💥Join UPSC 2027,2028 Mentorship (August Batch) + XFactor Notes & Microthemes PDF
Talk to Mentor

Civilsdaily

Login

GS Paper: GS3

  • Major reforms in Banks Board Bureau (BBB)

    The Union Finance Ministry is working to expand and relaunch the Banks Board Bureau (BBB) by bringing in more representatives from the insurance sector.

    What is Banks Board Bureau (BBB)?

    • Banks Board Bureau (BBB) is an autonomous body to Promote excellence in Corporate Governance in Public Sector Financial Institutions.
    • The BBB works as step towards governance reforms in Public Sector Banks (PSBs) as recommended by J. Nayak Committee.
    • It was formed in 2016 to select executive directors, and managing directors and chief executives of state-run banks.
    • It is tasked to search and select personages for Board of Public Sector Banks, Public Sector Financial Institutions and Public Sector Insurance Companies and recommend measures to improve Corporate Governance in these Institutions.
    • It has been selecting directors and chairmen and managing directors of PSU general insurance companies since 2018.

    Its establishment

    • The Central Government notified the amendment to the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1980.
    • It provided the legal framework for composition and functions of the Banks Board Bureau on March 23, 2016.
    • The Bureau accordingly started functioning from April 01, 2016 as an autonomous recommendatory body.

    Functions of BBB

    The mandate of the Bureau is to advise the Central Government on –

    • Selection and appointment of Board of Directors in Nationalised Banks, Financial Institutions and Public Sector Insurance Companies (Whole Time Directors and Chairman)
    • Matters relating to appointments, confirmation or extension of tenure and termination of services of the Directors of mandated institutions
    • Desired management structure of mandated institutions, at the level of Board of Directors and senior management
    • Suitable performance appraisal system for mandated institutions
    • Formulation and enforcement of a code of conduct and ethics for managerial personnel in mandated institutions
    • To build a data bank containing data relating to the performance of mandated institutions and its officers
    • Evolving suitable training and development programs for managerial personnel in mandated institutions
    • To help the banks in terms of developing business strategies and capital raising plan and the like;
    • Any other work assigned by the Government in consultation with RBI

    Why such move?

    • The revamp is, in part, pushed by a Delhi High Court order last year.
    • It observed that the bureau was not a competent body to recommend appointments at PSU general insurers.
    • It held that circulars enabling BBB to select general managers and directors of PSU insurers were not legally valid.

    Reasons behind the revamp

    • FM aims to legally empower the body to recommend candidates for public sector insurers, and accelerate top-level hiring at all state-run financial institutions.
    • The ministry plans to identify new members, restructure the bureau, and refer the new names to the appointments committee of the cabinet (ACC) in a couple of months.
    • The revamped BBB may also get a new name to indicate its remit over a wider set of financial institutions.

    Significance

    • A revamp of the BBB will enable it to recommend full-time appointments at financial institutions where the current executives are given additional charge through interim arrangements.

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • Need for a National Security Doctrine

    Context

    All major powers undertake a periodic (every 4-5 years) review of their evolving national security objectives. The government of India, on the other hand, has neglected to undertake any such exercise, in the past 75 years.

    India’s defence budget for FY 2022-23

    • In 2022-23, the Ministry of Defence has been allocated Rs 5,25,166 crore.
    • This includes expenditure on salaries of armed forces and
      civilians, pensions, modernisation of armed forces, production establishments, maintenance, and research and development organisations.
    • According to the Stockholm International Peace
      Research Institute (SIPRI), India was the third largest defence spender in absolute terms in 2020
      after USA and China.
    • In the last decade (2012-13 to 2022-23), the budget of the Ministry of Defence has grown at an annual average rate of 8.6%, while total government expenditure has grown at 10.8%.
    • Defence expenditure as a percentage of GDP declined from 2.3% in 2012-13 to 2% in 2022-23.

    Neglect of defence expenditure in India

    • Defence expenditure as non-plan expenditure: Independent India saw defence expenditure being relegated to the “non-plan” category, within the ambit of a Soviet-inspired, central economy.
    • Pension bill linked to defence budget: In another anomaly, the pension bill of veteran soldiers — a separate charge on the exchequer — was linked to the defence budget.
    • Neglect of modernisation needs: And the growing pension bill was given as an excuse for the dwindling funds available for force-enhancement and hardware replacement/modernisation.
    • As a result, the finance ministry, instead of finding ways and means of raising essential, additional funds for national defence demanded that they evolve measures for reducing the pension bill.

    Two issues with our national security approach

    1] Lack of periodic review

    • Every nation faces the eternal “guns vs butter” dilemma.
    • Periodic review: All major powers undertake a periodic (every 4-5 years) review of their evolving national security objectives, the options available, and the economic/military means available for achieving them.
    • Apart from providing fiscal guidance, this process also facilitates the evolution of a national security strategy. 
    • China, has, since 2002, been issuing, with unfailing regularity, a biennial “Defence White Paper”, which encapsulates all of the foregoing, and is available on the Internet; for the information of foes and friends, alike.
    • The government of India, on the other hand, has neglected to undertake any such exercise, in the past 75 years.
    • India is amongst the few major powers which has failed to issue a National Security Strategy or Doctrine.

    2] Lack of organisation reforms

    • A second fact that we need to face is that our armed forces have remained in a Second World War time-warp, as far as their organisation and doctrines are concerned.
    • Lack of political will and internal resistance: Attempts at organisational reform have come to naught due to lack of political will as well as internal resistance from the services; with the constitution of a Chief of Defence Staff and creation of a Department of Military Affairs providing the latest examples.

    Way forward

    • Given the transformed nature of warfare, down-sizing of the Indian army, by substituting manpower with smart technology and innovative tactics, has become an imperative need.

    Agnipath Scheme

    • Recently announced Agnipath scheme provides for the recruitment of youths in the age bracket of 17-and-half to 21 years for only four years with a provision to retain 25 per cent of them for 15 more years.
    • Later, the government extended the upper age limit to 23 years for recruitment in 2022.
    • The personnel to be recruited under the new scheme will be known as Agniveers.

    Suggestions for Agneepath Scheme

    • 1] Not the best time to introduce reform: Given the parlous security situation, on the country’s northern and western borders as well as the ongoing domestic turbulence, this is not the best time to cast the armed forces — already short of manpower — into turmoil, with a radical and untried new recruitment system.
    • 2] The scheme is suitable for the army only: Such a scheme, in its present form, is suitable only for the army, whose large infantry component is not excessively burdened with technology.
    • In case of the navy and air force,  at least 5-6 years are required before a new entrant can acquire enough hands-on experience to be entrusted with the operation or maintenance of lethal weapon systems and complex machinery and electronics.
    • 3] Trial before implementation: A radical change of this nature should have been subjected to a trial before service-wide implementation.
    • Ideally, a few units of the regular or Territorial Army could have been earmarked as a testing ground, and feed-back obtained.
    • 4] Legal backing to post-demobilisation employment: Experience of the past has shown that the home ministry has resisted induction of ex-servicemen into the armed-police and para-military forces, on the grounds that it would spoil the career path of their own cadres.
    • Neglect by the state government: Similarly, state governments and other agencies have blatantly ignored the reservations mandated for ESM.
    • Therefore, if the Agnipath scheme has to offer a meaningful promise of post-demobilisation employment or education, this must be mandated by an Act of Parliament, on the lines of the “GI Bill” enacted by the US Congress.

    Conclusion

    A scheme on the lines of Agnipath, appropriately constituted, and focused on enhancing “combat effectiveness” rather than “effecting savings” or “generating employment,” could have triggered a reformative process. But the above given caveats need to be borne in mind in this context.

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • Explained: Critical Information Infrastructure

    The Union Ministry of Electronics and IT (MeitY) has declared IT resources of ICICI Bank, HDFC Bank and UPI managing entity NPCI as ‘critical information infrastructure’.

    Try this PYQ:

    In India, the term “Public Key Infrastructure” is used in the context of

    (a) Digital security infrastructure

    (b) Food security infrastructure

    (c) Health care and education infrastructure

    (d) Telecommunication and transportation infrastructure

     

    [wpdiscuz-feedback id=”2d4o8z90sm” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

    What is Critical Information Infrastructure (CIC)?

    • The Information Technology Act, 2000 explicitly gives definition of CIC.
    • It defines CIC as a computer resource, the incapacitation or destruction of which shall have debilitating impact on national security, economy, public health or safety.
    • It basically aims to protect the digital assets.
    • The government, under the Act, has the power to declare any data, database, IT network or communications infrastructure as CII.
    • Any person who secures access or attempts to secure access to a protected system in violation of the law can be punished with a jail term of up to 10 years.

    Why is CII classification and protection necessary?

    • IT resources form the backbone of countless critical operations in a country’s infrastructure.
    • Given their interconnectedness, disruptions can have a cascading effect across sectors.

    What led to the classification of CICs?

    • In 2007, a wave of denial-of-service attacks, allegedly from Russian IP addresses, hit major Estonian banks, government bodies – ministries and parliament, and media outlets.
    • It was cyber aggression of the kind that the world had not seen before.
    • The attacks played havoc in one of the most networked countries in the world for almost three weeks.

    Recent incidents of CIC incapacitation

    • In October, 2020 as India battled the pandemic, the electric grid supply to Mumbai suddenly stopped.
    • It hit the mega city’s hospitals, trains and businesses.
    • Later, a study by a US firm claimed that this power outage could have been a cyber-attack, allegedly from a China-linked group.
    • The government, however, was quick to deny any cyber-attack in Mumbai. But prospects cannot be denied.
    • The incident underlined the possibility of hostile state and non-state actors probing internet-dependent critical systems in other countries, and the necessity to fortify such assets.

    How are CIIs protected in India?

    • Created in January 2014, the National Critical Information Infrastructure Protection Centre (NCIIPC) is the nodal agency.
    • It takes all measures to protect the nation’s critical information infrastructure.
    • It is mandated to guard CIIs from “unauthorized access, modification, use, disclosure, disruption, incapacitation or distraction”.
    • NCIIPC monitors and forecasts national-level threats to CII for policy guidance, expertise sharing and situational awareness for early warning or alerts.

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • What are Private Captive Networks?

    The Cellular Operators’ Association of India (COAI) wrote a letter urging the government against allotting 5G spectrum to private captive networks, claiming that it will diminish their revenue to the point where offering 5G will pointless.

    What is a Private Captive 5G Network?

    • A private captive 5G network is basically a network set up by a private entity for the use of just one organisation.
    • It is similar to a captive coal mine in that the 5G service offered by this captive network will only be utilised by the enterprise concerned, and no one else.

    Why are telecom providers against it?

    • The COAI’s argument is that enterprises are the biggest users of 5G networks.
    • If private entities are allowed to offer captive networks to enterprises, the TSPs (telecom service providers) retail revenues will fall.
    • COAI implied that there is no great demand for 5G right now as “the needs of voice and data of the entire nation is being adequately met by the TSPs through their 4G networks today”.

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • Oil palm

    Context

    Supply disruptions during the pandemic and the Russia-Ukraine war have led many nations to think about “self-sufficiency” in critical food items or at least reduce their “excessive dependence” on imports of essential food products.

    Challenges facing global trade

    • The World Trade Organisation’s (WTO) recently concluded12th Ministerial Conference in Geneva, struggled to find answers to some of the complex questions pertaining to global trade.
    • The Ministerial Conference is the top decision-making body of the agency whose basic goal is to ensure that trade flows as smoothly, predictably and freely.
    • Trading rules for dire situations: As far as agriculture, trade and food security are concerned, the challenge is to figure out the most appropriate trading rules in dire situations like pandemics, wars, social/political disruptions or natural disasters.
    • Export bans: Recent examples include Russia’s export ban on wheat and sunflower oil, Ukraine’s ban on exports of food staples, Indonesia’s ban on palm oil exports, Argentina’s ban on beef exports, Turkey, Kyrgyzstan and Kazakhstan’s ban on a variety of grain products, and India’s wheat export ban.
    • Sudden actions such as these exacerbate the pressure on global trade leading to a spike in the prices.

    India’s import dependence for edible oil

    • India imports 55 to 60 per cent of its edible oil requirements.
    • India’s edible oil import bill in 2021-22 (FY22) crossed $19 billion (for more than 14 MMT of imports) (see figure).
    • Palm oil comprises more than 50 per cent of India’s edible oil imports, followed by soybean and sunflower.
    • Atmanirbharta in edible oil: The “excessive dependence” on imports has raised the pitch for “atmanirbharta” in edible oil. 
    • The Prime Minister launched the National Edible Oil Mission-Oil Palm (NEOM-OP) in 2021.

    Self-reliance Vs Self-sufficiency

    • “Self-sufficiency” and “self-reliance” are two different concepts with very different policy implications.
    • What is self-sufficiency? Self-sufficiency would imply replacing all imports of a commodity (say edible oils in India’s case) at any cost (thus raising import duties exorbitantly).
    • What is self-reliance? Self-reliance would continue to embed the principle of “comparative advantage” in the endeavour to reduce dependence on imports.
    • Case of India’s agriculture: The country’s agri-exports in FY22 touched $ 50.3 billion against its agri-imports of $ 32.4 billion.
    • This means that Indian agriculture is largely globally competitive. 
    • But its biggest agri-import item, edible oil, accounts for 59 per cent of India’s agri-import basket.

    Way forward

    • 1] Develop oil palm: Given the way international prices of edible oils have surged in the last year or so (by more than 70 per cent), it may be time for India to ramp up its efforts in developing oil palm.
    • Why oil palm? The Prime Minister launched the National Edible Oil Mission-Oil Palm (NEOM-OP) in 2021.
    • Challenges in traditional oilseed: Achieving atmanirbharta in edible oils through traditional oilseeds such as mustard, groundnuts and soya would require an additional area of about 39 million hectares under oilseeds.
    • Danger to food security: Such a large tract of land will not be available without cutting down the area under key staples (cereals) – this could endanger the country’s food security even more.
    • So, a rational policy option to reduce import dependence in edible oils is to develop oil palm at home and ensure that it gives productivity comparable to that in Indonesia and Malaysia — about four tonnes of oil per hectare, which is more than 10 times mustard can give at existing yields.
    • India has identified 2.8 million hectares of area where oil palm can be grown suitably.
    • So far the objective of NEOM-OP is to bring in at least 1 million hectare under oil palm by 2025-26.
    • 2] Declare oil palm as a plantation crop: The other option is to declare oil palm as a plantation crop and allow the corporate players to own/lease land on a long-term basis to develop their own plantations and processing units.
    • This does not seem plausible in the current socio-political context.

    Challenges

    • Long gestation period: It takes four to six years to come to maturity; during this period, smallholders need to be fully supported.
    • The support (subsidy) could be the opportunity cost of their lands, say profits from paddy cultivation, which is largely the crop oil palm will replace in coastal and upland areas of Andhra, Telangana and Northeast India.
    • Pricing formula: Further, the pricing formula of fresh fruit bunches (FFB) for farmers has to be dovetailed with a likely long-run average landed price of crude palm oil with due flexibility in the import duty structure.
    • Appropriate import duty: One needs to identify trigger points when import duties need to be raised as global prices come down, and when to reduce these duties in case of rising global prices.
    • Oil recovery: Besides this, the processing industry needs to ensure an oil recovery of at least 18 to 20 per cent – that must be built into the pricing formula.

    Conclusion

    Overall, unless India thinks holistically and adopts a long-term vision, the chances of reducing India’s imports of edible oils from 14MMT in FY22 to 7MMT by FY27 look bleak.

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • The Cyber factor in the Russia-Ukraine war

    Context

    After 100 days of Ukraine crisis, Russia is yet to achieve what can be termed as a decisive victory in any sector of the current conflict.

    Reasons for the lacklustre performance of Russia

    • Several reasons have been adduced by experts in the West for the lacklustre performance of the Russian army.
    • Lack of motivation: There is a lack of motivation and the poor morale of the Russian forces sent to Ukraine.
    • Outdated weaponry: Russian weaponry being outdated and ineffective to fight an informationalised war under modern conditions.
    • Leadership issue: Russian commanders have also proved inept in devising plans and taking appropriate decisions in battlefield conditions against a determined enemy.

    Important role of cyber warfare

    • Given that cyber is often touted as the Fifth Dimension of warfare, it may be worthwhile to examine whether this indeed is the first major conflict in which ‘cyber’ is playing a crucial role, allowing a weaker nation with cyber capabilities to use it to its advantage.
    • A former Chief of the National Security Agency of the U.S., in his memoirs had said that although cyberspace is a man-made domain, it had become critical to military operations on land, sea, air and in space.
    • A former U.S. Secretary of Defence a few years ago,, even talked of a possible ‘cyber Pearl Harbour to paralyze nations and create a profound sense of vulnerability’.
    • The Russian military oligarchy is indeed among the world leaders in digital disruption and cyber-methodology.
    • One could have reasonably presumed that even before the conflict commenced, Russia would have swamped Ukraine with an avalanche of digital attacks.
    • Ukraine, for its part, has its own digital army, including a corps of digital weapons.

    Limits of cyber warfare

    • There are several publicised instances earlier, of alleged Russian operatives waging a cyberwar against Ukraine.
    • Both sides now possess and use malware such as data-wipers which have proved highly effective.
    • On the day the Russian invasion of Ukraine began, Russian cyber units are believed to have successfully deployed destructive malware against several Ukrainian military targets.
    •  A series of distributed denial-of-service (DDoS) attacks against Ukrainian banking and defence websites occurred simultaneously.
    • As far as the conduct of the war is concerned, the string of small-scale cyberattacks cannot be said to have had any material impact on the conduct or outcome of the conflict.
    • Hence, the cardinal question is why given that Ukraine has put up such a heroic defence — and to a considerable extent stalled the Russian offensive — Russia has not embarked on a massive all-out cyber-offensive.
    • If that be the case, then much of the speculation that cyberattacks in the event of a war provide a perpetrator the capability to enact another ‘Pearl Harbour’ seems highly unrealistic.

    Conclusion

    It is very likely, and possibly a fact, that there are major difficulties in planning and executing massive cyberattacks on a short timeline to ensure higher efficacy of kinetic attacks.

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • Analysing the Agnipath scheme

    Context

    Recently, the Agnipath scheme for recruitment of short-term contracted soldiers was announced.

    About Agnipath Scheme

    • This will be the only form of recruitment of soldiers into the three defence services from now.
    • The scheme aims at strengthening national security and for providing an opportunity to the youth to serve in the armed forces.
    • Recruits under the scheme will be known as ‘Agniveers’.
    • After completing the four-year service, they can apply for regular employment in the armed forces.
    • They may be given priority over others for various jobs in other government departments.
    • The move is expected to decrease the average age profile of armed forces personnel from the current 32 to 24-26 years over a period of time.

    Benefits of the Agnipath Scheme

    • Lower the average age: The average age in the forces is 32 years today, which will go down to 26 in six to seven years, the scheme envisions.
    • Youthful armed forces will allow them to be easily trained for new technologies.
    • Employment opportunities: It will increase employment opportunities and because of the skills and experience acquired during the four-year service such soldiers will get employment in various fields.
    • High-skilled workforce: The scheme will also lead to the availability of a higher-skilled workforce to the economy which will be helpful in productivity gain and overall GDP growth

    Financial constraints and challenges

    • Directing funds towards modernisation: It has been argued that the savings in the pensions bill — which will show up on the books only after a couple of decades — would be directed towards the modernisation of defence forces.
    • The armed forces do not have that kind of time available to them to postpone their already long-delayed modernisation.
    • Shortage: The Indian Air Force is already down to 30 squadrons of fighter jets against the 42 squadrons it needs, and the Indian Navy is at 130 ships when its vision was to be a 200-ship navy; the Indian Army is already short of 1,00,000 soldiers.
    •  Instead of expanding the economy to support the military, the Government has resorted to shrinking the military.

    Issues with the short-term recruitment

    • No theoretical modelling: As the short-term recruitment policy has neither been theoretically modelled nor tried out as a pilot project, the exact consequences of the move will only be known as they play out.
    • Adverse effect on professional capabilities: But its adverse effect on the professional capabilities of the armed forces is certain.
    • It starts with the very high turnover of young soldiers, the increase in training capacities and infrastructure and the augmentation of the administrative setup for greater recruitment, release, and retention of soldiers.
    • An armed forces boasting of a poor teeth-to-tail ratio is further increasing the tail.
    • Impact on operational capabilities: The tooth-to-tail ratio (T3R), in military jargon, is the amount of military personnel it takes to supply and support (“tail”) each combat soldier (“tooth”).
    • The Indian Air Force and the Indian Navy employ their airmen and sailors in very specialised roles, which require technical skills, and a high degree of training and experience.
    • Because the short-term contractual soldier model (the Agniveer scheme) is going to take a few years to fully play out at an organisational level, the actual degradation of operational capability will only be known then.
    • Class-based recruitment abolished: In the Agnipath proposal, the class-based recruitment has been replaced with an all-India all-class recruitment.
    • It will strike at the core of the organisational management, leadership structures and operating philosophy of the Indian Army.
    • Even though the soldiers in the Indian Army are professionally trained, they also draw their motivation from their social identity  — where each soldier cares for his reputation among the peers in his caste group or his village or his social setting.
    • To replace that with a pure professional identity of a soldier will bring its own challenges in a tradition-bound army.
    • Training challenges: There will be major problems in training, integrating and deploying soldiers with different levels of experience and motivations.
    • An organisation which depends on trust, camaraderie and esprit de corps could end up grappling with rivalries and jealousies amongst winners and losers, especially in their final year of contract.
    • Legal challenges: Even though the Government has kept the contract at four years to deny the Agniveer gratuity and is not counting the contractual period towards regular service, these provisions are bound to be challenged legally.
    •  Over time, this will lead to the salary and pension budget creeping back up again.
    • Political imbalance: The Agnipath scheme also does away with the idea of a State-wise quota for recruitment into the Army, based on the Recruitable Male Population of that State which was implemented from 1966.
    • This prevented an imbalanced army.
    • Academic research shows that the high level of ethnic imbalance has been associated with severe problems of democracy and an increased likelihood of civil war.
    • Impact on motivation: A short-term contractual soldier, without earning pension, will be seen as doing jobs after his military service that are not seen to be commensurate in status and prestige with the profession of honour.
    • Impact on motivation: It will reduce the motivation of those joining on short-term contracts while diminishing the “honour” of a profession which places extraordinary demands on young men.
    • Social unrest: There are numerous examples of demobilised soldiers leading to increased violence against minorities.
    • This could happen in India as the youth who are not given regular recruitment after four year’s service would turn to violence.

    Conclusion

    The Government’s yearning for financial savings runs the risk of reducing the honour of a profession, the stability of a society and the safety of a country.

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • Pak. may get off FATF ‘grey list’ after on-site check

    Pakistan got a reprieve from the Financial Action Task Force (FATF) as it announced that the country could be removed from the “grey list” after a visit by a fact-finding team.

    What is the news?

    • FATF noted Pakistan’s constructive claims of actions to curb terror funding.
    • It would formally be taken off the “grey list” in October.
    • China is working relentlessly to get Pakistan off FATF ‘grey list’.

    India’s stance

    • New Delhi has been sceptical of Pakistan’s commitment to completely end terror safe havens in the country.
    • Infiltration in J&K continues and small arms and IEDs are being habitually pushed across the LoC.

    What is the FATF?

    • The FATF is an international watchdog for financial crimes such as money laundering and terror financing.
    • It was established at the G7 Summit of 1989 in Paris to address loopholes in the global financial system after member countries raised concerns about growing money laundering activities.
    • In the aftermath of the 9/11 terror attack on the US, FATF also added terror financing as a main focus area.
    • This was later broadened to include restricting the funding of weapons of mass destruction.
    • The FATF currently has 39 members.

    Working of FATF

    • The decision-making body of the FATF, known as its plenary, meets thrice a year.
    • Its meetings are attended by 206 countries of the global network.
    • It includes members, and observer organisations, such as the World Bank, some offices of the UN, and regional development banks.

    Functions of FATF

    • The FATF sets standards or recommendations for countries to achieve in order to plug the holes in their financial systems and make them less vulnerable to illegal financial activities.
    • It conducts regular peer-reviewed evaluations called Mutual Evaluations (ME) of countries to check their performance on standards prescribed by it.
    • The reviews are carried out by FATF and FATF-Style Regional Bodies (FSRBs), which then release Mutual Evaluation Reports (MERs).
    • For the countries that don’t perform well on certain standards, time-bound action plans are drawn up.
    • Recommendations for countries range from assessing risks of crimes to setting up legislative, investigative and judicial mechanisms to pursue cases of money laundering and terror funding.

    What are the Black List and the Grey List?

    • The words ‘grey’ and ‘black’ list do not exist in the official FATF lexicon.
    • They however designate countries that need to work on complying with FATF directives and those who are non-compliant.
    1. Black List: The blacklist, now called the “Call for action” was the common shorthand description for the FATF list of “Non-Cooperative Countries or Territories” (NCCTs).
    2. Grey List: Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list. This inclusion serves as a warning to the country that it may enter the blacklist.

    Consequences of being:

    (1) In the grey list:

    • Economic sanctions from IMF, World Bank, ADB
    • Problem in getting loans from IMF, World Bank, ADB and other countries
    • Reduction in international trade
    • International boycott

    (2) In the black list:

    • High-risk jurisdictions subject to call for action
    • Countries have considerable deficiencies in their AML/CFT (anti-money laundering and counter terrorist financing) regimens
    • Enhanced due diligence
    • Members are told to apply counter-measures such as sanctions on the listed countries

    Note: Currently, North Korea and Iran are on the black list.

    Pakistan and FATF

    • Pakistan, which continues to remain on the “grey list” of FATF, had earlier been given the deadline till the June to ensure compliance with the 27-point action plan against terror funding networks.
    • It has been under the FATF’s scanner since June 2018, when it was put on the Grey List for terror financing and money laundering risks.
    • FATF and its partners such as the Asia Pacific Group (APG) are reviewing Pakistan’s processes, systems, and weaknesses on the basis of a standard matrix for anti-money laundering (AML) and combating the financing of terrorism (CFT) regime.

    Why is Pakistan on the grey list?

    • Pakistan has found itself on the grey list frequently since 2008, for weaknesses in fighting terror financing and money laundering.
    • It never addressed concerns on the front of terror financing investigations and prosecutions targeting senior leaders and commanders of UN-designated terrorist groups.
    • However, now steps had been taken in this direction such as the sentencing of terror outfit chief Hafiz Saeed, prosecution of Masood Azhar and seizure of their properties.
    • India meanwhile, a member of FATF, suspects the efficacy and permanence of Pakistani actions.

    How FATF impacts Pakistan?

    • The FATF grey list made it more difficult for Pakistan to get financial aid from the International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB) and the European Union (EU).
    • This will further create an economic crisis for Pakistan which is already struggling to control its financial position.
    • Bearing the cost of global politics the impact of FATF grey-listing on Pakistan’s economy has claimed that FATF’s decision has led to a loss of USD 38 billion for Pakistan so far.

    Steps taken by Pakistan

    • Pakistan is currently banking on its potential exclusion from the grey list to help improve the status of tough negotiations with the International Monetary Fund to get bailout money.
    • Pakistan is now making a high-level political commitment to the FATF and APG to address its strategic AML/CFT deficiencies.

     

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • [pib] BIS develops an Standard for ‘Non-electric Cooling Cabinet made of Clay’

    Bureau of Indian Standards (BIS), the National Standards Body of India, has developed an Indian Standard, IS 17693: 2022 for ‘non-electric cooling cabinet made of clay’.

    IS 17693: 2022

    • BIS standard specifies the construction and performance requirements of a cooling cabinet made out of clay, which operates on the principle of evaporative cooling.
    • These cabinets may be used to store perishable foodstuff without the need of electricity.
    • This standard helps BIS in fulfilling 6 out of 17 UN Sustainable Development Goals (SDGs) like No poverty, Zero hunger, Gender equality, Affordable and clean energy, Industry, innovation, and infrastructure, and Responsible consumption and production.

    Why such move?

    • Named as ‘Mitticool refrigerator’, Mansukh Bhai Prajapati from Gujarat is the innovator behind the refrigerator which projects an eco-friendly technology.
    • It is a natural refrigerator made primarily from clay to store vegetables, fruits, milk, and also for cooling water.
    • It provides natural coolness to foodstuffs stored in it without requiring any electricity.
    • Fruits, vegetables, and milk can be stored reasonably fresh without deteriorating their quality.

    Back2Basics: Bureau of Indian Standards (BIS)

    • BIS is the National Standards Body of India working under the aegis of the Ministry of Consumer Affairs, Food & Public Distribution.
    • It is established by the Bureau of Indian Standards Act, 1986 which came into effect on 23 December 1986.
    • The organization was formerly the Indian Standards Institution (ISI), set up under the Resolution of the Department of Industries and Supplies in September 1946.
    • The ISI was registered under the Societies Registration Act, 1860.
    • A new Bureau of Indian standard (BIS) Act 2016 has been brought into force with effect from 12 October 2017.
    • The Act establishes the Bureau of Indian Standards (BIS) as the National Standards Body of India.

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • Issues with Agnipath Scheme

    Massive protests are occurring against the Agnipath scheme all across the nation.

    What is the Agnipath Scheme?

    • This will be the only form of recruitment of soldiers into the three defence services from now.
    • The scheme aims at strengthening national security and for providing an opportunity to the youth to serve in the armed forces.
    • Recruits under the scheme will be known as ‘Agniveers’.
    • After completing the four-year service, they can apply for regular employment in the armed forces.
    • They may be given priority over others for various jobs in other government departments.
    • The move is expected to decrease the average age profile of armed forces personnel from the current 32 to 24-26 years over a period of time.

    Why are aspirants protesting?

    • Contractualisation of armed forces: The foundation of this scheme is a four-year contract.
    • Jobs for the majority: States such as Bihar, Jammu & Kashmir, Punjab, Himachal Pradesh, Haryana, Uttar Pradesh, Uttarakhand and Rajasthan, are where the bulk of the Army recruitment takes place.
    • Perks and benefits: Many of these people value job stability, which includes retirement benefits and pensions over competitive salaries.
    • Uncertainty after end of commission: Most of them will be forced to leave the job within four years, which doesn’t fit into their hopes and aspirations.
    • Casualization of Training: It reportedly takes two to three years to train a member of the army, but as a part of the Agnipath, soldiers will only be trained for six months.
    • Threats to national security: Defence analysts have allegedly pointed out that the Russian soldiers who were trained for a limited amount of time before they went to war have performed disastrously.
    • Conflicts of interest: Apprehensions have been voiced against how the new recruits will be adjusted in the existing system under which most of the Army units are region, caste or class based.

    Reasons behind aspirants’ frustration

    • Unemployment: Analysts always cite the crunch of gazetted officers in the Armed forces and there has been no recruitment for the last two years.
    • Pandemic impact: Many aspirants lost their chance to join the Armed forces as they are now overage.’
    • Unanticipated reforms: In guise of a push for “major defence policy reform”, the scheme is a fuss.

    What is the official explanation?

    • Once retired, aspirants will be free to pursue other careers, with several departments and governments.
    • Aspirants will get preference, educational credits, skill certificates, to help them rehabilitate in other fields.
    • Those wishing to be entrepreneurs will get a financial package and bank loans and those wishing to study further will be given 12 class equivalent certificate.
    • For job-seekers, the government has already said they will get priority in the Central Armed Police Forces.

    Way forward

    • The modalities of how this will happen are still being worked out.
    • But one thing is very clear, poorly crafted schemes are on the rise.
    • For making any scheme a success, pre-legislative consultation and discussion in the public domain is a must.

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)