Daily Prelims Notes 8 March 2024

Daily Prelims Notes

8 March 2024

Table Of Contents

1. Shiv Sena row | Supreme Court asks whether Maharashtra Speaker contradicted verdict
2. Centre to rope in ISRO to provide Internet in 80 remote tribal villages
3. AI knowledge consortium formed by 12 organisations
4. A bold step towards a cervical cancer-free future
5. As Big Tech scrambles to meet EU rules, investigations seen as likely
6. The Italian court ruling against returning sea migrants to Libya
7. 12 security agencies to use indigenously developed explosive detectors
8. Novo valuation surpasses Tesla on experimental obesity drug data
9. Cabinet Approves Ambitious India AI Mission to Strengthen the AI Innovation Ecosystem
10. Launch of Exploration Licence for Critical and Deep-Seated Minerals by the States of Karnataka and Rajasthan – A First in the Country
11. Workshop on ‘Count of Pastoralists and their Livestock in 21st Livestock Census’
12. India’s Proposed Maritime Development Fund
13. Global Banking Regulators Crack Down on G-SIBs

1. Shiv Sena row | Supreme Court asks whether Maharashtra Speaker contradicted verdict

Subject: Polity

Section: Elections

Context:

• The Supreme Court of India questioned Maharashtra Speaker Rahul Narwekar’s decision to recognize Chief Minister Eknath Shinde’s faction as the “real” Shiv Sena, based on ‘legislative majority.’

Details:

• Chief Justice of India D.Y. Chandrachud, leading a three-judge Bench, raised concerns that this criterion seemed to contradict a previous ruling by the Constitution Bench.
• The Bench had previously emphasized that the Speaker’s decision on party disputes should not solely rely on the legislative majority but should also consider the structure of leadership outside the Legislative Assembly, indicating the support from the party’s political wing, not just its legislative members.
  • A majority faction of the legislature party cannot be construed as a political party for the purposes of the Tenth Schedule.
• This query came up in the context of resolving disqualification petitions against Mr Shinde by the rival Uddhav Thackeray faction under the anti-defection law.

2018 constitution:

• In the ongoing legal tussle regarding the Shiv Sena party’s leadership, Senior advocates Kapil Sibal, A.M. Singhvi, and Devadutt Kamat argued that Maharashtra Speaker Rahul Narwekar erred by not recognizing the 2018 Constitution of Shiv Sena, which named Mr Thackeray as president.
• They highlighted that this constitution had been acknowledged by both the High Court and the Supreme Court previously, but the Speaker disregarded it because it wasn’t filed with the Election Commission of India, opting instead for a 1999 version of the constitution that had not been previously contested.
• Opposing this, Mr Salve, representing the other side, alleged that the documents presented by the Thackeray camp were fabricated and mentioned an ongoing similar case in the Bombay High Court, arguing against simultaneous petitions in multiple courts over the same matter.
• Despite this, the Supreme Court has decided to continue hearing the case, scheduling further arguments for the week of April 8 and requesting the records of the disqualification proceedings from the Maharashtra Speaker’s office.

Source: TH

2. Centre to rope in ISRO to provide Internet in 80 remote tribal villages

Subject: Science and tech

Section: Space sector

Context:

• The Ministry of Tribal Affairs plans to partner with the Indian Space Research Organisation (ISRO) to introduce V-SAT stations for Internet services in approximately 80 tribal villages across Jharkhand, Madhya Pradesh, Odisha, and Maharashtra.

Details:

• This initiative aims to provide pilot connectivity, including Internet, medical, and educational services, to these tribal-dominated areas.
• The proposal was part of a larger discussion on empowering tribal communities, which also explored potential projects with other leading institutes like AIIMS Delhi, IIT Delhi, IIM Calcutta, and IISc Bengaluru, chaired by Tribal Affairs Minister Arjun Munda.

V-SAT stations (very small aperture terminal):

• The government plans to collaborate with ISRO to establish V-SAT stations in 80 geographically remote and difficult-to-access tribal villages, aiming to overcome connectivity challenges these areas face.
• This pilot project, part of a broader initiative to promote tribal development and e-governance in remote locations, will be closely monitored for potential expansion to additional tribal villages across other states.
• The selection of these 80 villages across Jharkhand, Madhya Pradesh, Odisha, and Maharashtra is underway, with the project’s specifics to be determined soon.

Other initiatives:

• Additionally, the Tribal Affairs Ministry is partnering with AIIMS Delhi to advance research on tribal health issues, particularly Sickle Cell Anemia, and to organize training for medical staff in tribal regions.
• There are plans to establish a Bhagwan Birsa Munda Chair of Tribal Health and Haematology at AIIMS Delhi.
• Collaborations with IIT Delhi and IIM Kolkata are also in the works to create a department for Appropriate Technology and Entrepreneurship, while a proposal with the Indian Institute of Science, Bengaluru, aims to establish a training facility offering semiconductor courses to tribal students.
• One other proposal was also tabled to collaborate with the Indian Institute of Science in Bengaluru for setting up a training facility which will offer courses on semiconductors to tribal students.

Source: TH

3. AI knowledge consortium formed by 12 organisations

Subject: Science and tech

Section: Awareness in IT

About AI Knowledge Consortium (AIKC):

• AIKC, a coalition of twelve research institutions and think tanks, has been formed in Indiato promote a multi-stakeholder approach to AI governance.
• This initiative underscores the importance of responsible business practices and societal oversight in integrating AI into daily life.
• The AIKC’s operations will be coordinated by Koan Advisory, a consultancy specializing in assisting foreign businesses with entering the Indian market.
• A report titled “What Indian Parliamentarians Think of AI,” which reflects the views of37 MPs on AI regulation and innovation, was released alongside the announcement.
• Key members of the AIKC include Aapti Institute, Cyber Saathi, Communeeti, Esya Centre, the Institute for Governance, Policies and Politics, and the New Indian Consumer Initiative.

Mission:

• To elevate AI governance in India, ensuring that the technological revolution trigged by it is inclusive, equitable, and reflective of our shared values and aspirations.
• AIKC collaborate to navigate the challenges and opportunities of AI, towards shaping a resilient future, one which is just, and abundant with possibilities for all.

Foundational Pillars:

• We are guided by four pillars that embody our collective aspirations and principles. These serve as the bedrock of our collaboration, weaving together our diverse membership and expertise.
• Together, these pillars frame our collective endeavour, ensuring that our approach is reflective, responsive, and resonant with our values.

Pillar 1: Community Empowerment

Pillar 2: Knowledge Stewardship and Research

Pillar 3: Capacity Building

Pillar 4: Inclusive Dialogue and Outreach

Source: TH

4. A bold step towards a cervical cancer-free future

Subject: Science and tech

Section: Health

Context:

• The interim Union Budget for 2024-25 notably emphasizes women’s health and a standout feature of the budget is its support for vaccinating girls aged nine to 14 years against cervical cancer, representing a crucial step in enhancing women’s health and safety in the country.

The ‘90-70-90’ targets, global programmes:

• Despite healthcare advances, cervical cancer remains a significant challenge in India, being the second most common cancer among women with over 127,000 cases and around 80,000 deaths annually.
• The human papillomavirus (HPV) plays a crucial role in the onset of cervical cancer, prompting the adoption of HPV vaccination as a key preventive measure.
• The World Health Organization (WHO) has set ambitious ’90-70-90′ targets for 2030: vaccinating 90% of girls by age 15, screening 70% of women by ages 35 and 45, and treating 90% of women with cervical cancer.
• These goals are central to the global effort to eradicate cervical cancer and highlight the critical importance of India’s initiative for HPV vaccination.
• Globally, over 100 countries have introduced HPV vaccination programs, significantly reducing cervical cancer incidence.

International and regional efforts:

• Notable examples include Scotland, where fully vaccinated women born between 1988 and 1996 have shown no cervical cancer cases, and Australia, which is on track to eliminate cervical cancer by 2035.
• Rwanda’s successful vaccination campaign has markedly decreased HPV prevalence among women, demonstrating the vaccine’s effectiveness in preventing cervical cancer.
• In the Southeast Asia Region, six countries, including Bhutan, Indonesia, the Maldives, Myanmar, Sri Lanka, and Thailand, have rolled out national HPV vaccination programs.
• Bhutan, in particular, has achieved a 95% vaccination rate among targeted girls since introducing the program in 2010 and has extended vaccination to boys in 2021. Research in Bhutan has shown a reduction in the prevalence of vaccine-targeted HPV types, evidencing the program’s impact on reducing HPV transmission within the community.
• These international and regional efforts underscore the vital role of HPV vaccination in combating cervical cancer.

The Sikkim model:

• Sikkim’s successful HPV vaccination campaign, achieving a remarkable 97% coverage in 2018, showcases the importance of comprehensive communication strategies in public health initiatives.
• This approach involved educating teachers, parents, girls, health-care workers, and the media about the HPV vaccine’s benefits.
• India’s development of its indigenous quadrivalent HPV vaccine, Cervavac, priced at ₹2,000 per dose and created by the Serum Institute of India in collaboration with the Department of Biotechnology, represents a significant advancement in making the vaccine more accessible and affordable.
• The potential expansion of India’s vaccination program to include adolescent boys, alongside recent evidence suggesting that a single dose of the HPV vaccine may offer similar protection as multiple doses, points towards a more comprehensive strategy to combat HPV infections and related diseases.
• HPV vaccination’s impact extends beyond individual health, aiming to reduce the societal and economic burdens of cervical cancer, which predominantly affects women in their prime years and imposes a heavy toll on families and communities.
• By preventing HPV infections, vaccination not only decreases the incidence of cervical cancer and its associated healthcare costs but also promotes the overall well-being and productivity of women, ultimately benefiting society at large.

Meet the challenges:

• India faces challenges such as vaccine hesitancy and ensuring equitable access to vaccination.
• Addressing these issues requires engaging with communities, combating misinformation, and enhancing healthcare infrastructure.
• The introduction of U-WIN, akin to the Co-WIN platform, aims to maintain an electronic registry of all immunizations in the country and allow for real-time responsiveness in vaccination programs.

Source: TH

5. As Big Tech scrambles to meet EU rules, investigations seen as likely

Subject: Science and tech

Section: Awareness in IT

Context:

• The world’s largest tech companies, including Google, Apple, Amazon, Microsoft, Meta, and ByteDance, have updated their core platform services to comply with the European Union’s Digital Markets Act (DMA), aiming to ensure fair competition.
• However, there’s scepticism about the adequacy of these efforts, with potential investigations looming due to possible non-compliance.

About Digital Marketing Act (DMA):

• The DMA represents a significant regulatory move to control the influence of “Big Tech,” threatening fines of up to 10% of global turnover for non-compliance.
• Apple is notably impacted by the DMA,required to allow alternative app distribution channels outside its App Store in the EU.
• However, its introduction of a “core technology fee” has raised concerns among EU antitrust authorities for potentially discouraging businesses from switching to competitors.
• The EU aims for swift enforcement of the DMA, contrasting with the typically lengthy antitrust investigations, indicating a rigorous approach to regulating Big Tech’s market practices.

Which companies have to follow the rules?

• DMA targets 22 services spanning operating systems, messenger apps, and social media platforms, aiming to regulate the largest tech companies.
• Services under scrutiny include Google’s Maps, YouTube, Chrome browser, and Android OS; Amazon’s Marketplace; Apple’s Safari browser and iOS; Meta’s Facebook, Instagram, and WhatsApp; and Microsoft’s Windows and LinkedIn.

WHAT EFFECT WILL THE RULES HAVE GLOBALLY?

• DMA signifies a crucial development by the European Union in its role as a global leader in regulating the tech industry.
• The EU has a history of imposing significant fines on Google for antitrust violations, establishing stringent social media regulations, and introducing pioneering artificial intelligence legislation.
• Now, countries such as Japan, Britain, Mexico, South Korea, Australia, Brazil, and India are creating their DMA-like rules to prevent tech giants from monopolizing digital markets.

HOW WILL DOWNLOADING APPS CHANGE?

• Apple has announced it will allow European iPhone users to download apps from sources outside its App Store, a significant shift from its previous policy.
• This change is in response to the Digital Markets Act (DMA) requirements but comes with a caution from Apple about the potential security risks of “sideloading” apps.
• Despite reducing the fees for app developers who choose to use Apple’s payment-processing system in Europe, Apple is introducing a 50-euro cent fee for each iOS app installed via third-party app stores.
• Critics argue this could discourage developers of free apps from using alternative app stores, as they would now face a per-user fee, potentially limiting the diversity and appeal of these stores.

HOW WILL PEOPLE GET MORE OPTIONS ONLINE?

• Under the Digital Markets Act (DMA), consumers will gain more autonomy over their digital choices, and no longer be bound to default options for essential services.
• Android users will have the freedom to select their preferred search engine, while iPhone users can choose their default browser.
• These changes aim to dismantle the automatic preference for services like Apple’s Safari or Google’s Search, with European users encountering choice screens on their devices to facilitate this. Additionally, Microsoft will no longer compel users to adopt its Edge browser.
• However, concerns persist among smaller service providers that these measures may not significantly alter consumer behaviour.

HOW WILL INTERNET SEARCHES CHANGE?

• Google will modify how some search results are displayed, eliminating the preferential treatment for its own services.
  • For instance, hotel searches will feature an additional carousel for booking sites like Expedia, while Google Flights will no longer have a dedicated button and will be included among the standard blue link search results. This change aims to foster a fairer competitive environment online.
• Furthermore, the DMA empowers users to have more control over their privacy, particularly concerning targeted advertising. Google will offer users the option to prevent their data from being utilized across its various services for ad-targeting purposes.
• Similarly, Meta is introducing measures to allow users to keep their Facebook and Instagram data separate, preventing the amalgamation of personal information for advertising.
• Another significant change introduced by the DMA is the requirement for interoperability among messaging systems.
  • This means companies must ensure their messaging apps can communicate with one another.
  • Specifically, Meta, owning the only two chat apps covered by these rules, is expected to devise a plan enabling Facebook Messenger and WhatsApp users to exchange text messages, videos, and images seamlessly, further enhancing user choice and flexibility in digital communication platforms.

Source: AP

6. The Italian court ruling against returning sea migrants to Libya

Subject: IR

Section: Int Conventions

Context:

• Italy’s top court acknowledged that migrants face the risk of ‘inhuman and degrading treatment’ at detention centers should they be returned to Libyan coastguards.

More on news:

• Rights agencies have drawn attention to human rights abuses in Libyan territory, particularly in coastal prisons run by coastguards and armed militias, which become grounds for vast human trafficking networks.
• Unprotected refugees and asylum seekers are reportedly facing violence, torture, and inhumane conditions.
• Groups like UpRights and StraLi welcomed the “landmark” ruling, urging Italy to comply with international human rights standards and end its complicity with violations of migrants’ rights.

The court cases

• The case in question is a 2018 incident. 
• A lower Italian court prosecuted the ship’s captain in 2021, finding him guilty of violating international humanitarian and refugee laws.
• The principle of non-refoulement forbids the forced return of people to countries where their lives or rights are at risk. 
• As per international law, Libya is currently not a port of safety.
• The court said that once picked up, the migrants were under the captain’s charge, and in ‘abandoning’ them, the captain violated directives of the International Maritime Organization and the International Convention for the Safety of Life at Sea (SOLAS).

What are the legal obligations in handling rescues at sea?

• The expanse of the Mediterranean Sea between Libya and Italy is among the most dangerous albeit oft-used passage for migrants from sub-Saharan Africa fleeing ethnic conflict, war and famine.

About Article 98 of the United Nations Convention on the Law of the Sea:

• Under Article 98 of the United Nations Convention on the Law of the Sea, every shipmaster is required “to render assistance to any person found at sea in danger of being lost.”
• International maritime law also requires coastal states to conduct search and rescue services, and if needed, coordinate with other nations during these operations.

Some facts about Libya:

• Libya is a country in the Maghreb region of North Africa.
• It borders the Mediterranean Sea to the north, Egypt to the east, Sudan to the southeast, Chad to the south, Niger to the southwest, Algeria to the west, and Tunisia to the northwest. 
• Tripoli is the capital of Libya.
• Libya had the largest proven crude oil reserves in Africa.

7. 12 security agencies to use indigenously developed explosive detectors

Subject: Science and tech

Section: Msc

Context:

• Two indigenously developed explosive detectors have been handed over to the Intelligence Bureau for field deployment by 12 identified security agencies across the country.

More on news:

• The move is expected to further strengthen the apparatus of the security forces.
• The Electronics Corporation of India Limited (ECIL), the Department of Atomic Energy (DAE) and the Defence Research and Development Organisation (DRDO) have developed the explosive detectors for security forces.

About the detectors:

• The detectors, based on Ion Mobility Spectrometry (lMS) technique and Raman Backscattering (RBS) principle respectively, have been customized as per specific requirements of the agencies, as part of a development project initiated at the behest of IB in 2017.
• The user agencies have been asked to provide feedback about the field deployment experience of the 2 detectors so that further improvements, if required, can be made.

8. Novo valuation surpasses Tesla on experimental obesity drug data

Subject: Science and tech

Section: Health

Context:

• Novo Nordisk’s market valuation has surpassed Tesla and Visa after announcing positive early trial data for a new obesity drug; shares rose over 8% to record highs.

More on news:

• Shares surged more than 8% to record highs, shooting Novo Nordisk up in global rankings to the 12th most valuable company from 14 previously.

About the drug:

• Wegovy belongs to a class of drugs known as GLP-1 agonists, originally designed to treat type 2 diabetes, that have been shown to reduce food cravings and empty the stomach more slowly.
• Wegovy was the first of a new group of highly effective weight-loss drugs to be launched.
• Novo and Lilly are so far the leaders in the obesity drug market, forecast by analysts to be worth $100 billion by 2030.
• Wegovy also had a clear cardiovascular benefit, boosting efforts by the company to move Wegovy beyond its image as a lifestyle drug.

Semaglutide

• Semaglutide injection is in a class of medications called incretin mimetics. It works by helping the pancreas to release the right amount of insulin when blood sugar levels are high. Insulin helps move sugar from the blood into other body tissues where it is used for energy.
• Novo Nordisk is the sole patent holder of semaglutide, the active ingredient in both Wegovy and Novo’s diabetes drug Ozempic, which are not yet approved for sale in India
• Wegovy, Ozempic and Eli Lilly’s Mounjaro and Zepbound belong to a class of therapies known as GLP-1 receptor agonists originally developed to control blood sugar in patients with type 2 diabetes. But they also slow digestion, helping patients feel full longer.
• Indian law allows drugs approved in foreign countries to be imported and sold in the country after obtaining an import license from the drug regulator by the original drug manufacturer’s partner in India.
• Novo aims to officially launch Wegovy in India in 2026 after securing regulatory approvals
• Certain provisions of the law also allow drugs that have not been formally approved by the Indian drug regulator to be imported for individual use, provided patients make an appeal with valid prescriptions and proof of identity.

9. Cabinet Approves Ambitious India AI Mission to Strengthen the AI Innovation Ecosystem

Subject: Schemes

Section: Computer

Context:

• In furtherance to the vision of Making AI in India and Making AI Work for India, the Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the comprehensive national-level India AI mission with a budget outlay of Rs.10,371.92 crore.

More on news:

• The Mission will be implemented by ‘India AI’ Independent Business Division (IBD) under Digital India Corporation (DIC).

Components under the mission:

IndiaAI Compute Capacity: 

• The IndiaAI compute pillar will build a high-end scalable AI computing ecosystem to cater to the increasing demands from India’s rapidly expanding AI start-ups and research ecosystem.
• The ecosystem will comprise AI compute infrastructure of 10,000 or more Graphics Processing Units (GPUs), built through public-private partnership.
• An AI marketplace will be designed to offer AI as a service and pre-trained models to AI innovators.
• It will act as a one-stop solution for resources critical for AI innovation.

IndiaAI Innovation Centre: 

• The IndiaAI Innovation Centre will undertake the development and deployment of indigenous Large Multimodal Models (LMMs) and domain-specific foundational models in critical sectors.

IndiaAI Datasets Platform:

• The IndiaAI Datasets Platform will streamline access to quality non-personal datasets for AI Innovation.
• A unified data platform will be developed to provide a one-stop solution for seamless access to non-personal datasets to Indian Startups and Researchers.

IndiaAI Application Development Initiative:

• The IndiaAI Application Development Initiative will promote the AI applications in critical sectors for the problem statements sourced from Central Ministries, State Departments, and other institutions.
• The initiative will focus on developing/scaling/promoting adoption of impactful AI solutions with potential for catalyzing large scale socio-economic transformation.

IndiaAIFutureSkills:

• IndiaAIFutureSkills is conceptualized to mitigate barriers to entry into AI programs and will increase AI courses in undergraduate, masters-level, and Ph.D. programs.
• Further, Data and AI Labs will be set-up in Tier 2 and Tier 3 cities across India to impart foundational level courses.

IndiaAI Startup Financing: 

• The IndiaAI Startup Financing pillar is conceptualized to support and accelerate deep-tech AI startups and provide them streamlined access to funding to enable futuristic AI Projects.

Safe & Trusted AI:

• Recognizing the need for adequate guardrails to advance the responsible development, deployment, and adoption of AI, the Safe & Trusted AI pillar will enable the implementation of Responsible AI projects including the development of indigenous tools and frameworks, self-assessment checklists for innovators, and other guidelines and governance frameworks.

10. Launch of Exploration Licence for Critical and Deep-Seated Minerals by the States of Karnataka and Rajasthan – A First in the Country

Subject: Geography

Section: Eco geography

Context:

Karnataka and Rajasthan launched an auction of Exploration Licence (EL) for critical and deep seated minerals on 06.03.2024.

More on news:

• Exploration License blocks are being auctioned for the first time in the country.
• Karnataka launched an auction of one block of Gold, Copper and Lithium and Rajasthan launched an auction of three blocks of Rare Earth Elements, Rare Metal and Potash minerals.
• The Mines and Minerals (Development and Regulation) Act, 1957 was amended through the MMDR Amendment Act, 2023, to introduce a new mineral concession of Exploration Licence for 29 critical and deep-seated minerals to further boost exploration and mining of critical and deep-seated minerals in the country.

About the Critical Minerals:

• Critical minerals refer to mineral resources, both primary and processed, which are essential inputs in the production process of an economy, and whose supplies are likely to be disrupted due to the risks of non-availability or unaffordable price spikes.
• Minerals such as antimony, cobalt, gallium, graphite, lithium, nickel, niobium, and strontium are among the 22 assessed to be critical for India.
• Critical and deep-seated minerals such as Cobalt, Lithium, Nickel, Gold, Silver, and Copper are difficult to explore and mine as compared to surficial or bulk minerals.
• The exploration license granted through auction shall permit the licensee to undertake reconnaissance and prospecting operations for critical and deep-seated minerals mentioned in the newly inserted Seventh Schedule to the MMDR Act.

11. Workshop on ‘Count of Pastoralists and their Livestock in 21st Livestock Census’

Subject: Schemes

Section: Agri

Context:

• The Department of Animal Husbandry and Dairying, Ministry of Fisheries, Animal Husbandry and Dairying organized a workshop on ‘Count of Pastoralists and their Livestock in 21st Livestock Census’ in Indore, Madhya Pradesh.

About Livestock Census:

• The Department of Animal Husbandry and Dairying conducts livestock census across the country every 5 years since 1919. 
• The last livestock census i.e. 20th LC was conducted in 2019. 
• The 21st livestock census is due in 2024. 
• There is a demand to collect the information on Pastoralists and their livestock in 21st Livestock Census.
• The livestock census is the main source of data for proper planning and formulation of the Livestock Welfare Programme for bringing further improvement in this sector. 
• The livestock census usually covers all domestic animals and head counts of these animals which includes various species of animals (cattle, buffalo, mithun, yak, sheep, goat, pig, horse, pony, mule, donkey, camel, dog, rabbit and elephant)/poultry birds (fowl, duck and other poultry birds) possessed by the households, household enterprises/non-household enterprises at that site Breed-wise with their age, sex.

12. India’s Proposed Maritime Development Fund

Subject: Economy

Section: Msc

• Objective:
  • The proposed fund aims to provide long-term, low-cost financial support to promote indigenous ship-building in India.
• Expected Timeline:
  • The fund is likely to be ready by the end of this year.
• Participation:
  • It will involve participation from industry stakeholders, financial institutions, and Ministries.
• Structural Options:
  • Two options are under discussion:
    • Setting up a dedicated maritime vertical under a proposed development finance institution.
    • Establishing a standalone company with multi-agency equity.
  • Reducing Ship Leasing Costs:
    • India currently spends about $75 billion annually on leasing ships from outside.
    • The aim is to boost India’s ship-building industry to reduce dependence on leasing.
  • India’s Current Tonnage and Goals:
    • India owns about 2% of the world’s total tonnage with approximately 1,500 ships under its flag.
    • The fund aims to increase India’s share to up to 5% of the world’s tonnage.
  • Focus Areas of the Fund:
    • The Maritime Development Fund will focus on the entire value chain, including ship-building, flagging, ownership financing, and leasing.
    • It will also promote cruise tourism and activities such as mechanization and capacity expansion of existing ports through Public-Private Partnerships (PPPs).
  • Proposed Corpus and Funding Mechanisms:
    • The fund is proposed to start with a corpus of ₹25,000 crore over a seven-year period.
    • It will utilize multiple funding mechanisms such as debt, equity, Viability Gap Funding (VGF), and buyer credit support.
  • Challenges in Accessing Finance:
    • Indian shipping companies face challenges in growing tonnage due to difficulties in accessing required finance.
  • Seeking ‘Infrastructure’ Status:
    • The Ministry is working with the Finance Ministry to provide ‘infrastructure’ status to vessel operators and shipping companies.
    • This status will enable them to raise long-term, low-cost finance for the shipping sector.
  • Government Initiatives:
    • The Ministry is taking steps to make the shipping sector more attractive by providing infrastructure status and facilitating access to long-term funds.
    • The fund will play a crucial role in boosting India’s maritime sector, enhancing indigenous ship-building capabilities, and reducing leasing costs.

Current Status of Maritime Transport in India:

• Global Ranking:
  • India is the 16th largest maritime country in the world.
• Trade Volume and Value:
  • Maritime transport in India handles 95% of trade by volume and 68% by value.
• Ship Recycling:
  • India is among the top 5 ship recycling countries
  • Holds 30% share in the global ship recycling market.
• Ship-Breaking Industry:
  • India owns over 30% global market share in the ship-breaking industry.
  • The largest ship-breaking facility is located in Alang, Gujarat.
• Sagar Mala Program:
  • Launched in 2017 for port-led development and growth of logistics-intensive industries.
• Port Infrastructure:
  • India has 12 major and 200 non-major/intermediate ports under state government administration.
  • Jawaharlal Nehru Port Trust is the largest major port, while Mundra is the largest private port.
• Maritime India Vision 2030 (MIV 2030):
  • A ten-year blueprint for the maritime sector.
  • Focuses on boosting waterways, shipbuilding industry, and cruise tourism.
  • Aims to develop world-class Mega Ports, transshipment hubs, and modernize port infrastructure.
  • Estimated investments of ₹1,00,000-1,25,000 crore for capacity augmentation and infrastructure development.

Policy Initiatives and Development Projects:

• Maritime Development Fund:
  • A ₹25,000-crore fund to provide low-cost, long-term financing for the sector.
  • Centre contributing ₹2,500 crore over seven years.
• Port Regulatory Authority:
  • Establishment of a pan-India port authority under the new Indian Ports Act.
  • Aimed at enhancing oversight, institutional coverage, and structured growth.
• Eastern Waterways Connectivity Transport Grid project:
  • Aims to develop regional connectivity with Bangladesh, Nepal, Bhutan, and Myanmar.
• Riverine Development Fund:
  • Provides financing for inland vessels through the Riverine Development Fund (RDF).
  • Extending the tonnage tax scheme to inland vessels for long-term, low-cost finance.
• Rationalization of Port Charges:
  • Making port charges more competitive and transparent.
• Promotion of Water Transport:
  • Developing waterways as an alternative means of urban transport.

13. Global Banking Regulators Crack Down on G-SIBs

Subject: Economy

Section: Monetary Policy

• Background:
  • Globally systemic banks (G-SIBs) are required to hold more capital than smaller domestic banks due to their systemic importance.
  • This distinction is based on various factors, determining the “bucket” they fall into, and consequently, the extra capital they must hold.
  • These rules were established a decade ago following the global financial crisis, during which many banks were bailed out by the money of taxpayers.
• Objective of Crackdown:
  • The Basel Committee, which includes global banking regulators, aims to address “unacceptable” attempts by major banks to manipulate rules to avoid heavier capital requirements.
  • The goal is to prevent “window-dressing” tactics used by banks to lower their G-SIB scores temporarily.
• Proposed Measures:
  • The committee has set out potential measures to constrain banks’ ability to manipulate their G-SIB scores.
  • This includes requiring banks to report and disclose most G-SIB indicators based on an average of values over the reporting year, rather than year-end values.
  • The intent is to prevent “regulatory arbitrage behavior” aimed at reducing banks’ perceived systemic risk around reporting dates.
• Impact on Reporting:
  • Banks participating in the G-SIB assessment exercise would need to provide more consistent and reliable data throughout the reporting year.
  • This move aims to ensure that banks cannot exploit temporary fluctuations in their systemic risk indicators.
• Significance of Measures:
  • These measures are crucial to maintain financial stability and prevent a repeat of the 2008 financial crisis.
  • By ensuring that G-SIBs holdadequate capital, regulators aim to protect taxpayers from bearing the burden of bank failures.
• Conclusion:
  • The Basel Committee’s proposed measures aim to strengthen the resilience of the global banking system.
  • By closing loopholes and preventing banks from gaming the system, regulators seek to enhance transparency and reduce systemic risks posed by G-SIBs.

About Window Dressing:

Window dressing refers to the practice of manipulating financial statements or transactions to create a more favorable impression of a company’s financial position.

Purpose: Companies engage in window dressing to make their financial statements appear stronger or more appealing to investors, creditors, or regulators.

Methods: This can include actions such as:

Timing of Transactions: Shifting certain transactions or sales to the end of a reporting period to inflate revenues.

Asset-Liability Management: Temporarily removing liabilities from the balance sheet at reporting dates to improve financial ratios.

Misclassification: Improperly classifying expenses as capital expenditures to show lower expenses.

Intentions: The goal of window dressing is often to present a rosier picture of financial health than actually exists, which can mislead stakeholders.

G-SIB (Global Systemically Important Bank):

G-SIBs are banks that are deemed to be of global systemic importance due to their size, complexity, and interconnectedness with the global financial system.

Designation Criteria: The Financial Stability Board (FSB) assigns G-SIB status based on a bank’s systemic importance, considering factors such as:

• Size
• Complexity
• Global activity
• Interconnectedness with other financial institutions

Capital Requirements: G-SIBs are required to hold more capital than smaller banks to ensure they can withstand financial shocks without destabilizing the financial system.

Regulatory Oversight: G-SIBs are subject to enhanced regulatory scrutiny and supervision to mitigate risks to financial stability.

Risk Mitigation Measures: The designation aims to prevent G-SIBs from engaging in risky behaviors that could lead to another financial crisis like of 2008.

Impact on Operations: Banks classified as G-SIBs must meet specific requirements, such as submitting recovery and resolution plans, to ensure they can be resolved without taxpayer bailouts if they fail.

Conclusion:

In essence, “window dressing” refers to the deceptive practice of manipulating financial data, while “G-SIBs” are banks deemed systemically important to the global financial system.

The concern arises when G-SIBs engage in window dressing to present a lower systemic risk profile than is accurate, which can have implications for financial stability and regulatory oversight. The Basel Committee’s measures aim to address these concerns and ensure the integrity of G-SIB assessments.