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GS Paper: GS3

  • MUDRA 2.0 Loans

    Why in the News?

    The Union Budget 2024 has sought to increase the loan limit under the MUDRA scheme signifying the potential launch of MUDRA 2.0.

    What is MUDRA 1.0?

    Details
    Launch
    • Pradhan Mantri Mudra Yojana (PMMY)
    • Launched in 2015.
    Purpose To extend affordable credit to micro and small enterprises, bringing them into the formal financial system and funding the unfunded.
    Loan Providers Public Sector Banks (PSU Banks), Regional Rural Banks, Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions (MFI), and Non-Banking Finance Companies (NBFC).
    Eligibility Indian citizens with a business plan for non-farm sector income-generating activities in manufacturing, processing, trading, or services, requiring less than ₹10 lakh.
    Types of Loans • Shishu: Loans up to ₹50,000.
    • Kishor: Loans above ₹50,000 and up to ₹5 lakh.
    • Tarun: Loans above ₹5 lakh and up to ₹10 lakh.
    Subsidy
    • No direct subsidy;
    • Loans linked to Government schemes providing capital subsidies are eligible under PMMY.

    Achievements of MUDRA 1.0

    • Financial Inclusion: Disbursed over Rs 27.75 lakh crore to 47 crore small entrepreneurs, improving access to formal credit.
    • Support for Marginalized Groups: 69% of loans went to women, and 51% to SC/ST and OBC entrepreneurs, enhancing social equity and gender equality.
    • Job Creation: Helped create jobs and encouraged self-employment, especially in rural and semi-urban areas.
    • Reduction in NPAs: Reduced non-performing assets (NPAs) from 3.61% in FY21 to 2.1% in FY24, showing better loan management.

    Challenges Faced by MUDRA 1.0

    • Unequal Loan Distribution: In 2021-22, the top 10 districts received Rs 26,000 crore, about the same as the bottom 318 districts, showing uneven credit distribution.
    • High NPAs in Early Categories: The Shishu (loans up to Rs 50,000) and Kishore (loans between Rs 50,001 and Rs 5 lakh) categories had NPAs above 4% from FY20 to FY22 due to a lack of business skills among early-stage entrepreneurs.
    • Low Financial Literacy: Only 27% of the population is financially literate, leading to poor loan management and higher defaults.
    • Monitoring and Credit Appraisal Issues: Increased lending led to challenges in maintaining quality credit appraisal processes and monitoring, resulting in some misuse of funds.

    What is MUDRA 2.0?

    • MUDRA 2.0 is the proposed next phase of the scheme, aiming to expand and enhance support for micro-entrepreneurs, especially in underserved regions.
    • Features of MUDRA 2.0:
      • Expanded Outreach: Establish new centers in rural and semi-urban areas to provide financial literacy, mentorship, and business support.
      • Enhanced Financial Literacy: Launch nationwide programs covering budgeting, savings, credit management, and digital literacy to help entrepreneurs manage their finances better.
      • Improved Credit Support: Introduce the Enhanced Credit Guarantee Scheme (ECGS) to reduce risks for banks and encourage more lending to small enterprises.
      • Stronger Monitoring: Implement a robust monitoring framework using data analytics to track loan disbursements, usage, and repayments in real-time, ensuring transparency and reducing misuse.

    PYQ:

    [2016] Pradhan Mantri MUDRA Yojana is aimed at:

    (a) Bringing the small entrepreneurs into formal financial system.

    (b) Providing loans to poor farmers for cultivating particular crops.

    (c) Providing pension to old and destitute persons.

    (d) Funding the voluntary organizations involved in the promotion of skill development and employment generation.

  • What was the Great Moon Hoax of 1835?

    Why in the News?

    The Great Moon Hoax of 1835 is a series of fabricated news reports published by The New York Sun, an American newspaper, claiming that life had been discovered on the moon.

    What is the Great Moon Hoax of 1835?

    • The Great Moon Hoax was a series of newspaper articles falsely claiming that John Herschel, an astronomer, had discovered life on the moon.
    • The hoax was created and published by The New York Sun, a daily newspaper in New York City, starting on August 25, 1835.
    • It described various fantastical creatures, such as bat-winged humanoids (called Vespertilio-homo), unicorns, and upright beavers, along with detailed landscapes and other features of the moon.
    • These reports were entirely fictional and intended as satire.
    • However, they were widely believed by the public and reprinted in other newspapers.

    Why the Hoax was conceived?

    • To Mock Religious Influence on Science: It aimed to satirize the blend of religious beliefs with scientific claims, especially in astronomy.
    • Boost Readership: The hoax was a tactic to increase The New York Sun’s circulation from 8,000 copies a day.
    • Challenge Public Credulity: It highlighted how easily the public could be deceived by sensational stories without verifying their accuracy.

  • Simple Medical Tools of an OPD Visit

    Why in the News?

    • These medical tools—thermometers, stethoscopes, weighing scales, and sphygmomanometers—are essential for diagnosing and monitoring basic health parameters.
      • Each tool has its own function and specific way of operation, which helps healthcare professionals make informed decisions about patient care.

    Here is the list of tools used in a Doctor’s Diagnosis:

    Function Description and Working Principle
    Thermometer Measures body temperature.
    • Mercury Thermometer: Features a mercury-filled bulb and a glass capillary with numerical markings. Temperature changes cause the mercury to expand or contract, moving through the capillary to indicate temperature.
    • Digital Thermometer: Utilizes sensors like infrared or thermistors to detect temperature changes, which are then converted into digital readings.
    Stethoscope Listens to internal body sounds.
    • Acoustic Stethoscope: Comprises a diaphragm for high-frequency sounds and a bell for low-frequency sounds, connected by a tube to earpieces.
    • Electronic Stethoscope (Stethophone): Amplifies body sounds electronically and may include recording capabilities and additional diagnostics such as electrocardiograms. These devices transmit sound data to smartphones or other devices.
    Weighing Scale Measures body weight.
    • Spring Scale: Uses a spring under a plate; weight is measured by the degree of spring compression or extension. Requires calibration to account for local gravity variations.
    • Electronic Scale: Converts the mechanical force of weight into electrical signals using load cells or strain gauges, displayed as weight readings on a digital screen.
    Sphygmomanometer Measures blood pressure.
    • Manual Sphygmomanometer: Includes an inflatable cuff, linked to a mercury or aneroid manometer. Uses a stethoscope to detect blood flow sounds (Korotkov sounds) for determining systolic and diastolic pressures.
    • Electronic Sphygmomanometer: Uses oscillometric technology to sense pressure oscillations caused by arterial blood flow, automating blood pressure measurement. Easier for home use but may have accuracy issues in patients with certain cardiovascular conditions.

     

    PYQ:

    [2019] In the context of wearable technology, which of the following tasks is/are accomplished by wearable devices?

    1. Location identification of a person
    2. Sleep monitoring of a person
    3. Assisting the hearing-impaired person

    Select the correct answer using the codes given below:

    (a) 1 only

    (b) 2 and 3 only

    (c) 3 only

    (d) 1, 2 and 3

  • Tackling the frictions in cross-border payments  

    Why in the News?

    Despite being worth $181.9 trillion in 2022, cross-border payments still have inefficiencies prompting the G-20 to focus on improving them for economic growth.

    Present Status of the Global Cross-Border Payments Market

    • The cross-border payments market was valued at approximately $181.9 trillion in 2022 and is projected to reach $356.5 trillion by 2032, reflecting a compound annual growth rate (CAGR) of 7.3% from 2023 to 2032.
    • The growth is driven by increasing globalization, the rise of e-commerce, and technological innovations in the financial sector. The demand for faster, more secure, and transparent payment solutions is compelling banks and fintech companies to enhance their offerings.
    • The market includes various channels such as bank transfers, money transfer operators, and card payments, with a significant share coming from business-to-business (B2B) transactions.

    Difference Between Old and New Systems

     

    Cross-Border Payment 

    		 Features Challenges
    Old System Cross-border payments relied on manual processes involving letters of credit, checks, and extensive documentation. It faced challenges such as high transaction costs, slow processing times, and limited access due to regulatory burdens.
    New System Incorporates technological advancements such as blockchain, digital wallets, and instant payment systems.

    Example:  peer-to-peer transactions and interlinked payment infrastructures

    		 challenges around scalability, security, regulation and standardization.

    Challenges to Cross-Border Payments

    • High Costs: Transaction fees remain a significant barrier, with various financial institutions imposing different charges that complicate cost-effectiveness.
    • Low Speed: Processing times can vary greatly, often taking several days due to intermediary banks and regulatory checks, which can frustrate users seeking rapid transactions.
    • Limited Access: Many individuals and businesses still face obstacles in accessing cross-border payment services, particularly in underbanked regions.
    • Insufficient Transparency: Users often lack clarity regarding fees, processing times, and the overall transaction process, leading to mistrust and reluctance to engage in cross-border transactions.
    • Regulatory Compliance: Navigating diverse legal frameworks across jurisdictions complicates transactions, with anti-money laundering (AML) and counter-terrorist financing (CFT) regulations adding layers of complexity.

    Way forward: 

    • Adoption of Emerging Technologies: Leveraging blockchain, digital currencies, and AI can streamline processes, reduce transaction costs, and enhance transparency, making cross-border payments faster and more accessible.
    • Regulatory Harmonization and Collaboration: Promoting global regulatory alignment and fostering collaboration between financial institutions and governments can simplify compliance, improve transaction efficiency, and broaden access to underbanked regions.

  • What is Sonoluminescence? 

    Why in the News?

    Recent studies have provided deeper insights into the mechanics of Sonoluminescence, particularly the conditions under which light is emitted from collapsing bubbles in liquids.

    What is Sonoluminescence?

    • Sonoluminescence is a phenomenon in which small gas bubbles in a liquid emit short bursts of light when exposed to intense sound waves.
    • The light is produced when the bubble undergoes rapid compression and expansion.
    • This is due to the alternating high- and low-pressure phases of the sound waves, causing the gas inside to heat up and emit light.
    • This phenomenon was discovered in 1934 by two German engineers while they were studying sonar technology, which uses sound waves to detect objects underwater.
    • They noticed that when a tiny bubble in a liquid was hit by strong sound waves, it emitted a brief flash of light.

    Mystery behind Sonoluminescence

    • Although the general mechanism is understood, the exact details of how the light is produced remain a mystery. 
    • Scientists are still exploring the precise processes that cause the gases inside the bubble to ionize and emit light at such high temperatures.

    Examples of Sonoluminescence

    • Controlled Experiments: In laboratory settings, scientists create sonoluminescence by trapping a bubble in a liquid and subjecting it to high-frequency sound waves.
    • Pistol Shrimp: When the shrimp (marine creature with a specialized claw) snaps its claw shut, it shoots out a jet of water that moves so fast it creates a low-pressure bubble. The bubble then collapses, producing a loud sound, intense heat, and sometimes a brief flash of light.

  •  Time to reset the GST system   

    Why in the News?

    Most states appear to be opposed to altering the current five primary GST rate slabs: 0%, 5%, 12%, 18%, and 28%.

    About Goods and Service Tax (GST):

    • The Goods and Services Tax (GST) in India was introduced by the Constitutional (One Hundred and First Amendment) Act of 2017. It is a unified tax system that replaced multiple indirect taxes levied by both the Central and State Governments.
    • Under GST, the Central (CGST) and state government (SGST) share the authority to levy and collect taxes on goods and services. In the case of Inter-state transactions, Integrated GST (IGST) is applicable.

    Essential Features of GST

    • Multiple Tax Levels: India’s GST system has multiple tax rates, with four primary tax rates (5%, 12%, 18%, and 28%). Additionally, there is a “zero rate” for certain essential goods and services (e.g. exports).
    • One Nation, One Tax: GST is based on the principles of value-added tax and applies to the supply of goods and services across the nation. It brings uniformity in the tax structure across India, eliminating the cascading effect of taxes.
    • Destination-Based Tax: This means that the revenue generated from GST is collected by the state where the goods or services are consumed, rather than where they are produced.
    • Eliminating Cascading Effect: Under the Indian GST system, businesses can claim input tax credit for the GST they paid on their purchases. This ensures that taxes are levied only on the value added at each stage of the supply chain.
    • Sector-specific Exemptions: Certain sectors, such as healthcare, education, and basic necessities like food grains, are either exempted from GST or have reduced tax rates to ensure affordability and accessibility.
    • Threshold Exemption: Small businesses with a turnover below a specified threshold (currently, it is 20 lakhs: supplier of both goods & services and 40 lakhs: for supplier of goods (Intra–State) in India) are exempt from GST.

    Present Challenges in GST Rates

    • Complexity and Confusion: The existence of multiple GST slabs creates confusion for businesses and consumers alike. Different rates for similar items lead to complications in compliance and classification, resulting in litigation and disputes.
      • For instance, the GST on cement is 28%, while essential items like milk are exempt, yet products derived from milk, such as skimmed milk powder, are taxed at 5%.
    • Anomalies in Taxation: There are notable inconsistencies in the application of GST rates. For example, the taxation of medical and life insurance premiums at 18% is seen as burdensome for individuals seeking financial protection against uncertainties.

    Need to simplify the current GST Slabs

    • Rationalization Proposal: There is a growing consensus among industry experts and some government officials that the GST structure should be simplified to a maximum of three slabs. 
      • This would not only streamline compliance but also reduce the administrative burden on businesses and the government alike.
    • Economic Stimulus: Simplifying GST rates could potentially stimulate economic activity by lowering indirect tax burdens, encouraging consumption, and ultimately leading to higher tax revenues.

    Why are states resisting?

    • Fear of Revenue Loss: Many states are apprehensive about the implications of changing the GST structure, fearing that it might lead to a decrease in their revenue streams.
    • Political Considerations: The political landscape also plays a role in the resistance to change. With upcoming elections and the need to maintain fiscal health, state governments may prioritize short-term revenue stability over long-term structural reforms.

    Way forward: 

    • Phased Implementation: Start by introducing pilot programs in select states or sectors to test the impact of GST simplification. This approach can help address specific concerns and refine the model before a nationwide rollout.
    • Revenue Protection Schemes: Develop robust mechanisms to compensate states for any potential revenue losses during the transition. This could involve a formula-based compensation fund or a temporary revenue guarantee.

    Mains PYQ: 

    Q Explain the rationale behind the Goods and Services Tax (Compensation to States) Act of 2017. How has COVID-19 impacted the GST compensation fund and created new federal tensions? (2020)

  • The road to 2047 for Indian agriculture   

    Why in the News?

    India’s 100th independence anniversary in 2047 is approaching, and the goal to become ‘a developed nation’ has a significant focus.

    Goals of Indian Agriculture by Vision 2047:

    • Comprehensive Goal: India’s centennial year of independence requires a six-fold increase in per capita Gross National Income (GNI), emphasizing the need for comprehensive development, especially in agriculture.
    • Trade Goal: India’s agricultural and processed food exports have gone up to more than USD 50 billion in 2022-23.
      • The Vision 2047 aims to improve the availability of nutritious foods by enhancing the processing of fruits and vegetables, and augment the proportion of value-added products in India’s export portfolio.
    • Sustainable Goal: Transforming Indian agriculture will hinge on adopting sustainable practices such as precision farming, genetically modified crops, and advanced irrigation techniques (e.g., drip and sprinkler systems).

    Present starking Imbalance in the Indian Economy

    • Workforce vs. GDP Contribution: Despite agriculture engaging nearly 46% of the workforce, it contributes only about 18% to the GDP, revealing a significant imbalance.
    • Growth Disparity: While the overall GDP has grown at 6.1% annually since 1991-92, agricultural GDP has lagged at 3.3%. In the last decade (2013- 2023), overall GDP growth was 5.9%, with agriculture growing at 3.6%, which is insufficient for the sector’s socio-economic importance.
    • Future Projections: By 2047, agriculture’s share in GDP might shrink to 7%-8%, but it could still employ over 30% of the workforce, necessitating significant structural changes to avoid exacerbating the disparity.

    Government Initiatives:

    • For Water Management: The Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) has promoted water-use efficiency through micro-irrigation, covering 78 lakh hectares with a ₹93,068 crore allocation for 2021-26.
    • For Risk Management: The Pradhan Mantri Fasal Bima Yojana (PMFBY) offers financial assistance for crop losses, with 49.5 crore farmers enrolled and claims totalling over ₹1.45 lakh crore.
    • For Market Access: The Electronic National Agriculture Market (eNAM) integrates existing markets through an electronic platform, benefiting 1.76 million farmers and recording trade worth ₹2.88 lakh crore by September 2023.
    • For better Farmer Support: The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, disbursing ₹6,000 annually to farmers, has benefited over 11.8 crore farmers.
    • For enhanced Soil Health: The Soil Health Card (SHC) scheme aims to optimize soil nutrient use, enhancing productivity, with over 23 crore SHCs distributed.

    Need for Strategic Planning

    • Population Growth: India’s population is projected to reach 1.5 billion by 2030 and 1.59 billion by 2040, increasing the demand for food by approximately 2.85% annually.
    • Future Demand: By 2047-48, food grain demand is projected to range from 402 million tonnes to 437 million tonnes, requiring sustainable production exceeding demand by 10%-13% under the Business-As-Usual scenario.

    Way Forward: 

    • Investment in R&D: To meet future demands sustainably, significant investments in agricultural research, infrastructure, and policy support are necessary.
    • Budget Allocation: The Budget for 2024-25 includes ₹20 lakh crore for targeted agricultural credit and the launch of the Agriculture Accelerator Fund, highlighting a proactive approach to fostering agricultural innovation and growth.
    • Enhance Digital Infrastructure: Support and expand digital platforms like eNAM to improve market access, provide real-time data, and facilitate better price realization for farmers.

    Mains PYQ: 

    Q Give the vulnerability of inidan agriculture to vagaries of nature, discuss the need for crop insurance and bring out the salient features of the Pradhan Mantri Fasal Bima Yojana (PMFBY). (2016)

  • Polaris Dawn Mission: A Private Space Endeavor

    Why in the News?

    Polaris Dawn is set to be the first privately-funded mission to conduct a spacewalk, aiming to reach an altitude of about 700 kilometers above Earth, the highest altitude for a human space mission to date.

    What is Polaris Dawn Mission?

    • Polaris Dawn is a privately-funded space mission led by billionaire entrepreneur Jared Isaacman, in collaboration with SpaceX.
    • It is set to be the first non-government mission to conduct a spacewalk.
    • This 700km altitude will surpass the current record held by NASA’s Gemini 11 mission in 1966.
    • The mission will test new spacesuits designed by SpaceX to protect astronauts from high radiation levels encountered in the Van Allen Belts.

    What are the Van Allen Belts?

    • The Van Allen Belts are two zones of charged particles that surround Earth, held in the magnetosphere.
    • These belts were discovered in 1958 by American physicist James Van Allen.
    1. Inner Belt: This belt is located approximately 680 to 3,000 km above Earth’s surface and is primarily composed of high-energy protons. It is formed by cosmic rays interacting with Earth’s atmosphere.
    2. Outer Belt: Located about 15,000 to 20,000 km above Earth’s surface, the outer belt mainly consists of high-energy electrons captured from solar wind.

    Why are the Van Allen Belts dangerous for Humans?

    • The Van Allen Belts are dangerous for humans because they contain high levels of radiation that can pose significant health risks to astronauts.
    • The belts are filled with charged particles that can cause radiation sickness, damage human tissues, and increase the risk of cancer. 

     

    PYQ:

    [2011] What is the difference between asteroids and comets?

    1. Asteroids are small rocky planetoids, while comets are formed of frozen gases held together by rocky and metallic material.
    2. Asteroids are found mostly between the orbits of Jupiter and Mars, while comets are found mostly between Venus and Mercury.
    3. Comets show a perceptible glowing tail, while asteroids do not.

    Which of the statements given above is/are correct?

    (a) 1 and 2 only
    (b) 1 and 3 only
    (c) 3 only
    (d) 1, 2 and 3

  • A look at ongoing Indian Space Missions

    Why in the News?

    Since Chandrayaan 3’s successful moon landing on August 23, 2023 and its declaration of National Space Day, ISRO has remained highly active with several key missions, despite a quieter phase at Sriharikota.

    Key Missions and Milestones:

    Details Date
    Chandrayaan 3
    • Successful Moon landing by Vikram lander.
    • August 23 declared as India’s National Space Day.
    		 August 23, 2023
    Aditya L1
    • Solar science mission to study the Sun.
    • Reached Earth-Sun L1 point on January 6, 2024.
    • Studied solar storm in May 2024.
    		 Launched: September 2, 2023
    L1 Orbit: January 6, 2024
    Gaganyaan TV-D1
    • First abort mission for Gaganyaan program.
    • Tested Crew Escape System (CES); crew module recovered by INS Shakthi.
    		 October 21, 2023
    XPoSat
    • X-ray Polarimeter Satellite to study radiation polarization.
    • Second such space observatory after NASA’s IPEX.
    		 Launched: January 1, 2024
    INSAT-3DS
    • Meteorological satellite launched to support GSLV credibility for NISAR mission.
    • Enhances weather forecasting capabilities.
    		 Launched: February 17, 2024
    RLV-TD (Pushpak)
    • Reusable Launch Vehicle tests (LEX-02 and LEX-03) conducted.
    • Simulated landing conditions for future Orbital Return Flight.
    		 LEX-02: March 22, 2024
    LEX-03: June 7, 2024
    SSLV
    • Final development flight of Small Satellite Launch Vehicle (SSLV).
    • Successfully placed EOS-08 and SR-0 Demosat in orbit.
    		 August 16, 2024
    ISRO Roadmaps
    • 25-year roadmap until 2047.
    • Plans for crewed lunar missions, sample-return missions, and the Bharatiya Antariksh Station (BAS) by 2035.
    		 Announced: December 2023
    Next-Generation Launch Vehicle (NGLV)
      • New 3-stage launch vehicle under development to replace GSLV.
    • Powered by semi-cryogenic, liquid, and cryogenic engines.
    • Project report submitted to Union Cabinet.
    		 Project report submitted: February 2024
    NSIL Missions
    • Agreement with SpaceX for GSAT-20/GSAT-N2 launch.
    • SSLV launch service agreement with an Australian company.
    		 2024
    Private Space Missions
    • Agnikul Cosmos launched SoRTeD-01, first semi-cryogenic engine vehicle from Indian soil.
    • Skyroot and Dhruva Space progressing with tests and launches.
    		 2024
    IN-SPACe Initiatives
    • Released ‘Norms, Guidelines, and Procedures for Authorisation of Space Activities’.
    • Granted first satellite broadband license to Eutelsat
    • OneWeb and first ground station service license to Dhruva Space.
    • 100 % Direct FDI policy.
    		 2024

  • Why has Malaysia tweaked its ‘Orangutan Diplomacy’?

    Why in the News?

    Malaysia, after initially introducing its version of soft power called “Orangutan Diplomacy” following China’s successful “panda diplomacy,” has now reversed its decision.

    What is Orangutan Diplomacy?

    • It is a Malaysian strategy that seeks to use orangutan conservation as a tool of soft power, inspired by China’s “panda diplomacy.”
    • It had first announced plans to gift orangutans (IUCN Status: Critically Endangered) to palm oil-buying countries.
    • It engages other countries in conservation efforts, focusing on symbolic adoptions rather than sending animals abroad.
    • Reasons behind:
      • Palm Oil Industry Criticism: Malaysia faces criticism for deforestation due to palm oil plantations, threatening orangutans.
      • Enhance Image: It aims to counter negative perceptions and showcase commitment to sustainability and position Malaysia as a leader in wildlife protection.
      • Global Cooperation: It seeks to strengthen ties with major palm oil importers like China, India, and the EU through conservation partnerships.

    Criticisms:

    • Habitat Concerns: Critics argue real conservation requires protecting habitats, not just symbolic actions.
    • Comparisons to Panda Diplomacy: Malaysia’s effort lacks the infrastructure and commitment seen in China’s panda conservation.

    PYQ:

    [2021] With reference to ‘palm oil’, consider the following statements :​

    1. The palm oil tree is native to Southeast Asia.​

    2. The palm oil is a raw material for some industries producing lipstick and perfumes.​

    3. The palm oil can be used to produce biodiesel.​

    Which of the statements given above are correct?​

    (a) 1 and 2 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) 1, 2 and 3