose a name change to the Board, provided there is a compelling reason and adequate evidence.
- Once a decision is made, the names are officially listed in the federal Geographic Names Information System, used by federal agencies.
- The board’s decisions are binding only within the federal government, meaning private entities like Google and Apple may continue using previous names.
Recent changes in names:
- Recently, the board has been involved in renaming several sites that carry offensive or racially insensitive names, such as the 2023 decision to rename Mount Evans to Mount Blue Sky.
- The renaming of Phoenix’s prominent mountain to Piestewa Peak in 2008 honoured Army Specialist Lori Piestewa, the first Native American woman to die in combat.
Case of Mount McKinley:
- Mount McKinley, initially named in honour of President William McKinley, was a name attached by a gold prospector in 1896, despite local indigenous groups having their own name for the peak, “Deenaalee”, meaning “the high one”.
- In 2015, President Barack Obama issued an executive order to officially restore the name Denali, respecting the local Koyukon Athabaskan tradition.
- The name change reflected cultural respect for Alaska Natives, as the peak is sacred to them.
8. In the Gulf military drills, Iran deploys AI-equipped missiles
Sub : IR
Sec: Places in news
Context:
- Iran’s Revolutionary Guards recently conducted military drills in the Persian Gulf, showcasing missiles equipped with artificial intelligence (AI).
- The move aligns with recent remarks by Iran’s Supreme Leader, Ayatollah Ali Khamenei, who urged Iranian authorities to “master artificial intelligence” to strengthen the country’s defence capabilities.
Deployment of AI-Equipped Missiles:
- The Revolutionary Guards’ naval force utilized Ghaem and Almas missiles, both developed domestically by Iran’s Defence Ministry, featuring artificial intelligence for enhanced targeting and precision.
- The missiles were launched from Mohajer-6 and Ababil-5 drones, which are unmanned aerial vehicles (UAVs) capable of carrying and launching missiles.
- According to reports, the missiles successfully destroyed hypothetical enemy targets during the drills, demonstrating their operational effectiveness.
Significance of the Military Exercises:
- The exercises took place in strategic locations, including Bushehr and Khuzestan provinces, which are home to Iran’s major oil and petrochemical facilities, as well as the Bushehr nuclear power plant.
- The drills were focused on simulating the defence of these critical infrastructure sites, which hold significant economic and geopolitical importance for Iran.
- The presence of these sensitive locations in the areas where the drills were conducted highlights the importance of Iran’s defence preparedness in safeguarding its resources and nuclear facilities.
- The missile test and military drills were conducted shortly after the inauguration of U.S. President Donald Trump, who had previously implemented a “maximum pressure” campaign against Iran during his first term.
Persian Gulf:
- The Persian Gulf is an extension of the Indian Ocean located between Iran and the Arabian Peninsula. It is connected to the Gulf of Oman in the east by the Strait of Hormuz.
- Eight nations have coasts along the Persian Gulf: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.