UPSC/STATE PSC
Curated by Experts For Civil Service Aspirants
The Hindu & Indian Express
News 1: Use of Web3 and AI in banking to detect fraud
Background:
- Union Minister for Finance and Corporate Affairs Nirmala Sitharaman on Friday asked banks to be more digital savvy and give immediate priority to use Web3 and artificial intelligence technology in fraud detection and to generate early warning signs in case of an unforeseen event.
Web3:
- Web3 embraces decentralization and is being built, operated, and owned by its users.
- Web3 puts power in the hands of individuals rather than corporations.
- Web3 uses blockchains, cryptocurrencies, and NFTs to give power back to the users in the form of ownership.
Core principles:
- Web3 is decentralized: instead of large swathes of the internet controlled and owned by centralized entities, ownership gets distributed amongst its builders and users.
- Web3 is permissionless: everyone has equal access to participate in Web3, and no one gets excluded.
- Web3 has native payments: it uses cryptocurrency for spending and sending money online instead of relying on the outdated infrastructure of banks and payment processors.
- Web3 is trustless: it operates using incentives and economic mechanisms instead of relying on trusted third parties.
Artificial intelligence:
- Artificial intelligence (AI) refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. The term may also be applied to any machine that exhibits traits associated with a human mind such as learning and problem-solving.
- Narrow AI or Artificial Narrow Intelligence (ANI)—is AI trained and focused to perform specific tasks. Example: Apple’s Siri, Amazon’s Alexa, IBM Watson, and autonomous vehicles.
- Strong AI is made up of Artificial General Intelligence (AGI) and Artificial Super Intelligence (ASI). Artificial general intelligence (AGI), or general AI, is a theoretical form of AI where a machine would have an intelligence equaled to humans; it would have a self-aware consciousness that has the ability to solve problems, learn, and plan for the future.
- Artificial Super Intelligence (ASI)—also known as superintelligence—would surpass the intelligence and ability of the human brain.
- Machine learning, deep learning, and neural networks are all sub-fields of artificial intelligence. However, neural networks is actually a sub-field of machine learning, and deep learning is a sub-field of neural networks.
News 2: Sitharaman asks private firms to clear MSME dues in 45 days
Background:
- Finance Minister Nirmala Sitharaman on Friday asked the private sector to clear dues of micro, small and medium enterprises (MSMEs) within 45 days.
- The Centre revised the threshold for small firms’ paid-up capital to ₹4 crore from ₹2 crore.
- The turnover threshold has also been revised to “not exceeding ₹40 crore” from ₹20 crore.
MSMEs definition:
- Micro enterprises: Not more than Rs.1 crore and Annual Turnover; not more than Rs. 5 crore
- Small enterprises: Not more than Rs.10 crore and Annual Turnover; not more than Rs. 50 crore
- Medium enterprises: Not more than Rs.50 crore and Annual Turnover; not more than Rs. 250 crore
News 3: Front-loaded rate hikes needed to tame inflation: RBI
Background:
- Inflation has remained above the RBI’s tolerance level since January, prompting it to raise interest rates by a total of 140 basis points in the current cycle.
Reason behind high inflation:
- Resurgence of food price pressures, mainly from cereals, even as fuel and core components such as transport and manufacturing provided a modest measure of respite.
RBI:
- Established: 1935 established under RBI Act, 1934; Nationalized in 1949
- Headquarter: Mumbai
Objective:
- To regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage;
- To have a modern monetary policy framework to meet the challenge of an increasingly complex economy, to maintain price stability while keeping in mind the objective of growth.
Function:
Monetary Authority:
- Formulates, implements and monitors the monetary policy.
- Objective: maintaining price stability while keeping in mind the objective of growth.
Regulator and supervisor of the financial system:
- Prescribes broad parameters of banking operations within which the country’s banking and financial system functions.
- Objective: maintain public confidence in the system, protect depositors’ interest and provide cost-effective banking services to the public.
Manager of Foreign Exchange
- Manages the Foreign Exchange Management Act, 1999.
- Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.
Issuer of currency:
- Issues, exchanges and destroys currency notes as well as puts into circulation coins minted by Government of India.
- Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality.
Developmental role
- Performs a wide range of promotional functions to support national objectives.
Regulator and Supervisor of Payment and Settlement Systems:
- Introduces and upgrades safe and efficient modes of payment systems in the country to meet the requirements of the public at large.
- Objective: maintain public confidence in payment and settlement system
Related Functions
- Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker.
- Banker to banks: maintains banking accounts of all scheduled banks.
News 4: Sri Lanka set to revive and upgrade FTA with India
Background:
- Sri Lanka will revive its Free Trade Agreement (FTA) with India and upgrade it to “a comprehensive economic and technological partnership”, President Ranil Wickremesinghe has said, signalling Colombo’s willingness to revisit a stalled pact.
Indo – Sri Lanka Free Trade Agreement:
- Indo-Sri Lanka Free Trade Agreement (ISFTA) came into effect in 2000 and several rounds of bilateral discussions later, Colombo and New Delhi are yet to reach an agreement on its upgraded version.
Areas of engagement:
- The power grid connection between India and Sri Lanka, offshore wind energy, the solar power plant at Sampur and the renewable energy projects on three islands of Jaffna Peninsula, Development of west terminal at Colombo airport.
Free Trade Agreement:
- India has signed 13 Free Trade Agreements (FTAs) with its trading partners, including the 3 agreements, namely India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA), India-UAE Comprehensive Partnership Agreement (CEPA) and India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA) signed during the last five years.
- India shares preferential market access and economic cooperation through trade agreements with over 50 countries.
News 5: Bio-Diesel
Background:
- As part of efforts to reduce its carbon footprint, the Indian Air Force (IAF) is looking to fly an AN-32 transport aircraft modified to operate on 10% blended biodiesel for 200 flight hours in the next six months, Air Vice Marshal S. K. Jain, Assistant Chief of the Air Force (Maintenance Plans), said on Friday.
Biodiesel:
- Biodiesel is a liquid fuel derived from animal fats, vegetable oils, and waste cooking oil, which is a possible replacement for conventional diesel fuel.
- Bio-diesel is an eco-friendly, alternative diesel fuel prepared from domestic renewable resources ie. vegetable oils (edible or non- edible oil) and animal fats.
- These natural oils and fats are primarily made up of triglycerides.
- These triglycerides when it reacts chemically with lower alcohols in presence of a catalyst result in fatty acid esters.
- These esters show striking similarity to petroleum derived diesel and are called “Biodiesel”.
Benefits of biodiesel:
- It reduces vehicle emission which makes it eco-friendly.
- It is made from renewable sources and can be prepared locally.
- Increases engine performance because it has higher cetane numbers as compared to petro diesel.
- It has excellent lubricity.
- Increased safety in storage and transport because the fuel is nontoxic and biodegradable (Storage, high flash point)
- Production of bio diesel in India will reduce dependence on foreign suppliers, thus helpful in price stability.
- Reduction of greenhouse gasses at least by 3.3 kg CO2 equivalent per kg of biodiesel.
News 6: The cheetahs are coming
Background:
- Eight African cheetahs from Namibia — five females and three males between the ages of 4-6 years — will be flown 8,000 km over the Indian ocean to the Kuno National Park in Madhya Pradesh, where they will be released as part of India’s Rs 90-crore Cheetah Introduction project.
- This is the first time in the world that a large carnivore will be relocated from one continent to another.
Origin of Cheetah:
- The cheetah has an ancient history in the country, with a Neolithic cave painting of a ‘slender spotted feline being hunted’ having been found at Chaturbunj Nala in Mandasur, Madhya Pradesh.
- The name ‘cheetah’ is believed to have originated from Sanskrit word chitrak, which means ‘the spotted one’.
- In India, the cheetah population used to be fairly widespread.
- The animal was found from Jaipur and Lucknow in the north to Mysore in the south, and from Kathiawar in the west to Deogarh in the east.
- The cheetah is believed to have originated in South Africa and spread across the world through land connectivity.
Extinction:
- The cheetah was officially declared extinct by the Indian government in 1952.
- While over-hunting was a major contributing factor for the cheetah’s extinction, the decimation of its relatively narrow prey base species and the loss of its grassland-forest habitat also played a role.
- During the decades preceding independence, as well as those after, India’s emphasis on agriculture – which included acquiring and parcelling off grassland – led to a decline in the cheetah’s habitat.
Why is the cheetah being brought back?
- The aim behind the translocation is not only to restore India’s ‘historic evolutionary balance’, but also to develop a cheetah ‘metapopulation’ that will help in the global conservation of the animal.
- As it is a flagship species, the conservation of the cheetah will revive grassland-forests and its biome and habitat, much like Project Tiger has done for forests and all the species found in these forests.
- Project Tiger has also resulted in the conservation of 250 water bodies found in India’s 52 Tiger Reserves. The Cheetah Project is likely to have a similar impact.
Why was Kuno National Park chosen for settling of Cheetah:
- Kuno, which had been monitored since 2006, was found to be ready to receive the cheetah immediately, as it had already been prepared for the Asiatic Lion.
- Both animals share the same habitat – semi-arid grasslands and forests that stretch across Gujarat, Rajasthan and Madhya Pradesh.
- The upgradation of sites required investment on a large scale in terms of reducing anthropogenic pressures through relocation of villages, mitigating infrastructure (roadways and railway) and prey augmentation for the cheetah through translocation of blackbuck, chital, chinkara and wild boar, among other animals.
- While Kuno itself has a healthy prey base (with chital, sambhal, neel gai, wild pig, gazelle, langur, peafowl), 700 more such herbivores have also been introduced to the area.
- In Sheopur district, where Kuno is located, rainfall levels, temperatures, altitude, and conditions are similar to conditions in both South Africa and Namibia.
News 7: SCO summit in Uzbekistan
Resilient supply chains:
- Prime Minister Narendra Modi urged Shanghai Cooperation Organisation member states Friday to “give each other full right to transit”.
- Addressing the SCO summit that included China President Xi Jinping and Russia President Vladimir Putin in the Uzbekistan city of Samarkand, Modi framed the “right to transit” in the context of connectivity and how it could help establish reliable and resilient supply chains in the region.
- Lack of transit across Pakistan’s territory has been a challenge for India to access Central Asian markets, and Delhi has flagged this concern several times in the past.
India – Turkey:
- Economic and commercial relationship assumes an important dimension in bilateral relationship, diplomatic ties have been adversely impacted over Turkey’s public criticism of the revocation of Article 370 in Jammu and Kashmir and the February 2020 riots in north-east Delhi.
India – Iran:
- Reviewed the progress in the development of the Shahid Behesti terminal, Chabahar Port and underscored the importance of bilateral cooperation in the field of regional connectivity.
- India-Iran bilateral ties are marked by historic and civilizational connections, including strong people to people contacts.
Samarkand Declaration of SCO summit:
- Leaders of SCO member states sign Samarkand declaration which included a decision on the Comprehensive Action Plan for 2023-27 for the implementation of provisions of the treaty on long-term good neighbourliness, friendship and cooperation among the SCO member states.
- Varanasi was declared as the tourist and cultural capital of the SCO in 2022 – 23.
SCO:
- SCO is a permanent intergovernmental international organization, established in 2001
- aims to maintain peace, security and stability in the region.·
- Prior to creation of SCO in 2001, Shanghai Five was there which included the members China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan
- Headquarter: Beijing
- Members: China, Russia, Kazakhstan, Kyrgyzstan,Tajikistan, Uzbekistan, India, Pakistan. India and Pakistan became members in 2017. In September 2021, it was announced Iran will become a full-time member.
Regional Anti-Terrorist Structure – Shanghai Cooperation
- Organization (RATS-SCO) : RATS is a permanent body of the SCO and is intended to facilitate coordination and interaction between the SCO member states in the fight against terrorism, extremism and separatism.
- SCO member countries contribute about 30 per cent of global GDP, and 40 per cent of the world’s population also lives in SCO countries.
Recent Posts
Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.
Globally, around 80% of wastewater flows back into the ecosystem without being treated or reused, according to the United Nations.
This can pose a significant environmental and health threat.
In the absence of cost-effective, sustainable, disruptive water management solutions, about 70% of sewage is discharged untreated into India’s water bodies.
A staggering 21% of diseases are caused by contaminated water in India, according to the World Bank, and one in five children die before their fifth birthday because of poor sanitation and hygiene conditions, according to Startup India.
As we confront these public health challenges emerging out of environmental concerns, expanding the scope of public health/environmental engineering science becomes pivotal.
For India to achieve its sustainable development goals of clean water and sanitation and to address the growing demands for water consumption and preservation of both surface water bodies and groundwater resources, it is essential to find and implement innovative ways of treating wastewater.
It is in this context why the specialised cadre of public health engineers, also known as sanitation engineers or environmental engineers, is best suited to provide the growing urban and rural water supply and to manage solid waste and wastewater.
Traditionally, engineering and public health have been understood as different fields.
Currently in India, civil engineering incorporates a course or two on environmental engineering for students to learn about wastewater management as a part of their pre-service and in-service training.
Most often, civil engineers do not have adequate skills to address public health problems. And public health professionals do not have adequate engineering skills.
India aims to supply 55 litres of water per person per day by 2024 under its Jal Jeevan Mission to install functional household tap connections.
The goal of reaching every rural household with functional tap water can be achieved in a sustainable and resilient manner only if the cadre of public health engineers is expanded and strengthened.
In India, public health engineering is executed by the Public Works Department or by health officials.
This differs from international trends. To manage a wastewater treatment plant in Europe, for example, a candidate must specialise in wastewater engineering.
Furthermore, public health engineering should be developed as an interdisciplinary field. Engineers can significantly contribute to public health in defining what is possible, identifying limitations, and shaping workable solutions with a problem-solving approach.
Similarly, public health professionals can contribute to engineering through well-researched understanding of health issues, measured risks and how course correction can be initiated.
Once both meet, a public health engineer can identify a health risk, work on developing concrete solutions such as new health and safety practices or specialised equipment, in order to correct the safety concern..
There is no doubt that the majority of diseases are water-related, transmitted through consumption of contaminated water, vectors breeding in stagnated water, or lack of adequate quantity of good quality water for proper personal hygiene.
Diseases cannot be contained unless we provide good quality and adequate quantity of water. Most of the world’s diseases can be prevented by considering this.
Training our young minds towards creating sustainable water management systems would be the first step.
Currently, institutions like the Indian Institute of Technology, Madras (IIT-M) are considering initiating public health engineering as a separate discipline.
To leverage this opportunity even further, India needs to scale up in the same direction.
Consider this hypothetical situation: Rajalakshmi, from a remote Karnataka village spots a business opportunity.
She knows that flowers, discarded in the thousands by temples can be handcrafted into incense sticks.
She wants to find a market for the product and hopefully, employ some people to help her. Soon enough though, she discovers that starting a business is a herculean task for a person like her.
There is a laborious process of rules and regulations to go through, bribes to pay on the way and no actual means to transport her product to its market.
After making her first batch of agarbathis and taking it to Bengaluru by bus, she decides the venture is not easy and gives up.
On the flipside of this is a young entrepreneur in Bengaluru. Let’s call him Deepak. He wants to start an internet-based business selling sustainably made agarbathis.
He has no trouble getting investors and to mobilise supply chains. His paperwork is over in a matter of days and his business is set up quickly and ready to grow.
Never mind that the business is built on aggregation of small sellers who will not see half the profit .
Is this scenario really all that hypothetical or emblematic of how we think about entrepreneurship in India?
Between our national obsession with unicorns on one side and glorifying the person running a pakora stall for survival as an example of viable entrepreneurship on the other, is the middle ground in entrepreneurship—a space that should have seen millions of thriving small and medium businesses, but remains so sparsely occupied that you could almost miss it.
If we are to achieve meaningful economic growth in our country, we need to incorporate, in our national conversation on entrepreneurship, ways of addressing the missing middle.
Spread out across India’s small towns and cities, this is a class of entrepreneurs that have been hit by a triple wave over the last five years, buffeted first by the inadvertent fallout of demonetization, being unprepared for GST, and then by the endless pain of the covid-19 pandemic.
As we finally appear to be reaching some level of normality, now is the opportune time to identify the kind of industries that make up this layer, the opportunities they should be afforded, and the best ways to scale up their functioning in the shortest time frame.
But, why pay so much attention to these industries when we should be celebrating, as we do, our booming startup space?
It is indeed true that India has the third largest number of unicorns in the world now, adding 42 in 2021 alone. Braving all the disruptions of the pandemic, it was a year in which Indian startups raised $24.1 billion in equity investments, according to a NASSCOM-Zinnov report last year.
However, this is a story of lopsided growth.
The cities of Bengaluru, Delhi/NCR, and Mumbai together claim three-fourths of these startup deals while emerging hubs like Ahmedabad, Coimbatore, and Jaipur account for the rest.
This leap in the startup space has created 6.6 lakh direct jobs and a few million indirect jobs. Is that good enough for a country that sends 12 million fresh graduates to its workforce every year?
It doesn’t even make a dent on arguably our biggest unemployment in recent history—in April 2020 when the country shutdown to battle covid-19.
Technology-intensive start-ups are constrained in their ability to create jobs—and hybrid work models and artificial intelligence (AI) have further accelerated unemployment.
What we need to focus on, therefore, is the labour-intensive micro, small and medium enterprise (MSME). Here, we begin to get to a definitional notion of what we called the mundane middle and the problems it currently faces.
India has an estimated 63 million enterprises. But, out of 100 companies, 95 are micro enterprises—employing less than five people, four are small to medium and barely one is large.
The questions to ask are: why are Indian MSMEs failing to grow from micro to small and medium and then be spurred on to make the leap into large companies?
At the Global Alliance for Mass Entrepreneurship (GAME), we have advocated for a National Mission for Mass Entrepreneurship, the need for which is more pronounced now than ever before.
Whenever India has worked to achieve a significant economic milestone in a limited span of time, it has worked best in mission mode. Think of the Green Revolution or Operation Flood.
From across various states, there are enough examples of approaches that work to catalyse mass entrepreneurship.
The introduction of entrepreneurship mindset curriculum (EMC) in schools through alliance mode of working by a number of agencies has shown significant improvement in academic and life outcomes.
Through creative teaching methods, students are encouraged to inculcate 21st century skills like creativity, problem solving, critical thinking and leadership which are not only foundational for entrepreneurship but essential to thrive in our complex world.
Udhyam Learning Foundation has been involved with the Government of Delhi since 2018 to help young people across over 1,000 schools to develop an entrepreneurial mindset.
One pilot programme introduced the concept of ‘seed money’ and saw 41 students turn their ideas into profit-making ventures. Other programmes teach qualities like grit and resourcefulness.
If you think these are isolated examples, consider some larger data trends.
The Observer Research Foundation and The World Economic Forum released the Young India and Work: A Survey of Youth Aspirations in 2018.
When asked which type of work arrangement they prefer, 49% of the youth surveyed said they prefer a job in the public sector.
However, 38% selected self-employment as an entrepreneur as their ideal type of job. The spirit of entrepreneurship is latent and waiting to be unleashed.
The same can be said for building networks of successful women entrepreneurs—so crucial when the participation of women in the Indian economy has declined to an abysmal 20%.
The majority of India’s 63 million firms are informal —fewer than 20% are registered for GST.
Research shows that companies that start out as formal enterprises become two-three times more productive than a similar informal business.
So why do firms prefer to be informal? In most cases, it’s because of the sheer cost and difficulty of complying with the different regulations.
We have academia and non-profits working as ecosystem enablers providing insights and evidence-based models for growth. We have large private corporations and philanthropic and funding agencies ready to invest.
It should be in the scope of a National Mass Entrepreneurship Mission to bring all of them together to work in mission mode so that the gap between thought leadership and action can finally be bridged.