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  • [Burning Issue] Age of Cyber Warfare

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    Context

    The war between Russia and Ukraine is not only being fought on the ground, but also in cyberspace. Cyberattacks on state-owned digital assets, including websites and banking services, have gradually increased in both frequency and sophistication, beginning with Distributed-denial-of-service (DDoS) attacks before escalation with the use of complex wiper malware and ransomware.

    What has happened in Ukraine so far?

    • Ukraine has been one of the primary targets of Russia since 2020. The recent spate of attacks started in mid-January and knocked out websites of the ministry of foreign affairs and the ministry of education.
    • The attacks have intensified in the last few weeks and now, banks in Ukraine are being targeted.
    • DDoS attacks disrupt online services by overwhelming websites with more traffic than their server can handle.

    What is cyberwarfare?

    • Another front of war: Cyberwarfare has emerged as a new form of retaliation or passive aggression deployed by nations that do not want to go to actual war but want to send a tough message to their opponents.
    • A cyber-attack can maliciously disable computers, steal data, or use a breached computer as a launch point for other attacks.
    • Cybercriminals use a variety of methods to launch a cyber-attack, including malware, phishing, ransomware, denial of service, among other methods.
    • Case with India: In 2020, Gothic Panda and Stone Panda, two China-based hacker groups, targeted media and critical infra companies in India with large-scale attacks amid the border stand-off between India and China.
    • For many countries, cyberwarfare is a never-ending battle as it allows them to constantly harass and weaken geopolitical rivals.

    What do cyber attackers target?

    Cyberattacks happen because organizations, state actors, or private persons want one or many things, like:

    • Business financial data
    • Clients lists
    • Customer financial data
    • Customer databases, including personally identifiable information (PII)
    • Email addresses and login credentials
    • Intellectual property, like trade secrets or product designs
    • IT infrastructure access
    • IT services, to accept financial payments
    • Sensitive personal data
    • US government departments and government agencies

    When Did Cyber Warfare Start?

    • Cyber warfare began in 2010 with Stuxnet, which was the first cyber weapon meant to cause physical damage. Stuxnet is reported to have destroyed 20% of the centrifuges Iran used to create its nuclear arsenal.
    • Then, between 2014 and 2016, Russia launched a series of strategic attacks against Ukraine and the German parliament.
    • During the same period, China hacked 21.5 million employee records, stealing information from the U.S. Office of Personnel Management.
    • In 2017, the WannaCry attack impacted upwards of 200,000 computers in 150 countries. The attack targeted Windows computers with ransomware.
    • The NotPetya attack originated in Ukraine, destroyed files, resulting in more than $10 billion in damage.

    Why do cyber-attacks happen?

    • In addition to cybercrime, cyber-attacks can also be associated with cyber warfare or cyberterrorism, like hacktivists.
    • Motivations can vary, in other words. And in these motivations, there are three main categories: criminal, political and personal.
    • Criminally motivated attackers seek financial gain through money theft, data theft or business disruption.
    • Personally motivated, such as disgruntled current or former employees, will take money, data or a mere chance to disrupt a company’s system.
    • Socio-political motivated attackers seek attention for their causes. As a result, they make their attacks known to the public—also known as hacktivism.
    • Other cyber-attack motivations include espionage, spying—to gain an unfair advantage over competitors—and intellectual challenge.

    Which countries are behind state-backed cyberattacks?

    • Russia is one of the top perpetrators of state-backed cyberattacks.
    • According to an October 2021 report by Microsoft Corp., Russia accounted for 58% of state-backed attacks worldwide, followed by North Korea (23%), Iran (11%), and China (8%).
    • North Korea is said to have built a cyber-army of 7,000 hackers.

    Which companies are targeted and why?

    • State-backed cyberattacks are usually carried out to steal state secrets, trade deals and weapons blueprint, or target large multinationals to steal their intellectual property (IP) and use it to build local industry.
    • Cryptos are also on the radar now. North Korean hackers reportedly stole cryptos worth $400 million in 2021.
    • However, when states launch cyberattacks on other states as a result of worsening of geopolitical relations, the target is usually critical infrastructure firms to disrupt economic activity.

    How often is India targeted?

    • Such cyberattacks rose 100% bet-ween 2017 and 2021, according to a global study by Hewlett-Packard and the University of Surrey.
    • In 2019, the administrative network of the Kudankulam Nuclear Power Plant was hit by a malware attack by North Korea-backed Lazarus Group.
    • China-backed hackers were believed to be behind a power outage in Mumbai in 2020.
    • According to Black Lotus Labs, Pakistan-based hackers targeted power firms and one government organization in India in early 2021 using Remote Access Trojans.

    What are common types of cyber-attacks?

    Common types of cyber-attacks are:

    (1) Backdoor Trojan

    • A backdoor Trojan creates a backdoor vulnerability in the victim’s system, allowing the attacker to gain remote, and almost total, control.
    • Frequently used to link up a group of victims’ computers into a botnet or zombie network, attackers can use the Trojan for other cybercrimes.

    (2) Cross-site scripting (XSS) attack

    • XSS attacks insert malicious code into a legitimate website or application script to get a user’s information, often using third-party web resources.

    Denial-of-service (DoS)

    • DoS and Distributed denial-of-service (DDoS) attacks flood a system’s resources, overwhelming them and preventing responses to service requests, which reduces the system’s ability to perform.
    • Often, this attack is a setup for another attack.

    (3) DNS tunnelling

    • Cybercriminals use DNS tunnelling, a transactional protocol, to exchange application data, like extract data silently or establish a communication channel with an unknown server, such as a command and control (C&C) exchange.

    (4) Malware

    • Malware is malicious software that can render infected systems inoperable. Most malware variants destroy data by deleting or wiping files critical to the operating system’s ability to run.

    (5) Phishing

    • Phishing scams attempt to steal users’ credentials or sensitive data like credit card numbers.
    • In this case, scammers send users emails or text messages designed to look as though they’re coming from a legitimate source, using fake hyperlinks.

    (6) Ransomware

    • Ransomware is sophisticated malware that takes advantage of system weaknesses, using strong encryption to hold data or system functionality hostage.
    • Cybercriminals use ransomware to demand payment in exchange for releasing the system. A recent development with ransomware is the add-on of extortion tactics.

    (7) Zero-day exploit

    • Zero-day exploit attacks take advantage of unknown hardware and software weaknesses. These vulnerabilities can exist for days, months or years before developers learn about the flaws.

    What can cyber-attacks do?

    • If successful, cyber-attacks can damage enterprises.
    • They can cause valuable downtime, data loss or manipulation, and money loss through ransoms. Further, downtime can lead to major service interruptions and financial losses. For example:
    • DoS, DDoS and malware attacks can cause system or server crashes.
    • DNS tunnelling and SQL injection attacks can alter, delete, insert or steal data into a system.
    • Phishing and zero-day exploit attacks allow attackers entry into a system to cause damage or steal valuable information.
    • Ransomware attacks can disable a system until the company pays the attacker a ransom.

    How cyber-attacks can be reduced?

    • Organizations can reduce cyber-attacks with an effective cybersecurity system.
    • Cybersecurity is the practice of protecting critical systems and sensitive information from digital attacks, involving technology, people and processes.
    • An effective cybersecurity system prevents, detects and reports cyber-attacks using key cybersecurity technologies and best practices, including:
    1. Identity and access management (IAM)
    2. A comprehensive data security platform
    3. Security information and event management (SIEM)
    4. Offensive and defensive security services and threat intelligence

    What are recent Cyber Attacks in news?

    (1) Russia/Ukraine conflict

    • Check Point Research (CPR) has released information on cyber-attacks that have been seen in the context of the ongoing Russia-Ukraine conflict.
    • In the first three days of battle, cyber-attacks on Ukraine’s government and military sector increased by an astounding 196%. The number of cyber-attacks on Russian businesses has climbed by 4%.
    • Phishing emails in East Slavic languages grew sevenfold, with a third of those malicious phishing emails being sent from Ukrainian email addresses to Russian receivers.

    (2) SolarWinds Sunburst Attack

    • The world is now facing what seems to be a 5th generation cyber-attack – a sophisticated, multi-vector attack with clear characteristics of the cyber pandemic.
    • Named Sunburst by researchers, this is one of the most sophisticated and severe attacks ever seen.
    • The attack has been reported to impact major US government offices as well as many private sector organizations.
    • This series of attacks was made possible when hackers were able to embed a backdoor into SolarWinds software updates.
    • Over 18,000 companies and government offices downloaded what seemed to be a regular software update on their computers, but was actually a Trojan horse.

    (3) HermeticWiper malware

    • This was named after the false digital certificate used to sign the file, which is issued under the name of a company named Hermetica Digital Ltd.
    • This is wiper malware which means it is designed to wipe the hard drives or system storage of the systems it infects.
    • The malware used against Ukrainian targets misused legitimate drivers of popular disk management software to corrupt data on the infected machine.
    • The wiper was used to target Ukrainian organisations.
    • Due to this attack, customers of Privatbank, Ukraine’s largest state-owned bank, and Sberbank, another state-owned bank reported problems with online payments and the banks’ applications.
    • The hosting provider for Privatbank and the Ukrainian army were among the attackers’ targets.

    Way forward

    • The need to be aware of the nature of the cyber threat and take adequate precautionary measures, has become extremely vital.
    • New technologies such as artificial intelligence, Machine learning and quantum computing, also present new opportunities.
    • Pressure also needs to be put on officials in the public domain to carry out regular vulnerability assessments and create necessary awareness of the growing cyber threat.
    • It is time that cybersecurity as a specialised discipline becomes an integral component of any IT syllabus being taught within our university systems as well as outside.
    • Coordination among CERTs of different countries. Ensure that vulnerable sections of our society do not fall prey to the evil designs of cyber criminals.
    • Need for India to move on from IT security to cyber security.
    • Organisations that are hit by cyber-attacks must inform law enforcement immediately instead of worrying about their reputations.
    • Important to have crisis management plans so that it helps to react in a given situation.
    • A dedicated industry forum for cyber security should be set up to develop trusted indigenous solutions to check cyber-attacks.

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  • What is ‘General Consent’ for CBI?

    Meghalaya has withdrawn consent to the CBI to investigate cases in the state, becoming the ninth state in the country to have taken this step.

    General Consent

    • Unlike the National Investigation Agency (NIA), which is governed by its own NIA Act and has jurisdiction across the country, the CBI is governed by the Delhi Special Police Establishment Act.
    • This makes consent of a state government mandatory for conducting an investigation in that state.
    • There are two types of consent: case-specific and general.
    • Given that the CBI has jurisdiction only over central government departments and employees, it can investigate a case involving state government employees or a violent crime in a given state only after that state government gives its consent.

    When is Consent needed?

    • General consent is normally given to help the CBI seamlessly conduct its investigation into cases of corruption against central government employees in the concerned state.
    • Almost all states have given such consent.
    • Otherwise, the CBI would require consent in every case.

    What does the withdrawal of consent mean?

    • It means the CBI will not be able to register any fresh case involving a central government official or a private person stationed in these two states without getting case-specific consent.
    • Withdrawal of consent simply means that CBI officers will lose all powers of a police officer as soon as they enter the state unless the state government has allowed them.

    Under what provision has general consent been withdrawn?

    • In exercise of the power conferred by Section 6 of the Delhi Special Police Establishment Act, 1946, the government can withdraw the general consent to exercise the powers and jurisdiction.
    • Section 6 of the Act says nothing contained in Section 5 shall be deemed to enable any member of the Delhi Special Police Establishment to exercise powers and jurisdiction in any area in a State, not being a Union Territory or Railway, area, without the consent of the Government of that State.

    Does that mean that the CBI can no longer probe any case in the two states?

    • The CBI would still have the power to investigate old cases registered when general consent existed.
    • Also, cases registered anywhere else in the country, but involving people stationed in that particular state would allow CBI’s jurisdiction to extend to these states.
    • There is ambiguity on whether the agency can carry out a search in either of the two states in connection with an old case without the consent of the state government.

    Why such a move by the States?

    • If a state government believes that the ruling party’s ministers or members could be targeted by CBI on orders of the Centre, and that withdrawal of general consent would protect them.
    • This is a debatable political assumption.
    • CBI could still register cases in Delhi which would require some part of the offence being connected with Delhi and still arrest and prosecute ministers or MPs.
    • The only people it will protect are small central government employees.

    Legal Remedies for CBI

    • The CBI can always get a search warrant from a local court in the state and conduct searches.
    • In case the search requires a surprise element, there is CrPC Section 166, which allows a police officer of one jurisdiction to ask an officer of another to carry out searches on his behalf.
    • And if the first officer feels that the searches by the latter may lead to loss of evidence, the section allows the first officer to conduct searches himself after giving notice to the latter.

    Back2Basics: Central Bureau of Investigation (CBI)

    • The Bureau of Investigation traces its origins to the Delhi Special Police Establishment, a Central Government Police force, which was set up in 1941 by the Government of India.
    • It then aimed to investigate bribery and corruption in transactions with the War and Supply Department of India.
    • It then had its headquarters in Lahore.
    • After the end of the war, there was a continued need for a central governmental agency to investigate bribery and corruption by central-government employees.
    • The DSPE acquired its popular current name, Central Bureau of Investigation (CBI), through a Home Ministry resolution dated in 1963.

    Mandate of the CBI

    • The CBI is the main investigating agency of the GoI.
    • It is not a statutory body; it derives its powers from the Delhi Special Police Establishment Act, 1946.
    • Its important role is to prevent corruption and maintain integrity in administration.
    • It works under the supervision of the CVC (Central Vigilance Commission) in matters pertaining to the Prevention of Corruption Act, 1988.
    • The CBI is also India’s official representative with the INTERPOL.

    Cases to investigate

    • Cases connected to infringement of economic and fiscal laws
    • Crimes of a serious nature that have national and international ramifications
    • Coordination with the activities of the various state police forces and anti-corruption agencies.
    • It can also take up any case of public importance and investigate it
    • Maintaining crime statistics and disseminating criminal information.

    Issues with CBI

    • Caged parrot: The Supreme Court has criticized the CBI by calling it a “caged parrot speaking in its master’s voice”.
    • Political interference: It has often been used by the government of the day to cover up wrongdoing, keep coalition allies in line and political opponents at bay.
    • Investigation delay: It has been accused of enormous delays in concluding investigations due to political inertia.
    • Loss of Credibility: CBI has been criticised for its mismanagement of several cases involving prominent politicians and mishandling of several sensitive cases like Bofors scandal, Bhopal gas tragedy.
    • Lack of Accountability: CBI is exempted from the provisions of the Right to Information Act, thus, lacking public accountability.
    • Acute shortage of personnel: A major cause of the shortfall is the government’s sheer mismanagement of CBI’s workforce.
    • Limited Powers: The powers and jurisdiction of members of the CBI for investigation are subject to the consent of the State Govt., thus limiting the extent of investigation by CBI.
    • Restricted Access: Prior approval of Central Government to conduct inquiry or investigation on the employees of the Central Government is a big obstacle in combating corruption at higher levels of bureaucracy.

    Reforming CBI

    • Need for autonomy:   As long as the government of the day has the power to transfer and post officials of its choice in the CBI, the investigating agency will not enjoy autonomy and will be unable to investigate cases freely.
    • Selection of director/ Officers: To ensure that the CBI is a robust, independent and credible investigation agency, there is an urgent need to work out a much more transparent mechanism for selection and induction of officers on deputation.
    • Lokpal scrutiny: The Lokpal Act already calls for a three-member committee made up of the PM, the leader of the opposition and the CJI to select the director.
    • Bifurcation of Cadre: CBI should be bifurcated into an Anti-Corruption Body and a National Crime Bureau.
    • Develop own cadre: One of the demands that have been before Supreme Court, and in line with international best practices, is for the CBI to develop its own dedicated cadre of officers.
    • Annual social audit should be carried out by ten reputed, knowledgeable persons with background of law, justice, public affairs and administration and the audit report should be placed before the parliament.

     

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  • What is ‘Front-of-Pack Labelling’ (FoPL)?

    The Food Safety and Standards Authority of India (FSSAI) will soon start labelling the front of packaged food products with Health Star Rating (HSR).

    What is FoPL?

    • In India, packaged food has had back-of-package (BOP) nutrient information in detail but no FoPL.
    • Counter to this, FoPL can nudge people towards healthy consumption of packaged food.
    • It can also influence purchasing habits.
    • The study endorsed the HSR format, which speaks about the proportions of salt, sugar, and fat in food that is most suited for consumers.
    • Countries such as the UK, Mexico, Chile, Peru, Hungary, and Australia have implemented FoPL systems.

    What warranted such rating in India?

    • Visual bluff: A lot of Indian consumers do not read the information available at the back of the packaged food item.
    • Burden of NCDs: Also, India has a huge burden of non-communicable diseases that contributes to around 5.87 million (60%) of all deaths in a year.
    • Healthy dietary choices: HSR will encourage people to make healthy choices and could bring a transformational change in the society.
    • Supreme court order: A PIL seeking direction to the government to frame guidelines on HSR and impact assessment for food items and beverages was filed in the Supreme Court in June 2021.

    Which category of food item will have HSR?

    • All packaged food items or processed food will have the HSR label.
    • These will include chips, biscuits, namkeen, sweets and chocolates, meat nuggets, and cookies.
    • However, milk and its products such as chenna and ghee are EXEMPTED as per the FSSAI draft notified in 2019.

    Will there be pushback from food industry?

    • Negative warning: Some experts opposed the use of the HSR model in India, suggesting that consumers might tend to take this as an affirmation of the health benefits rather than as a negative warning of ill effects.
    • Lack of awareness: This is significant because there is lack of awareness on star ratings related to consumer products in India.
    • Impact on Sale: Certain organisations fear it might affect the sale of certain food products.

    When will the rating come into force?

    • FSSAI’s scientific panel recommends voluntary implementation of HSR format from 2023 and a transition period of four years for making it mandatory.
    • FSSAI noted that the proposed thresholds are in alignment with the models implemented in other countries and ‘WHO population nutrient intake goals recommendations’.
    • FSSAI will analyse the nutritional information in 100 mg of packaged food.
    • The food safety compliance system licensing application portal will have a module for generating certificates wherein a licensee can enter details of a product.

     

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    Back2Basics: Food Safety and Standards Authority of India (FSSAI)

    • The FSSAI is an autonomous body established under the Ministry of Health & Family Welfare, Government of India.
    • It has been established under the Food Safety and Standards Act, 2006 which is a consolidating statute related to food safety and regulation in India.
    • It is responsible for protecting and promoting public health through the regulation and supervision of food safety.
    • It is headed by a non-executive Chairperson, appointed by the Central Government, either holding or has held the position of not below the rank of Secretary to the Government of India.
  • Kavach: the Indian technology that can prevent collision of Trains

    Kavach, this indigenously developed Automatic Train Protection System is earmarked for aggressive rollout on 2,000 km in 2022-23, according the Budget proposals.

    What is Kavach?

    • It is India’s very own automatic protection system in development since 2012, under the name Train Collision Avoidance System (TCAS), which got rechristened to Kavach or “armour”.
    • Simply put, it is a set of electronic devices and Radio Frequency Identification devices installed in locomotives, in the signalling system as well the tracks.
    • They connect to each other using ultra high radio frequencies to control the brakes of trains and also alert drivers, all based on the logic programmed into them.

    Key features of Kavach

    • One of its features is that by continuously refreshing the movement information of a train, it is able to send out triggers when a loco pilot jumps signal, called Signal Passed at Danger (SPAD).
    • The devices also continuously relay the signals ahead to the locomotive, making it useful for loco pilots in low visibility, especially during dense fog.
    • It includes the key elements from already existing, and tried and tested systems like the European Train Protection and Warning System, and the indigenous Anti Collison Device.
    • It will also carry features of the high-tech European Train Control System Level-2 in future.
    • The current form of Kavach adheres to the highest level of safety and reliability standard called Safety Integrity Level 4.

    What is the upgrade?

    • In the new avatar, India wants to position Kavach as an exportable system, a cheaper alternative to the European systems in vogue across the world.
    • While now Kavach uses Ultra High Frequency, work is on to make it compatible with 4G Long Term Evolution (LTE) technology and make the product for global markets.
    • Work is on to make the system such that it can be compatible with other already installed systems globally.

    How far is the rollout?

    • So far, Kavach has been deployed on over 1,098 km and 65 locomotives in ongoing projects of the South Central Railway.
    • In future it will be implemented on 3000 km of the Delhi-Mumbai and Delhi-Howrah corridors where the tracks and systems are being upgraded to host a top speed of 160 kmph.
    • Further, over 34,000 km on the High Density Network (HDN) and Highly Utilized Network (HUN) of on the Golden Quadrilateral have been included in its sanctioned plans.

     

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  • Hike in crude oil prices and its impact on India

    Context

    The Russia-Ukraine conflict will impact India’s economy through several channels. The first order impact, emanates from the negative terms of trade shock from higher commodity prices, particularly oil.

    • Crude prices have surged well past a $110/barrel and there is a growing expectation that, as the conflict gets more entrenched, crude could remain elevated for much longer and average close to $100/barrel in 2022, vis-a-vis $70/barrel in 2021.

    Why crude oil price is increasing?

    Limited Supply:

    • Major oil-producing countries had cut oil production last year amid a sharp fall in demand due to the Covid-19 pandemic.
    • Saudi Arabia pledged extra supply cuts in February and March 2020 following reductions by other members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies.
    • In early January 2021, the OPEC and Russia (as OPEC+) agreed to cut back on oil production to increase prices.

    Rising Demand:

    • The production and rollout of vaccines for Covid-19 and the rising consumption post the Covid lockdowns last year have both led to a revival in international crude oil prices.

    Geopolitical reasons

    • Geopolitical tension has risen between Russia, which is the second largest oil producer in the world, and neighbouring Ukraine.
    • In January, there were drone attacks on oil facilities in UAE, another major oil producer.
    • An outage on a major oil pipeline linking Saudi Arabia and Turkey further added to the pressures.

    How it will impact India?

    • Current Account Deficit: The increase in oil prices will increase the country’s import bill, and further disturb its current account deficit (excess of imports of goods and services over exports).
      • According to estimates, a one-dollar increase in crude oil price increases the oil bill by around USD 1.6 billion per year.
    • Inflation: The increase in crude prices could also also further increase inflationary pressures that have been building up over the past few months.
      • This will decrease the space for the monetary policy committee to ease policy rates further.
      • The government had hiked central taxes on petrol and diesel by Rs. 13 per litre and Rs. 11 per litre in 2020 to boost revenues amid lower economic activity.
    • Fiscal Health: If oil prices continue to increase, the government shall be forced to cut taxes on petroleum and diesel which may cause loss of revenue and deteriorate its fiscal balance.
      • The growth slowdown in the last two years has already resulted in a precarious fiscal situation because of tax revenue shortfalls.
      • The revenue lost will erode the government’s ability to spend or meet its fiscal commitments in the form of budgetary transfers to states, payment of dues and compensation for revenue shortfalls to state governments under the goods and services tax (GST) framework.

    Why high growth impact on fiscal space leads to a greater hit to demand and growth?

    • The growth impact will manifest through constraints on fiscal space, household purchasing power being impinged and firm margins coming under pressure.
    • Why does marginal propensity to consume matter? The quantum of the growth impact will depend on how the shock is distributed across the fiscal, households and firms because of the different marginal propensities to consume.
    • For example, the excise duty cuts last November have already absorbed about one-third of the shock from oil (0.4 per cent of GDP).
    • The cost of this, however, is commensurate pressures on fiscal expenditures and growth, agnostically assuming a fiscal multiplier of 1.
    • In contrast, the marginal propensity to consume/invest out of income/earnings is typically lower than 1 for households/firms.
    • So, the greater the fraction of the shock absorbed on the fiscal, the greater the hit to demand and growth. 

    Way forward

    1] Let the rupee reach the new equilibrium

    • The widening of the CAD and associated BoP pressures will create some depreciation pressures on the rupee.
    • More fundamentally, a persistent negative terms of trade shock will argue for a weaker equilibrium real effective exchange rate.
    • Policymakers should let the rupee reach this new equilibrium – albeit in a gradual and non-disruptive manner – and not prevent this adjustment because it will facilitate the necessary “expenditure switching” to reduce imports, boost exports and help narrow an elevated CAD.

    2] Pragmatic fiscal policies

    • Cutting excise duties would buffer the impact on households and protect consumption, but potentially result in a larger hit to demand by shrinking fiscal space to spend.
    • If the government doesn’t cut duties, it has resources that can potentially be used to more directly target affected households at the bottom of the pyramid.
    • But this will mean higher retail prices that can harden inflationary expectations, increasing the challenges for monetary policy.
    • Finally, policymakers could always cut duties, not cut spending and let the deficit widen commensurately — effectively pushing out some of the terms of trade costs to the future — but negative surprises on the fiscal during periods of heightened macro uncertainty can generate significantly risk premia in markets.
    • All told, the fiscal will confront several trade-offs, and should try avoiding corner solutions.
    • What should be clear is that as soon as markets begin to stabilise, authorities must plough ahead with planned asset sales/disinvestment to create more fiscal headroom, without trying to perfectly time the market.

    3) Reduce the dependence

    • India has proposed Oil Buyer’s club. This would be a grouping of India, China, Japan and South Korea. The objective is to reduce the dependence on OPEC, have better bargains, increase the imports of crude oil imports from USA etc
    • It was put forward by Mani Shankar Ayyar in 2005
    • Create a stabilization fund or reserve account – Thailand, UK etc

    Conclusion

    A persistent adverse supply shock is complicated and challenging to respond to, and the new equilibrium will inevitably need some combination of a weaker rupee, higher rates, and judicious fiscal management.

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    Back2Basics: What is a fiscal multiplier?

    • The fiscal multiplier measures the effect that increases in fiscal spending will have on a nation’s economic output, or gross domestic product (GDP).
    • Fiscal multipliers are important because they can help guide a government’s policies during an economic crisis and help set the stage for economic recovery.

    What is Marginal Propensity to Consume?

    • In economics, the marginal propensity to consume (MPC) is defined as the proportion of an aggregate raise in pay that a consumer spends on the consumption of goods and services, as opposed to saving it.
    • Marginal propensity to consume is a component of Keynesian macroeconomic theory and is calculated as the change in consumption divided by the change in income.
    • MPC varies by income level. MPC is typically lower at higher incomes.
  • Asian Infrastructure Investment Bank (AIIB)

    The Beijing-based Asian Infrastructure Investment Bank (AIIB) said it was putting on hold and reviewing all projects in Russia and Belarus.

    About AIIB

    • The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia, began operations in January 2016.
    • It aims to stimulate growth and improve access to basic services by furthering interconnectivity and economic development in the region through advancements in infrastructure.
    • AIIB has now grown to 102 approved members worldwide. US & Japan are not its members.
    • It is a brainchild of China. It has invested in 13 member regions.

    Capital and shareholding of AIIB

    • It has authorized capital of US 100 billion dollars and subscribed capital of USD 50 billion.
    • It offers sovereign and non-sovereign finance for projects in various sectors with an interest rate of London Interbank Offered Rate (LIBOR) plus 1.15 % and a repayment period of 25 years with 5 years in grace period.
    • China is the largest shareholder in AIIB with a 26.06% voting power, followed by India with 7.62% and Russia with 5.92% voting power.

     

    Try this question from CSP 2019

    Q.With reference to Asian Infrastructure Investment Bank (AIIB), consider the following statements

    1. AIIB has more than 80 member nations.
    2. India is the largest shareholder in AIIB.
    3. AIIB does not have any members from outside Asia.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

     

     

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  • What is Agni Kandakarnan Theyyam?

    Ritual dance Agni Kandakarnan Theyyam performing at the Kaliyattam festival has begun in Kannur, Kerala.

    What is Theyyam?

    • Theyyam is a popular thousand-year-old ritual form of dance worship in Kerala and Karnataka, India.
    • The people of these districts consider Theyyam itself as a channel to a god and they thus seek blessings from Theyyam.
    • There are about 456 types of Theyyam.
    • Theyyam is performed by males, except the Devakoothu theyyam; the Devakoothu is the only Theyyam ritual performed by women.
    • It is performed only in the Thekkumbad Kulom temple.

    Major types of performances

    • Vishnumoorthi: It is the most popular Vaishnava Theyyam. This theyyam narrates and performs the story of Hiranyakashipu’s death by the Lord Vishnu in his avatar of Narasimham.
    • Sree Muthappan Theyyam: It consists of two divine figures is considered as the personification of two divine figures— the Thiruvappana or Valiya Muttapan (Vishnu) and the Vellatom or Cheriya Muttapan (Shiva).
    • Padikutti Amma: It is believed to be the mother of Muthapan. The Padikutti Amma Theyyam is performed in the Palaprath Temple in Kodallur near Parassini Kadavu in the Meenam (a Malayalam month)

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  • What is WHO’s Pandemic Treaty?

    Members of the World Health Organisation (WHO) held the first round of negotiations towards the pandemic treaty on February 24, 2022.

    What is the Pandemic Treaty?

    • In December 2021, the World Health Assembly agreed to start a global process to draft the pandemic treaty.
    • The need for an updated set of rules was felt after the COVID-19 pandemic exposed the shortcomings of global health systems.
    • The Health Assembly adopted a decision titled “The World Together” at its second special session since it was founded in 1948.
    • Under the decision, the health organization established an intergovernmental negotiating body (INB) to draft and negotiate the contents of the pandemic treaty in compliance with Article 19 of the WHO Constitution.

    What is it likely to entail?

    • The pandemic treaty is expected to cover aspects like data sharing and genome sequencing of emerging viruses and equitable distribution of vaccines and drugs and related research.
    • Solutions to the COVID-19 pandemic have seen an inequitable distribution of vaccines so far, with poorer countries at the mercy of others to receive preventive medication.

    Why need such treaty?

    • Most countries have followed the “me-first” approach which is not an effective way to deal with a global pandemic.
    • A widely-accepted theory points that the novel coronavirus may have jumped from animals to humans in a wildlife market of China.
    • Many nations want a ban on wildlife markets.

    Issues in negotiations

    • While the EU wants the treaty to be legally binding, the U.S., Brazil and India have expressed reservations about the same.
    • The legal nature of the treaty is yet to be defined.

     What is Article 19 of the WHO Constitution?

    • Article 19 of the WHO Constitution gives the World Health Assembly the authority to adopt conventions or agreements on matters of health.
    • A two-third majority is needed to adopt such conventions or agreements.
    • The WHO Framework Convention on Tobacco Control was set up under Article 19 and it came into force in 2005.

     

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  • New Rules for Deputation of DIGs

    After its proposal to amend the All India Service Rules that would allow it to call any IAS, IPS or IFoS officer on central deputation with or without the state’s consent, the Centre has issued another order on central deputation of Deputy Inspector General-level IPS officers.

    What is the order?

    • The Department of Personnel and Training (DoPT) has said that IPS officers coming to the Centre at DIG level would no longer be required to be empanelled at that level with the Union Government.
    • According to existing rules, a DIG-ranked IPS officer with a minimum experience of 14 years could only be deputed to the Centre if the Police Establishment Board empanelled them as DIGs at the Centre.
    • The board chooses the panel on the basis of officers’ career and vigilance records.
    • Only Superintendent of Police-level officers do not require empanelment at the Centre.
    • The new order makes the entire pool of DIG-level officers in a state eligible for central deputation.

    Why has it been issued?

    Ans. Huge Vacancies

    • The move is aimed at increasing the pool of DIG-level IPS officers for central deputation in the backdrop of massive vacancies in central police organisations (CPOs) and the Central Armed Police Forces (CAPFs).
    • Out of 252 posts reserved for IPS officers at DIG level at the Centre, 118 (almost half) are vacant.
    • IPS officers have a quota of 40% in CPOs and CAPFs.

    How will the move help?

    • The idea is to ease up the process of central deputation as verification of records takes a long time.
    • Also, it increases the size of the pool of officers available to the Centre.

    So why would states have a problem?

    Ans. Relieving the Officers

    • States would have to be willing to relieve these officers.
    • The new order may be seen by many states as the Centre’s attempt at pushing the envelope further on increasing its powers over officers serving in the states.
    • With these orders, the Centre would have powers to demand, within a stipulated time frame, a certain quota of officers from the state for central deputation.
    • It may also call any IAS officer on central deputation in “public interest”.
    • In case the state failed to relieve the officer, he/she would be deemed relieved following the date fixed.

    Why don’t states relieve officers?

    Ans. Vacancy in states

    • There is a serious paucity of officers in the states too.
    • In a cost-cutting move during the Atal Bihari Vajpayee regime, the size of IPS batches among other government staff was reduced even though sizeable vacancies existed even then.
    • From 80-90 officers each, IPS batches were cut to 35-40 officers (in 1999-2002, the average was 36).
    • The average attrition rate of IPS officers due to superannuation is 85 per year.
    • The strength of IAS officers too had been impacted due to low intake during the 1990s.

    How has this impacted the services?

    • The anomaly in IPS recruitment adversely affected cadre management over the years.
    • At some levels, there are fewer officers than sanctioned posts, while at others there is a glut. For example, UP has a shortage of DIGs and IGs, but too many officers at the level of ADGs.

     

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  • Egypt hikes Suez Canal transit fees for ship

    Cash-strapped Egypt increased transit fees for ships passing through the Suez Canal, one of the world’s most crucial waterways, with hikes of up to 10%.

    Suez Canal

    • The Suez Canal is an artificial sea-level waterway in Egypt, connecting the Mediterranean Sea to the Red Sea through the Isthmus of Suez; and dividing Africa and Asia.
    • Constructed by the Suez Canal Company between 1859 and 1869, it officially opened on 17 November 1869.
    • The canal was earlier controlled by British and French interests in its initial years but was nationalized in 1956 by Egypt’s then leader Gamal Abdel Nasser.
    • It extends from the northern terminus of Port Said to the southern terminus of Port Tewfik at the city of Suez.
    • Its length is 193.30 km including its northern and southern access channels.

    Its significance

    • The Suez Canal provides a crucial link for oil, natural gas and cargo being shipping from East to West.
    • About 10% of global trade, including 7% of the world’s oil, flows through the Suez Canal.
    • It provides a major shortcut for ships moving between Europe and Asia, who before its construction had to sail around Africa to complete the same journey.
    • As per a report, the canal is a major source of income for Egypt’s economy, with the African country earning $5.61 billion in revenues from it last year.

    Try this PYQ:

    Q.Between India and East Asia, the navigation time and distance can be greatly reduced by which of the following?

    1. Deepening the Malacca straits between Malaysia and Indonesia.
    2. Opening a new canal across the Kra isthmus between the Gulf of Siam and Andaman sea.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

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