Daily Current Affairs - Civil Services - 28-05-2021

Useful compilation of Civil Services oriented - Daily Current Affairs - Civil Services - 28-05-2021

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• SECTION 1 - TEN NEWS HEADLINES

1. Indian Economy - Ratings firm warns second wave will hurt rural - India Ratings firm has said that the economic impact of the second COVID-19 wave will be felt more through loss of demand impulse in rural India, than in urban India. The rating agency (Ind-Ra) said that the demand for agricultural credit and inputs such as fertilisers and pesticides could remain strong but the demand for FMCG products could suffer. A big factor that will adversely impact rural demand and expenditure during Covid 2.0 is the decline in non-agricultural activities as these activities require high human contact, be it work of a carpenter, blacksmith, auto/tractor/cycle repair, construction, transport and storage. Thus even employment offered under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in rural areas may be less effective if family bread-winners fall to Covid-19 infection. Another factor will be a decline in rural wages, as the largest chunk of rural population consists of daily wage earners and not farmers. Rural wage growth both for agricultural and non-agricultural activities has declined lately. Providing free rations, income support, higher allocation under the Mahatma Gandhi National Rural Employment Guarantee Scheme will go a long way in reducing the injury inflicted by the pandemic. Ind-Ra is a 100% owned subsidiary of the Fitch Group.
2. World Economy - Bitcoin Mining Council - Upon the prodding of Elon Musk, and to defend Bitcoin's mining practices, a Bitcoin Mining Council is being set up. It will consist of miners who commit to publishing current and planned renewable usage, a “potentially promising” move. The move comes after Elon Musk suspended Tesla vehicle purchases using bitcoin, over environmental concerns, and said that Tesla will not sell any bitcoin and intends to use bitcoin for transactions as soon as mining moves to more sustainable energy. Musk convinced many bitcoin miners in North America to form an organisation to promote cryptocurrency’s energy usage transparency and accelerate sustainable mining worldwide. The Bitcoin Mining Council, formed by cryptocurrency companies like ArgoBlockchain, Galaxy Digital, Core Scientific and Hive, will standardise energy reporting, pursue industry ESG goals and educate and grow the marketplace. Musk will lead the council and respect bitcoin’s fungibility, and won’t change the nature of the crypto asset. It will promote greener practices.
3. Governance and Institutions - Mekedatu - The National Green Tribunal (NGT), Southern Zone, has appointed a joint committee to look into allegations of unauthorised construction activity taking place in Mekedatu, Karnataka. Mekedatu (meaning 'goat's leap') is a gorge along Kaveri where Arkavati merges with Kaveri. From this point, about 3.5 kilometers downstream, the river Kaveri flows through a deep and narrow gorge. In 2017, the Karnataka government had proposed to construct a dam in Mekedatu across the Cauvery River. This project received approval from the erstwhile Ministry of Water Resources for the detailed project report. The Karnatake govt. has opposed this NGT decision (to form the committee) saying that the Mekedatu case is already pending in the Supreme Court and the state was constructing the reservoir within its jurisdiction. The long-pending project has run into rough weather ever since it was announced in 2018 with Tamil Nadu raising strong objections.
4. World Politics - Diamond merchant Mehul bhai running from island to island - Fugitive diamond trader Mehul Choksi was arrested in Dominica after he was reported missing from his home in Antigua and Barbuda, the Caribbean nation of which he has been a citizen since early 2018 (after fleeing from India). Mr. Choksi, wanted for defrauding banks in India, was arrested in Dominica after an Interpol Yellow Notice was issued against him. Dominica is an island country in the Caribbean, whose capital is Roseau. It is geographically situated as part of the Windward Islands chain in the Lesser Antilles archipelago in the Caribbean Sea. Dominica has been nicknamed the "Nature Isle of the Caribbean" for its natural environment. It is the youngest island in the Lesser Antilles, and in fact it is still being formed by geothermal-volcanic activity, as evidenced by the world's second-largest hot spring, called Boiling Lake. The country is a member of the Commonwealth of Nations, the United Nations, the Organization of American States and the Non-Aligned Movement. India is trying to get Choksi extradited.
5. Polity and Constitution - IBF expansing scope of work - The Indian Broadcasting Foundation (IBF), the apex body of broadcasters, is expanding its purview to cover digital streaming platforms and will be renamed the Indian Broadcasting and Digital Foundation (IBDF). The move would bring broadcasters and OTT (over-the-top) platforms, which have seen a substantial jump in their viewership base after the pandemic, under one roof. For this, the IBDF was in the process of forming a new wholly-owned subsidiary to handle all matters of digital media. The IBDF would also form a self-regulatory body, the Digital Media Content Regulatory Council (DMCRC), for digital OTT platforms. The government has brought a new Ethics Code also, named the "Intermediary Guidelines and Digital Media Ethics Code" to govern these new platforms.
6. World Politics - Swiss-EU ties - Switzerland dumped years of negotiations with the European Union over a proposed overarching agreement that would have upgraded its relations with the bloc, currently governed by a patchwork of more than 120 bilateral deals. The talks failed after the two sides could not agree over issues such as full access for EU citizens to the Swiss labour market, and the collapse is expected to hamper future ties as the multiple existing agreements become outdated or lapse. Switzerland is the EU’s fourth-largest trading partner, and is surrounded by EU countries. Relations between the two partners rest on the foundation of over 120 separate treaties, something which has frustrated the EU for a long time. Unlike the UK, Switzerland has access to the EU single market and maintains open borders. For years, the EU had been pushing for an “institutional framework agreement” with Switzerland, suggesting that the lack of an overarching agreement could also hamper cooperation in the labour market, the health sector, education and research.
7. World Economy - Bangladesh-Sri Lanka currency swap - Bangladesh’s central bank has approved a $200 million currency swap facility to Sri Lanka, which will help Colombo manage its foreign exchange crisis. A currency swap is a loan that Bangladesh will give to Sri Lanka in dollars, with an agreement that the debt will be repaid with interest in Sri Lankan rupees. For Sri Lanka, this is cheaper than borrowing from the market, and a lifeline as is it struggles to maintain adequate forex reserves even as repayment of its external debts looms. The period of the currency swap will be specified in the agreement. This may be the first time that Bangladesh is extending a helping hand to another country. It is also the first time that Sri Lanka is borrowing from a SAARC country other than India. In recent times, India-Sri Lanka relations have been tense over Colombo’s decision to cancel a valued container terminal project at Colombo Port. In July 2020, the Reserve Bank of India did extend a $400 million credit swap facility to Sri Lanka, which Central Bank of Sri Lanka settled in February 2021, while not extending the facility.
8. Governance and Institutions - Indian govt. cracks the whip on platforms - The Centre asked digital media publishers, including OTT and digital news platforms, to give all details within 15 days on their compliance with the new IT guidelines. The government said the rules were to "establish a soft touch progressive institutional mechanism with a level-playing field featuring a Code of Ethics and a three-tier grievance redressal framework". While Twitter has picked a fight with the government, Google said it was committed to complying with local laws. CEO Sundar Pichai said that the values of a free and open internet are to be considered, while engagement with regulators around the world happes. Government reacted after Twitter said it was concerned with recent attacks on freedom of expression in India, stating that it was more concerned about protecting it than a foreign company! WhatsApp has already filed a lawsuit in the Delhi High Court challenging the new digital rules on grounds that the requirement for the company to provide access to encrypted messages will break privacy protections.
9. Science and Technology - Various updates - (a) China tested a camera system, using AI and facial recognition, to reveal states of emotion, on Uyghurs in Xinjiang province. A software engineer claimed to have installed such systems in police stations in the province. (b) Denmark's central bank Governor Lars Rohde said he was tempted to ignore Bitcoin and other cryptocurrencies as it was a very speculative asset. (c) The price of Dubai's first cryptocurrency DubaiCoin rose by over 1000% in 24 hours, and was trading at around $1.13 up from an original price of $0.17. It was launched by Arabianchain Technology. (d) Billionaire investor Carl Icahn told Bloomberg in an interview that his firm is planning to invest in cryptocurrency in a "big way", and may eventually invest about $1.5 billion. (e) Paytm is aiming to raise about $3 billion in an initial public offering later this year, and if it goes through, it would be the largest market debut of an Indian company so far.
10. Indian Politics - Covid Update - (a) India reported the lowest COVID-19 cases in 44 days, with 1.86 lakh new coronavirus cases in 24 hours. The active caseload declined to 23,43,152. As many as 2,59,459 patients recovered during the 24 hours, with recoveries outnumbering the daily new cases for 15th straight day. India has administered 20.57 crore vaccine doses so far. (b) The anti-Covid drug developed by the Defence Research and Development Organisation (DRDO) has been priced at Rs 990 per sachet. The drug, developed in collaboration with Hyderabad-based pharma company Dr Reddy’s Laboratories (DRL), will be provided to central and state government hospitals at a discounted price. (c) Kerala government will now issue Covid-19 vaccination certificates with passport numbers to those people who require them to go abroad for job or studies and need travel clearance. (d) The National Environmental Engineering Research Institute (NEERI) has developed a simple and fast method of swab collection and processing for RT-PCR coronavirus test which could be used in rural and tribal areas. The method is simple, fast, cost-effective, patient-friendly and comfortable. (e) Aviation regulator DGCA said suspension of scheduled international passenger flights has been extended till June 30. (f) NUMBERS - INDIA - Total cases: 27,547,705; New cases: 179,770; Total deaths: 318,821; New deaths: 3,558; Total recovered: 24,890,326; Active cases: 2,338,558.

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• SECTION 2 - DAILY CURRENT AFFAIRS

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

The downside of Bitcoin

• The story: The story of leading cryptocurrency Bitcoin (BTC) is one of extreme optimism and extreme fear. While the supporter are cult-like in their love for the BTC, the detractors say that absence of any real world underlying asset makes it pure speculation. After all, Bitcoin is just one of thousands of cryptocurrencies, and as it is the earliest one, it is the most well-known.
• The issue of real value: Some say that fiat money (normal currencies in use today) does not have any real value either since the time the gold standard was dumped by governments. But fiat money has the value of the guarantee of the government that issues it, and the power of taxation those governments carry. On the Indian rupee note, there is a “promise to pay the bearer" commitment by the RBI governor. In the US dollar, the words “legal tender" means the same. Governments have the power to tax their people and businesses, the ability to sell public assets, issue bonds and other ways to guarantee their currencies. These powers are missing in Bitcoin. Even shares have value springing from their companies' ability to generate actual profits in the real world. Physical commodities are raw materials actually used, so carry value. To that extent, the only of BTC is the faith that someone else will want to buy.
• The issue of stabiliser: While fiat money is defended by the government that issues it, and Central banks go into the international monetary markets to perform “market operations" (to buy or sell national currencies to keep them stable), such stability mechanisms don't exist with BTC. Its volatility makes it a bad currency, irrespective of its reach. Most people are investing in bitcoin as a store of value, not as a currency. If bitcoin’s value goes up by 20% in a week, you wouldn't want to make any payment with it now. When bitcoin starts to fall, vendors will stop accepting it as payment (because they don’t want the value to go down by 20% a week after).
• The issue of sovereign competition: If anyone thinks that Bitcoin will replace fiat money soon, it's not possible. Is it even possible that the central banks of China, the US and the EU will agree to cancel their currencies and just use bitcoin? Their monetary systems will crack. China has actually banned bitcoin trading and mining. Other countries have hinted that they would be following suit. Countries will not adopt bitcoin, but will issue their own versions instead (digital government coins) and then ban bitcoin.
• The issue of bitcoin versus blockchains: There are cryptocurrencies called stablecoins, backed up by real assets (US dollar) that use the very latest in blockchain technology. These coins are suitable as currencies because they only fluctuate as much as their underlying assets. So bitcoin is not being bought or sold due to blockchain technology.
• Summary: The bitcoin was launched by Satoshi Nakamoto in 2009, frustrated with the potential inflation inherent in the limitless dollar printing being done by the US federal reserve, and others. It is like a utopian dream, of believers in a future where currencies are fully democratized and not controlled by governments. Bitcoin is valuable today due to the huge liquidity in markets, created due to monetary and fiscal policies of many governments to combat Covid. Once fiat money goes digital, bitcoin may lose ground really fast.

RBI worried on inflation risks, wants GoI's fiscal measures

• The story: Inflation is finally catching up with the bosses at the RBI. It has now said that runaway price rise has reduced the space available for monetary policy to revive slumping economic growth. It now wants fiscal measures, the domain of governments, to crush supply-side inflation.
• Inflationary expectations: Inflation is a key concern now, and constraining the monetary policy from using the space available to act in support of growth. RBI said that monetary policy will monitor closely all threats to price stability, to ensure general financial stability, while continuing with the accommodative stance. Supply-side inflation refers to price rise caused by shortages of goods.
• Why the concern: The RBI warning comes after cuts in India’s FY22 growth forecast by many experts, due to a vast secod Covid wave. In April 2021, the RBI had estimated retail inflation at 5% in the fourth quarter of fiscal 2021; 5.2% in the first three months of FY22; 5.2% in the second quarter; 4.4% in the following three months; and 5.1% in the fourth quarter, with risks broadly balanced. It had also projected economic growth at 10.5% in FY22.
• Kotak wants notes: Recently, the Confederation of Indian Industry (CII) chairman and Kotak Mahindra Bank chief executive Uday Kotak had said that it was time RBI expanded its balance sheet in support of the economy. It is true that the MPC has no option but to stay accommodative even as it monitors incipient price pressures and keeps all rates on hold. Since 5 May, when RBI announced liquidity measures, India’s growth outlook has further degraded as inflation may remain persistent even in the second half of 2021.
• FIT: The government has retained RBI’s flexible inflation target in the 2-6% band for the five years through 31 March 2026. While inflation measured by the Wholesale Price Index softened in 2020-21, there was no pass-through to retail inflation. According to RBI, the substantial wedge between wholesale and retail inflation during the year pointed to the persistence of supply-side bottlenecks and higher retail margins, underscoring the importance of supply management. Meanwhile, RBI managed to repatriate nearly Rs.1 trillion to the government after higher income from the sale of foreign exchange transactions and lower provision.
• New financial year: Starting fiscal 2021, RBI changed its accounting year from July-June to April-March. In the nine months ended 31 March, RBI saw a 69% increase in earnings from foreign exchange transactions to Rs.50,629.18 crore from Rs.29,993.22 crore a year ago. The accounting change adopted in 2019, as per the recommendations of the Bimal Jalan Committee report, allows RBI to pass part of the profit made from selling foreign exchange to the government as a surplus. From July 2020 to March 2021, RBI sold a total of $85.2 billion of its foreign exchange. Interestingly, much of the dollars were sold in the last two months of the accounting year, soon after the Budget.

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

5° Celsius target for global average temperature is closer

• The story: Warnings from global environment experts is clear - nations must cut emissions to ensure that the world does not warm up, on average, beyond a certain limit. In 2020, the average temperatures tied with 2016 for the warmest on record, with temperatures 1.2°C above pre-industrial times. The past seven years have been the warmest seven ever recorded, a sign that climate change is accelerating.

• Bad news: There’s about a 40% chance that the global average temperature for at least one of the next five years will be 1.5º Celsius higher than in pre-industrial times—and the odds are only going up.

1. That level of temperature increase would most likely be temporary, according to an annual climate update led by the UK Met Office and published by the World Meteorological Organization (WMO).
2. But the figure is significant because most global leaders committed to taking actions that would limit global warming to 1.5ºC and well below 2ºC by the end of the century when they signed the Paris Agreement in 2015.
3. The world may be getting measurably and inexorably closer to the lower target of the Paris Agreement on climate change.  It is yet another wakeup call that the world needs to fast-track commitments to slash greenhouse gas emissions and achieve carbon neutrality.

• Rising emissions: Man-made global warming is manifesting itself in phenomena such as rising sea levels, melting sea ice, and extreme weather events. While a year with average temperatures 1.5°C warmer than pre-industrial times is likely to be a one-off, that doesn’t mean the next half-decade will come in below recent records either. Average temperatures are likely to be at least 1°C warmer in each of the coming five years, with the WMO estimating they’ll be between 0.9°C and 1.8°C. There’s a 90% likelihood that at least one year between 2021 and 2025 will become the warmest on record, dislodging 2016 from the top slot. Increasing temperatures mean “greater impacts on food security, health, the environment and sustainable development.”
• Prognosis: The next five years will likely bring more tropical cyclones in the Atlantic Ocean and more rain in high latitudes and the Sahel region of central Africa, compared to the average between 1981 and 2010. This year, southwestern North America will likely be drier than in the past, while the Sahel and Australia are likely to be wetter.
• Need for a jump: National commitments to cut greenhouse gas emissions currently fall far short of what’s needed to fulfill the Paris Agreement, according to a United Nations analysis released in 2021. Global leaders are expected to present more ambitious climate goals ahead of the UN-sponsored COP26 climate talks, due to be held in Glasgow in November. Pressure from the public as well as international competition has generated momentum on the policy front in recent months, although significant issues remain unresolved, including the creation of an international carbon market that would put a price on emissions.

• Knowledge centre:

1. Permafrost - Permafrost is a permanently frozen layer on or under Earth's surface. It consists of soil, gravel, and sand, usually bound together by ice. Permafrost usually remains at or below 0°C (32ºF) for at least two years. Permafrost can be found on land and below the ocean floor. When permafrost thaws, this matter warms up and decomposes, eventually releasing the carbon that it holds as carbon dioxide (CO2) and methane, gases which have a greenhouse warming effect on the planet. The release of greenhouse gases threatens a vicious circle in the warming of the Earth.
2. COP 26 - COP26 is the next annual UN climate change conference. COP stands for Conference of the Parties, and the summit will be attended by the countries that signed the United Nations Framework Convention on Climate Change (UNFCCC) – a treaty that came into force in 1994. The climate talks, called Cop26, are set for November after being postponed for a year owing to the coronavirus pandemic.

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

Myanmar - Crushing democracy easy, Restarting economy tough

• The story: While in January 2021, Myanmar’s minister of investment promised local and foreign businessmen a swift recovery from damage wrought by covid-19, and plans for internet and renewable energy, just two weeks later the army launched a coup, bundling Thaung Tun and other members of Aung San Suu Kyi’s cabinet into detention. The Myanmar economy could shrink by as much as 20% this year.
• What changed: Business-friendly technocrats who used to advise General Thein Sein, who served as president until 2016, hold little clout in the new regime. The army has shut companies it believes are harbouring opponents, including media firms, while trying to force businesses it deems essential to stay open. The army is frightened by rolling strikes organised in protest against the coup and the hundreds of killings its soldiers have carried out.
• Four months after: Myanmar economy is struggling, as long queues forming at cash machines show. People wait past dusk to get money, even though being out after dark increases the risk of running into trouble with soldiers patrolling the streets. Frightened citizens trying to withdraw their savings are being seen as aiming to “disturb the country and create mistrust”! The junta asked banks to send it CD-ROMs containing records of all deposits and withdrawals.
• Forced to work: The army threatened to fine or nationalise banks that did not get striking employees back to their posts. Quite a few returned. But the threat of violence from security forces means many workers are frightened to be out and about for long. Internet restrictions are making online commerce difficult. The junta started blocking all mobile internet in mid-March, in an effort to stymie demonstrations.
• Keen no more: Investors were once keen on Myanmar’s digital economy, which grew particularly swiftly during lockdowns imposed to control the spread of covid-19, piling money into local firms such as Frontiir, an internet service provider. Not any more. Telenor, a Norwegian mobile operator that began rolling out its service in Myanmar almost a decade ago, has written off the full value of its business!
• Summary: Activists want more businesses to take a stand against the regime. They want companies should exert the maximum leverage on the military. More than 200 firms, local and foreign, have backed a joint statement calling for democracy and the rule of law. But the army has a history of violence against the staff of businesses that upset it. Perhaps Myanmar still has to negotiate many more streams of blood before seeing a settled solution.

Venezuela and crypto adoption

• The story: Venezuela was listed as the third country with the most cryptocurrency adoption in the world. (Chainalysis 2020 report) With its citizens coping with crippling inflation and losing purchasing power, the country has taken a turn for these assets to survive.

• Details: It is known that Venezuela has adopted cryptocurrency with the most force in LATAM. There is no doubt in what caused this: the economic disaster that was the result of years of wrong monetary policies, exchange controls, and corruption.

1. But how deep is the hole that Venezuelans are living in today? How Venezuela went from one of the richest countries in the region to become an inflationary mess in just a few years?
2. While the Venezuelan economy always had a tendency to have important inflationary numbers, it reached a point of no return in 2014, with an annual increase of 69%.
3. From that year, inflation figures worsen with each year, but the Central Bank of Venezuela stopped giving official numbers in 2015, which made it difficult to follow what was really going on in the country. For 2018, the International Monetary Fund estimated that the annual inflation would be 1,000,000%, a number that put Venezuela in one of the worst hyperinflationary escalates at that time.
4. This made Venezuelans who saved in their local currency reach poverty status in less than a decade and destroyed the national currency as a store of value.

• Monetary Policy, Devaluation and Exchange Control: The country had established an exchange control since 2003, with the creation of CADIVI, an institution that dealt with the distribution of dollars to the population and entrepreneurs according to limits dictated by the government. An official price was set by this organization for the U.S. dollar. This created a black market, that offered dollars freely but at a higher exchange rate than the official dollar price. This approach would be proven not viable anymore and the system evolved into a moving band system in 2016.
• Dollarisation happened: However, the exchange control and the government’s policy of devaluing its own currency by increasing the price of the dollar/bolivar pair led to a de facto dollarization, relegating the bolivar to a purely transactional currency. The value of the bolivar plunged even more as a consequence, making cash almost useless. To face this whole ordeal, the government took three zeroes out of its currency in 2008 and three zeroes of it again ten years later, in 2018, in a process called currency reconversion. This didn't result in a more solid currency. In fact, only 1 of every 1000 emitted bolivares is in cash, leaving unbanked Venezuelans with almost no choice but to use dollars.
• Welcome crypto: All of these factors created a turbulent situation in the country, perfect for the adoption of new assets like cryptocurrencies, that are not linked to the emission policy of local governments and are not affected by other local problems. Numbers from Localbitcoins and Binance have confirmed this tendency, being these two the most used platforms in Venezuela to exchange bolivares or dollars. While the dollar is now the most used currency in the country for retail purchases, with 67% of the sales being paid with dollars according to a study made by Ecoanalitica, a local firm, cryptocurrency is being more and more popular among a significant part of Venezuelans, that see it as an opportunity to preserve (and even gain) part of their purchasing power.
• Summary: So not only is crypto attractive to those seeking capital appreciation, it's also the shelter for those running from turbulence!

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

Surge in cash use in Britain

• The story: Even before Covid-19 appeared, a surprising quantity of coins and banknotes were at large in Britain. The rise of internet shopping and contactless payment cards pushed the share of transactions involving physical money down from over two-thirds in the early 2000s to under a quarter by 2019. Yet over the same period the value of banknotes in circulation rose from just over 2% of GDP to over 3%. This is strikingly similar to the trend seen in India.
• Demand for cash: Cash as a medium of exchange has fallen but demand for physical money as a store of value has more than compensated. And over the past 15 months, even as many pubs and retailers have insisted on cashless payment, the amount of money in circulation has risen even further.
• Background: A decade of low inflation and extremely low interest rates explains some of the appeal of old-fashioned notes. The opportunity cost of keeping savings in a liquid but non-interest-bearing form has rarely been lower. But that cannot explain the jump in the amount of money in circulation since March 2020.
• Behaviour of Britons: Cash machines were busy in the days before the first national lockdown in March 2020 in Britain. Panicked consumers stockpiled money at the same time as they emptied supermarkets of toilet paper and pasta. After that, usage fell sharply. Total withdrawals from cash machines between April and December 2020 were 35% lower than the year before. But as the amount of cash entering circulation fell, the amount leaving circulation fell even faster.
• What's going on: It is likely that some of the extra notes are not actually changing hands. Saving rates have been historically high since the pandemic began, and some of that is probably in the form of physical money. Households and small businesses have made fewer trips to the bank, just as they have made fewer trips of all kinds. Some of the cash that would have normally been paid into bank accounts is probably sitting in wallets and tills.
• Summary: Another, more worrying, explanation for the surge in cash is that much of the rise may have been caused by growth in the undeclared cash-in-hand economy since the early months of 2020. Four million Britons are still furloughed from their jobs; some of them are no doubt looking to top up their incomes. For those who choose to work in the shadows, cash is still king.

Domestic remittances down

• The story: Not only does the Indian diaspora send money to India by the bulk ($80 b in 2020 alone), but the Indian migrant workers send billions of dollars worth of remittances back home to villages. Of course, this happens in pure Indian rupees!
• Bad year: Domestic remittances have now fallen by about 20 per cent in the second wave of the Covid-19 pandemic, that has once again led to State level lockdowns and rising unemployment. These remittances, largely sent by migrant workers to their families, have fallen across the country though not as sharply as last year during the national lockdown. Work is stalled at many places due to which wages are stalled as well. There are also reports of workers returning to their villages.
• What is the drop: Many agents are also unable to service customers throughout the day due to the lockdown. The remittances industry is down between 10 per cent to 20 per cent with larger centres more impacted than smaller centres. Just before the second wave, remittances had almost normalised.

1. Remittances from urban to rural have been fluctuating but all the financial services of cash withdrawal, cash deposit within rural areas have been growing. A lot of migration into rural India has also happened.
2. PayNearby firm has an 11 per cent market share in domestic money transfers and it saw a drop of 20 per cent to 25 per cent in remittances.
3. If strict lockdowns continue in most parts of the country, this will worsen.

• Reverse: Now, families from villages and rural India are sending money to support the workforce in cities! The fall in domestic money transfers comes at a time when labour markets are also disturbed. Data with the Centre for Monitoring Indian Economy shows that the unemployment rate for the week of 23 May shot up to 14.73 per cent on an all India basis. It was even higher at 17.41 per cent for urban areas.
• Summary: Expectations are that remittances will begin to slowly recover after the lockdowns are lifted and may take about four to five months after that to return to normal.

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

Government must pump fiscal support for domestic demand

• The story: The nation's society and economy is hit by the second Covid wave badly. Fiscal measures such as direct cash transfers, enhanced allocation under rural job guarantee scheme, free foodgrain distribution, modest cuts in excise duty on fuels, and expedited vaccination are now crucial to overcome the second wave of Covid-19. It's a political decision with significant ramifications.

• What to do: A targeting spending is now needed, also for contact-based services that have borne the brunt of the pandemic since 2020. It is crucial to support rural and urban demand because the economic impact of the pandemic this time will be more on demand impulse than on supply-side disruptions amid an intensification of infections in rural areas.

1. Targeted spending through cash transfers can be done to support both rural areas and the urban poor. Direct spending, or through employers, would have to be given, considering whatever the fiscal space allows. Of course, there is caution needed in direct cash transfers as distribution problems exist.
2. The space for a fiscal stimulus is likely to be limited, making effective targeting crucial. Things like the RBI's huge transfer may help.

• Demand push: Demand in rural and urban areas may need to be supported given the expected prolonged impact of the second surge on sentiment. So, a combination of free foodgrain and cash transfers, higher allocation under the Mahatma Gandhi National Rural Employment Guarantee Act, and cuts in excise duty on fuels are needed. The MGNREGA allocation will need to be enhanced from FY22 budget estimate of Rs 0.7 trillion, given concerns regarding the rural economy. That's what happened in last fiscal too.
• Monsoon impact: Impact of second wave on the economy will be felt more through the loss of demand impulse than supply-side disruptions. The loss of demand-side impulse is expected to be more pronounced in rural areas than in urban areas, notwithstanding the Indian Meteorological Department's forecast of a near normal monsoon in 2021.
• Vaccination drive: Govt. needs to strengthen focus on the vaccination drive. And while that happens, providing free rations, income support, higher allocation under the Mahatma Gandhi National Rural Employment Guarantee Scheme would go a long way in reducing the injury. Even higher allocation to farmers under the PM-KISAN scheme may be done. The call for targeted spending comes as the US too has given fiscal stimulus through one-time direct cash payment, expansion of unemployment benefits to include gig workers, and grants to hospitals and health care providers.
• Capex: In April 2021, India eased the rules for capital expenditure by its ministries to try to boost spending in the economy and also announced the allocation of 5 kg of free food to the poor every month. But as fiscal room is limited for the government despite the Rs.99,122 crore dividend it received from the Reserve Bank of India, nothing much is coming forth. India aims to reduce its FY22 fiscal deficit to 6.8% of the gross domestic product from an estimated 9.5% last year.
• Summary: While the nature of the second wave of the virus is different from the first one when the rural economy was insulated, the situation is difficult as large cash transfers would require fiscal leeway and the government is not comfortable with that.

Twitter-Government faceoff in India

• The story: In Feb 2021, the government brought tighter rules to regulate all online platforms and media. tthe May 26th deadline to comply passed, too. Twitter’s defiant statement complaining that the govt. was crushing freedom of expression in India, evoked a sharp response from the government, which accused the company of seeking to undermine India's legal system.
• What Twitter said: It said that it was concerned by recent events regarding its employees in India and the potential threat to freedom of expression. While it will strive to comply with India's new social media intermediary guidelines, it said it will not compromise on its principles of transparency and the protection for freedom of expression and privacy of its users under the rule of law.
• Police in action: The Delhi Police had gone to the company’s offices to serve a notice regarding the ‘toolkit’ investigation, and it weighed in with its own statement, describing Twitter’s account as mendacious. The police said the company's statement was designed to impede a lawful enquiry and that it is purporting to be both an investigating authority as well as an adjudicating judicial authority.
• Give us some time: Twitter urged the Ministry of Electronics and IT (MeitY) to publish standard operating protocols on procedural aspects of compliance with the new rules for public consultation and may also seek a minimum extension of three months to implement the rules. This came a day after the much-contested new guidelines for ‘significant’ social media platforms—with five million or more registered users—under the Information Technology Act came into effect. It escalated an ongoing face-off between the San Francisco-based microblogging platform and the Indian government.
• Manipulated: Relations between Twitter and the government have been frayed over the ‘toolkit’ controversy and over the US company's tagging of certain tweets as ‘manipulated media’. Many top BJP leaders were snared in that tag, which Twitter refused to remove. Soon, two teams from the special cell of Delhi Police visited Twitter’s Gurgaon and Delhi offices to serve a notice (over the platform tagging a post by BJP spokesman Sambit Patra as ‘manipulated media’).
• Summary: Twitter said it was committed to the people of India, and would strive to comply with applicable law in India. The govt. hit back saying protecting free speech was not the prerogative of only a private, for-profit, foreign entity like Twitter but the commitment of the world’s largest democracy and its robust institutions. That was quite uplifting.

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

War may confuse self-propelled weapons

• Iron dome of Israel: As the skies of Israel lit up in May with the sinuous trails of interceptors colliding with thick volleys of rockets fired from Gaza, the aerial duels showed autonomous weapons at work. Though each launcher of Iron Dome, Israel’s missile-defence system, is manned by soldiers, only a computer can keep up with the most intense barrages. It is largely an algorithm that decides where and when to fire.
• Details: The Iron Dome is a defensive system that attacks physical objects (the incoming rockets) in an aerial battle-theatre devoid of immediate civilian bystanders. The falling debris may injure or kill someone. One day similar latitude might be given to offensive weapons which fire at human enemies on the ground, in more crowded places. That will make things quite tough.
• How they work: Autonomous systems rely on artificial intelligence (AI), which in turn relies on data collected from those systems’ surroundings. When these data are good - plentiful, reliable and similar to the data on which the system’s algorithm was trained - AI can excel. But in many circumstances data are incomplete, ambiguous or overwhelming. Consider the difference between radiology, in which algorithms outperform human beings in analysing X-ray images, and self-driving cars, which still struggle to make sense of a stream of inputs from the outside world. On the battlefield, that problem is multiplied.
• Very tough: Conflict environments are harsh, dynamic and adversarial, as dust, smoke and vibration can obscure or damage the cameras, radars and other sensors capturing data. Dust on a sensor can easily mislead an algorithm into classifying a civilian object as a military one! Enemies will constantly attempt to fool those sensors through camouflage and concealment. While pedestrians have no reason to bamboozle self-driving cars, soldiers work hard to blend into foliage.
• Limited training data: The problem will be that algorithms trained on limited data samples would encounter a much wider range of inputs in a war zone. In the same way that recognition software trained largely on white faces struggles to recognise black ones, an autonomous weapon fed with examples of Russian military uniforms will be less reliable against Chinese ones.
• Marching on, nonetheless: Despite these limitations, the technology is trickling onto the battlefield. In its war with Armenia in 2020, Azerbaijan unleashed Israeli-made loitering munitions capable of choosing their own targets. The International Committee of the Red Cross (ICRC) has recommended new rules to regulate autonomous weapons, including a prohibition on those that are “unpredictable”, and also a blanket ban on any such weapon that has human beings as its targets.
• Summary: These things will be debated in December 2021 at the five-yearly review conference of the UN Convention on Certain Conventional Weapons, originally established in 1980 to ban landmines and other “inhumane” arms. Government experts will meet thrice over the summer and autumn, under UN auspices, to lay the groundwork. Powerful states remain wary of ceding an advantage to rivals.

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

The global hunger pandemic

• The story: The disease ripping through India is one of the destructive forces affecting the lives of crores of Indians. The dramatic increase in hunger is surely another. This too is the result of policy failure and official callousness, causing suffering among affected people and will have serious repercussions on their future health and physical resilience.
• What 2020 lockdown did: Indian saw how that the brutal national lockdown imposed in March 2020 led to an economic collapse and loss of livelihood among people who had little or no ability to withstand such a shock. Official “relief” measures were so little compared to the need that they could only provide a drop in the ocean for crores who faced falling incomes and inability to meet their basic needs. The provision of 5 kg free food grain rations per month to NFSA card holders from April to November barely touched the surface of the problem, even as it excluded at least 100 million people who were not part of NFSA lists.

• Food crisis is here: Yet the full extent of the humanitarian catastrophe was possibly still not evident, without real data to indicate how food consumption had actually been affected. A report from Hunger Watch, based on a survey of 3,994 households conducted over 11 States in October 2020, provides a horrifying picture.

1. The survey was designed to cover weaker sections of the population, with 79 per cent of respondents having household income of less than Rs.7,000.
2. This is quite representative of the population, and captures the group that relief measures should seek to benefit.
3. The survey provided a stark evidence of the degree to which basic material conditions and access to food had worsened by October 2020.

• Income decline: First, almost all households reported falling income — only 6 per cent said their income had not changed while another 4 per cent could not say. 27 per cent of households had no income at all over the period from the start of the lockdown to October 2020, while for another 24 per cent their incomes had halved. Income declines of this severity are nothing less than catastrophic. With such widespread income loss, it is hardly surprising that there were significant declines in food consumption. Consumption of basic cereals declined “a lot” for around one-fifth of the population, and nearly half the sample slept without a meal at least once, while skipping meals “sometimes” or “often” was also significant.
• Urban versus rural: Urban areas showed more widespread declines, as all food has to be purchased. Both quantity and quality of food intake were affected: the nutritional quality of food intake clearly suffered, becoming “much worse” for 40 per cent of the sample and “worse” for another 45 per cent. More detailed data in the report suggest that declining intake was especially evident for meat/fish/eggs, pulses and fresh vegetables.

• Food insecurity: A worrying feature of food insecurity apparent from the Report is that it was even greater among socially vulnerable groups that were specially identified. This was true for almost all of the defined vulnerable categories, with some (like survivors of domestic violence, Scheduled Castes, Particularly Vulnerable Tribal Groups and Muslims) experiencing particularly sharp declines.

1. The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) which was announced as a relief measure in April 2020 to provide 5 kg of free rations per month, was extended until November 2020. However, only those with NFSA ration cards were eligible to receive these free rations.
2. Only 43 per cent of the respondents had NFSA ration cards to access these free grains under the PMGKAY. 27 per cent of the respondents had ration cards providing subsidised grains under various State schemes, but States would have had to provide free grain additionally on their own.
3. Shockingly, 23 per cent of respondents had no ration cards at all (36 per cent in urban areas and 13 per cent in rural areas). Therefore, the estimates of exclusion from the NFSA are confirmed, with dire consequences.

• Second wave: The disastrous second wave that swept over a population already enfeebled over 2020, would be very brutal. It is clear that the Supreme Court judgement of 13 May, directing the Centre and the State governments of Punjab, Haryana and Uttar Pradesh to provide free rations without insisting on ID proof to all migrant workers and to run kitchens providing free meals twice a day, is both necessary and welcome.
• Summary: Hunger in India is now widespread, and not only among migrant workers. Basic provision of free foodgrain without requiring ID must now be provided across the country, and it must be accompanied by direct cash transfers of at least Rs.7,000 per month for three months, to compensate for more than a year of lost livelihood. Without these most basic measures, the health crisis is being compounded by a hugely damaging hunger crisis.

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

DNA vaccines effective in hamsters

• The story: Researchers from Taiwan developed a vaccine using DNA of coronavirus spike protein and tested its efficacy on Mice and Hamsters. This technique is different than mRNA vaccines.
• Points to note: The DNA vaccines are usually hard to deliver into cells. But, researchers from National Health Research Institutes, Taiwan, coupled electroporation while delivering DNA vaccination. According to research, mice and hamsters immunised with new DNA vaccine developed long-lasting antibodies against SARS-CoV-2 spike protein. Antibodies peaked at eight weeks after immunisation but levels were relatively high at week 20.
• DNA vaccine: It is thermally stable and no cold chain is needed in such vaccines. It can induce high levels of long-lasting neutralising antibody against SARS-CoV-2.  It can be produced quickly at lower cost. Several clinical trials have indicated the efficacy of DNA vaccines in treating infections like Zika, HIV-1, Ebola and influenza viruses.
• mRNA-based vaccines: Most of the available Covid-19 vaccines is based on mRNA strands. Such vaccines teach human immune system to recognize SARS-CoV-2 virus. Similarity between both vaccines is that both use genetic material encoding part of virus to draw out an immune response.

Unified Health Interface

• The story: As part of the National Digital Health Mission (NDHM), a Unified Health Interface (UHI) will be rolled soon.
• Details: The launch of NDHM happened on the 74th Independence Day. This mission is a part of three digital announcements including a new cyber security policy and optical fibre connectivity to six lakh villages in India.
• National Digital Health Mission (NDHM): It is a complete digital health ecosystem having four key features — health ID, Digi Doctor, personal health records and health facility registry. Later it will also include e-pharmacy & telemedicine services. It will be implemented National Health Authority (NHA) under Ministry of Health and Family Welfare. App version as well as website version of NDHM platform will be available.
• Digi Doctor: It will allow doctors to enrol and their details, as per their consent, will be made available. Doctors will also be assigned a digital signature for free for writing prescriptions. The unique health ID will be a repository of all health-related information of citizens. Various healthcare providers including hospitals, laboratories, online pharmacies, telemedicine firms etc will participate in health ID system. Patient who wants their health records available digitally will require to create unique Health ID using their basic details, mobile or Aadhaar card.

IIT Mandi - Key protein structure in Covid-19 virus

• The storY: Part of structure of a key protein in COVID-19 virus was revealed by researchers from Indian Institute of Technology, Mandi.
• Why important: The Covid-19 protein structure will help in understanding mode of action & its role in spread and severity of covid-19 disease. It will also help in development of antiviral therapeutics. Current COVID-19 treatments only manage symptoms while body fights infection with its immune defence system. It is not yet confirmed whether antiviral drugs can stop virus from replicating. One way to neutralise virus is to attack its proteins. Thus, this study will help in developing neutralising agents.
• Structure of virus: This virus comprises 16 non-structural proteins (NSP1-NSP16). Out of them, NSP1 plays a significant role in pathogenicity, that is, ability of virus to cause disease. NSP1 disrupts proteins of host cell and suppresses immune functions. NSP1 is also called as ‘host shutoff factor’.
• More: The Severe acute respiratory syndrome coronavirus 2 or SARS‑CoV‑2 virus causes COVID-19. It is also called as coronavirus. Covid-19 was declared a Public Health Emergency of International Concern by World Health Organisation in January 2020, and later in March 2020 it was declared a pandemic.

Sham election bring Bashar Al-Assad back for a fourth term

• The story: Bashar al-Assad was re-elected as President for a fourth term in war-ravaged Syria, amid accusations that polls were “neither free nor fair”.
• Points to note: The President Mr. Assad got 95.1 percent of votes cast. In the last multi-candidate poll of 2014, he had won 88 percent of vote.
• Bashar al-Assad: He is a Syrian politician, the 19th president of Syria since 2000, who succeeded his father who served from 1971 to 2000. He served as commander-in-chief of Syrian Armed Forces and regional secretary of Arab Socialist Ba’ath Party in Syria. He started to work as doctor in Syrian Army.
• Syria: It is located in Western Asia, sharing its border with Mediterranean Sea in west, Turkey in north, Iraq in east, Jordan in south, and Israel & Lebanon in southwest. Known for fertile plains, high mountains, and deserts, Country is home to ethnic & religious groups such as Kurds, Syrian Arabs, Turkmens, Armenians, Assyrians, Circassians, Mandeans and Greeks. Major religious groups include Sunnis, Christians, Salafis, and Yazidis. Arabs are largest ethnic group while Sunnis are largest religious group on the Syrian land. Syria is a unitary republic comprising of 14 governorates. It is the only country which politically espouses Ba’athism. It is a member of United Nations and Non-Aligned Movement. Arab League and Organisation of Islamic Cooperation had suspended Syria in November 2011.

9.1 Today's best editorials to read

• We offer you 7 excellent editorials from across 10 newspapers we have scanned. 

CLICK HERE TO OPEN AND READ!

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• SECTION 3 - MCQs (Multiple Choice Questions)

Solve the online quiz given, right now. Check scores, and relative performance!

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