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  • Govt. introduces Disaster Management (Amendment) Bill, 2024 in Lok Sabha     

    Why in the news?

    Union Minister of State for Home Nityanand Rai presented the Disaster Management (Amendment) Bill, 2024 in the Lok Sabha on Thursday.

    Proposed Provisions in the Bill

    • Creation of a Disaster Database: The Bill mandates the establishment of a comprehensive disaster database at both national and state levels, which will include disaster assessments, fund allocation details, expenditures, preparedness and mitigation plans, and a risk register based on the type and severity of risks.
    • Urban Disaster Management Authority: It proposes the formation of an “Urban Disaster Management Authority” for state capitals and large cities with municipal corporations, aimed at enhancing local disaster management capabilities.
    • Empowerment of NDMA and SDMAs: The Bill empowers the National Disaster Management Authority (NDMA) and State Disaster Management Authorities (SDMAs) to prepare disaster management plans, replacing the previous role of the National Executive Committee and State Executive Committees.
    • Periodic Risk Assessment: The NDMA is tasked with periodically assessing the entire range of disaster risks in the country, including emerging risks due to extreme climate events.
    • Statutory Status for Pre-Act Organizations: The Bill provides statutory recognition to certain pre-existing organizations, such as the National Crisis Management Committee and the High-Level Committee.
    • Penalties for Non-Compliance: It includes provisions allowing the Central and State governments to impose penalties for actions that hinder disaster management efforts, with fines not exceeding ₹10,000.

    Substantial Questions on Excessive Powers

    • Concerns Over Central Authority: Opposition members, including Congress leader Manish Tewari, raised concerns that the Bill grants excessive rule-making powers to the Central government, potentially encroaching upon the legislative powers reserved for State governments.
    • Constitutional Validity: Questions were raised regarding the constitutional basis for the Bill, as disaster management is not explicitly mentioned in the subjects of the Concurrent List.
    • Multiplicity of Authorities: Critics, including Trinamool Congress member Sougata Roy, expressed concerns that the creation of multiple authorities could lead to confusion and bureaucratic inefficiencies, potentially hampering effective disaster response.

    Need to aim for more clarity

    • Clarification of roles: The Bill aims to bring more clarity and convergence in the roles of various authorities and committees involved in disaster management, addressing the need for streamlined coordination among stakeholders.
    • Enhanced Local Management: By empowering local authorities through the establishment of Urban Disaster Management Authorities, the Bill seeks to ensure that disaster management plans are more relevant and tailored to specific regional challenges.
    • Alignment with Development Plans: The Bill emphasizes the need to mainstream disaster management into development plans, aligning with recommendations from the Fifteenth Finance Commission and ensuring that disaster risk reduction is integrated into broader governance frameworks.

    Way forward: 

    • Strengthening Collaboration with State Governments: To address concerns about excessive central authority and potential overlaps with state powers, it is crucial to establish a framework for ongoing collaboration between the Central and State Disaster Management Authorities.
    • Implementing a Comprehensive Training and Capacity-Building Program: The successful implementation of the proposed Urban Disaster Management Authorities and the broader disaster management framework will depend on the capacity of local officials and stakeholders.

    Mains PYQ: 

    Q  Discuss the recent measures initiated in disaster management by the Government of India departing from the earlier reactive approach. (2020)

  • States can directly buy Rice from FCI

    Why in the News?

    The Union Food and Consumer Affairs Minister announced that States can now directly purchase rice from the Food Corporation of India (FCI) under the Open Market Sale Scheme (Domestic) without participating in e-auctions.

    Key Announcements:

    Direct Rice Purchase of Rice by the States:

    • States can procure rice directly from FCI at ₹2,800 per quintal (excluding transportation cost), down from the earlier rate of ₹2,900 per quintal.
    • This new rate applies to rice procured over the stipulated 5 kg of free grain per individual under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).

    Launch of Price Monitoring System (PMS) 4.0:

    • Minister Joshi launched the 4.0 version of the Price Monitoring System (PMS) mobile app.
    • The app, which previously monitored prices of 22 commodities daily, will now include 38 commodities.
    • The additional 16 food items are bajra (whole), jowar (whole), ragi (whole), suji (wheat), maida (wheat), besan, ghee, butter (pasteurised), brinjal, egg, black pepper, coriander, cumin seed, red chillies, turmeric powder, and banana.

     

    About Open Market Sale Scheme

    Details
    Purpose Enhance the supply of food grains, especially wheat, during the lean season to moderate open market prices, especially in deficit regions.
    Administered by Food Corporation of India (FCI)
    Method of Sale Surplus stocks of wheat and rice sold at pre-determined prices through e-auction on the National Commodity and Derivatives Exchange (NCDEX) platform.
    Participants Bulk consumers, private traders, State Governments, and Union Territory Administrations
    Auction Frequency Weekly
    Reserve Price Fixed by the government; bidders cannot quote less than the reserve price.
    Schemes under OMSS
    1. Sale of wheat to bulk consumers/private traders through e-auction.
    2. Sale of wheat to bulk consumers/private traders through e-auction by dedicated movement.
    3. Sale of Raw Rice Grade ‘A’ to bulk consumers/private traders through e-auction.

     

    PYQ:

    [2017] Which of the following is/are the advantage/advantages of implementing the ‘National Agriculture Market’ scheme?

    1. It is a pan-India electronic trading portal for agricultural commodities.

    2. It provides the farmers access to nationwide market, with prices commensurate with the quality of their produce.

    Select the correct answer using the codes given below:

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

  • What is the Sovereign Gold Bond Scheme?

    Why in the News?

    Recent reports suggest that the government might reduce or discontinue the Sovereign Gold Bond (SGB) scheme due to its high cost.

    Decline in Popularity of SGB:

    • This speculation follows the Union budget’s decision to slash customs duties on gold and silver from 15% to 6%.
    • The reduction in customs duties is expected to decrease demand for SGBs, which has already led to a 2-5% drop in their prices on the National Stock Exchange (NSE).

    About Sovereign Gold Bonds (SGBs)

    Details
    Launch 2015
    Nature
    • Government securities denominated in grams of gold.
    • Issued by RBI.
    Objective Reduce dependence on gold imports and shift savings from physical gold to paper form.
    Eligibility Resident in India, including individuals, HUFs, trusts, universities, and charitable institutions.
    Denomination and Tenor
    • Denominated in multiples of grams of gold, with a basic unit of 1 gram.
    • Tenor of 8 years with an exit option from the 5th year on interest payment dates.
    Investment Limits
    • Minimum: 1 gram of gold.
    • Maximum: 4 kg for individuals and HUFs,
      • 20 kg for trusts and similar entities per fiscal year.
    Benefits
    • Quantity of gold protected, receiving market price at redemption.
    • Eliminates storage risks and costs.
    • Assured market value at maturity and periodic interest.
    • Free from making charges and purity issues.
    • Held in RBI books or demat form, eliminating scrip loss risk.
    Add-ons
    • Can be used as collateral for loans.
    • Loan-to-value (LTV) ratio set equal to ordinary gold loans.

     

    PYQ: 

    [2016] What is/are the purpose/purposes of Government’s ‘Sovereign Gold Bond Scheme’ and ‘Gold Monetization Scheme’?

    1. To bring the idle gold lying with Indian households into the economy
    2. To promote FDI in the gold and jewellery sector
    3. To reduce India’s dependence on gold imports

    Select the correct answer using the codes given below:

    (a) 1 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

     

    https://indianexpress.com/article/business/commodities/gold-customs-duty-may-take-some-shine-off-sovereign-gold-bonds-9485686/

  • Mapping: River Seine

    Why in the News?

    The swimming events in the ongoing Paris Olympics were postponed due to concerns about the water quality of the River Seine.

    Issues with River Seine’s Water Quality:

    • Old Sewage System: Paris’ aged sewage system combines rainwater and wastewater in the same pipes, leading to overflow during heavy rains.
    • Untreated Sewage Discharge: Overflowing pipes cause untreated sewage to be discharged directly into the Seine instead of being treated.
    • Wildlife Contamination: Heavy rains wash wildlife, such as rodents, into the river, adding to the contamination.
    • E. coli Threat: The River often has high levels of E. coli bacteria, which can cause severe gastrointestinal and urinary tract infections.
    • Exceeding Safe Levels: Following heavy rains, E. coli levels in the Seine frequently exceed the safe threshold of 900 colony-forming units (cfu) per 100 ml of water.
    • Long-term Pollution: The Seine has been historically polluted, with a swimming ban in place since 1923 due to health risks.
    • Health Risks: High contamination levels pose significant health risks to swimmers, including infections and illnesses.

    About River Seine

    Details
    Country France
    Length 777 km
    Major Cities Along Course Paris, Troyes, Melun, Rouen, Le Havre
    Major Tributaries Aube, Marne, Yonne, Oise, Eure
    Population in Basin About 17 million people, including the Paris metropolitan area
    Navigability Navigable for about 560 kilometers from the estuary to Burgundy
    Estuary Location Empties into the English Channel at Le Havre and Honfleur
    Estuary Type Tidal estuary with significant tidal influence up to Rouen
    Historical Significance Central to Paris, with landmarks like Notre-Dame Cathedral, Eiffel Tower, and the Louvre along its banks
    UNESCO Status Banks of the Seine in Paris are listed as a UNESCO World Heritage Site
    Economic Importance Major waterway for commercial shipping and tourism; key ports include Paris, Rouen, and Le Havre
    Recreational Activities Popular for river cruises, boating, fishing, and walking along its banks

     

    PYQ:

    [2020] Consider the following pairs?

    River: Flows into

    1. Mekong:  Andaman sea
    2. Thames: Irish Sea
    3. Volga: Caspian Sea
    4. Zambezi: Indian Ocean

    Which of the pairs above is/are correctly matched?

    (a) Only 1

    (b) Only 2

    (c) 3 Only

    (d) None of the above/More than one of the above.

     

    https://indianexpress.com/article/explained/explained-sports/paris-olympics-triathlon-event-river-seines-water-quality-sewage-system-water-treatment-plants-9485616/

  • [pib] Artificial Insemination in Cattle

    Why in the News?

    • The Department of Animal Husbandry and Dairying is implementing the Rashtriya Gokul Mission.
      • The mission aims to develop and conserve indigenous bovine breeds, genetically upgrade the bovine population, and enhance milk production and productivity.

    About Rashtriya Gokul Mission:

    Details
    About
    • Initiated in December 2014.
    • Announced under the National Programme for Bovine Breeding and Dairy Development during the 12th Five Year Plan. 
    • Continued under Rashtriya Pashudhan Vikas Yojana (2021-2026) with a budget of Rs. 2400 crore.
    Nodal Ministry Ministry of Fisheries, Animal Husbandry, and Dairying
    Objectives
    • Enhance productivity of bovines and increase sustainable milk production using advanced technologies.            
    • Propagate the use of high genetic merit bulls for breeding.
    • Expand artificial insemination coverage by strengthening the breeding network and delivering services at farmers’ doorsteps.
    • Promote scientific and holistic conservation of indigenous cattle and buffalo rearing.
    Significance
    • Increased productivity, benefiting all cattle and buffaloes in India, with a focus on small and marginal farmers.
    • Empowers women, who perform over 70% of livestock farming tasks.
    Components
    1. Availability of High Genetic Merit Germplasm
    2. Extension of Artificial Insemination Network
    3. Development and Conservation of Indigenous Breeds
    4. Skill Development
    5. Farmers’ Awareness
    6. Research, Development, and Innovation in Bovine Breeding
    Implementing Agency State Implementing Agency (SIA) viz. Livestock Development Boards
    Significant Initiatives
    • Gopal Ratna Awards: For farmers maintaining the best herd of Indigenous Breed and practicing best management practices.          
    • Kamdhenu Awards: For best-managed Indigenous herd by Institutions/Trusts/ NGOs/ Gaushalas or best-managed Breeders’ societies.
    • Gokul Grams: Integrated cattle development centers focusing on promoting indigenous cattle rearing and conservation in a scientific manner.
    • National Kamdhenu Breeding Centre (NKBC): Centre of Excellence for the holistic and scientific development and conservation of Indigenous Breeds.
    • E-Pashu Haat: Web portal providing information on pet cattle and facilitating trading of bovine animals.
    • Nakul Prajnan Bazaar: E-market portal connecting breeders and farmers for quality, disease-free bovine germplasm.
    • Pashu Sanjivni: Animal wellness program providing animal health cards and unique identification, uploading data on the National Database.
    • Advanced Reproductive Technology (ART): Includes Assisted Reproductive Technique- IVF/Multiple Ovulation Embryo Transfer (MOET) and sex-sorted semen technique.
    • National Bovine Genomic Center for Indigenous Breeds (NBGC-IB): To be established for selecting breeding bulls of high genetic merit at a young age using highly precise gene-based technology.

    Key Initiatives for Artificial Insemination:

    • Multi-Purpose Artificial Insemination Technicians in Rural India (MAITRI): This initiative provides trained manpower for delivering quality artificial insemination services at farmers’ doorsteps.
    • Nationwide Artificial Insemination Programme: This programme extends artificial insemination coverage among bovines using semen from high genetic merit bulls of indigenous breeds.
    • Induction of High Genetic Merit Bulls: This program produces bulls with known genetic potential through progeny testing and pedigree selection, supplying these bulls to semen stations for quality semen dose production.
    • Strengthening of Semen Stations: Efforts are made to improve the quality of semen production by formulating minimum standard protocols and establishing a Central Monitoring Unit for evaluation and grading of semen stations.
    • Breed Purity Tests: To protect indigenous breeds from indiscriminate breeding, breed purity tests are conducted for all imported germplasm.
    • Guidelines for Import and Export of Bovine Germplasm: The Department has formulated guidelines to regulate the import of germplasm and prevent the ingress of exotic diseases, ensuring the safety and purity of bovine genetics within the country.

    PYQ:

    [2012] Consider the following crops of India:

    1. Cowpea
    2. Green gram
    3. Pigeon pea

    Which of the above is/are used as pulse, fodder and green manure?

    (a) 1 and 2 only

    (b) 2 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

    [2015] Livestock rearing has a big potential for providing non-farm employment and income in rural areas. Discuss suggesting suitable measures to promote this sector in India.

  • ‘Zombies’ in our Genes helped us evolve      

    Why in the News?

    Research suggests that around 8% of the human genome is composed of Endogenous Retroviruses (ERVs) often referred to as ‘zombie’ regions.

    Retroviruses and Human Genome Integration

    • Most viruses can’t affect the human genome, but retroviruses are an exception.
    • Retroviruses can integrate and reshape the genomes of their hosts.
    • They have an RNA genome and can reverse-transcribe it to DNA, inserting it into the host’s genome.
    • This process is facilitated by the enzyme reverse transcriptase.
    • Discovered by Howard Temin and David Baltimore in 1971, this enzyme converts the virus’s RNA into a corresponding DNA sequence.
    • Historical Discoveries:
      • Viral causes of cancer were known even before the mechanism was understood.
      • In 1908, Oluf Bang and Vilhelm Ellermann discovered the viral cause of chicken leukosis.
      • In 1957, Ludwik Gross isolated a leukaemia-causing virus in mice.

    What are Endogenous Retroviruses (ERVs)?

    • ERVs are remnants of ancient viral infections that have integrated into the genome of the host species.
    • When these retroviruses infect germ cells (sperm or egg cells), their genetic material can be passed down to the next generation, becoming a permanent part of the host’s DNA.
    • Zombie Regions:
      • They refer to inactive viral sequences within the genome that no longer produce functional viruses but remain as embedded genetic fossils.
      • These regions are a result of retrovirus integration that has lost its ability to replicate and produce proteins, yet they persist in the host’s DNA.

    Evolutionary Significance of ERVs:

    • In the life cycle of a retrovirus, reverse-transcribed DNA is integrated into the host’s DNA with the help of integrase.
    • The viral DNA, called a provirus, hijacks human cells, turning them into virus-making factories.
    • Over tens of thousands of years, many retroviruses have left genomic elements in human genome, contributing to evolutionary processes.
    • Example:
      • Syncytins are genes thought to have descended from ERVs and are crucial for placental development. These genes originally came from viruses and were acquired during mammalian evolution.

    Their Contribution to Human Biology

    • ERVs are highly expressed in the placenta and may influence conditions like preeclampsia.
    • Researchers found that a particular RNA derived from an ERV is dysregulated in early-onset preeclampsia, suggesting it could be used as a biomarker for the condition.
    • ERVs play a role in cell-type differentiation during embryo development.
    • A protein called MERVL-gag is derived from an ERV. This transition is crucial for producing pluripotent stem cells capable of forming different cell types.
    • Researchers also found that a human ERV element LTR10 affects tumour formation in colorectal cancer.

    PYQ:

    [2021] Consider the following statements :​

    1. Adenoviruses have single-stranded DNA genomes whereas retroviruses have double-stranded DNA genomes.​

    2. Common cold is sometime caused by an adenovirus whereas AIDS is caused by a retrovirus.​

    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

  • On discarding indexation for LTCG    

    Why in the news?

    Finance Minister Nirmala Sitharaman’s decision to eliminate indexation for calculating long-term capital gains (LTCG) tax in the Union Budget has received a lukewarm response from stakeholders.

    Changes in the LTCG Regime

    • The new LTCG regime removes the indexation benefit for property, gold, and other unlisted assets.
    • The LTCG tax rate is reduced from 20% to 12.5%.
    • For assets purchased before 2001, the fair market value as of April 1, 2001, is considered the cost of acquisition.

    What is long-term capital gains (LTCG) tax? 

    • LTCG refers to the profit realized from the sale of an asset that has been held for more than one year. This includes various types of assets such as stocks, bonds, real estate, and mutual funds. 
    • If an asset is sold before this holding period, the gains are classified as short-term capital gains (STCG) and are taxed at different rates.

    Why has the Union Finance Minister done away with indexation for computing long-term capital gains (LTCG) tax?

    • Simplification of Tax Computation: The Finance Minister proposed the change to “ease computation of capital gains for the taxpayer and tax administration.” The intention is to simplify the tax process.
    • Uniform Tax Rate: Long-term gains on all financial and non-financial assets would now be taxed at a flat rate of 12.5%, replacing the previous tiered structure.
    • High real estate return: The Income Tax department believes that the real estate returns (12-16% per annum) are higher than indexation for inflation (4-5%). Thus, it predicts “substantial tax savings” for a “vast majority” of taxpayers under the new system.

    What is indexation?

    • Indexation is a mechanism used to adjust the original purchase price of an asset to account for inflation. It helps in calculating the real gains and prevents inflation from inflating the tax liability. The adjusted purchase price is called the indexed cost of acquisition.

    How does Indexation help in Tax Savings?

    • Adjusts the purchase price for inflation: Indexation increases the original purchase price of an asset to account for inflation between the time of purchase and sale. This results in a lower taxable capital gain.
    • Reduces the taxable capital gains: By revising the purchase price upwards using the Cost Inflation Index, indexation reduces the difference between the sale price and purchase price. This lowers the taxable capital gains amount.
    • Leads to lower tax liability: With a reduced taxable capital gain, the tax payable on it also decreases. For example, on a ₹48 lakh gain from selling a house, indexation can bring down the taxable gain to ₹28.6 lakh, saving ₹4,264 in tax (assuming 20% LTCG rate).

    What has been the feedback from corporates and industry regarding the move?

    • Concerns Over Increased Tax Liability: Many stakeholders expressed apprehension that the removal of indexation would lead to higher tax obligations for ordinary investors, particularly in the real estate sector.
      • There are fears that this might encourage the undervaluation of properties to reduce capital gains tax and potentially increase black money transactions in real estate.
    • Mixed Reactions from Realty Players: While some real estate developers and consultants indicated that the removal of indexation might not significantly impact demand and prices, especially for primary home buyers, they noted that high-end properties could see a drop in demand.
      • Some developers viewed the changes positively and said that the lowered tax rate (from 20% to 12.5%) could make real estate a more attractive long-term investment.
    • Government Justifications and Clarifications: The government has argued that the new tax regime simplifies the capital gains tax structure and is beneficial for most taxpayers.

    Way forward: 

    • Transitional Provisions: Govt. should implement transitional provisions for existing investments to ease the shift from the old system to the new one.
    • Strengthen the monitoring system: Need to strengthen monitoring mechanisms to prevent the undervaluation of properties and reduce black money transactions.

    Mains PYQ: 

    Q Comment on the important changes introduced in respect of the Long-term Capital Gains Tax (LCGT) and Dividend Distribution Tax (DDT) in the Union Budget for 2018-2019. (UPSC IAS/2018)

  • AI needs cultural policies, not just regulation    

    Why in the news?

    Only by providing fair and broad access to data can we unlock AI’s full potential and ensure its benefits are shared equitably.

    Present Scenario of ‘Data Race vs. Ethics’

    • Data Demand vs. Quality: The race for data has intensified as AI systems, particularly Large Language Models (LLMs), require vast amounts of high-quality data for training. 
      • However, there is a growing concern that this demand may compromise ethical standards, leading to the use of pirated or low-quality datasets, such as the controversial ‘Books3’ collection of pirated texts.

    What are Large Language Models (LLMs)?

    Large Language Models (LLMs) are advanced AI systems that can understand and generate human-like text by learning from vast amounts of data, enabling a wide range of language-related applications.

     

    • Feedback Loops and Bias Amplification: The reliance on existing datasets can create feedback loops that exacerbate biases present in the data.
      • As AI models are trained on flawed datasets, they may perpetuate and amplify these biases, resulting in skewed outputs that reflect an unbalanced and often Anglophone-centric worldview.
    • Ethical Considerations: The urgency to acquire data can overshadow ethical considerations. This raises questions about the fairness and accountability of AI systems, as they may be built on datasets that do not represent the diversity of human knowledge and culture.

    Challenges towards the Sources

    • Lack of Primary Sources: Current LLMs are primarily trained on secondary sources, which often lack the depth and richness of primary cultural artefacts.
      • Important primary sources, such as archival documents and oral traditions, are frequently overlooked, limiting the diversity of data available for AI training.
    • Underutilization of Cultural Heritage: Many repositories of cultural heritage, such as state archives, remain untapped for AI training.
      • These archives contain vast amounts of linguistic and cultural data that could enhance AI’s understanding of humanity’s diverse history and knowledge.
    • Digital Divide: The digitization of cultural heritage is often deprioritized, leading to a lack of access to valuable data that could benefit AI development.
      • This gap in data availability disproportionately affects smaller companies and startups, hindering innovation and competition with larger tech firms.

    Case Studies from Italy and Canada

    • Italy’s Digital Library Initiative: Italy allocated €500 million from its ‘Next Generation EU’ package to develop a ‘Digital Library’ project aimed at making its rich cultural heritage accessible as open data. However, this initiative has faced setbacks and deprioritization, highlighting the challenges of sustaining investment in cultural digitization.
    • Canada’s Official Languages Act: This policy, once criticized for being wasteful, ultimately produced one of the most valuable datasets for training translation software.

    Conclusion: There is a need to implement robust ethical guidelines and standards for data collection and usage in AI training. These standards should ensure that datasets are sourced legally, represent diverse cultures and perspectives, and minimize biases. Encourage collaborations between tech companies, governments, and cultural institutions to develop and adhere to these guidelines.

  • SEBI’s proposed measures to curb F&O speculation    

    Why in the news?

    SEBI has proposed a series of measures to curb speculative trading in the index derivatives segment due to concerns over the exponential increase in trading volumes in futures and options, especially among individual investors.

    What are the different types of derivatives?  

    Note: Derivatives are financial contracts deriving their value from an underlying asset such as stocks, commodities, or currencies.
    • Futures: 
        • Futures are standardized contracts obligating the buyer to purchase an underlying asset (such as stocks, commodities, or currencies) at a predetermined price on a specified future date. They are traded on exchanges, with daily settlements based on market price changes.
        • Futures contracts have margin requirements and are marked to market daily, ensuring liquidity and reducing credit risk.
    • Options: 
        • Options give the buyer the right, but not the obligation, to buy (call option) or sell (put option) an underlying asset at a predetermined price within a specified time frame. Unlike futures, options are not obligatory; the buyer can choose whether to exercise the option.
        • Options can be traded on exchanges or over-the-counter (OTC) and require the payment of a premium by the buyer.
    • Forwards: 
        • Forward contracts are similar to futures but are privately negotiated agreements between two parties to buy or sell an asset at a future date and price. They are customizable and traded over the counter, which allows for flexibility but introduces counterparty risk.
        • Settlement occurs at the maturity date, and forward contracts do not have standardization like futures.
    • Swaps: 
      • Swaps involve the exchange of cash flows or financial instruments between two parties, often based on interest rates or currencies. Common types include interest rate swaps and currency swaps, which allow participants to manage exposure to interest rate fluctuations or gain access to different currencies.
      • Swaps are typically traded over the counter and can be tailored to meet the specific needs of the parties involved.

    What measures have the SEBI proposed?

    • Increase in minimum contract size for index derivatives from Rs 5-10 lakh to Rs 15-20 lakh, which can be further increased to Rs 20-30 lakh after six months.
    • Upfront collection of option premiums by brokers from clients.
    • Intraday monitoring of position limits for index derivative contracts by Market Infrastructure Institutions (MIIs).
    • Providing only one weekly options contract on a single benchmark index of an exchange.
    • Removal of calendar spread benefits on the expiry day for positions involving any of the contracts expiring on the same day.
    • Rationalisation of options strikes, with a uniform interval up to a fixed coverage of 4% near the prevailing index price and an increased interval as the strikes move away from the prevailing price.
    • Increasing margins on the expiry day and the previous day to address the issue of high implicit leverage in options contracts near expiry.

    Why have these measures been proposed?

    • The measures aim to enhance investor protection and promote market stability in the derivative markets, amidst concerns about an exponential rise in the volume of trade in the futures and options (F&O) segment, particularly by individual investors.
    • In the Union Budget 2024-25, the Securities Transaction Tax (STT) on F&O of securities was doubled to 0.02% and 0.1%, respectively, effective October 1, 2024.
    • Data shows that in FY 2023-24, 92.50 lakh unique individuals and proprietorship firms traded in the NSE index derivatives segment and cumulatively incurred a trading loss of Rs 51,689 crore, with only 14.22 lakh investors (about 15%) making a net profit.

    Way forward: 

    • Enhancing Investor Education and Awareness: To mitigate the risks associated with speculative trading in index derivatives, it is essential to implement comprehensive investor education programs.
    • Strengthening Regulatory Oversight and Compliance: SEBI should enhance its regulatory framework by implementing robust monitoring systems that ensure compliance with the proposed measures.

  • [pib] National Pharmaceutical Pricing Authority (NPPA)

    Why in the News?

    The NPPA monitors the prices of scheduled as well as non-scheduled medicines under Drugs (Prices Control) Order, 2013 (DPCO, 2013), informed the Union Minister of State for Chemicals and Fertilizers.

    What are Scheduled and Non-Scheduled Formulations?

    [A] Scheduled Formulations:

    • Defined as formulations listed in Schedule-I of the Drugs (Prices Control) Order, 2013 (DPCO, 2013).
    • Ceiling prices of these formulations are revised annually based on the Wholesale Price Index (WPI) for the preceding calendar year.
    • National Pharmaceutical Pricing Authority (NPPA) is responsible for revising and notifying these prices.

    [B] Non-Scheduled Formulations:

    • Defined as formulations not included in Schedule-I of the DPCO, 2013.
    • Prices of these formulations can be increased by manufacturers, but the Maximum Retail Price (MRP) cannot be increased by more than 10% during the preceding 12 months.
    • NPPA also monitors the prices of non-scheduled formulations to ensure compliance.

    Action is taken against companies selling formulations at prices higher than permissible, and overcharged amounts are recovered.

    About National Pharmaceutical Pricing Authority (NPPA)

    • NPPA was set up as an independent regulator on August 29, 1997, for drug pricing and ensuring affordable access to medicines.
    • It is an attached office of the Department of Pharmaceuticals (DoP), Ministry of Chemicals & Fertilizers.
    • NPPA is not a Statutory or Constitutional Body.
    • It is responsible for implementing and enforcing the provisions of the DPCO.

    Functions of NPPA:

    • Fixation and revision of prices of ‘Scheduled’ drugs under Drug (Price Control) Orders.
      • Scheduled drugs (15% of the pharma market) are allowed an increase based on WPI.
      • Non-scheduled drugs (85% of the pharma market) are allowed an automatic 10% increase annually.
    • Monitoring and enforcement of drug prices.
    • Ensuring availability and accessibility of all medicines and medical devices, including non-scheduled drugs.
    • Undertaking or sponsoring studies on drug pricing.
    • Collecting and maintaining data on production, exports, imports, market share, and profitability of pharmaceutical companies.
    • Advising the Central Government on changes or revisions in drug policy.

    Back2Basics: Drugs (Prices Control) Order (DPCO)

    • The DPCO is an order issued by the Government of India under Sec. 3 of Essential Commodities Act, 1955 to regulate the prices of drugs.
    • The Order provides the list of price controlled drugs, procedures for fixation of prices of drugs, method of implementation of prices fixed by Govt., penalties for contravention of provisions etc.
    • Under the provisions of DPCO 2013, only the prices of drugs that figure in the National List of Essential Medicines (NLEM) are monitored and controlled by the regulator, the National Pharmaceutical Pricing Authority.
      • Essential medicines are those that satisfy the priority healthcare needs of the majority of the population.

     

    PYQ:

    [2019] How is the Government of India protecting traditional knowledge of medicine from patenting by pharmaceutical companies?