Daily Prelims Notes 31 January 2023

January 31, 2023
Posted by: OptimizeIAS Team
Category: DPN

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Daily Prelims Notes

31 January 2023

Table Of Contents

1. Migratory birds and Earth’s Magnetic field

Subject: Environment

Section: Msc

Context: Disturbances in Earth’s magnetic field may be responsible for stranded migratory birds says the study.

More on the News:

A new study published by Scientific Reports has found that the Earth’s magnetic field may be partially to blame for birds losing their way when migrating- also referred to as avian vagrancy.
Though birds sometimes lose their way due to storms, cloud cover or dense fog, an increasing number of studies have suggested that they also rely on the Earth’s magnetic field to navigate, especially when flying long distances. There’s increasing evidence that birds can actually see geomagnetic fields.
Scientists analysed 2.2 million records of birds constituting 152 species that were captured and then released between 1960 and 2019, and found that the birds’ ability to use the geomagnetic field was hampered when there were disturbances in the magnetic field.
The geomagnetic field, or Earth’s invisible magnetic field which runs from the North Pole to the South Pole, is highly influenced by a number of internal and external factors.
When Earth’s magnetic field is disturbed, it would leave the birds with ‘distorted maps’ which would land them in completely different locations.
Ending up in unknown territory could potentially be fatal for birds as they may find it challenging to find suitable food or habitat.
On the other hand, it could also lead birds whose traditional habitats have changed due to climate change to more conducive homes, leading to range expansion.
Even when other factors like weather play a role, incidences of vagrancy among the captured birds and geomagnetic disturbances coincided strongly during spring and autumn migration. The correlation was especially pronounced during the autumn migration.
Though the study was conducted only on birds, its results could help researchers understand the reasons why other migrating species such as whales get stranded far from their usual domain.

2. Attorney General raises serious objections to filing of petitions in SC against States’ religious conversion laws

Subject: Polity

Section: Constitution

Context: Attorney General R. Venkataramani on Monday in the Supreme Court raised serious objections to petitions being filed in the Supreme Court against various States’ religious conversion laws.

Details:

The case concerns anti-conversion enactments of nine States, including Uttar Pradesh, Himachal Pradesh, Madhya Pradesh, Uttarakhand, Gujarat, Chhattisgarh, Haryana, Jharkhand and Karnataka
The petitions have argued that these State laws amount to undue interference in a person’s right of choice of faith and life partner.
One of the main petitions in the batch is by Jamiat Ulama-i-Hind, which has asked the Supreme Court to declare religious conversion laws, particularly of five States, as unconstitutional, saying they bring the personal decision of an individual to adopt another faith under state scrutiny.
The religious conversion laws under challenge mandate a person proposing to convert or a priest who would preside over the ceremony to take prior permission from the local District Magistrate. Besides, the burden of proof was on the convert to prove that he or she was not forced or “allured” to change faith.
The petitions have argued that the State laws have a ‘chilling effect’ on the right to profess and propagate one’s religion, enshrined in Article 25 of the Constitution.
The scrutiny by the state of a personal decision to convert is a grave assault on personal liberty of an individual and is violative of Articles 21 (right to dignity, privacy) and 25 (freedom of religion) of the Constitution
The government has opposed the locus of Citizens for Justice and Peace, an NGO associated with activist Teesta Setalvad, in approaching the apex court against religious conversion laws.
According to government these are State legislations and the State High Courts are hearing them. There are petitions pending there and the same petitioners have now filed petitions in the Supreme Court

Attorney General

The Attorney General (AG) of India is a part of the Union Executive. AG is the highest law officer in the country.
Article 76 of the Constitution provides for the office of AG of India.
AG is appointed by the President on the advice of the government.
S/he must be a person who is qualified to be appointed a judge of the Supreme Court, i.e. s/he must be a citizen of India and must have been a judge of some high court for five years or an advocate of some high court for ten years or an eminent jurist, in the opinion of the President.
Term of the Office: Not fixed by the Constitution.
Procedures and grounds for the removal of AG are not stated in the Constitution. S/he holds office during the pleasure of the President (may be removed by the President at any time).

Duties and Functions:

To give advice to the Government of India (GoI) upon such legal matters, which are referred to her/him by the President.
To perform such other duties of a legal character that are assigned to her/him by the President.
To appear on behalf of the GoI in all cases in the Supreme Court or in any case in any High Court in which the GoI is concerned.
To represent the GoI in any reference made by the President to the Supreme Court under Article 143 (Power of the President to consult the Supreme Court) of the Constitution.
To discharge the functions conferred on her/him by the Constitution or any other law.

Rights and Limitations:

S/he has the right to speak and to take part in the proceedings of both the Houses of Parliament or their joint sitting and any committee of the Parliament of which s/he may be named a member, but without a right to vote.
S/he enjoys all the privileges and immunities that are available to a member of Parliament.
S/he does not fall in the category of government servants. S/he is not debarred from private legal practice.
However, s/he should not advise or hold a brief against the GoI.
Solicitor General of India and Additional Solicitor General of India assist the AG in fulfillment of the official responsibilities.
Corresponding Office in the States: Advocate General (Article 165).

3. SC to examine pleas on electoral bond scheme today

Subject :Polity

Section : Elections

Context: The Supreme Court is going to examine whether petitions challenging the validity of electoral bonds scheme need to be referred to a Constitution Bench. The petitions, which have been in limbo for about eight years, allege that the scheme has opened the doors for anonymous donations to political parties days before polls are due.

Details:

The petition has argued that amendments made via Finance Acts of 2016 and 2017, both passed as Money Bills, have through the electoral bonds scheme, “opened the floodgates to unlimited political donations”.
The amendments have removed the caps on campaign donations by companies and have legalised anonymous donations.
The Finance Act of 2017 has introduced the use of electoral bonds which are exempt from disclosure under the Representation of Peoples Act, 1951, opening doors to unchecked, unknown funding to political parties.
The Finance Act, 2016 has also amended the Foreign Contribution Regulation Act (FCRA), 2010, to allow foreign companies with subsidiaries in India to fund political parties in India, effectively, exposing Indian politics and democracy to international lobbyists
The Supreme Court is on January 31 scheduled to examine whether petitions challenging the validity of electoral bonds scheme need to be referred to a Constitution Bench.
According to Department of Economic Affairs (DEA) electoral bonds were sold from March 2018 to December 2022 in 24 phases at a total cost of ₹10.23 crore to the taxpayer. The expenses include ₹8.33 crore in bank commission and ₹1.90 crore in printing charges. While Rs. 6.74 lakh electoral bonds were printed, bonds worth Rs. 11699.84 crore were sold,
Also in focus in the apex court is a challenge to a recent government notification allowing the sale of electoral bonds for an additional 15 days during Assembly election years.

4. Caesium-137

Subject :Science and Technology

Context: A tiny radioactive capsule is lost on a highway in Western Australia.

More on the News:

It was discovered the truck had lost a rather special piece of cargo somewhere along the way: a tiny capsule containing a highly radioactive substance, used in a radiation gauge on the mine site.
Western Australia’s Department of Fire and Emergency Services are now searching for the missing ceramic capsule.

Caesium-137:

The capsule contains caesium-137, a radioactive isotope which spits out electrons (or beta radiation) and high-energy photons (or gamma radiation).
The beta radiation is blocked by the shell of the capsule, but the gamma radiation streams right through
The source has an activity of 19 gigabecquerels, which means it emits about 19 billion high-energy photons per second.
Caesium-137 is dangerous stuff, but the radiation it produces can also be very useful. It is used in some cancer treatments, for measuring the thickness of metal or the flow of liquids, and for calibrating radiation gauges.
Half life: Caesium-137 has a half-life of just over 30 years, which means the source’s radiation output will halve every 30 years, until it disappears completely.

5. General Assembly divided over UN reforms

Subject: International Relations

Section: International organization

Concept :

The UN General Assembly President Csaba Kőrösi during his visit to India said that the reform of the UN Security Council was a member-driven process that would require the members of the UN General Assembly (UNGA) to collaborate and pass a resolution demanding the reforms.
The process to urge the UN Security Council (UNSC) or P5 to accept a proposal coming from the UN General Assembly for reform starts with the passage of a resolution in the UNGA.
However, such a resolution has not yet been passed so far as the UNGA has always been very much divided.
According to the UNGA President, among the 193 countries in the UNGA, there are five negotiating groups and they have been neutralising each other’s demands.
The UNGA President also claimed that the permanent members (P5) were “historically not enthusiastic” about reforms of the UN system and has argued that the role of the UNGA is as important as the P5 members of the UNSC in ensuring reform of the UN system.
He added that the system of veto in the UNSC was 77 years old and has become an instrument to block the work of the global body with respect to various issues.

Intergovernmental Negotiations (IGN)

The UNGA President in October 2022, tried to revive the process of introducing reforms by appointing two negotiators for the programme of reform to look after the Intergovernmental Negotiations (IGN) as co-chairs.
The appointed negotiators included two Permanent Representatives namely Tareq M.A.M. Albanai of Kuwait and Michal Mlynar of Slovakia.
The IGN is the team that takes care of the issue of UN reform.

India’s stand on UN reforms

India has shown dissatisfaction over the delay in implementing reforms of the UNSC.
The External Affairs Minister of India during the recently held Voice of the Global South Summit had described the UN as a “frozen 1945-invented mechanism” and had held that a few of the global powers were singularly focused on advancing their own interests rather than focusing on the well-being of the international community.
India’s Membership: India has served seven times in the UN Security Council as a non-permanent member and in January 2021, India entered the UNSC for the eighth time.

UNSC Reform

UNSC is considered the nucleus of the UN system.
It is the only body of UN which has teeth to bite. It has a major say in all critical appointment in UN
Chapter VI of the UN charter gives a mandate to UNSC to settle disputes peacefully through mediation and secure a ceasefire through peacekeeping force.
Chapter VII of UN charter give power to UNSC to impose military and economic sanctions

Procedure for the reform

The UNSC reform requires an amendment to the Charter of the United Nations.
In the first stage, the UN General Assembly must approve the reform by a two-thirds majority.
After approval from the UN General Assembly, the amended Charter must then be ratified by at least two-thirds of the member states, including the five permanent Security Council members.
According to Article 108 of the Charter all the permanent members of the Security Council must ratify the amendment otherwise it will not be accepted.

6. Centre to roll out process to set up 16th Finance Commission soon

Subject: Polity

Section: National body

Concept:

The Union Government is expected to initiate the process of establishing the 16th Finance Commission.
The Finance Commission is a constitutional body that is tasked with recommending the revenue-sharing model between the Union and the States and their distribution among the States.
As per the Indian Constitution, a Finance Commission is to be set up every five years.
The 15th Finance Commission was established in November 2017 with a mandate to make recommendations for the five-year period from 2020-21 and its mandate was extended by a year till 2025-26, breaking the cycle.
The last time a Finance Commission was granted a six-year time frame was for the 9th Finance Commission which was set up in 1987.
The Union Finance Ministry will usually notify the terms of reference for the Finance Commission and the Commission is usually given close to two years to deliberate on its terms of reference, consult States and frame its recommendations.
Experts believe that a key new challenge for the 16th Finance Commission would be the co-existence of the GST Council which is another permanent constitutional body.
Experts feel that GST Council’s decisions on tax rate changes could alter the revenue calculations made by the Finance Commission for sharing fiscal resources.

Finance Commission

Finance Commission is a constitutional body for the purpose of allocation of certain revenue resources between the Union and the State Governments.
It was established under Article 280 of the Indian Constitution by the Indian President.
It was created to define the financial relations between the Centre and the states. It was formed in 1951.
It shall be the duty of the Commission to make recommendations to the President in relation to the:
the distribution between the Union and the States of the net proceeds of taxes which are to be, or maybe, divided between them and the allocation between the States of the respective shares of such proceeds;
the principles which should govern the grants in aid of the revenues of the States out of the Consolidated Fund of India;
any other matter referred to the Commission by the President in the interests of sound finance
The Commission shall determine their procedure and shall have such powers in the performance of their functions as Parliament may by law confer on them.

Composition of Finance Commission

Chairman: Heads the Commission and presides over the activities. He should have had public affairs experience.
Four Members.
The Parliament determines legally the qualifications of the members of the Commission and their selection methods.

Qualifications of Finance Commission Chairman and Members

Parliament specifies chairman to be a person of experience in public affairs.
The 4 members should be or have been qualified as High Court judges, or be knowledgeable in finance or experienced in financial matters and are in administration, or possess knowledge in economics.
All the appointments are made by the President of the country.
Grounds of disqualification of members: found to be of unsound mind, involved in a vile act, if there is a conflict of interest
The tenure of the office of the Member of the Finance Commission is specified by the President of India and in some cases, the members are also re-appointed.
The members shall give part-time or service to the Commission as scheduled by the President.
The salary of the members is as per the provisions laid down by the Constitution.

Advisory Role of Finance Commission

The recommendations made by the Finance Commission are of an advisory nature only and therefore, not binding upon the government.
It is up to the Government to implement its recommendations on granting money to the states.

7. Budget terms

Subject: Economy

Section :Fiscal Policy

Concept:

Budget and Revised Estimate

Budget Estimates represent the idea of upcoming government projects and their progression. The revised Estimate explains the expenses that are going to happen.
Budget estimates work like a critical process and show the transparency work and budget fund of the government. The budget estimates session committee asks every finance minister and public services about their action decisions and advice for upcoming projects for public benefit.
Revised estimates only get sanction permission if the previous original sanctioned estimates go more than 5% due to material quality matter and rates. It also covers the fact of material quantity.
It is an evaluation that is presented in the middle of the year.

Deficits in the budget

Fiscal deficit by definition is the difference between total expenditure and the sum of revenue receipts and non-debt receipts. It indicates how much the Government is spending in net terms.
Since positive fiscal deficits indicate the amount of expenditure over and above revenue and non-debt receipts, it needs to be financed by a debt-creating capital receipt.
Primary deficit is the difference between fiscal deficit and interest payments.
Revenue deficit is derived by deducting capital expenditure from fiscal deficits.

FRBM Act and amendment

It was enacted in August 2003.
It aims to make the Central government responsible for ensuring inter-generational equity in fiscal management and long-term macro-economic stability.
The Act envisages the setting of limits on the Central government’s debt and deficits.
It limited the fiscal deficit to 3% of the GDP and mandates that the revenue deficit should be brought down to zero.
To ensure that the States too are financially prudent, the 12th Finance Commission’s recommendations in 2004 linked debt relief to States with their enactment of similar laws.
The States have since enacted their own respective Financial Responsibility Legislation, which sets the same 3% of Gross State Domestic Product (GSDP) cap on their annual budget deficits.
It also mandates greater transparency in fiscal operations of the Central government and the conduct of fiscal policy in a medium-term framework.
The Budget of the Union government includes a Medium Term Fiscal Policy Statement that specifies the annual revenue and fiscal deficit goals over a three-year horizon.
The rules for implementing the Act were notified in July 2004.

Amendment in 2018

The rules were amended in 2018, and most recently to the setting of a target of 3.1% for March 2023.
The NK Singh committee (set up in 2016) recommended that the government should target a fiscal deficit of 3% of the GDP in years up to March 31, 2020 cut it to 2.8% in 2020-21 and to 2.5% by 2023.

Expenditure

Capital expenditure:
- Capital expenditure is incurred with the purpose of increasing assets of a durable nature or of reducing recurring liabilities.
- Consider the expenditure incurred for constructing new schools or new hospitals. All these are classified as capital expenditure as they lead to creation of new assets.
Revenue expenditure:
- Revenue expenditure involves any expenditure that does not add to assets or reduce liabilities.
- Expenditure on the payment of wages and salaries, subsidies or interest payments would be typically classified as revenue expenditure.

Receipts

The receipts of the Government have three components —revenue receipts, non-debt capital receipts and debt-creating capital receipts.
Revenue receipts involve receipts that are not associated with increase in liabilities and comprise revenue from taxes and non-tax sources.
Non-debt receipts are part of capital receipts that do not generate additional liabilities. Recovery of loans and proceeds from disinvestments would be regarded as non-debt receipts since generating revenue from these sources does not directly increase liabilities, or future payment commitments.
Debt-creating capital receipts are ones that involve higher liabilities and future payment commitments of the Government.

8. Kerala Bar Council seeks lawyer explanation on charge of bribing judges

Subject : Polity

Section :Judiciary

Concept :

Acting on a complaint forwarded from the Union Law Ministry, the Bar Council of Kerala on Monday decided to initiate a probe into the allegation that Kerala High Court Advocates’ Association president Saiby Jose Kidangoor has taken money from clients for allegedly bribing HC judges.

Bar Council of India

The Bar Council of India is a statutory body created by Parliament under the Advocates Act, 1961 to regulate and represent the Indian bar.
It performs the regulatory function by prescribing standards of professional conduct and etiquette and by exercising disciplinary jurisdiction over the bar.
It also sets standards for legal education and grants recognition to Universities whose degree in law will serve as qualification for enrolment as an advocate.
In addition, it performs certain representative functions by protecting the rights, privileges and interests of advocates and through the creation of funds for providing financial assistance to organise welfare schemes for them.
It consists of members elected from each state bar council, and the Attorney General of India and Solicitor General of India who are ex-officio members of the bar council.
The members from the state bar council are elected for a period of five years.
The Act provided for the constitution of Bar Council of India, State Bar Councils, their powers, enrolment, qualification, disqualification of Advocates etc.

State Bar Councils

The State Bar Councils are statutory bodies established under Section 3 of the Advocates Act, 1961.
These were set up as different councils for the states and union territories of India.
They act as regulatory bodies, making rules for the legal profession and education in their respective states and also act as the representatives of the advocates of that state, thereby acting in their interests.
The main functions of the State Bar Councils as specified under Section 6 of the Advocates Act are to act in the interest of the advocates, to bring in legal reform, to regulate the conduct of advocates, to establish funds and to oversee the Legal Education in the respective states among others.
They work in coordination with and under the supervision of the Bar Council of India, which is a national body established under Section 4 of the Advocates Act, 1961.

9. Many family offices interested in Adani FPO, may invest ₹9,000 crore

Subject: Economy

Section: Financial market

Concept:

The ongoing FPO by Adani Enterprises could get a boost on Tuesday with investments worth about ₹9,000 crore expected from family offices in Dubai and India.
A family office is an entity created by high net-worth individuals to manage their money-related matters including investments.
This will be in addition to the ₹6,000 crore from anchor investors and ₹3,200 crore from International Holding Company.
The fresh investments will take Adani Enterprise closer to its target of ₹20,000 crore from the FPO.

Follow on Public Offer (FPO)

A follow-on public offer (FPO), also known as a secondary offering, is the additional issuance of shares after the initial public offering (IPO).
Companies usually announce FPOs to raise equity or reduce debt.
The two main types of FPOs are dilutive—meaning new shares are added—and non-dilutive—meaning existing private shares are sold publicly.
An at-the-market offering (ATM) is a type of FPO by which a company can offer secondary public shares on any given day, usually depending on the prevailing market price, to raise capital.

10. Understanding Financial Markets

Subject: Economics

Concept:

Financial market refers to a place where buyers and sellers participate in the trade. It is platform that facilitates traders to buy and sell financial instruments/securities.
The main functions of the financial market are :
It provides facilities for interaction between the investors and the borrowers.
It provides pricing information resulting from the interaction between buyers and sellers in the market when they trade the financial assets.
It provides security to dealings in financial assets.
It ensures liquidity by providing a mechanism for an investor to sell the financial assets.
It ensures a low cost of transactions and information.

Financial markets consist of two major segments:

Money Market:

Market for overnight to short-term funds and instruments having a maturity period of 1 or less than 1 year.
This market encompasses the trading and issuance of short term non equity debt instruments including treasury bills, commercial papers, bankers acceptance, certificates of deposits, etc.
Money Market consists of all the organizations and institutions which deal or facilitate dealings in short term debt instruments. These institutions include RBI, commercial banks, cooperative banks, non-banking financial companies like LIC, GIG, UTI, and special institutions like Discount and Finance House of India (DFHI). The important money market instruments or securities (financial assets) are as follows.
RBI is the primary regulator for money market.

Capital Market:

Market for long-term funds–both equity and debt–that have maturity period greater than year.
In this market, the capital funds comprising of both equity and debt are issued and traded. This also includes private placement sources of debt and equity as well as organized markets like stock exchanges.
SEBI is the primary regulator for capital market.
Capital market can be further divided into primary and secondary markets.

Primary Market :

In primary Market, new securities are issued for the first time. It helps a company /government to connect with the investor.
It has no separate physical existence but classified as such for economic analysis.

Secondary Market :

Secondary Market is a place where the old securities are resold.
It has physical existence such as Bombay Stock Exchange (BSE) at Dalal Street, Mumbai. Provides liquidity & confidence to investors to buy new securities in Primary Market.
Secondary market could be either auction or dealer market. While stock exchange is the part of an auction market, Over-the-Counter (OTC) is a part of the dealer market.

11. LIC exposure to adani group is under 1% of AUM

Subject : Economy

Section: Financial market

Concept :

India’s largest insurer LIC on Monday (30 January) said that its exposure in the Adani Group is just 0.975 per cent of its total assets under management (AUM) at book value.
The statement by LIC comes amid reports about LIC’s exposure to Adani Group, which is mired in controversy after US-based short seller Hindenburg Research released a report.

Assets under management (AUM)

It measures the total market value of all the financial assets which a financial institution manages on behalf of its clients and themselves.
AUM is an indicator of the size and success of a given fund house.

About LIC

LIC stands for Life Insurance Corporation of India, it is a governmental organization established in the year 1956.
LIC is actually an insurance and investment organization that was invented from the Life Insurance Act of India (Statutory Body).
The aim of LIC is to provide the citizens of India with a larger return on their economic security.
The services and products offered by the LIC are comparatively good than the other investment companies in the market. Through LIC all the citizens can get a quality life with assured economic development.
LIC is fully owned by the government.
LIC has equity investments worth over ₹10 trillion, while its total assets under management are valued at around ₹41 trillion (Approx) as on 2022.