Daily Prelims Notes 4 September 2024

Daily Prelims Notes

4 September 2024

Table Of Contents

1. How can biotechnology be harnessed for economic development?
2. Households Rebuild Financial Savings: Insights from address of RBI Deputy Governor Patra
3. China Initiates Anti-Dumping Probe on Canadian Canola Imports
4. Impact of Corporate Tax Cuts on Wages and Investment
5. Exploring the Link Between Seismic Activity and Gold Nugget Formation in Quartz Veins
6. OpenAI’s Project Strawberry: The Future of AI’s Advanced Capabilities
7. New study suggests existence of a dockyard at Lothal, Gujarat, during Harappan Civilisation
8. Centre gives nod to defence proposals worth ₹1.44 lakh cr.

1. How can biotechnology be harnessed for economic development?

Sub: Sci

Sec: Biotechnology

BioE3 Policy:

The Centre has introduced the BioE3 (Biotechnology for Economy, Environment, and Employment) policy to:

• Revolutionize industrial and manufacturing processes
• Promote sustainability and environmental friendliness
• Develop manufacturing methods mimicking natural biological systems
• Advance the industrialization of biology for economic growth

Understanding Biotechnology:

Biotechnology is the science of manipulating biological organisms and processes to develop desired products or applications. It includes:

• Genomics
• Genetic engineering
• Synthetic biology
• Bioinformatics
• Gene therapy

Recent advancements:

• Gene editing
• Protein synthesis
• AI integration

Potential Applications and Benefits:

1. Animal-free milk:
   • Uses precision fermentation
   • Lower carbon footprint
   • Higher nutritional value
2. Biodegradable bioplastics:
   • Made from renewable sources (e.g., corn starch, sugarcane)
   • Reduces environmental hazards
3. Carbon capture using microorganisms:
   • Converts CO2 into useful compounds (e.g., biofuels)
   • Eliminates need for storage
4. Synthetic biology and organ engineering:
   • Design of novel organisms for specific functions
   • Lab-grown organs to eliminate donor need

BioE3 Policy Benefits for India:

Economic Impact

• Biomanufacturing is expected to have $2-4 trillion impact over the next decade

Strategic Advantages

• Builds competencies and promotes research
• Trains talent for future technological maturity
• Aligns with other initiatives:
  • Artificial Intelligence Mission
  • Quantum Mission
  • Green Hydrogen Mission

Biomanufacturing Hubs:

Planned establishment across India, focusing on:

1. Bio-based chemicals and enzymes
2. Functional foods and smart proteins
3. Precision biotherapeutics
4. Climate-resilient agriculture
5. Carbon capture and utilization
6. Marine and space research
   • Waste recycling systems for space habitats
   • Novel marine compounds for pharmaceuticals and cosmetics

Implementation:

• Requires collaboration among 15+ government departments
• Led by the Department of Biotechnology

2. Households Rebuild Financial Savings: Insights from address of RBI Deputy Governor Patra

Sub: Eco

Sec: Indian Economy

• Rising Financial Savings Among Households:
  • Households have started to rebuild their financial savings, driven by rising incomes.
  • Financial savings had dropped significantly from their levels in 2020-21 due to shifts towards physical assets like housing and the unwinding of savings accumulated during the pandemic.
• Historical and Recent Trends in Financial Savings:
  • During 2011-17, household financial savings were around 10.6% of GDP, increasing to 11.5% of GDP during 2017-23 (excluding the pandemic year).
  • Prior to the global financial crisis, household financial savings were as high as 15% of GDP.
  • This level may be approached again as households continue to rebuild their financial assets.
• Increase in Physical Savings Post-Pandemic:
  • Post-pandemic, household physical savings have risen to over 12% of GDP.
  • However, this is still below the 16% of GDP observed in 2010-11.
• Households as Key Lenders to the Economy:
  • Households are expected to remain the top net lenders to the economy in the coming decades, playing a critical role in supporting the financial system.
• Corporate Sector Borrowing Dynamics:
  • The private corporate sector has reduced its net borrowing due to increased internal accruals and subdued capacity creation.
  • However, net borrowing needs are expected to rise with the revival of the capital expenditure (capex) cycle, with households and external resources likely to meet these financing requirements.
• Public Sector Dissaving:
  • Net dissaving of the public sector has been moderating but unevenly.
  • The public sector is expected to remain a net borrower in the economy, given the crucial role of fiscal policy in shaping India’s future.
• Role of External Financing:
  • Domestic savings have largely financed India’s investment needs, with external financing playing a supplemental role, reflected in modest current account deficits.
  • As the productive capacity of the economy increases, the volume and composition of external financing may undergo significant changes.
  • External debt sustainability will remain a key policy priority, especially as the nation continues to borrow from the rest of the world to finance its investment needs.

3. China Initiates Anti-Dumping Probe on Canadian Canola Imports

Sub: Eco

Sec: External Sector

• Announcement of Anti-Dumping Investigation:
  • China has initiated an anti-dumping investigation into Canadian canola imports.
  • The investigation aims to determine whether Canada is selling canola in China at unfairly low prices, potentially harming Chinese domestic industries.
  • The probe also extends to some Canadian chemical products.
• Context of the Investigation:
  • The move follows Canada’s decision to impose a 100% tariff on Chinese electric vehicles (EVs) and a 25% tariff on imported steel and aluminium from China.
  • These tariffs align with similar actions taken by the United States and the European Union.
  • China has expressed strong opposition to these tariffs, leading to the current trade investigation.
• Impact on Trade Relations:
  • China is the world’s largest oilseed importer, and Canada is the primary supplier of canola to China.
  • Canadian exports of canola to China were valued at C$5.0 billion (USD 3.7 billion) in 2023.
  • More than half of the canola produced in Canada is exported to China.
• Market Reactions:
  • Following the announcement, China’s rapeseed meal futures surged by 6% to 2,375 yuan (USD 333.56) per metric ton, reaching its highest level since August 6, 2024.
  • The ICE canola contract for November delivery in Canada dropped by 7% to $569.7 per metric ton, reflecting market concerns over potential disruptions in demand from China.
• Previous Trade Tensions:
  • China has previously targeted Canadian canola during trade disputes, notably in 2019, when it suspended two Canadian canola exporters before lifting restrictions three years later.
• Potential Alternative Supply Sources:
  • Analysts suggest that China may turn to Australia and Ukraine for alternative canola supplies if tensions with Canada continue.
  • Australia’s canola production is currently ample, while China’s agriculture trade with Ukraine remains limited.
• Diplomatic and Economic Implications:
  • The Canadian Farm Minister expressed deep concern over the investigation and pledged to defend and support the Canadian farm sector.
  • The situation highlights the growing complexity of global trade relations, where economic decisions are increasingly influenced by geopolitical factors.

Countervailing Duties (CVDs) and Anti-Dumping Duties:

4. Impact of Corporate Tax Cuts on Wages and Investment

Sub: Eco

Sec: Fiscal Economy

• Introduction to Corporate Tax Cuts:
  • Corporate tax cuts were implemented by major economies, including the U.S. and India, prior to the pandemic.
  • The goal was to stimulate economic growth, increase investment, and boost employment and wages.
• Corporate Tax Cuts in the U.S.:
  • The Tax Cuts and Jobs Act was signed into law by President Trump in December 2017.
  • Significant provision: Reduction of the top tax rate on corporate income from 35% to 21%.
• Expected Outcomes:
  • Increased corporate investment, leading to higher growth and employment.
  • Upgradation in technology and productivity, resulting in higher wages.
• Actual Outcomes:
  • Investment increased by 8% to 14%, preventing a potential decline without the tax cuts.
  • Long-term increase in GDP was only 0.9%.
  • Wage increase was less than $1,000 per worker, contrary to the expected $4,000 to $9,000.
  • Long-run reduction in tax revenue of approximately 41%.
• Corporate Tax Cuts in India:
  • In September 2019, India reduced corporate tax rates:
  • Existing companies: Tax rate reduced from 30% to 22%.
  • New companies: Tax rate reduced from 25% to 15%.
  • Impact on Revenue: A tax revenue loss of approximately ₹1 lakh crore in 2020-21.
• Employment Impact:
  • Despite some recovery, the corporate sector’s contribution to employment has been minimal.
  • Increase in employment primarily in insecure work and unpaid family work in rural areas.
• Wages Impact:
  • Rural regular wage workers saw a CAGR of 4.53%; urban regular wage workers had 5.75%, barely above inflation.
  • Real wages for rural areas declined, while urban wages stagnated.
• Corporate Tax Collections:
  • Despite healthy growth post-pandemic, there was minimal impact on employment and wages.
  • Notable layoffs in the tech industry despite tax cuts.
• Shift in Tax Burden:
  • Corporate tax cuts have resulted in a shift of the tax burden from corporates to individuals.
  • Corporate taxes as a share of gross tax revenues decreased from 32% in 2017-18 to 26.5% in 2024-25 (budget estimate).
  • Income taxes increased to 30.91%, and GST rose to 27.65%.
• Conclusion and Policy Implications:
  • Tax cuts have had only marginal effects on private investment.
  • Immediate benefits were seen by private capital, while wage-earners saw little to no improvement.
  • Suggested Strategy: High taxes on existing profits with increased incentives for future investment.
  • The experience underscores the complexity of policy making in an uncertain economic environment.

5. Exploring the Link Between Seismic Activity and Gold Nugget Formation in Quartz Veins

Sub: Geo

Sec: Physiography

Why in News

Recent research published in Nature Geoscience on September 2 has proposed a novel explanation for why gold nuggets are frequently found in orogenic quartz veins in mountainous regions. This study offers insights into the role of seismic activity and the piezoelectric properties of quartz in the formation of these gold deposits, a phenomenon that has puzzled scientists for years.

Explained:

Researchers have discovered that the formation of gold nuggets in orogenic quartz veins may be driven by seismic activity. Experiments confirmed that seismic waves from earthquakes can cause these reactions, gradually accumulating gold over time. This study provides a new explanation for the localization of gold nuggets in quartz veins, emphasizing the role of seismic activity and basic scientific principles in natural gold formation.

Gold Nuggets: Gold nuggets are naturally occurring lumps of gold, usually composed of high-purity gold (around 85-95%).They can contain small amounts of silver and other trace metals.

Gold nuggets vary widely in size, from tiny particles visible only under a microscope to large pieces weighing several kilograms.

The largest recorded gold nugget, the “Welcome Stranger,” weighed approximately 72 kilograms.

Gold nuggets are primarily found in alluvial deposits, which are the result of erosion and weathering of gold-bearing rocks.

Orogenic gold systems, contributing to up to 75% of the gold mined globally.

Formed through the process of piezo catalysis in quartz veins, where mechanical stress and seismic activity cause gold to deposit on the quartz.

The primary geological environment for gold nugget formation is orogenic gold systems, which are formed by the collision of tectonic plates.

Major gold nugget discoveries have been made in regions such as the Witwatersrand Basin in South Africa, the Goldfields of Australia, and the Yukon Territory in Canada. India has mined gold in regions like Kolar Gold Fields.

Quartz:

Quartz is a hard, crystalline mineral composed of silicon dioxide (SiO₂).

It is the second most abundant mineral in Earth’s continental crust, after feldspar.

Quartz is known for its hardness (7 on the Mohs scale) and resistance to weathering, making it a durable and long-lasting mineral.

It typically forms hexagonal crystals and is often transparent or translucent, with a glassy lustre.

Quartz comes in many varieties, including clear quartz (rock crystal), amethyst (purple), citrine (yellow), rose quartz (pink), and smoky quartz (brown to black).

It is commonly found in veins, pegmatites, and hydrothermal deposits, often associated with other minerals like gold, feldspar, and mica.

Quartz is piezoelectric, meaning it generates an electric charge when subjected to mechanical stress. This property is utilized in various technological applications, such as in quartz watches, pressure gauges, and electronic devices.

High-purity quartz is used in the production of silicon chips, which are essential components of electronic devices.

Major sources of quartz include Brazil, the United States (particularly Arkansas), Madagascar, and India. In India, quartz deposits are found in states like Rajasthan, Andhra Pradesh, and Tamil Nadu.

Seismic Waves:

Seismic waves are energy waves generated by the sudden release of energy in the Earth’s crust, typically due to earthquakes or volcanic activity.

They are classified into two main types: Body Waves and Surface Waves.

Body Waves: Travel through the Earth’s interior and include Primary (P) waves and Secondary (S) waves.

Surface Waves: Travel along the Earth’s surface and include Love waves and Rayleigh waves.

Primary (P) Waves: P-waves are the fastest seismic waves and the first to be detected by seismographs. They are compressional waves, moving in the direction of wave propagation, causing particles to move back and forth.

P-waves can travel through solids, liquids, and gases.

Secondary (S) Waves: S-waves are slower than P-waves and arrive after them. They are shear waves, moving perpendicular to the direction of wave propagation, causing particles to move up and down or side to side.

S-waves can only travel through solids, not through liquids or gases.

Surface Waves: Surface waves travel slower than body waves but are responsible for most of the shaking felt during an earthquake.

• Love Waves: Move the ground side to side in a horizontal plane.
• Rayleigh Waves: Cause a rolling motion, moving the ground up and down and side to side, similar to ocean waves.

Earthquake Measurement:

• The Richter scale measures the magnitude of an earthquake based on the amplitude of seismic waves.
• The Moment Magnitude Scale (Mw)is more commonly used today as it provides a more accurate measure of an earthquake’s size, considering the area of the fault that slipped and the amount of slip.

Seismic Waves and Mineral Formation:

• Seismic waves can trigger piezoelectric effects in certain minerals like quartz, leading to chemical reactions that may result in the deposition of minerals, such as gold, in quartz veins.

This study offers a compelling explanation for the formation of gold nuggets in quartz veins, attributing it to the piezoelectric properties of quartz and the mechanical stress induced by seismic activity. These findings not only solve a long-standing geological mystery but also underline the importance of basic scientific principles in understanding natural phenomena.

6. OpenAI’s Project Strawberry: The Future of AI’s Advanced Capabilities

Sub: Sci

Sec: Awareness in IT& Computer

Why in News

OpenAI is poised to release its most powerful AI model, possibly integrated into ChatGPT-5, under the codename Project Strawberry. This model aims to enhance AI reasoning and introduce autonomous Internet research, marking a significant step toward Artificial General Intelligence (AGI). Demonstrations to national security officials and reports of superior performance in math and programming highlight its potential impact on advancing AI technology.

Project Strawberry:

Project Strawberry is OpenAI’s new AI model, previously codenamed Project Q* (Q-star).

Enhanced Reasoning Abilities: Project Strawberry is designed to improve reasoning and problem-solving skills compared to current models. The model has demonstrated the ability to solve complex puzzles, such as The New York Times ‘Connections’, indicating its enhanced cognitive capabilities.

Mathematical Proficiency: Reports suggest that Project Strawberry will address limitations in mathematical reasoning observed in earlier models like ChatGPT. This improvement is crucial for complex calculations and programming tasks.

Autonomous Research: The model will integrate autonomous Internet research, enabling it to gather and analyze information independently.

Synthetic Data Generation: It will use advanced techniques to create high-quality synthetic data, addressing gaps in real-world datasets and reducing biases and inaccuracies.

Project Strawberry’s advancements will support the development of Project Orion, a subsequent AI model expected to build on Strawberry’s capabilities and integrate high-quality synthetic data.

Project Orion: Project Orion is an upcoming AI model being developed by OpenAI. It is designed to build on the advancements made by Project Strawberry and aims to surpass the capabilities of the current GPT-4 model.

Integration with Project Strawberry: Project Orion will utilize the advancements in reasoning, autonomous research, and synthetic data generation introduced by Project Strawberry. This integration is expected to significantly enhance Orion’s performance and accuracy.

High-Quality Synthetic Data: A major feature of Project Orion is its reliance on high-quality synthetic data. Synthetic data helps in reducing biases, filling gaps, and providing more balanced and comprehensive training material for AI models.

Error and Hallucination Reduction: Project Orion is being designed to address issues like errors and hallucinations (incorrect or fabricated information) that can occur in AI-generated responses.

What is Artificial Intelligence (AI)

Artificial Intelligence (AI) refers to the simulation of human intelligence in machines that are designed to think, learn, and solve problems. AI systems can perform tasks that typically require human intelligence, such as understanding natural language, recognizing patterns, making decisions, and adapting to new situations.

Types of AI:

Narrow AI (Weak AI): Designed to perform specific tasks, such as facial recognition or language translation. Most AI applications today are narrow AI.

General AI (Strong AI): Hypothetical AI that possesses human-like cognitive abilities across a wide range of tasks, potentially exhibiting consciousness and self-awareness.

Artificial Superintelligence (ASI): A theoretical form of AI that surpasses human intelligence in all aspects, leading to unprecedented technological advancements.

Generative Pre-trained Transformer (GPT)

GPT (Generative Pre-trained Transformer) is a type of AI model developed by OpenAI. It belongs to the class of models known as transformers, which are designed to handle sequential data like text. GPT is specifically a language model that generates human-like text based on the input it receives.

Versions of GPT:

GPT-1: The first version, a proof-of-concept that demonstrated the potential of transformer models.

GPT-2: A more powerful version with improved language generation capabilities, but initially withheld due to concerns about misuse.

GPT-3: A large and highly advanced model with 175 billion parameters, capable of generating highly coherent and contextually relevant text.

GPT-4: The latest version (as of now), offering even greater accuracy, reasoning, and performance across various tasks.

7. New study suggests existence of a dockyard at Lothal, Gujarat, during Harappan Civilisation

Sub: History

Sec: Ancient India

Context:

• Since the discovery of Harappan sites at Lothal, archaeologists have been divided on whether a dockyard existed at Lothal during the Indus Valley Civilisation (IVC) period.

Study and findings:

• A new study by the Indian Institute of Technology-Gandhinagar (IITGn) has found fresh evidence which suggests the existence of a dockyard at the IVC site of Lothal.
• According to the study, Sabarmati River used to flow by Lothal during the Harappan Civilisation. Currently, it flows 20 km away from Lothal.
• Satellite images have unveiled the old channels of the River Sabarmati, suggesting Lothal’s key location on a significant river route.
• There was also a travel route connecting Ahmedabad, through Lothal, the Nal Sarovar wetland, and the Little Rann, to Dholavira, according to the study.

About Lothal:

• Lothal is located in the Bhal region of modern-day Gujarat.
• Lothal is the only port town of Indus valley civilization.
• Said to be built in 2,200 BC, this port city was a thriving trade centre in ancient times with its trade of beads, gems and ornaments reaching West Asia and Africa.
• The port city was discovered in 1950sby a team of archaeologists led by SR Rao.

About Sabarmati River:

• The Sabarmati originates in the Dhebar lake situated in the southern part of the Aravalli range in the Udaipur district of Rajasthan.
• It flows in a south-western direction, and after traveling about 371 km, falls into the Gulf of Khambhat.
• The Sabarmati is the name given to the combined streams the Sabar and Hathmati.
• Left bank tributaries: Wakal, Hathmati and Vatrak
• Right bank tributaries: Sei

8. Centre gives nod to defence proposals worth ₹1.44 lakh cr.

Sub: Sci

Sec: Defence

Context:

• The Defence Acquisition Council (DAC) accorded Acceptance of Necessity (AoN), the preliminary step of the long procurement process, for 10 capital acquisition proposals amounting to ₹1,44,716 crore.
• Of the total cost, 99% is from indigenous sources under Buy (Indian) and Buy (Indian-Indigenously Designed Developed and Manufactured) categories of the defence acquisition procedure, the Ministry said.

What are the proposals for?

• Sevenstealth frigates under Project-17B ( a class of planned stealth  to be built for the Indian Navy (IN).
• Future-ready combat vehicles (FRCV) for the Army as a replacement for the main battle tanks
• Air defence fire control radars (FCR)
• Dornier-228 aircraft
• Next generation fast patrol and offshore patrol vessels.

About Defence Acquisition Council:

• The Defence Acquisition Council is the highest decision-making body in the Defence Ministry for deciding on new policies and capital acquisitions for the three services (Army, Navy and Air Force) and the Indian Coast Guard.
• It was formed, after the Group of Ministers’ recommendations on ‘Reforming the National Security System’, in 2001, post Kargil War (1999).
• The Minister of Defence is the Chairman of the Council.
• The objective of the Defence Acquisition Council is to ensure expeditious procurement of the approved requirements of the Armed Forces in terms of capabilities sought, and time frame prescribed, by optimally utilizing the allocated budgetary resources.