Daily Current Affairs - Civil Services - 09-06-2021

Useful compilation of Civil Services oriented - Daily Current Affairs - Civil Services - 09-06-2021

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• SECTION 1 - TEN NEWS HEADLINES

1. World Economy - G7 Nations agree on global minimum tax of at least 15% - G-7, the group of the world’s richest nations, finally reached a landmark deal to close cross-border tax loopholes used by some of the world’s biggest companies. The G7 would support a minimum global corporation tax rate of at least 15%, and would put in place measures to ensure taxes were paid in the countries where businesses operate. The global minimum tax rate would apply to overseas profits. Governments could set whatever local corporate tax rate they want, but if companies pay lower rates in a particular country, their home governments could top-up their taxes to the minimum rate, thus eliminating the advantage of shifting profits. The Organisation of Economic, Cooperation and Development (OECD) was coordinating tax negotiations on rules for taxing cross-border Digital Services and curbing tax base erosion, including a global corporate minimum tax. This will harm countries that use lower tax rates to attract investments. Impact on India - It may benefit as it has wanted to keep corporate tax rate lower to attract FDI in comparison to tax havens or low taxation countries.
2. World Politics - Global food price index rises to 10-year high - The UN Food and Agricultural Organisation’s (FAO) food price index (FPI) rose at its fastest monthly rate in a Decade in May 2021. Meanwhile, world cereal production was on its way to reach a new record. Revived demand in some countries was the driver for rising prices. A backlog of low production and market and supply disruptions due to restrictions on movement due to COVID-19 also pushed prices up. Higher inflation will affect poor countries dependent on imports. Large agri firms (Nestlé and Coca-Cola etc.) may pass on increased prices of their raw materials to consumers. For countries like India, it may cut both ways - agri exports will benefit, but locally, unless PDS supplies rise, the poor will be hurt badly.
3. Governance and Schemes - Unique Disability Identification Card - The Union Ministry of Health has written to the States/UTs to include the Unique Disability Identification (UDID) Card as a Photo ID while registering on Co-WIN 2.0. The UDID project was initiated by the Department of Empowerment of Persons with Disabilities. It aims at building a holistic end-to-end integrated system for issuance of Universal ID & disability certificates for "persons with disabilities" with their identification and disability details, and creating a national database for PwDs. Once the project covers all persons with disabilities, UDID Card will be made mandatory for availing various government benefits. As per the "Persons with Disabilities Act, 1995" only certain disabilities types can apply for the UDID card. List of disabilities includes blindness, cerebral palsy, low vision, locomotor disability, leprosy-cured, mental retardation, mental illness, and hearing impairment. The project will encourage transparency, efficiency and ease of delivering the government benefits to the person with disabilities, and also ensure uniformity. It will help streamline the tracking of physical and financial progress of beneficiary at all levels of hierarchy of implementation - from village level, block level, District level , State level and National level.
4. Constitution and Law - Draft Model Rules for Live-Streaming and Recording of Court Proceedings - The e-Committee, Supreme Court of India, has released the Draft Model Rules for Live-Streaming and Recording of Court Proceedings. It has invited inputs and suggestions on it from all the stakeholders. The e-Committee of Supreme Court of India along with the Department of Justice, Government of India is working under the National Policy and Action Plan for implementation of ICT in the Indian Judiciary. The right of access to justice, guaranteed under Article 21 of the Constitution encompasses the right to access live court proceedings. To imbue greater transparency, inclusivity and foster access to justice, the e-Committee has prioritised the project of live streaming of court proceedings. This will enable access to live court proceedings, including on matters of public interest to citizens, journalists, civil society, academicians and law students on a real time basis. These model rules were framed by a sub-committee consisting of judges of the Bombay, Delhi, Madras and Karnataka High Courts. They provide a balanced regulatory framework for live streaming and recording of court proceedings. [ICT - Information and Communication Technology]
5. Science and Technology - Big cats at Coronavirus risk - In a sad development, some lions at Chennai’s Vandalur Zoo and Ranchi’s Bhagwan Birsa Biological Park have died of suspected coronavirus infection. The defining feature of a coronavirus is the spike protein on its surface. The spike protein initiates infection by binding with a host protein, called ACE2 receptor. Different species express ACE2 to different extents, and this plays a key role in determining how much a species is susceptible to coronavirus infection. In various studies, domestic cats and their big cousins have been estimated to express ACE2 more significantly than many other species. Also, there are similarities in the ACE2 of cats and humans. One study found that the most vulnerable species to coronavirus infection, next to humans, are ferrets, followed by cats and civets. Another study found that the primates such as chimpanzee rhesus macaque are at very high risk. At high risk are species such as blue-eyed black lemur. Cats were found to have a medium risk, while dogs had a low risk. There are no studies on the genome of big felines, but it is assumed that since cats can be infected, there is a big chance that lions and tigers will as well, since they will be very close in sequence.
6. Indian Economy - Ratle Hydro Power project - NHPC limited, India’s premier hydropower company under the Ministry of Power, has formed a joint venture company, “Ratle Hydroelectric Power Corporation Limited” for the implementation of 850 MW Ratle Hydroelectric Project. The JVC has been incorporated on 01.06.2021 with NHPC and Jammu & Kashmir State Power Development Corporation Ltd (JKSPDC) holding equity share of 51% and 49% respectively. Ratle Hydoelectric Project (850 MW), is a Run of River Scheme located on River Chenab, Kishtwar district, Union Territory of Jammu and Kashmir. In January 2021, the Union Cabinet has given its approval for the investment of Rs.5281.94 crore for 850 MW Ratle Hydro Electric (HE) Project. It shall be commissioned within a span of 5 years.
7. World Politics - TRIPS meets again - The World Trade Organization Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS) met to continue discussions on a joint Indian and South African proposal to waive intellectual property protections on COVID-19 vaccines, now also backed in part by the United States. A counter-proposal, put together by the European Union, which keeps IP protections intact, also came under discussion. Humanitarian organization Doctors Without Borders, which backs the waiver proposal, has dismissed the EU proposal as “a maneuver to push for voluntary actions of pharmaceutical corporations as a solution to replace a concrete legal solution backed by more than 100 countries.”
8. Indian Economy - NARCL is India's first Bad Bank - Banks in India identified about 22 bad loans worth Rs.89,000 crore to be transferred to the National Asset Reconstruction Company Ltd. (NARCL) in the initial phase. The National Asset Reconstruction Company Ltd (NARCL), the name coined for the bad bank announced in the Budget 2021-22, is expected to be operational in June. Bad bank refers to a financial institution that takes over bad assets of lenders and undertakes resolution. The new entity is being created in collaboration with both public and private sector banks. It will be established on the asset reconstruction company (ARC) and asset management company (AMC) model. Finance Minister Nirmala Sitharaman in Budget 2021-22 had announced that the high level of provisioning by public sector banks of their stressed assets calls for measures to clean up the bank books. NARCL will pay up to 15 per cent of the agreed value for the loans in cash and the remaining 85 per cent would be government-guaranteed security receipts. The government guarantee would be invoked if there is loss against the threshold value. The Reserve Bank of India (RBI) has said that loans classified as fraud cannot be sold to NARCL. As per the annual report of the RBI, about 1.9 lakh crore of loans have been classified as fraud as on March 2020.
9. Environment and Ecology - Aravalli protection - The Supreme Court ordered the Haryana government and the Faridabad Municipal Corporation to take “all essential measures” to remove encroachments, including about 10,000 residential constructions, in the ecologically fragile Aravali forest land near Lakarpur Khori village. The Aravalli Range (also 'Aravali') is a very old mountain range that runs in modern Northwestern India, runnig approximately 670 km in a south-west direction, starting near Delhi, passing through southern Haryana and Rajasthan, and ending in Gujarat. The highest peak is Guru Shikhar at 1,722 metres (5,650 ft). Guru Shikhar is a peak in the Arbuda Mountains of Rajasthan. Three major rivers and their tributaries flow from the Aravalli, namely Banas and Sahibi rivers which are tributaries of Yamuna, as well as Luni River which flows into the Rann of Kutch.
10. Indian Politics - Covid Update - (a) India reported 92,596 new COVID-19 cases and 2,219 deaths in 24 hours, as per the Union Health Ministry. This is the second straight day when the country reported less than one lakh daily COVID-19 cases. With this, the total number of cases has reached 2,90,89,069 and the death toll has surged to 3,53,528. (b) NITI Aayog's VK Paul said that government will procure 75 per cent vaccines from the manufacturers which will be provided free of cost to the states for administration through government vaccination centres. (c) Sir Ganga Ram Hospital in New Delhi stated that monoclonal antibody was successfully used in two patients with fast progression of symptoms. A 36-year-old healthcare worker with high-grade fever, cough, myalgia, severe weakness and leucopenia was administered REGCov2 (CASIRIVIMAB Plus IMDEVIMAB) on day 6 of disease, the hospital said. The patient’s parameters improved within 12 hours and was discharged. (d) The government has announced a new update that enables an applicant to correct any inadvertent errors in name, year of birth and gender printed on the CoWIN vaccination certificate. Users can make the correction through the CoWIN website. (e) NUMBERS - INDIA - Total cases: 29,088,176; New cases: 92,596; Total deaths: 353,557; New deaths: 2,219; Total recovered: 27,496,198; Active cases: 1,238,421.

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• SECTION 2 - DAILY CURRENT AFFAIRS

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

Wholesale Price Index (WPI) set for major revision

• The story: In India, inflation rate is measured using two indicators - the Consumer Price Index (CPI) and the Wholesale Price Index (WPI). Both have different baskets of goods under them. Now, the government of India is reworking the WPI's structure.
• Give me ideas: The government has sought public comments by June 20 on the re-haul of the Wholesale Price Index (WPI) proposed by an inter-Ministerial Working Group. The basic suggestion is on expanding the list of products to incorporate items such as medicinal plants, adding solar index as a separate index under electricity and using auction prices for non-coking coal and electricity.
• Base year change: The draft technical report on ‘Revision of Current WPI Series 2011-12 to New Series 2017-18’ put together by the Working Group, headed by NITI Aayog Member Ramesh Chand, also gave its nod to adopting the new base year 2017-18, finalising modalities for State specific WPI and disseminating Business Services Price Index (BSPI) for six services to be merged into the WPI later. Other members of the Working Group, constituted by the Ministry of Commerce & Industry, included officials from the National Statistical Office, Ministry of Finance, Department of Agriculture, Ministry of Petroleum and Natural Gas, RBI and SBI Group.

• Change in basket: The inclusion of new items and the other changes proposed by the group will lead to a change in the composition of the index with share of primary articles expanding to 24.83 per cent from 22.62 per cent. Share of fuel and power is expected to shrink to 11.24 per cent from 13.15 per cent and manufactured articles to 63.93 per cent from 64.23 per cent.

1. Under agriculture commodities, new items such as medicinal plants like isabgol, aloe vera and menthol; fennel seed and methi seed (spices and condiments), moth (pulses), mushroom (vegetable) and watermelon (fruits) were proposed to be added in new series subject to availability of data.
2. Fuel & power, the electricity index of current series, has been bifurcated into hydro and thermal electricity. Thermal electricity has been further divided based on coal and gas based power generating stations. Solar index was also proposed to be added as a separate index under electricity.
3. The sub-group on conceptual issues, under the working group, suggested that the average tariff/unit value (tariff rate/total power sold) should not be used in price index as the tariff rate is fixed and the solar index is driven by the total power sold.
4. Ministry of Coal's suggestion to use auction prices along with notified prices of non-coking coal in the new series has been agreed. Alternative source of data source for minor minerals like Garnet & Sillimanite before dropping the items may also be explored..
5. For manufacturing items, it is now decided that the selected items under the pharmaceuticals may be mapped along with 30 categories of the National List of Essential Medicine. Items such as sanitizer, masks, hand gloves, flutes and harmonium may be included while there has been no suggestion made for dropping items yet.

• BSPI: The group further suggested that the BSPI (Business Services Price Index) may be disseminated separately for six price indices in the first phase including banking, insurance, securities, telecom and air. Once stability is achieved, the BSPI is to be merged with the WPI. The State specific WPI will be worked out in consultation with all concerned State’s Directorate of Economics and Statistics (DES).
• Summary: With every passing year, as the economic dynamics change, the indices have to keep up too!

Crude oil prices rising steadily

• The story: The price of Brent crude oil moving above $70 a barrel is a sign of looming distress for Indian refineries, consumers, and the Central government. Brent crude oil traded above $ 71 a barrel in June, in anticipation of a demand surge later this year as major economies reopen with the successful roll-out of Covid-19 vaccination programmes.  (Brent is the most popular benchmark against which around 75 per cent of the global crude oil trade is linked)

• Details: The current global demand for crude oil is at 94 million barrels per day (mbpd), around 6 mbpd lower than pre-pandemic Making hay are the Organisation of Petroleum Exporting countries plus and their allies (OPEC+), which are curtailing crude oil production to push up prices even higher.

1. As global economic recovery gathers pace, oil prices are rising and with artificial supply constraints created by OPEC+ there is a huge risk of a big spike.
2. Even at these crude oil prices, retail prices are on fire and as the Reserve Bank of India (RBI) has pointed out, rising fuel prices will fan inflation and might damage growth prospects.
3. The government is constrained as excise and value-added tax on fuel prices massively support our public finance.
4. It is expected that India’s demand for crude oil is expected to come back to pre-pandemic levels later this year. That too will push global prices up.

• Pricing: Indian refineries buy crude oil at a price reflected in the Indian basket of crude. It is a mix of prices of the sour grade (Oman and Dubai average) and sweet grade (Brent Dated) of crude oil processed in Indian refineries. It is a bit (5-10 per cent) cheaper than Brent, but follows the same price movement trajectory.

1. For Indian consumers, roughly every dollar increase in crude oil prices results in a 30-50 paisa hike in petrol and diesel prices. With petrol being sold well above Rs 100 a litre in six states, the prices are uncomfortably high for many consumers.
2. The Centre may nudge oil companies to keep a check on fuel price hikes as Assembly elections in many crucial states are due next year.
3. A significant impact will also be on liquefied petroleum gas (LPG) or cooking gas prices, which are well over Rs 800 for a domestic (14.2 kg) cylinder. With negligible subsidy currently being borne on cooking gas, managing the household budget will be tougher if crude oil prices continue on their trajectory.
4. When Brent goes above $70 a barrel, high retail prices lead to pressure on the marketing margins of oil-marketing companies (OMCs). Either taxes need to be cut or the gross refining margins of OMCs could be constrained.

• Summay: At present over 50 per cent of the final fuel price is in terms of central or state tax collections. How long can this continue, remains a moot question.

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

Future of monsoon in South Asia

• The story: Monsoon rains drive the economy in south Asia. Experts now say that there may be increased rainfall due to the south Asian monsoon in the future, as global carbon dioxide (CO2) levels increase. General predictions are that rising CO2 and higher global temperatures will lead to stronger monsoons.

• Process: Researchers recovered sediment core samples from beneath the Bay of Bengal seafloor in November 2014. These samples consist of sediment and fossils. They preserve a record of monsoon activity spanning millions of years.

1. They found that periodic changes in the intensity of monsoon rainfall over the past 9,00,000 years were associated with fluctuations in atmospheric CO2, continental ice volume and moisture import from the southern hemisphere Indian Ocean.
2. They also saw that periods of more intense monsoon winds and rainfall tended to follow peaks in atmospheric CO2 and low points in global ice volume. The models show that in a warming world, there will be more water vapour in the atmosphere. So regions that get a lot of rain now are going to get more rain in the future.

• South Asian monsoon: The south Asian monsoon is the single most powerful expression of Earth’s hydroclimate. Some locations regularly get several metres of rain each summer. The rains are vital to the region’s agriculture and economy, but can also cause flooding and crop disruption in years when particularly heavy. Because the monsoons played such a large role in the lives of nearly 1.4 billion people, understanding how climate change might affect them is critical.
• Summary: The next few decades will pose the big question of managing the fallout of climate change, in India and nearby regions. Climate mitigation efforts will need large funding from the Western nations.

Softbank's and Solar energy in India

• The story: SoftBank, under chairman and CEO Masayoshi Son, has tried to to build a big presence in India’s green economy. It had even given the promise of free electricity after 25 years to members of the International Solar Alliance (ISA), initiated by PM Modi. The company also planned to invest $1 trillion in India’s renewable energy capacity by 2030 and sought approvals to charge dollar-denominated tariffs.
• End of the dream: Those huge dreams have ended with a whimper, as the discounted sale of SB Energy India, proved. SB Energy is the venture in which the Japanese investor held 80% and Bharti Global Ltd held the remaining 20%. The firm’s troubled journey shows how solar energy space in India is movin — a period of high growth, followed by consolidation and regulatory debacles. Now just a few large firms control it.
• Nature of solar energy business: Experts say that solar is a pension fund kind of business, needing patience and long-term capital that expects fixed returns. However, SoftBank’s is an opportunistic capital firm, leveraging scale to capture the market and monetizing it after reaching the tipping point.

• What problems do solar firms face: There are many: difficulties with land acquisition, regulatory uncertainty, and delayed clearances and approvals ailing India’ clean energy sector. The high-cost structures at SB Energy (of Softbank) did not help.

1. Chinese module manufacturers started an upwardly revision of prices and began reneging on their Indian contracts to supply equipment that had already been contracted for, even at the risk of their bank guarantees getting encashed.
2. The union government also decided to impose a 40% basic customs duty (BCD) on solar modules and 25% on solar cells from 1 April 2022—a move that would make imports costlier but encourage local manufacturing.
3. Any price increase will impact the internal rate of return (IRR) from those projects that have already inked power purchase agreements.

• Perfect storm: In what was a perfect storm for energy developers, the Ministry of New and Renewable Energy (MNRE) issued an order enforcing a list of approved solar photovoltaic models and module manufacturers for government-supported schemes. This is a non-tariff barrier. An increase in the frequency of extreme weather events, such as cyclones in western India, also increases the cost of building solar projects in the region.
• Discoms' strategy: Already given clean energy capacity has been stranded because fund-starved discoms are unwilling to sign contracts at comparatively higher tariffs. Trying to sell to NTPC like firms is also tricky, as they too sign power purchase agreements (PPAs) with the project developer only after signing back-to-back power supply agreements (PSAs) with discoms.
• Risks: Renewables in India now need a stable regulatory environment as they are priced to perfection and any uncertainty on that account creates consequences. Overall, there are concerns like increased difficulties in land acquisition, inadequate grid connectivity on account of poor evacuation infrastructure, relatively lower track record of technology in Indian conditions, lack of stricter RPO enforcement by the state regulators, very high dependence on imported solar cells and modules, regulatory haze in terms of renegotiation of tariff in concluded PPAs and cancellation of concluded auctions, weak financial risk profile of discoms with significant delays in payment by a few state discoms, and increased difficulties in debt tie-up.
• Summary: India is running one of the world’s largest clean energy programmes, which aims to achieve 175 GW of renewable capacity, including 100 GW of solar power, by 2022. The Central Electricity Authority says that solar energy will be 280 GW of India’s 817 GW of power requirement by 2030. India has been ranked third in the EY renewable energy country attractiveness index, after the US and China. An investment of Rs.4.7 trillion has been made in India’s renewable energy space over the last six years, with an expected Rs.1 trillion investment opportunity forecast annually until 2030.

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

US 'strike force' on China trade

• The story: The United States will target China with a new "strike force" to combat unfair trade practices. The US has rolled out findings of a review of U.S. access to critical products, from semiconductors to electric-vehicle batteries.

• Details: The "supply chain trade strike force," led by the U.S. trade representative (USTR), will look for specific violations that have contributed to a "hollowing out" of supply chains that could be addressed with trade remedies, including toward China.

1. The Department of Commerce will start a Section 232 investigation into the national security impact of neodymium magnet imports used in motors and other industrial applications, which the United States largely sources from China.
2. President Biden ordered the review of critical supply chains in February 2021, requiring executive agencies to report back within 100 days on risks to U.S. access to critical goods like those used in pharmaceuticals as well as rare earth minerals, for which the United States is dependent on overseas sources.
3. Though not explicitly directed at China, the review is part of a broader Biden administration strategy to shore up U.S. competitiveness in the face of economic challenges posed by the world's second largest economy.

• Pandemic experience: The US faced serious challenges getting medical equipment during the COVID-19 epidemic and now faces severe bottlenecks in a number of areas, including computer chips, stalling production of goods such as cars. U.S. agencies are required to issue more complete reports a year after Biden's order, identifying gaps in domestic manufacturing capabilities and policies to address them.
• Allies and enemies: The United States claims it faced unfair trade practices from "a number of foreign governments" across all four of the supply chains covered in the initial review, including government subsidies and forced intellectual property transfers. But the United States was not looking to "wage trade wars with allies and partners." The strike force would be focused on "very targeted products."
• Specific sectors: The Commerce Department would work to "facilitate information flow" between chip makers and end users and increase transparency. In medicine, the administration will use the Defense Production Act to accelerate efforts to manufacture 50 to 100 critical drugs domestically rather than relying on imports. To address supply bottlenecks from lumber to steel that have raised fears of inflation, the administration is starting a task force focused on "homebuilding and construction, semiconductors, transportation, and agriculture and food."
• Semiconductors: These are a central focus in many legislations before the Congress, which would pump billions of dollars into creating domestic production capacity for the chips used in everything from consumer electronics to military equipment. Biden has said China will not surpass the United States as a global leader on his watch, and confronting Beijing is one of the few bipartisan issues in an otherwise deeply divided Congress.

BRICS update, 2021

• The story: In June, the the Foreign Ministers of the BRICS [Brazil, Russia, India, China and South Africa] countries met virtually. China wanted that the entire group should release a statement opposing “bloc politics” from the United States and the West.

• Details: The BRICS Foreign Ministers meet put out a joint statement on multilateralism. Among the targets of Beijing’s recent attacks on what it calls “selective multilateralism” is the India-Australia-Japan-U.S. Quad grouping, which Chinese officials have criticised.

1. India, which is the BRICS chair for 2021 and will host the leaders summit (possibly virtually), is in a tight position of being described by Beijing as both a partner and a target in its recent emphasis on the importance of “multilateralism” and its criticism of calls for a “rules-based order”, voiced not only by the U.S. but also by the Quad.
2. Chinese officials said that on the “different interpretations” of multilateralism, the “BRICS countries, as representatives of emerging markets and developing countries, have tackled the problem head-on and given their answer”.

• What China wants: It wants a renewed definition of multilateralism.

1. First, it should make global governance more inclusive, representative and participatory to facilitate greater and more meaningful participation of developing and least developed countries.
2. Second, it should be based on inclusive consultation and collaboration for the benefit of all.
3. Third, it should make multilateral organisations more responsive, action-oriented and solution-oriented based on the norms and principles of international law and the spirit of mutual respect, justice, equality, mutual beneficial cooperation.
4. Fourth, it should use innovative and inclusive solutions, including digital and technological tools.
5. Fifth, it should strengthen capacities of individual States and international organizations.
6. Sixth, it should promote people-centered international cooperation at the core.

• Summary: China thinks that the BRICS countries were different from a few developed countries in their attitude towards multilateralism. China wants everyone to observe the purposes and principles of the UN Charter and oppose exceptionalism and double standard. China says its committed to extensive consultation, joint contribution and shared benefits, and opposes hegemonic bullying and zero-sum games.

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

America's richest corporates paid next to nothing in taxes

• The story: The 25 richest Americans paid relatively little in US federal income taxes between 2014 and 2018, an analysis by ProPublica based on a trove of IRS tax filings, showed.

• Details: America's richest executives paid just a fraction of their wealth in taxes — $13.6 billion in federal income taxes on $401 billion of their wealth.

1. There was stark inequity in the U.S. tax system, as plutocrats such as Warren Buffett, Jeffrey Bezos, Michael Bloomberg and Elon Musk were able to benefit from a complex web of loopholes in the tax code.
2. The United States was currently seen as putting its emphasis on taxing labour income versus wealth.

• Biden in the seat: This analysis of the nation’s top billionaires came right when President Joe Biden is now trying to overhaul the tax code to raise taxes on corporations and the rich. Biden has proposed raising the top income tax rate to 39.6% from 37%.

1. There may be renewed calls for Biden to consider a wealth tax, something like a 2% tax to an individual’s net worth — including the value of stocks, houses, boats and anything else a person owns, after subtracting any debts — above $50 million.
2. Biden and his advisers have deemed the idea unworkable. Others say that the US tax system was rigged for billionaires who don’t make their fortunes through income, like working families do.

• Techniques to avoid taxation: The techniques that the wealthy of the US use to reduce their tax bills, include taking advantage of a complex web of loopholes and deductions that are perfectly legal and can significantly reduce — or erase — tax liability. That includes borrowing huge sums of money backed by enormous stock holdings. Those loans are not taxed and the interest that the executives pay on the money can often be deducted from their tax bills.

1. In 2007, Bezos, the CEO of Amazon, paid nothing in federal income taxes even as his company’s stock price doubled. Four years later, as his wealth swelled to $18 billion, Bezos reported losses and received a tax credit of $4,000 for his children.
2. Buffett, the CEO of Berkshire Hathaway, has long said publicly that the tax code should hit the rich harder, but he paid just $23.7 million in taxes from 2014 to 2018, when his wealth rose by $24.3 billion.

• Profiting from the pandemic: This data revealed that the US's wealthiest, who profited immensely during the pandemic, have not been paying their fair share. Some lawmakers objected, saying the disclosures added to concerns about a Biden administration proposal to give the IRS more access to the financial information of taxpayers.
• Summary: The president US has said on Twitter on Tuesday that he was continuing to work with Republicans on infrastructure and jobs legislation and said that he would not seek a tax increase on anyone who earns less than $400,000.

Videocon sold finally to Anil Agarwal

• The story: India’s bankruptcy court - the NCLT - has finally allowed billionaire Anil Agarwal’s Twin Star Technologies to takeover Videocon Industries.

• Details: Videocon, a consumer durables company manufacturing air-conditioners to washing machines, was among the first 12 companies pushed into bankruptcy after directions from the Reserve Bank of India in 2017. Indian banks have fought unpaid loans for the past couple of years and India is saddled with one of the worst bad-debt ratios in the world.

1. Twin Star, a part of Agarwal’s Vedanta Group, will pay about Rs.3000 crores to Videocon’s lenders. The company will put up Rs.500 crores within 90 days and the rest as non-convertible debentures over a period of time.
2. Lenders had sought the bankruptcy court’s approval in December for the resolution plan submitted by Twin Star. The court approved the plan.

• Trouble resolving things: Videocon's protracted debt resolution underscores the challenges facing Indian lenders to recover their money amid a severe pandemic that threatens to add to the bad loans. Videocon’s debt stood at over Rs.63500 crore in 2019, according to bankruptcy case related disclosures on the company’s website. Out of this, Rs.57400 crore was owed to over three dozen banks and other financial creditors.
• Summary: The kind of haircut lenders are now taking makes the entire process of resolution look strange.

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

Pension rules for Civil Servants changed

• The story: In June 2021, India's Central Government amended the pension rules for civil servants, putting new restrictions on officials of intelligence and security organisations after retirement. Many popularly known retired professionals have been critical of the Union govt's handling of defence and political matters, lately.
• Which rules: The government amended Rule-8(3)(a) of the CCS (Central Civil Services) Pension Rules-1972. It notified Central Civil Services (Pension) Amendment Rules, 2020.

• Points to note: The said rules were first drafted in 1972 and have been amended 47 times. In 2008, Rule 8 pertaining to “pension subject to future good conduct” was first amended by inserting the condition that retired intelligence and security officials will not publish any material that affects the “sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, or relation with a foreign State or which would lead to incitement of an offence”.

1. Amended Rule-8(3)(a) - Officials retired from certain intelligence or security establishments (included under 2nd schedule of RTI Act) will not be allowed to write anything about their organisation without permission. The Second Schedule of the Right to Information (RTI) Act 2005 covers 26 organisations including the Intelligence Bureau, R&AW, Directorate of Revenue Intelligence, CBI, NCB, BSF, CRPF, ITBP and CISF.
2. Requires the retired officials to sign an undertaking - Form 26 - and declare that without the prior approval of the competent authority they will not publish any information related to the “domain of the organisation and obtained by virtue of my working in the said organisation”.
3. The amendment expands the scope to include any information related to “domain of the organisation, any reference or information about any personnel and his designation, and expertise or knowledge gained by virtue of working in that organisation.”

• Why amend: The amendment was in process for around four years after the Committee of Secretaries recommended it. The move was prompted by concerns arising out of the fact that some high-profile retired officers had written books on their tenure, and some of these had revealed information.
• The fallout: This amendment to Rule 8 means that pension can be withheld or withdrawn if the pensioner disobeys the rules. This change in rules is likely to impact retired officials of security and intelligence organisations who write in newspapers and magazines or author books on their former organisations and experiences.

• Rules for Government Servants:

1. Rule 9 of CCS Pension Rules-1972 (Departmental Proceeding after Retirement) - says that if any government official has committed any misconduct and retires, he or she may face departmental proceedings only until four years after the date of committing that misconduct.
2. Central Civil Services (Conduct) Rules, 1964 - It puts some restrictions on Government Employees while in Service.
3. Rule 7 - It restricts government servants from resorting to or abetting any form of strike or coercion.
4. Rule 8 - It restricts them, except with government sanction, from owning or participating in the editing or management of any newspaper or other periodical publication or electronic media.
5. Rule 9 - It restricts a government servant from making statements of fact or opinion in writing or in a telecast or a broadcast “which has the effect of an adverse criticism of any current or recent policy or action of the Central Government or a State Government”.
6. Restriction on Political Activity while in Service - The Conduct Rules bars government servants from being associated with any political party or organisation, and from taking part or assisting any political activity.
7. An amendment in 2014 said, “Every government employee shall at all times maintain political neutrality” and “commit himself to and uphold the supremacy of the Constitution and democratic values”
8. Rule 26, All India Services (Death-cum-Retirement Benefits Rules) 1958 (Employment after Retirement) - It restricts a pensioner from any commercial employment for one year (until 2007 it was 2 years) after retirement, except with previous sanction of the central government.

• Penalties: Non-compliance can lead the central government declaring that the employee “shall not be entitled to the whole or such part of the pension and for such period as may be specified”.

• Joining politics after retirement: There is no rule to stop government servants from joining politics after their retirement. In 2013, the Election Commission had written to the DoPT (Department of Personnel and Training) and Law Ministry, suggesting a cooling-off period for bureaucrats joining politics after retirement, but it was rejected. The Legislative Department of the Ministry of Law advised “that any such restriction (against officials joining politics or contesting polls) may not stand the test of valid classification under Article 14 (equality before the law) of the Constitution of India”. And the DoPT told the EC that its suggestions “may not be appropriate and feasible.”
• Summary: The issue is bound to land at the Supreme Court's doors sooner or later, as it now seemingly lies in the domain of freedom of expression.

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

Are there UFOs out there?

• The story: For many years, the U.S. Department of Defense has been cataloging and investigating many bizarre encounters, most from the U.S. Navy, of ships and fighter jets tangling with or being tailgated by, so-called unidentified flying objects (UFOs).

• Details: Beginning in 2017, videos and eyewitness accounts of these weird sightings found their way into public view. The US Congress then demanded that the Pentagon produce a report summarizing all that the U.S. government knows about so-called unidentified aerial phenomena, or UAPs.

1. The report says that a vast majority of examined incidents were not caused by U.S. advanced technology programs.
2. Upon establishing the task force, the DOD released an accompanying statement explaining the justifications for its existence: “The safety of our personnel and the security of our operations are of paramount concern. The Department of Defense and the military departments take any incursions by unauthorized aircraft into our training ranges or designated airspace very seriously and examine each report. This includes examinations of incursions that are initially reported as UAP when the observer cannot immediately identify what he or she is observing.”

• The greatest adventure: Speculation is rife that humanity may be on the verge of a formal disclosure, backed by irrefutable evidence, that it is not alone and is indeed being monitored by extraterrestrial civilizations. But it could also be that UAPs are entirely homegrown products of revolutionary and clandestine technological advances, whether by US or other countries.
• Boring: Sadly, the assessment has not explained what UAPs are and provided no evidence to link them with any putative alien visitation—despite reviewing more than 120 incidents from the past 20 years. The report’s firmest conclusion was that the vast majority of UAP happenings and their surprising manoeuvers are not caused by any U.S. advanced technology programs.

• Scientific view: Many scientists say that, for decades, the media has lavished too much attention on sensational claims that vague lights in the sky are actually extraterrestrial spacecraft. A sober examination of these claims reveals that there is a lot less to them than first meets the eye. Many UFO sightings can essentially always be tied to terrestrial or celestial phenomena, such as lights from human-made vehicles and reentering space junk.

1. Some incidents could merely be mirages from flaws in newly deployed radar systems, as well as various sorts of well-understood visual artifacts regularly seen in cameras.
2. Another real issue is that pilots sometimes see things that they cannot readily identify, and they may misidentify such objects.
3. All the while, the military makes no comments, because that’s their modus operandi. Military things are assumed classified by default, and there is nothing compelling them to clear things up.

• Summary: Harvard University astrophysicist Avi Loeb says the significance of the UAP Task Force report will depend on the evidence it discloses, which at the moment remains mostly unknown. Loeb goes a step further, saying he is willing to sign up to help unravel the UAP/UFO saga. The truth, of course, is somewhere out there, whether or not it appears in the pages of the UAP Task Force report. But for now, the odds seem to be against the U.S. government knowing what it is, let alone revealing it anytime soon.

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

Covid-hit families and social security

• The story: The government of India announced an extension of pension coverage and insurance benefits for families of those who died due to Covid-19. It will be extended under the Employees’ state Insurance Corporation of India (ESIC) scheme and insurance benefits under the Employees’ Deposit-Linked Insurance (EDLI) scheme for members registered under the Employees’ Provident Fund Organisation (EPFO).

• Points to note:

1. Extension of benefits under ESIC Scheme - All dependent family members of such persons (who died of Covid) will be eligible for a pension equivalent to 90% of the average daily wage drawn by the worker as per the existing rules. This will be available retrospectively with effect from 24th March 2020 till 24th March 2022. The eligibility conditions for the ESIC benefits are likely to include the norm that the insured person must have been registered on the ESIC online portal at least three months prior to the diagnosis of Covid resulting in death, the insured person must have been employed for wages and contributions for at least 78 days.
2. Under EPFO-EDLI - The maximum insurance benefit has been increased to Rs 7 lakh from Rs 6 lakh. The provision of minimum insurance benefit of Rs 2.5 lakh has been restored and it will apply retrospectively from February 2020 for the next three years. Benefits are being made available to families of even those employees who may have changed jobs in the last 12 months preceding his/her death. All surviving dependent family members of EPFO are eligible to avail benefits of EDLI in case of death of the member. About 6.53 crore families are expected to be eligible.

• Employees’ State Insurance (ESI) Scheme: It is a multidimensional social system which provides socio-economic protection to the worker population and immediate dependent or family covered under the ESI scheme. The ESI is an integrated measure of social Insurance embodied in the Employees' State Insurance Act, 1948. (a) Coverage - The ESI Act applies to all factories and notified establishments located in implemented areas employing 10 or more persons and is applicable on employees drawing wages up to Rs 21,000 per month (Rs 25,000 for persons with disabilities). It covers about 3.49 crore of family units of workers and provides cash benefits and medical facilities to 13.56 crore beneficiaries.
• Employees’ Deposit-Linked Insurance: It is an insurance cover provided by the EPFO for private sector salaried employees. It was launched in 1976. Any employee who has an EPF account automatically becomes eligible for the EDLI scheme. The registered nominee receives a lump-sum payment in the event of the death of the person insured, during the period of the service. It applies to all organisations registered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952. The EDLI scheme is managed on the basis of 0.5% of monthly wages paid by the employer to the fund and there is no employee contribution. The nominee registered by the employee is eligible to claim the benefit under the scheme.
• Employees’ Provident Fund Organisation (EPFO): It is a government organization that manages provident fund and pension accounts for the workforce engaged in the organized sector in India. It implements the Employees’ Provident Fund (EPF) and Miscellaneous Provisions Act, 1952. The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 provides for the institution of provident funds for employees in factories and other establishments. It is administered by the Ministry of Labour & Employment, Government of India.
• Employees’ Provident Funds Scheme (EPFS): The EPF is the main scheme under the Employees’ Provident Funds and Miscellaneous Act, 1952. It offers the institution of provident funds for factory employees and other establishments. The employee and employer each contribute 12% of the employee’s basic salary and dearness allowance towards EPF. The Economic Survey 2016-17 had suggested that employees be allowed to choose whether or not to save 12% of their salary into EPF or keep it as take home pay. As per current laws, a person mandatorily becomes a member of EPF if his monthly salary does not exceed Rs. 15,000.
• Summary: Covid-19 has hit millions of Indian families very hard, and their social security concerns are only growing with time. The government is sitting up and noticing. Action is arriving, and its relevance and reasonable quantum will be judged in days to come.

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

A Carbon-neutral Ladkah

• The story: The state-owned Convergence Energy Services Ltd (CESL) has inked a pact with Ladakh administration to make Union Territory of Ladakh carbon-neutral.
• About MoU: The CESL which is a wholly owned subsidiary of Energy Efficiency Services Ltd (EESL) signed memorandum of understanding (MoU) with Administration of Ladakh to make it clean and green. Under it, several clean energy and energy-efficiency programmes will be implemented.
• Projects concerned: The CESL will take up projects like solar mini- and micro-grid solutions, energy storage-based solutions, energy-efficient lighting, efficient cooking stoves and electric mobility solutions. It will develop clean solutions for home appliances, electric heating, pump sets and cooking sets for very cold temperatures in Ladakh. It will also focus on EV ecosystem like EC charging infrastructure utilising renewable sources of power.
• Relevance: Energy access for Ladakh is foremost, and the UT needs sustainable solutions like decentralised energy-efficient solutions which can be easily implemented in the difficult terrains of Ladakh. Projects will eliminate fossil fuel to make Ladakh’s carbon-neutral. If the solar capacity is harnessed, it will trigger business and jobs in the region.

The cost of free food and vaccines

• The story: Indian PM Modi announced in June that the central govt will provide free vaccines to all citizens above the age of 18 years. He also announced a continuation of the free ration scheme for over 80 cr people in the country till November 2021.
• The price: The centre will have to spend Rs.80,000 crore ($11 billion) for these policy decisions. The government will earmark Rs.70,000 crore for providing food to the poor and other eligible groups until Diwali in November 21. The Centre will need an extra Rs.10,000 crore to provide free vaccinations, the report said, citing people familiar with the matter.
• Breakup and modus operandi: The government may not have to tap the bond market for the funds, as a dividend of Rs.99,122 crore surplus was received from the central bank and inflows were expected from asset sales. PM Modi also announced a cap of Rs.150 on the amount private hospitals can charge over the cost of the purchase of the vaccine from the manufacturer. India has administrated 23.61 cr crore doses since the world’s biggest vaccination drive started January 16, with 3.4% of the population now fully immunized.
• Summary: The corporates have received huge subsidies since 2019, first in the form of hugely slashed income tax rates, and then via the new PLI schemes. Now, the citizens of India are getting subsidised where the lives are directly, and positively, impacted. This is a good decision by the government.

Vaccine prices capped for private hospitals

• The story: Going forward in the vaccination battle, the Union Health Ministry capped the price for administration of Covid-19 vaccines in private hospitals.
• Points to note: Maximum price for Covaxin was fixed at Rs 1,400. This is a homegrown vaccine, that was promised to be 'very cheap' but will now be the costliest. Covishield will cost Rs 780 per dose, while Sputnik V vaccine will cost Rs 1,145 per dose. Strict action will be taken against private vaccination centres for overcharging. Apart from that, government will provide free vaccines to states to inoculate all person above age 18 from June 21.
• Procurement: The central government announced the purchase of 25 crores doses of Covishield and 19 crore doses of Covaxin. These 44 crore doses of Covid-19 vaccines will be delivered between August and December 2021. 30 per cent advance to Serum Institute of India and Bharat Biotech has been released to procure these doses. Further, Government also placed an order to purchase 30 crore doses of Biological E’s vaccine called Corbevax. It will be available by September.
• Corbevax vaccine: This is being developed by Biological-E, as a recombinant protein subunit vaccine. It is made up of a specific part of novel coronavirus called spike protein. Corbevax is similar to hepatitis vaccine. Thus, both the doses of Corbevax are tried & tested, unlike mRNA vaccines created by Pfizer and Moderna which were rolled out against any pathogen. Corbevax will insert this spike protein from virus into human body to achieve an immune response. Presence of spike protein in human body will not be harmful because rest of the virus is absent.

Major internet outage shuts down global sites

• The story: Many important websites in the U.S. and Europe were down on 08th June, 2021. Sites that were inaccessible included the U.K. government’s main public-services portal and several major U.S. and European news outlets, such as the New York Times, CNN and Le Monde.

• Fastly not so fast: The service provider "Fastly", the operator of a content-delivery network service that many websites use to help speed the loading of their webpages for users, reported issues with its services. These are called CDN services.

1. (a) Most of the websites that went down displayed a simple error message in plain text, saying, “Error 503 Service Unavailable," and including other codes.
2. (b) Joshua Bixby, Fastly’s chief executive, said the company was investigating the issue, but that it wasn’t attack-related. Later, Fastly’s status page updated to say a fix had been applied and told customers to expect global services to return.

• Technical details: Fastly operates what it calls an edge cloud network, which means it stores content from its clients’ websites on a large number of servers that are closer to where potential users are located. Such content-delivery networks trim the amount of time it takes information to reach end-users, speeding up things like website loading and the playing of streaming video. The setup, though, can make swaths of the internet vulnerable to failures that affect a single delivery network. On its website, Fastly lists dozens of clients. this interruption caused Fastly’s observed traffic volume to drop by about 75%.
• History: Past web outages have traced back to breaks in other parts of the digital supply chain. A crude 2016 cyberattack against Dyn, a service that acts as a virtual directory for internet addresses, took down hundreds of websites.

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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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