Daily Current Affairs - Civil Services - 20-03-2021

Useful compilation of Civil Services oriented - Daily Current Affairs - Civil Services - 20-03-2021

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• SECTION 1 - TEN NEWS HEADLINES

1. Indian Politics - Covid Update - Biggest one-day jump in cases - The crushing of the Covid curve is not working out as was imagined in Jan 2021, in India. As many as 39,726 coronavirus cases were confirmed in India in the last 24 hours (19 March), marking the biggest one-day jump in 2021 and taking the total number of cases to 1,15,55,284. Meanwhile, 188 deaths have been recorded in the last 24 hours, taking the death toll to 1,59,370. Out of the total cases, 2,71,282 cases are active. Over the past five days (14-03-2021 onwards), India saw the sharpest surge in Covid-19 infections in at least the last 10 months, with the seven-day rolling average of daily cases rising by as much as 39%. Nearly 27 lakh vaccine doses were administered in 24 hours, but pace needs to pick up if the curve is to be crushed again.
2. Science and Technology - Aluminium Air Battery - State-owned Indian Oil Corporation Ltd. has entered into a joint venture with Israel-based battery technology startup Phinergy to develop aluminium-air technology based battery systems for electric vehicles and stationary storage, as well as hydrogen storage solutions. Top automakers, including Maruti Suzuki and Ashok Leyland, have already signed letters of intent with the newly formed joint venture to commercially deploy the battery solutions produced by IOC Phinergy. Aluminium-air batteries are said to be a lower cost and more energy-dense alternative to lithium-ion batteries which are currently in widespread use for electric vehicles in India. Aluminium-air batteries utilise oxygen in the air which reacts with an aluminium hydroxide solution to oxidise the aluminium and produce electricity. Such electric vehicles are expected to offer much greater range of 400 km or more per battery compared to lithium-ion batteries which currently offer a range of 150-200 kilometres per full charge. The aluminium plate in an aluminium-air battery is converted into aluminium trihydroxide over time and that aluminium can be reclaimed from aluminium trihydroxide or even traded directly for industrial uses. Such batteries are also expected to be cheaper than lithium-ion batteries.
3. Governance and Institutions - Bihar Lokayukta (Amendment) Bill, 2021 - The Bihar Assembly passed the Bihar Lokayukta (Amendment) Bill, 2021 that proposes to punish people filing false cases before the anti-corruption ombudsman body to prevent any waste of time or misuse of the institution. Lokayukta carries out expeditious investigation and prosecution relating to allegations involving corruption against public servants of all grades. The proposed legislation has been brought keeping in view the misuse of the Lokayukta institution in false cases. It was proposed by the Lokayukta itself that there should be a provision for punishing people filing false cases before it. The Lokayukta acts of other States have the provision of punitive action against such erring persons. The Bill proposes that a case against a person filing a false case can be filed in the district court. If the person is found guilty of it or for giving false testimony or filed wrong affidavit, he/she will be sentenced to a jail term of upto three years besides a provision for fine.
4. Infrastructure - Eastern Rajasthan Canal Project (ERCP) - Rajasthan Chief Minister Ashok Gehlot has been strongly demanding national project status for the Eastern Rajasthan Canal Project (ERCP). The Eastern Rajasthan Canal Project aims to harvest surplus water available during the rainy season in rivers in southern Rajasthan such as Chambal and its tributaries including Kunnu, Parvati, Kalisindh. Besides supplying drinking water in 13 districts, the mega project will also provide irrigation water to an additional 2 lakh hectares of land. It will also supply water to the Delhi-Mumbai Industrial Corridor and take care of the flood and drought situation in the area. According to the state Water Resources Department, Rajasthan, the largest state of India with a geographical area of 342.52 lakh hectares which amount to 10.4 per cent of the entire country, holds only 1.16 per cent of India’s surface water and 1.72 per cent of groundwater. Among the state’s water bodies, only the Chambal river basin has surplus water, which cannot be tapped directly because the area around the Kota barrage is designated as a crocodile sanctuary. Therefore, the ERCP aims to create a network of water channels which will cover 23.67 per cent area of Rajasthan along with 41.13 per cent population of the state. The reason cited by the Chief Minister for wanting the ERCP to be a national project is that its estimated cost is around Rs 40,000 crore, which is not possible to be borne by the state government.
5. Science and Technology - High Electron Mobility Transistors (HEMTs) - Indian scientists have developed a highly reliable HEMT from gallium nitride (GaN). This is the first-ever indigenous HEMT device and is useful in electric cars, locomotives, power transmission and other areas requiring high voltage and high-frequency switching. This would reduce the cost of importing such stable and efficient transistors required in power electronics. It will also make India self-reliant in power transistor technology. High Electron Mobility Transistor (HEMT) is a normally OFF device and can switch currents up to 4A and operates at 600 V. HEMTs are used in integrated circuits as digital on-off switches. HEMT transistors are able to operate at higher frequencies than ordinary transistors, up to millimeter wave frequencies, and are used in high-frequency products such as cell phones, satellite television receivers, voltage converters, and radar equipment. They are widely used in satellite receivers, in low power amplifiers and in the defense industry.
6. Foreign Affairs - Crushing Myanmar further - The military junta that has seized power in Myanmar declared martial law in the country's two biggest cities, in an effort to curb protests. Soldiers have shot dead more than 200 people. China, meanwhile, urged Myanmar to protect Chinese-owned factories after several were set on fire during unrest in Yangon. Anti-government protesters accuse China of supporting the military takeover, which China denies. Myanmar, also known as Burma, is in South East Asia. It neighbours Thailand, Laos, Bangladesh, China and India. It has a population of about 54 million, most of whom are Burmese speakers, although other languages are also spoken. The biggest city is Yangon (Rangoon), but the capital is Nay Pyi Taw. The main religion is Buddhism. There are many ethnic groups in the country, including Rohingya Muslims. The country gained independence from Britain in 1948. It was ruled by the armed forces from 1962 until 2011, when a new government began ushering in a return to civilian rule. The ruling military changed the country's name from Burma to Myanmar in 1989. The two words mean the same.
7. Governance and Institutions - Digital Green Certificates by EU - A Digital Green Certificate is proof that a person has either been vaccinated against COVID-19, has received a negative test result or has recovered from COVID-19. The certificate will be in digital or paper format complete with a QR code and will be free of charge. It can be issued by authorities, including hospitals, testing centres and health authorities. Once the proposal for digital certificates is finalised, it will be accepted in all EU countries and will help to ensure that the restrictions imposed in different areas within the EU can be lifted in a coordinated manner. All EU citizens or third-country nationals who are legally staying in the EU will be able to use these digital certificates and thereby will be exempted from free movement restrictions. In the EU and across the world, the tourism industry has been severely impacted due to the spread of the disease. Many countries have, therefore, been contemplating digital certificates or passports that will be proof that a person has been vaccinated or has recovered from COVID-19. In February 2021, Israel became the first country to issue certificates called “vaccine passports” that will allow vaccinated individuals to use some facilities and attend events. Denmark also said that it was in the process of rolling out digital passports that would act as proof for those individuals who have been vaccinated.
8. Science and Technology - WhatsApp, Instagram go down in many parts of the world - Facebook-owned messaging platform WhatsApp and photo and video sharing platform Instagram suffered an outage in India and other parts of the world. Several users complained they were unable to send messages across WhatsApp and were unable to refresh Instagram. The reason behind the outage is currently not known. Downdetector showed that around 57 percent Facebook users reported about total blackout and 29 percent were not even able to access the social media app. Around 66 percent of Instagram users were not able to access News Feed as well as its official website. In case you are not aware, Downdetector is a site that monitors outages by collating status reports from users and some other sources.  In December 2020, WhatsApp went down alongside Instagram and Facebook for a few hours, before the services were restored.
9. Indian Economy - Mad rush for Nazara IPO - Billionaire investor Rakesh Jhunjhunwala-backed Nazara Technologies' ₹583-crore IPO has overtaken that of Easy Trip Planners to become India's second-most subscribed issue so far in 2021. The gaming company's IPO issue was subscribed 175.4 times, while Easy Trip Planners' ₹510-crore issue was subscribed 160 times. MTAR Technologies' issue is the most subscribed issue of 2021 so far. The issue — the eighteenth to go public so far this year— received bids for 92.88 crore shares compared to 52.94 lakh shares on offer at Rs 1,100-1,101 apiece. Various stakeholders of the company, which is also India’s only gaming firm with a presence in emerging and developed markets such as African and North American countries, encashed whole or part of their stake through the initial share sale of the firm.
10. Defence and Military - US defence secy Llyod Austin in India - The top US defence official landed in New Delhi as part of the Biden administration’s efforts to forge an alliance of countries seeking to push back against China’s assertiveness in the region. He met Prime Minister Modi and National Security Adviser Ajit Doval soon after. Austin is scheduled to meet defence minister Rajnath Singh. He said "Great meeting with National Security Advisor Doval last night. The breadth of collaboration between our two nations reflects the significance of our Major Defense Partnership as we work together to address the most pressing challenges facing the Indo-Pacific region." Prime Minister Modi, after meeting US Defence Secretary Lloyd J Austin on Friday, said, "India and US are committed to our strategic partnership that is a force for global good." Lloyd's three-day visit to India is aimed at further strengthening bilateral defence cooperation and exchanging views on regional security challenges.

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• SECTION 2 - DAILY CURRENT AFFAIRS

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• 1. ECONOMY (Prelims, GS Paper 3, Essay paper)

State Budgets, spending, and economic recovery

• Economy at state level: Several state governments have presented their budgets for the financial year 2021-22. States have spent less in this year, and may focus on fiscal consolidation in the year to come, weakening the hopes of a public-spending-led recovery.
• Projection on spending: There was much a collapse in states’ revenues in the last fiscal given the pandemic times. Transfers from the Centre thus become a key aspect in the last financial year. This was coupled with a “reluctance” among some states to borrow more to spend. So at the aggregate level, spending by these states in 2020-21 will end up being lower than what they had budgeted for before the onset of the pandemic. The revised estimates peg their total expenditure to decline by around 6% in 2020-21 from their budget estimates.
• Extrapolation: These are based on 11 states that account for a little over 60% of India’s GDP.  These trends may hold for the other states as well. In that case, the “additional” spending by the central government, over and above its budget estimate, is likely to be offset by the decline in spending by states. In effect, the total general government spending may end up being around or even lower than what was budgeted for before the onset of the pandemic.
• Revenue status: This year, states which typically run revenue surpluses will run revenue deficits. The revenue collapse meant that states that usually borrow to finance capital expenditure have had to borrow for recurring expenditure as well. As a result, capital spending by states, which was budgeted to be around 50% more than that of the Centre in 2020-21, has been cut sharply. The states had to cut back even on some of its revenue expenditure. Notably, most of these states have cut back on allocations for pensions. Some have even slashed allocations for salaries this year.

• Gap among the states: Some of the states did have the leeway to boost spending by borrowing more. The Centre had raised the ceiling on their market borrowings from 3 to 5% of GSDP.

1. Of this 2 percentage point increase in the borrowing limit, part was unconditional while the remaining was subject to fulfilling Centre-mandated reforms. Several states did qualify to undertake the conditional borrowings.
2. But, it is only the low-income states with already stretched finances that seem to have availed the additional borrowing space. [These include Bihar, Rajasthan and Madhya Pradesh; their budgeted fiscal deficit for 2020-21 was pegged at 3% or above before the pandemic.]
3. They were thus able to either maintain or exceed their budgeted expenditure levels.
4. In comparison, the high-income states of Gujarat, Maharashtra and Karnataka, that were better placed to borrow more and spend, have not done so.
5. The economic hit from the pandemic is thus uneven.

• Crisis is home: The growth projections accompanying these budgets suggest that some states expect to do better than others. But, considering the extent of the crisis, there has to be far greater spending than what is visible in these budgets.
• Scope for fiscal consolidation: As is the case with the Centre, states have, remarkably, budgeted for aggressive fiscal consolidation next year. The average fiscal deficit across these states is expected to fall by more than 1 percentage point of GSDP. This is more than twice the decline recommended by the 15th finance commission. This aggressive consolidation is expected to be achieved not by expenditure compression, as is the case with the Centre, but by significant revenue enhancement. However, some revenue assumptions are quite ambitious, e.g. some states have pegged their GST and VAT collections to grow far in excess of 30% in 2021-22
• The way ahead: Subdued general government spending during these crisis years heightens the risks to economic recovery. Economy may exit from this period with lower medium-term growth prospects. Given this, there is a strong case for greater government spending during these years. The states, put together, account for a larger share of general government spending than the Centre. Their spending stance is thus pivotal to the hopes of a government spending-led economic recovery.

• Knowledge centre:

1. Centre versus State govt. spending - Throughout India’s history, the centre had an oversized share in the use of public funds. But the constitutional division of subjects put more onerous welfare obligations on state governments. Since 2000, successive finance commissions have tried to allot more funds for state governments to correct the imbalance. From the 11th finance commission to the 14th, the share of net proceeds recommended to be devolved to states increased each time: from 29.5% to 30.5% to 32% to 42%. Net proceeds are defined in Article 279 of the Constitution as gross tax revenue of the centre less surcharges and cesses, and cost of collection. About two-thirds of India’s public capex comes from states, the highest decentralization of capital spending globally. India’s coalition era, in which regional parties held sway over Delhi ensured that there was broad-based political support for such a shift. As a result, in several critical areas of spending, such as capital expenditure, state governments came to assume the leading role. With a strong BJP govt., trend has reversed.
2. Pandemic and state revenues - The pandemic-induced lockdown had a crippling effect on already weakened state finances. The centre contributed to some of this fiscal stress, by delaying GST compensation cess, and by lowering the amount available for the divisible pool through cesses and surcharges. States are not blameless either. Populist programs such as farm loan waivers contributed to the current fiscal stress, without doing much to raise farm incomes. The rather tepid performance of the power debt restructuring scheme, UDAY, also strained state finances. The last blow came from Covid-19, and the lockdown that followed. The initial ban on liquor, the sharp fall in mobility, which hit fuel stations hard, and the slump in the property market during the lockdown hit state governments hard as they are heavily dependent on liquor, fuel, and real estate for revenues.

 

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• 2. ENVIRONMENT AND ECOLOGY (Prelims, GS Paper 3, Essay paper

Bitcoin’s electricity consumption - Carbon Footprint

• Mad rush: As is evident, investors around the world are rushing in to not miss the Bitcoin bus, currently worth around $1 trillion. But the carbon footprint that the cryptocurrency is leaving behind has raised concerns.
• How do Bitcoins work: Bitcoins are created by “mining” coins. For this, high-tech computers are used for long hours to do complex calculations. The more coins there are in the market, the longer it takes to “mine” a new one. As mining provides a solid source of revenue, people are willing to run power-hungry machines for hours to get a piece. In the process, more electricity is consumed.
• How much: Bitcoin uses more electricity per transaction than any other method known to mankind. In 2017, the Bitcoin network consumed 30 terawatt hours (TWh) of electricity a year. But the network currently uses more than twice as much energy: between 78TWh and 101TWh. Each bitcoin transaction roughly requires an average 300kg of carbon dioxide. This is equivalent to the carbon footprint produced by 7,50,000 credit cards swiped. Bitcoins may be leaving behind a carbon footprint of 38.10 Mt a year. The annual carbon footprint of Bitcoins is thus almost equivalent to that of Mumbai. To put it in a global perspective, it is as high as the carbon footprint of Slovakia. Roughly 60% of the costs of bitcoin mining is the price of the electricity used.

• Other impacts of Bitcoin mining: With miners using high-tech computers for hours to formulate new blockchains, these machines do not last long. Makers of Bitcoin mining devices need a substantial number of chips to produce these machines. During the Covid-19 crisis, the world had witnessed a shortage of these chips, which, in turn started affecting the production of electric vehicles around the world. To produce 1 million such computers, the largest provider, Bitmain, would have to use a month’s capacity of one of only two chip fabricators in the world capable of producing such high-power silicon. This potentially crowds out demand from other sectors such as Artificial Intelligence, transportation and home electronics.

1. Countries like Iran are using cryptocurrency to circumvent economic sanctions (imposed to prevent developing nuclear capabilities).
2. Cheap energy has lured in many cryptocurrency miners. The mining activity in Iran now represents 8% of the total computational power in Bitcoin’s network. The country is thus using Bitcoin to boost revenues while its oil exports suffer from international sanctions.

• What to do: The major problem with mining Bitcoin is not its massive energy-consumption nature, but the fact that most of the mining facilities are located in regions that rely heavily on coal-based power. Policymakers should follow the path shown by Québec in Canada. There, a moratorium on new mining operations has been imposed. Although Bitcoin might be a decentralised currency, many aspects of the ecosystem surrounding it are not. So, large-scale miners can easily be targeted with higher electricity rates, moratoria, or, in the most extreme case, confiscation of the equipment used. Governments can also ban cryptocurrencies from digital asset marketplaces as it will affect the prices of a digital currency.
• Indian case: India has around 75 lakh cryptocurrency investors. They have together pooled in over Rs 10,000 crore into Bitcoins and other such digital currencies. The prices have surged by over 900%, given the worldwide boom. A single bitcoin that used to cost around Rs 4 lakh in 2020 now costs somewhere around Rs 45 lakh. But the government seems keen on a complete ban on and criminalising the possession of Bitcoins. The Finance minister has said, though, that the Centre will take a “calibrated approach” and leave a window open for experiments with blockchain technology.

 

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• 3. FOREIGN AFFAIRS (Prelims, GS Paper 3, Essay paper)

Immigration puzzle for Biden at US-Mexico border

• The issue at hand: The nearly two-month-old U.S. government under President Joe Biden is facing the highest number of migrants reaching its border with Mexico in 20 years. While ex President Trump was hyper-aggressive about it, the democrats in power today are not.
• Extent of crisis: There is an unprecedented surge of unaccompanied minors at the U.S.-Mexico border in few weeks. The number of unaccompanied teens and children taken into U.S. custody along the border surged in few weeks to nearly 30,000 in February 2021. Migrant adults and families continue to be sent back to Mexico when they are caught. Unaccompanied children are being processed, and they get help resettling with U.S. relatives. Efforts are also stepped up to have children apply for asylum from their homes in Central America instead of making the dangerous journey to the U.S. border.
• The timing: Former President Donald Trump adopted a “zero tolerance” policy toward undocumented immigrants. Trump-era emergency rule gave border agents the authority to summarily turn away most migrants other than unaccompanied minors. It denied them the right to have their asylum claims heard. In a sense, the mounting crisis now is related to a sweeping immigration reform proposal unveiled by Mr. Biden’s administration a month ago. The migrants are thus apparently encouraged to try to enter the U.S. by Biden’s rejection of Trump’s “zero tolerance” policy.
• Other plans under way: There are smaller Bills that the Democrat-controlled Congress could pass with less resistance. These include measures to quicken the process for grant of legal status to agriculture workers and “Dreamers”, or undocumented immigrants who entered the U.S. as children. There are also plans under way to redress the ills of the legal migration system. Many obstacles to this were erected by the Trump White House. These include a controversial rule to raise mandatory minimum pay for foreign workers on the H-1B visa for skilled immigrants that is largely granted to Indian nationals.
• Biden approach: President Biden’s broader, omnibus immigration legislation proposal includes an eight-year pathway to citizenship for the nearly 11 million undocumented immigrants. It also proposes the use of hi-tech systems for border patrol enforcement. [It is suggested that the Biden administration’s proposed immigration bill could potentially increase annual ‘green card’ or permanent residency numbers by 35%.]
• Challenges posed by immigration crisis: Undoing some of the damaging policies implemented by his predecessor is getting to be a real challenge for Biden and his administration. The immigration crisis now has pushed the need for a comprehensive reform. The numbers so far is already wearing federal resources thin. The issue has made a call to choose between - the American Dream with an inclusive vision of economic growth premised on embracing diversity and skilled migration the Trumpian ‘America First’ battle cry for nativist populism. What Mr. Biden does in the months to come becomes truly significant.

• Knowledge centre:

1. America the melting pot - The melting pot is at the heart of the American immigration system. The melting pot comes from the idea that all of the cultural differences in the United States meld together, as if they were metals being melted down to become a stronger alloy. Rather than embracing multiculturalism, as is the policy in Canada and some other countries, the United States encourages different cultures to assimilate into its own. In fact, this philosophy demonstrates how American culture got its start.
2. H1-B visas - The H1B visa is an employment-based, non-immigrant visa for temporary workers. For this visa, an employer must offer a job in the US and apply for your H1B visa petition with the US Immigration Department. To qualify for the H-1B visa category, the prospective H-1B employee must hold a U.S. bachelor's or higher degree, or the equivalent. The person must hold a U.S. equivalent 4 years' bachelor's or higher degree from an accredited college or university.
3. Indian Americans - Indian Americans are Americans with ancestry from India. The US Census Bureau uses the term Asian Indian to avoid confusion with Native Americans (Red Indians). With a population of more than 40 lakhs, Indian Americans make up 1.2% of the U.S. population and are the third largest group of Asian Americans after Chinese Americans and Filipino Americans. The New York metropolitan area comprises the largest population of Indian Americans among U.S. metropolitan areas. 

 

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• 4. GOVERNMENT SCHEMES (Prelims, GS Paper 2, Essay paper)

Algorithmic trading in Indian markets

• Secretive and super-fast: Split-second, high-precision algorithmic trading is on the rise in India. It’s controlled by a secretive community of tech and market wizards who like to lie low - some names are - Hudson River Trading, Virtu Financial, Tower Research Capital, Jump Trading, Getco, Progress Apama, FlexTrade Systems etc.

• Unknown and huge: Not many have heard about these firms. These are global majors doing business worth hundreds of millions of dollars in India in the highly-secretive world of algorithmic trading in stock markets.

• Algorithmic trading: It is also called "algos" in market parlance. It refers to a software designed to execute trading strategies, in a fraction of a second, which is impossible manually. In the world of algos, the speed at which the trades are executed is of paramount importance. A split-second delay and the potential gains could be significantly reduced.

1. A code is written to automatically trigger a buy or a sell trade when, for instance, the price of a certain share goes below or above a predefined level. It could also be designed to capture the small difference in the share price of a company on the BSE and National Stock Exchange, known as arbitrage gains in market jargon.
2. Far more complex and sophisticated algos are now used by the deep-pocketed global and even domestic institutional investors and brokerages.
3. Large Indian brokerages like Edelweiss Securities, IIFL, Kotak Securities and Motilal Oswal Financial Services among others also offer algo-based trading facilities. They service foreign and domestic institutional investors who prefer algos to execute strategy-based trades in India.
4. Global majors are seeing a consistent rise in trading, but remain tight-lipped about their activities to avoid attracting undue regulatory or media attention.

• Regulators unhappy: Globally, regulators view algo as a very high-risk trading mechanism and hence algo firms do not like to talk much about their business activity. Global players use smart and sophisticated algos in India, which now offers a decently deep market to put their algos in play. It is believed that nearly 70% of the daily turnover is attributed to algos. That is a pretty large share, given that algo trading was allowed in India only in 2008 (though market regulator SEBI has barred the use of algos for retail investors).

• Co-location issues: Orders from co-location services — wherein the broker keeps his server close to that of the exchange to reduce the latency in order execution — use algos, as do direct market access (DMA), where the investor can directly send the order to the exchange through the broker’s terminal but without any manual intervention at the broker’s end.

1. The buy-side players like mutual funds often use algos to rebalance their portfolio that might run into thousands of crores.
2. Algos will slice the order and keep executing it in parts so as to keep the impact cost — the cost of executing a trade — low while also minimising the probability of front-running that would attract the regulator’s ire.
3. Front running is an illegal way of trading in shares based on the insider knowledge of an institutional trade that would influence the stock price.
4. Most large Indian brokerages now see over 80% of their institutional turnover emanating from algos.

• Dangers: On 13 March, 2020, the benchmark indices hit their 10% lower circuit limit and, as per regulatory norms, trading had to be halted for 45 minutes. Once trading resumed, the benchmarks staged an unprecedented rally to gain over 4,700 points. What caused such a rally?

1. Buying after the huge fall was triggered by algos that were programmed to initiate buy or sell orders based on the S&P 500 levels. Incidentally, there was huge volatility in the US markets as just a day earlier, the US Federal Reserve announced a trillion-dollar worth stimulus package.
2. On 31 May, 2019, in less than 30 minutes, the Sensex witnessed a sharp and sudden 700-points fall, which was again due to some algo trades gone sour. (c) There are many such instances. In 2011, all the trades done in the equity derivatives segment of BSE during the special Muhurat trading session were cancelled due to an algo trading mishap.

• SEBI's checks: One of the checks put in place is order-to-trade ratio, which refers to the total number of orders being sent by the algos to the total number of orders executed. A lower order-to-trade ratio attracts penalty as it means that the triggers set in the algo are not in sync with the current market prices.

1. According to the Indian regulatory framework, any algo before being introduced in the market has to be approved by the stock exchanges and the Securities and Exchange Board of India (SEBI) as well. This minimises the probability of a rogue algo disrupting the safety of the markets.
2. The danger is accentuated because the bulk of institutional trading is done through software codes and without any manual intervention.
3. There are simple execution algos that institutional brokerages offer their clients. There is alpha-generating algos that hedge funds, arbitrageurs and proprietary desks use.

• Secrecy: There is no public database of algos as such and no firm would talk about their algo strategies publicly. No one would know what are the kind of complex algos being used here. Developing an algo costs a lot and if the secrecy element is lost then the advantage would also be lost as someone might just try to replicate the model. Developing an algo requires a team of highly skilled persons. Algos require co-location facilities too and hence firms need to budget that as well. According to market participants, the annual cost for co-location starts from around ₹6 lakh and could go up to ₹15 lakh or even more depending on the number of servers to be kept in the exchange premises.
• Summary: Algos have gained immense popularity and acceptance in most markets globally, but there are risks associated. In India, SEBI has barred the use of algos for retail investors. The proprietary desks of brokerages are using algos to design trading strategies. There is no explicit ban on retail investors creating and testing strategies in the back end and then executing it through any regular broking platform. 

 

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• 5. POLITY AND CONSTITUTION (Prelims, GS Paper 2, GS Paper 3)

The role of Rajya Sabha

• Introduction: Rajya Sabha’ or the ‘Council of States’ is the second chamber of the Indian parliament, which traces its origin to the Montagu-Chelmsford Reforms, 1919. Rajya Sabha as the second chamber of the parliament intended to play certain roles as a permanent house (it never dissolves like Lok sabha and one-third of its members retire every two years), revisionary house (reconsidering bills passed by the Lok Sabha) and offers a degree of continuity in the underlying policies of laws passed by parliament.
• Federalism: Rajya Sabha also acts as a means to institutionalise the federal principle of power-sharing between the Centre and states. But the role and relevance of Rajya Sabha have been a matter of debate which can be traced from discussions in constituent assembly to recent times.

• Constituent Assembly Debates:

1. Against the Rajya Sabha - The section in the constituent assembly who was opposed to the idea of Rajya sabha held that an Upper House was not essential and opinionated that such a chamber can prove to be a “clog in the wheel of progress” of the nation, by delaying the legislative process.
2. In favour of Rajya Sabha - Proponents of the idea of Rajya Sabha held that an upper chamber would lend a voice to the states in the legislative scheme of things and check the legislation passed in haste.

• Role of Rajya Sabha: It is considered the safety valve of India’s federal polity. Bicameralism is necessary for a federal constitution to give representation to the units of the federation. While checks and balances usually operate between the executive, legislature and judiciary, the Council of States acts as a safety valve within the legislature itself, easing federal tensions. The Rajya Sabha thus represents a crucial component of the constitutional checks and balances scheme, in addition to the commonly identified examples of responsible government and judicial review.
• Review and revaluation: The Indian constitution framers wanted to create a house that would act as a revisionary house to keep a check on the hasty legislation that could be passed by the lower house under populist pressures. Also, when the ruling dispensation has a brute majority in the Lok Sabha, Rajya sabha can prevent the government of the day exercising authoritarianism.
• A deliberative body: The Parliament is not only a legislative body but also a deliberative one which enables the members to debate major issues of public importance. Thus, the role of the Upper House is to be a deliberative body besides balancing the “fickleness and passion” of the Lok Sabha.
• Representing the vulnerables: Women, religious, ethnic and linguistic minority groups are not adequately represented in the Lok Sabha (due to first past the post-election system). An indirect form of election (through propositional representation) to the Rajya Sabha, therefore, would give them a chance to get involved in the nation’s law-making process. So, Rajya Sabha can make a place for people who may not be able to win a popular mandate.
• Special powers: The Upper House also has some special powers, such as the power to transfer a subject from the State List to Union List for a specified period (Article 249), to create additional All-India Services (Article 312), and to endorse Emergency under Article 352 for a limited period when the Lok Sabha remains dissolved.

• Issues related to RS:

1. No equal representation of states - Federal countries like US, Australia, institutionalise the principle of federalism more strongly than India, by providing equal representation to all states in their upper houses. This is in contrast with the Rajya Sabha, where states are represented proportionally to their relative populations. So the number of seats allocated in Rajya Sabha to Uttar Pradesh alone is significantly higher than that of combined north-eastern states.
2. Bypassing the Rajya Sabha - Even ordinary bills are being passed in the form of a Money Bill, circumventing the Rajya Sabha and giving rise to the question about the very efficacy of the upper house of Parliament. Best (worst) example was the controversy related to Aadhar Act.
3. Undermining of federal character - By way of the Representation of People (Amendment) Act, 2003, parliament has removed the word ‘domicile’ from Section 3 of Representation of People Act, 1951. This means that a person who does not belong to a state can contest the Rajya Sabha elections from that state of which they are neither a resident nor a domicile. After the amendment, the seats in the Rajya Sabha have been used by the ruling party to get their defeated candidate in Lok Sabha, elected in Rajya Sabha.
4. Low Participation of Nominated Members - The sincerity of nominated members has been questioned in multiple instances. Nominations are made by the government to satisfy the sentiments of the followers of certain personalities. Once nominated, they rarely participate in the working of the house. Sachin Tendulkar was appointed in 2012 and the House has met 374 days since then, but the attendance of Sachin Tendulkar is a meagre 24 days.

• Steps to take: To preserve the federal character of Rajya Sabha, one step would be to have members of the Rajya Sabha be directly elected by the citizens of a state. This will reduce cronyism and patronage appointments. A federal arrangement can be devised to enable equal representation for each state, so that large states do not dominate the proceedings in the House. There is a need for a better procedure of nomination to improve the quality of discussion in the House. The UK case is illustrative. The House of Lords Act, 1999 has led to the introduction of the Appointments Commission in 2000 with the primary function of making recommendations for the appointment of non-party-political members to the House of Lords. This commission can recommend nomination to Rajya Sabha from groups under-represented.
• Conclusion: The Rajya Sabha has remained a vanguard for political and social values, a melting pot of cultural diversity. Also, along with Lok sabha, it is a flag-bearer of the sovereign, socialist, secular, democratic republic called India. It should not be seen as a ‘disruptive’ wing of the legislation and efforts should be made to enable Rajya Sabha to retain its significant role in Indian democracy.

 

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• 6. SCIENCE AND TECHNOLOGY (Prelims, Various GS Papers)

Honeybees run vaccination programmes

• Royal jelly: Research shows human beings are not alone in having invented vaccination. Perhaps honeybees got there first, with the equivalent of prime-boost childhood vaccination programmes.

• Social: Being gregarious, honeybees are at constant risk of diseases sweeping through their hives. Most animals which live in crowded conditions have particularly robust immune systems, so it long puzzled entomologists that honeybees do not. Indeed, they actually possess fewer immune-related genes than most solitary bees.

1. Part of the answer, discovered in 2015, is that queen bees vaccinate their eggs by transferring into them, before they are laid, fragments of proteins from disease-causing pathogens.
2. These act as antigens which trigger the development of a protective immune response in the developing young. But that observation raises the question of how the queen receives her antigen supply in the first place, for she subsists purely on royal jelly, a substance secreted by worker bees which are at the stage of their lives (which precedes the period that they spend flying around foraging for nectar and pollen) when they act as nurses to larvae.
3. Researchers wondered if the nurses were incorporating into the royal jelly they were producing, fragments from pathogens they had consumed while eating the victuals brought to the hive by the foragers.

• Testing: Researchers collected about 150 nurse bees and divided them among six queenless mini hives equipped with broods of larvae to look after. Instead of nectar, they fed the nurses on sugar-water, and for three of the hives they laced this syrup with Paenibacillus larvae, a bacterium that causes a hive-killing disease called American foulbrood.

1. In this case, to stop such an infection happening, researchers heat-treated, and so killed, the pathogens in advance. They labelled the dead bacteria with a fluorescent dye, to make their subsequent fates easy to track.
2. Fluorescent microscopy confirmed that fragments of P. larvae were getting into royal jelly secreted by those bees which had been fed with the laced sugar-water.
3. Examination of this royal jelly revealed elevated levels, compared with royal jelly from bees that had not been dosed with P. larvae, of an antimicrobial peptide known as defensin-1. This is thought to help bee immune systems fend off bacterial infections.

• Conclusion: Findings suggest that nurse bees are indeed, via their royal jelly, passing antigens on to the queen for inoculation into her eggs. Since the larvae, too, receive royal jelly for the first few days after they hatch, the nurses are inoculating their larval charges as well. Each infant bee is therefore being vaccinated twice. This is the herd, or swarm, immunity

 

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• 7. SOCIAL ISSUES (Prelims, GS Paper 2)

Covid increased poverty: Pew Report

• Falling through the cracks: A new research conducted by Pew Research Center has found that the coronavirus pandemic has pushed about 32 million Indians out of the middle class and increased poverty in the country. The report is based on an analysis of World Bank data. The Pew Research Center is a nonpartisan fact tank that informs the public about the issues, attitudes and trends shaping the world.

• Points to note: The poverty rate in India likely rose to 9.7% in 2020, up sharply from the January 2020 forecast of 4.3%. From 2011 to 2019, the number of poor in India was estimated to have reduced to 78 million from 340 million (34 crore). In 2020, the number increased by 75 million (7.5 crore).

1. Poor - People with incomes of USD 2 or less a day. Increase in India accounts for nearly 60% of the global increase in poverty. Record increase in Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) participants as proof that the poor were struggling to find work.
2. Reduced Middle Class - The middle class in India is estimated to have shrunk by 3.2 crore in 2020. Middle Class: Includes people with incomes of approximately Rs. 700-1,500 or USD 10-20 per day. The middle income group is likely to have decreased from almost 10 crore to just 6.6 crore.
3. Shrunk Low Income Group - The vast majority of India’s population fall into the low income group. This group shrank from 119.7 crore to 116.2 crore per day, with about 3.5 crore dropping below the poverty line. Low Income Group: Includes people earning about Rs.150 to 700 per day.
4. Rich Population - The richer population also fell almost 30% to 1.8 crore people. Rich: Includes the people who earn more than Rs.1,500 a day.

• Comparison with China: Like India, China has a large population of around 1.4 billion people. But the pandemic’s effect on poverty was much smaller in China. It was the only major economy to grow in 2020 and that has helped poverty levels to remain “virtually unchanged”. In January 2021, the International Monetary Fund in its World Economic Outlook Report, estimated India’s economy to contract 8% in the Financial Year (FY) 2020 while China’s economy was expected to expand by 2.3% in 2020. China’s middle class is likely to see a miniscule dip of just one crore, while the number of poor people may have gone up by 10 lakh.
• Global scenario: The global poverty rate also increased to 10.4% last year after witnessing a steady decline over the years. It was previously expected that the poverty rate would decrease to 8.7% in 2020. The number of ‘global poor’ are estimated to have increased to 803 million in 2020, which is a significant increase from 672 million, the pre-pandemic prediction. From 2011 to 2019, the middle class population globally had increased to 1.34 billion from 899 million. Further, it was expected to increase by 54 million annually on average.
• South Asia: It saw the greatest reduction in the number of middle class and the largest ‘expansion’ in poverty in 2020. This could be attributed to South Asia experiencing sharp decrease in economic growth during the pandemic. The lockdown triggered by the pandemic resulted in shut businesses, lost jobs and falling incomes, plunging the Indian economy into a deep recession. Sharp rise in global poverty was owing to the fact that many under the low income tier prior to the pandemic were living on the margin of poverty.
• Effect: India and China also account for more than a third of the global population, with about 1.4 billion people each, the course of the pandemic in these two countries and how each recovers will have a substantial effect on changes in the distribution of income at the global level. It claws back several years of progress on the economic front. At least 271 million people were lifted out of multi-dimensional poverty between 2005-06 and 2016-17, claimed India’s Voluntary National Review (VNR) of Sustainable Development Goals (SDG).

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• 8. MISCELLANEOUS (Prelims, GS Paper 1, GS Paper 2)

World Happiness Report - Highlights

1. The story: The United Nation Sustainable Development Solutions Network has released its annual report called “World Happiness Report, 2021”. The report was collected and prepared slightly differently amid the COVID-19 pandemic.
2. What it measures: It measures the subjective well-being by relying on three indicators namely, Life Evaluation, Positive Emotions and Negative Emotions. The report was presented ahead of “World Happiness day” which is observed on March 20.
3. Highlights: In order to measure the life evaluations, Gallup World Poll asked people to evaluate their current life using image of a ladder. The best possible life for them was evaluated as 10 while the worst possible life as 0. The report highlights that, “life evaluations” provide the most informative measure to conduct the international comparisons because this indicator captures the quality of life in a complete and stable way.
4. Positive emotions: The positive emotions were captured in the report by asking the people whether they smiled or laughed the previous day. The positive response was coded as 1 while the negative response was coded as 0. Following this, average response was calculated for each person in the range of 0 and 1.
5. Negative emotions: Lastly, the negative emotions were measured by asking the respondents whether they experienced any specific negative emotions on the same day.
6. Key findings: Finland was again titled as the World’s happiest country because the overall rankings remained similar to the index of 2020. The other countries that performed well on the rankings are Denmark, Iceland, Switzerland and Netherlands. United States was ranked at 19th position. Afghanistan was titled as the ‘Least Happy’ country. India was ranked at 139th position out of 149 countries. India was ranked at 144th position out of 156 countries in the “world happiness report, 2020”.  Ten countries who have been ranked behind India in the year 2021 are Burundi, Yemen, Tanzania, Haiti, Malawi, Lesotho, Botswana, Rwanda, Zimbabwe and Afghanistan.

 

Gram Ujala scheme launched for rural areas

1. The story: India has launched the “Gram Ujala Scheme” on March 19, 2021 to provide the cheapest LED bulbs in the rural areas. The scheme was launched by the Union power and new and renewable energy minister, Raj Kumar Singh.
2. ‘Gram Ujala Scheme’: It is an ambitious scheme which offers the world’s cheapest LED bulbs in rural areas. It provides the LED bulbs in these areas at a mere ₹10. The scheme does not come with the government’s support or subsidy. Bulbs are offered by the state-run Energy Efficiency Services Ltd’s subsidiary Convergence Energy Services Ltd (CESL). The scheme proposes for distributing some 600 million LED at Rs.10. It will be financed entirely through the carbon credits which will be claimed under the “United Nations’ Clean Development Mechanism (CDM)”. The revenue from the carbon credit will contribute to Rs.60 per LED. This scheme also proposes to take back the incandescent and compact fluorescent lamp (CFL) bulbs of the rural consumers. After submitting the bulbs, the consumers will get 7 watt and 12-watt LED bulbs with three years’ warranty.
3. First phase: In the first phase, the scheme was launched from Arrah district in Bihar. In this phase around 15 million LED bulbs will be distributed in the villages of Arrah (Bihar), Vijayawada (Andhra Pradesh), Varanasi (Uttar Pradesh), Nagpur (Maharashtra), and western Gujarat.
4. Background: In 2014, the previous Unnat Jyoti by Affordable Lighting for All (Ujala) scheme had cut the LED bulb prices to Rs.70 per piece from around Rs.310. India is currently the second-largest LED market across the world by value. So, the scheme will help in avoiding the peak electricity demand of 9,428 megawatts.

 

IIT Bombay’s Energy Swaraj Yatra Bus

1. The story: The Union Education Minister, Ramesh Pokhriyal ‘Nishank’, took his ride in the ‘Energy Swaraj Yatra’ bus which has been built by the professor of Indian Institute of Technology (IIT) Bombay, Dr Chetan Singh Solanki.
2. Highlights: The “Energy Swaraj Yatra” bus runs on the solar energy. It comprises of a complete work-cum-residential unit. The professor has been travelling on the bus to raise awareness regarding the use of solar power since the year 2020. This yatra will continue till 2030.  While taking the ride, the education minister highlighted that, this project is in line with the “National Education Policy” which comprises of an “in-built framework for imparting skills” with respect to the use of solar energy in schools and colleges. The minister also stated that, this bus has been designed with the objective of creating a public movement for the adoption of 100 percent solar energy.
3. About “Energy Swaraj Yatra” Bus: The bus allows the occupant to perform all the daily activities such as bathing, cooking, sleeping, working, meeting and training. This bus has been fitted with the 3.2 kW solar panels. It is having the capacity of 6 kWh of battery storage. The concept of “Energy Swaraj Yatra” is based on “Gandhian ideologies” to mitigate the climate change and to ensure the energy sustainability. Climate change has become an emergency which requires public efforts in order to mitigate it. The Energy Swaraj Movement was started to bring about the public awareness and their involvement to solve climate change problem.

 

BDL to supply Anti-Tank Guided Missiles to Indian Army

1. The story: The defence ministry has signed deal worth Rupees 1,188 crores with the state-run Bharat Dynamics Limited (BDL). Following the deal, the BDL will supply 4,960 Milan-2T Anti-Tank Guided Missiles (ATGMs) for Indian Army. The defence ministry had signed the deal with BDL in March 2016 for these missiles.
2. Milan-2T ATGMs: It is a Tandem Warhead ATGM having the range of 1,850 metres. The missiles have been produced by BDL under the license from MBDA Missile Systems of France. The warheads comprise of a forward charge and a rear charge which is separated by the blast shield. The forward charge of the ATGM fires first and disrupts the outer armor of target while the rear charge of the missile fires after a short while. It then penetrates remaining armor of the target. These missiles will be inducted in the Indian Army in three years.
3. Features: These missiles can be fired from both the ground and vehicle-based launchers. The missile can also be deployed in the anti-tank role for offensive as well as the defensive tasks.
4. Importance: The move will help in strengthening the Make in India programme of the government.  The induction of these missiles will enhance the operational preparedness of Armed Forces. This project will also showcase the capability of the defence industry.
5. Indian defence industry: The government has been pushing the Indian private sector to do the job of manufacturing more of the defence hardware in the country under the flagship Make in India and Atmanirbhar Bharat programmes. This is helping India to reduce its armaments imports & import bills. These initiatives are also transforming India into a defence manufacturing hub. With this objective, two industrial corridors have been set in north India and in south India.

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• SECTION 3 - MCQs (Multiple Choice Questions)

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