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GS Paper: GS3

  • Bank Deposit Insurance Programme

    The PM has addressed depositors during a programme titled ‘Depositors First: Guaranteed Time-bound Deposit Insurance Payment up to ₹5 Lakh’.

    Deposit Insurance Programme

    • The bank savings are insured under the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act providing full coverage to around 98 per cent of bank accounts.
    • Earlier, account holders had to wait for years till the liquidation or restructuring of a distressed lender to get their deposits that are insured against default.
    • Last year, the government raised the insurance amount to Rs 5 lakh from Rs 1 lakh.
    • Prior to that, the DICGC had revised the deposit insurance cover to Rs 1 lakh on May 1, 1993 — raising it from Rs 30,000, which had been the cover from 1980 onward.

    What are new changes?

    • Earlier, out of the amount deposited in the bank, only Rs 50,000 was guaranteed, which was then raised to Rs 1 lakh.
    • Understanding the concern of the poor, understanding the concern of the middle class, we increased this amount to Rs 5 lakh.
    • If a bank is weak or is even about to go bankrupt, depositors will get their money of up to Rs five lakhs within 90 days.

    Significance of the scheme

    • Earlier account holders could not access their own money for up to 8-10 years after financial stress at banks.
    • The new changes would give confidence to depositors and strengthen the banking and financial system.
    • Now, depositors can get insurance money within 90 days, without waiting for the eventual liquidation of the distressed banks.

     

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  • 5G Network and Aviation Safety

    The US Federal Aviation Administration (FAA) has issued directives to create a framework as well as gather more information about the potential effects of 5G on crucial aviation safety equipment.

    What is 5G technology?

    • 5G or fifth generation is the latest upgrade in the long-term evolution (LTE) mobile broadband networks.
    • It mainly works in 3 bands, namely low, mid and high-frequency spectrum — all of which have their own uses as well as limitations.

    Three bands of 5G

    • The low band spectrum has shown great promise in terms of coverage and speed of internet and data exchange, the maximum speed is limited to 100 Mbps (Megabits per second).
    • This means that while telcos can use and install it for commercial cellphones users who may not have specific demands for very high-speed internet, the low band spectrum may not be optimal for specialised needs of the industry.
    • The mid-band spectrum, on the other hand, offers higher speeds compared to the low band but has limitations in terms of coverage area and penetration of signals.
    • Telcos and companies, which have taken the lead on 5G, have indicated that this band may be used by industries and specialised factory units for building captive networks that can be moulded into the needs of that particular industry.
    • The high-band spectrum offers the highest speed of all the three bands, but has extremely limited coverage and signal penetration strength.
    • Internet speeds in the high-band spectrum of 5G have been tested to be as high as 20 Gbps (gigabits per second), while, in most cases, the maximum internet data speed in 4G has been recorded at 1 Gbps.

    What is the issue?

    • There is a threat of potential radar altimeter interference from 5G cellular in the 3700 MHz-3800 MHz frequency or the C-band.
    • The 3700-4200 MHz band is close to the 4200 MHz-4400 MHz range used by aircraft radio altimeters.

    Potential impacts

    • Operations by aircraft including large jets could be limited or prohibited from using certain landing and navigation systems in places where there is scope for potential interference from new 5G cellular networks.
    • The restrictions could be severe for smaller aircraft and helicopters.
    • Overall, these could result in flight cancellations, delays or diversions in 46 places where these towers are, according to an aviation report.

    What is the aircraft equipment that can be affected?

    • The radio altimeter measures height (not altitude) of the aircraft above the surface immediately below the plane. It transmits a radio signal directly below.
    • There are various other systems that depend on inputs from the radio altimeter — for example, predictive wind shear, ground proximity warning system, traffic collision avoidance system, and auto land.
    • These effects are only when the aircraft is close to the ground, i.e. up to 2,500 ft above ground level (depending on the aircraft make).
    • Any disturbance to internal radio altimeter readings caused by 5G or other equipment transmitting in frequency bands close to it can result in disastrous effects on crucial systems during approach/landing.

    Impact of mobile phones

    • 5G devices can interfere with aircraft altitude instruments and recommended that they should be turned off (or put to flight mode) during flight.
    • Experts believe that electrical interference from a mobile phone could have been a factor in the crash of a small aircraft.
    • The navigation system of the small aircraft could be disrupted by mobile phone signals.
    • But up until now, there has been no evidence of a mobile phone having caused a crash.

    What about the implications for India?

    • Pilots in India are aware of the implications of 5G in the country.
    • However, in India, 5G could be rolled out in the 3.2 GHz-3.6 GHz band, which may not have the potential to interfere with aircraft operations.

     

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  • What are Chaperone Proteins?

     

    Chaperones are a functionally related group of proteins assisting protein folding in the cell under physiological and stress conditions.

    What are Chaperones?

    • DNA is a linear chain of nucleotides, portions of which are faithfully transcribed into linear messenger RNA.
    • The message in this RNA is translated into strings of amino acids – proteins.
    • Proteins need to take a precise three-dimensional shape to become functional entities.
    • This protein folding does not happen all by itself, at least most of the time.
    • A special bunch of proteins called molecular chaperones assist in correctly folding the protein.

    Functions of chaperone proteins

    • In biological systems, Chaperones play crucial roles.
    • Many molecular chaperones belong to the class of “heat shock” proteins (or stress-response proteins).
    • This is because whenever an organism is subjected to elevated temperatures – a heat shock – proteins in the system begin to lose their native shapes, and chaperones are produced in large quantities to restore order.

    General need of chaperones

    Chaperones are needed under physiological conditions too, for normal cellular function since misfolding of proteins can cause a number of diseases.

    • Alpha-synuclein protein, present in neurons, is wrongly folded in Parkinson’s disease.
    • Brains of Alzheimer’s patients have plaques formed from aggregates of amyloid beta-peptide.
    • This accumulation of amyloid fibrils is toxic, leading to widespread destruction of neurons – a ‘neurodegenerative’ disorder.
    • Aberrant folding of crystallins of the eye lens leads to cataracts.

    Types of Chaperones

    • Major chaperones in humans include HSP70, HSC70 and HSP90: the numbers express the size of the proteins in kilodaltons.
    • In normal cells 1%–2% of all proteins present are heat shock proteins.
    • This number rises threefold during stressful conditions.

    HSC70: The molecular thermometer

    • HSC70 appears to be more like a molecular thermometer, with an ability to sense cold temperatures.
    • It is induced by heat, whereas HSC70 is always present at high levels in normal cells.
    • This knowledge comes from the study of an intriguing set of disorders, exemplified by Familial Cold Autoinflammatory Syndrome (FCAS).

    HSC70 and HSP90: Role in Cancer

    • Cancer cells divide at a break-neck pace, and heat shock proteins are very important in maintaining the stressful cancerous state.
    • An overabundance of heat shock proteins in cancer cells is an indicator of a poor prognosis. Cancerous cells accumulate mutations in proteins that would normally suppress tumours.
    • HSP70 and HSP90 play the roles of villains, as they continue to fold the mutated proteins, thus allowing tumor progression.

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  • Places in news: Buxa Tiger Reserve

    In a major success for tiger conservation, a photograph of a tiger was captured in a camera trap in West Bengal’s Buxa Tiger Reserve since 1998.

    Locate all major tiger reserves in India.

    Buxa Tiger Reserve

    • Buxa Tiger Reserve is a tiger reserve in northern West Bengal, India, covering an area of 760 km2 (290 sq mi).
    • In altitude, it ranges from 60 m in the Gangetic Plains to 1,750 m bordering the Himalayas in the north.
    • Its northern boundary runs along the international border with Bhutan.
    • The Sinchula hill range lies all along the northern side of BTR and the eastern boundary touches that of the Assam state.

    Key features of BTR

    • It is the easternmost extension of extreme bio-diverse North-East India and represents highly endemic Indo-Malayan region.
    • The fragile “Terai Eco-System” constitutes a part of this reserve.
    • The Phibsoo Wildlife Sanctuary of Bhutan is contiguous to the north of BTR.
    • It serves as an international corridor for Asian elephant migration between India and Bhutan.

     

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  • What true MSP means

    Context

    Amid the demand for a guarantee of MSP, many commentators fail to understand the true spirit of the demand for a legal MSP.

    How demand for legal backing for MSP is misinterpreted?

    • Mandatory enforcement of price above MSP: The demand has been interpreted as a mandatory enforcement of trade in agricultural produce, including private trade to be necessarily at or above the MSP for that crop.
    • Nationalisation of agricultural trade: Another interpretation is the nationalisation of agricultural trade whereby the government promises to buy all the crop produced at MSP.
    • Commentators have been using these two interpretations to project large estimates of government expenditure needed to implement.
    • They fail to understand the true spirit of the demand for a legal MSP.

    Current nature of MSP

    • It is not an income support program: By definition MSP is not an income support programme.
    • Intervention to stabilise prices: It is designed to be used as government intervention to stabilise prices, to provide remunerative prices to farmers.
    • Public procurement program to meet requirements of NFSA: Currently, it is no more than a public procurement programme to meet the requirements of the National Food Security Act (NFSA).
    • Only rice and wheat procured: As against the official announcement of MSP for 23 crops, only two, rice and wheat are procured as these are distributed in NFSA.

    Larger context of demand for legal backing to MSP

    • Droughts and declining commodity prices: In addition to the twin droughts of 2014 and 2015, farmers have also suffered from declining commodity prices since 2014.
    • Impact of demonetisation and GST: The twin shocks of demonetisation and hurried rollout of GST, crippled the rural economy, primarily the non-farm sector, but also agriculture.
    • Impact of pandemic: The slowdown in the economy after 2016-17 followed by the pandemic has ensured that the situation remains precarious for majority of the farmers.
    • Increased input prices: Higher input prices for diesel, electricity and fertilisers have only contributed to the misery.
    • In this context, the demand for ensuring remunerative prices is only a reiteration of the promise by successive governments to implement the Swaminathan Committee report.

    What should be the true nature of MSP?

    • Intervene to stabilise price: A true MSP requires the government to intervene whenever market prices fall below a pre-defined level, primarily in case of excess production and oversupply or a price collapse due to international factors.
    • It does not require the government to buy all the produce but only to the extent that creates upward price pressures in the market to stabilise prices at the MSP level.

    Way forward

    • Mechanism for market intervention: What is needed is a mechanism to monitor the prices.
    • While such a mechanism already exists, a policy for requisite market intervention is missing.
    • Use MSP as incentive to achieve nutritional security and reduce import dependence: MSP can also be an incentive price for many of the crops which are desirable for nutritional security such as coarse cereals, and also for pulses and edible oils for which we are dependent on imports. 
    • Include pulses, edible oil and millets in PDS: Despite repeated demands from food activists, there has not been any progress in including pulses, edible oils and millets in PDS.
    • A guaranteed MSP then is nothing more than restoring the true spirit and functions of MSP, applicable to a broad range of crops and all sections of farmers.

    Issues

    • The current MSP regime has no relation to prices in the domestic market.
    • Its sole raison d’être is to fulfil the requirements of NFSA making it effectively a procurement price rather than an MSP. 
    • It is basically a lack of understanding of what agriculture needs and above all a lack of political commitment to ensure remunerative prices to farmers.

    Conclusion

    An efficient and functional MSP is certainly the least that the government can do to protect a sector which remains the largest employer and a refuge for the poor and vulnerable as was seen during the pandemic.

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  • Goods and Services Tax as an unfinished agenda

    Context

    Seen purely from a revenue point of view and as a fiscal policy tool, India’s GST is still on a rocky road.

    Background

    • The GST was launched by India on the midnight of July 1, 2017.
    • Benefits of GST: Hailed as a landmark reform in India’s tax history, it was expected to improve tax-GDP ratio, end tax cascading, enhance efficiency, competitiveness, growth, and ensure lower prices.
    • Fiscal federalism: It was also projected as a watershed in India’s fiscal federalism.
    • the States have forgone a substantial part of their own tax revenue.
    • States were in turn guaranteed a GST compensation assuring 14% growth in their GST revenue during the initial five years.
    • India’s GST architecture: India’s GST architecture is built on the firm foundations of a GST Council and the GST Network (GSTN).
    • GST Council as due federal process: The first is the key decision-making body, chaired by the Union Finance Minister with a Minister of State in charge of Finance and the Finance Ministers of States as members.
    • This is envisaged as a due federal process to protect the interests of the States.

    Unresolved issues

    [1] Revenue neutrality not achieved

    • India’s GST paradigm stands on two key pillars: revenue neutrality and GST compensation for the States.
    • The assured revenue neutrality remains a mirage and many States have experienced a declining tax-GDP ratio.
    • Decline in tax to GDP ratio of state: In the case of major 18 States, the ratio of own tax revenue to GDP has declined.
    • While the share of the Centre in total GST increased by 6%, that of States put together lagged behind with only a 4.5% increase.
    • Stark differences between the Revenue Neutral Rates (RNR) for the producing States and consumption State have been observed. States producing exempted food grains also lost out.
    • Since the rates were lower under GST vis-à-vis the VAT regime, revenue neutrality was not adhered ab initio.
    • The problems were compounded with massive evasion following the dismantling of check posts, and later on fake invoices, that grew by leaps and bounds.
    • Experience of other countries: The South African experience illustrates how zero-rating and large exemptions have defeated revenue goals.
    • Canadian experience shows that GST could be improved by limiting zero rating, tax-exemptions and harmonising tax rates.
    • The resilience of the economy at the time of rolling out of GST is critical for its wider reception as the Australian experience shows.

    [2] Not conducive to co-operative federalism

    • While the States collectively forewent 51.8% of their total tax revenue, the Centre surrendered only 28.8%.
    • Yet, GST is shared equally between the Centre and States despite two expert committees recommended for a higher share for the States.
    • Given the revenue neutrality failure and the host of other issues, many of the States are left with no option except to depend on GST compensation.
    • This is not conducive to sustainable co-operative federalism.

    [3] Need for revenue sharing formula for IGST

    • Although IGST is a key source of revenue for many of the States, the clearing house mechanism and the process therein remains unknown territory.
    •  It was pointed out that GST is discriminatory to manufacturing States, indicating the need for a revenue sharing formula that duly incentivises exporting States by sharing IGST revenue among three parties instead of two.

    [4] Other issues

    • Swift functioning of Input tax credit: The Malaysian experience demonstrates the need for swift and transparent functioning of the input tax credit system through a flawless IT infrastructure.
    • We operate in an almost information vacuum especially with respect to IGST along with several glitches in the digital architecture.
    • GSTN is now in the doldrums.
    • Data monopoly: It neither makes effective use of the massive and invaluable data being generated nor shares them to enable others to make use of them.
    • Such practice in “data monopoly” was a fact of history in India’s statistical system and has to go sooner rather than later.
    • Australia, having several similarities with India, in terms of Centre and the subnational units, and destination-based, multi-stage tax with input credit provisions, has not been revenue-buoyant.
    • It is a matter for consideration whether widening exemptions and the replacing of income-tax by GST in the case of small and medium enterprises are advisable measures in the Indian context.

    Consider the question “What are the challenges facing the GST in India? What India can learn from the experience of other countries’ experience.”

    Conclusion

    Despite many years of efforts in evolving an Indianised GST system and over 50 months of adjustments with over a thousand notifications, with accompanying uncertainties in the first year and the novel coronavirus pandemic and the lockdown still in the saddle, GST continues to be an unfinished agenda. But how far and how long?

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  • Radioactive Pollution in Water

    Radioactive pollution of water is newly emerging but is of grave concern for water pollution and human health.

    Quick recap: Radioactivity

    • Radioactivity is the phenomenon of spontaneous emission of particles or waves from the unstable nuclei of some elements.
    • There are three types of radioactive emissions: Alpha, Beta and Gamma.
    • Alpha particles are positively charged He atoms, beta particles are negatively charged electrons and gamma rays are neutral electromagnetic radiations.
    • Radioactive elements are naturally found in the earth’s crust.

    Radioactive contamination of Water

    • Natural: Percolation of naturally occurring radioactive materials (NORM) from the soil sediments to the aquifer causes groundwater contamination.
    • Man-made: Anthropogenic sources of such pollution include- nuclear weapon investigation, nuclear calamities, nuclear powerhouses and dumping of radioactive waste.

    Various contaminant elements

    • Uranium, thorium and actinium are three NORM series that contaminate water resources.
    • A number of radionuclides are found in surface and subsurface waters, among which 3H, 14C, 40K, 210Pb, 210Po, 222Rn, 226Ra, 228Ra, 232Th and 234,235,238U are common.
    • Strontium-90, Caesium-137, etc are also formed by nuclear reactors, along with numerous unnecessary radioisotopes wastes.
    • 40K and 7Be are the most commonly found radioactive elements in the sludge generated in sewage treatment plants.
    • Nuclear reactors produce radioisotopes (Cobalt-60, Iridium-192, etc) that hand out as sources of gamma radiation in radiotherapy and numerous industrial appliances.

    Oceanic sources

    • Oceans and seas are the natural repositories of naturally occurring uranium. It is found in the form of uranyl carbonate ion.
    • A significant concentration of uranium is supposed to be found in the greater salinity of the marine water.
    • 40K (Radioactive Potassium) is also found in considerable concentration in the marine environment.

    Measuring radioactive pollution

    • Radioactivity is measured in Becquerel (SI unit) or in Curie.
    • Energy absorbed per unit mass is measured by Gray, while the unit Sievert measures the quantity of radiation absorbed by human tissues.
    • A small amount of radiation is found in all types of water but the extended amount of radiation is harmful to human health.
    • Radioactivity in drinking water can be determined by a gross alpha test.

    Hazards of such pollution

    • Radioactive elements have an effect on the environment and can cause a risk to human healthiness if inhaled, injected or exposed.
    • Human tissues absorb radiation through polluted water and foodstuff, which can cause serious health risks.
    • High doses of radiation can cause acute radiation syndrome or cutaneous radiation injury.
    • Exposure to radiation causes various disorders in human physiology, including cancer, leukaemia, genetic mutations, osteonecrosis, cataracts and chromosomal disruption.

     

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  • NASA’s Imaging X-Ray Polarimetry Explorer (IXPE) Mission

    NASA has launched a new mission named Imaging X-ray Polarimetry Explorer or IXPE.

    About IXPE

    • IXPE observatory is a joint effort of NASA and the Italian Space Agency.
    • The mission will study “the most extreme and mysterious objects in the universe – supernova remnants, supermassive black holes, and dozens of other high-energy objects.”
    • The mission’s primary length is two years and the observatory will be at 600 kilometers altitude, orbiting around Earth’s equator.
    • IXPE is expected to study about 40 celestial objects in its first year in space.

    What are the instruments onboard?

    • IXPE carries three state-of-the-art space telescopes.
    • Each of the three identical telescopes hosts one light-weight X-ray mirror and one detector unit.
    • These will help observe polarized X-rays from neutron stars and supermassive black holes.
    • By measuring the polarization of these X-rays, we can study where the light came from and understand the geometry and inner workings of the light source.
    • This new mission will complement other X-ray telescopes such as the Chandra X-ray Observatory and the European Space Agency’s X-ray observatory, XMM-Newton.

    Why is it important?

    The mission will help scientists answer questions such as:

    • How do black holes spin?
    • Was the black hole at the center of the Milky Way actively feeding on surrounding material in the past?
    • How do pulsars shine so brightly in X-rays?
    • What powers the jets of energetic particles that are ejected from the region around the supermassive black holes at the centers of galaxies?

     

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  • [pib] Saryu Nahar National Project

     

    PM will inaugurate the Saryu Nahar National Project.

    Saryu Nahar National Project

    • The Project involves the interlinking of five rivers – Ghaghara, Saryu, Rapti, Banganga and Rohini to ensure optimum usage of water resources of the region.
    • It will benefit nine districts of Eastern Uttar Pradesh namely – Bahraich, Shravasti, Balrampur, Gonda, Siddharthnagar, Basti, Sant Kabir Nagar, Gorakhpur and Maharajganj.
    • The sub canals with a length of 6,600km have been linked to the 318km main canal.
    • The work on the project started in 1978 but due to lack of continuity, it got delayed and was not completed even after nearly four decades.

    Benefits offered

    • The project will provide assured water for irrigation of over 14 lakh hectares of land and benefit about 29 lakh farmers of over 6200 villages.
    • The farmers of the region, who were the worst sufferers of the inordinate delay in the project, will now immensely benefit from the upgraded irrigation potential.
    • They will now be able to grow crops on a larger scale and maximize the agri-potential of the region.

    Back2Basics: Sarayu River

    • The Sarayu is a river that originates at a ridge south of Nanda Kot mountain in Bageshwar district in Uttarakhand.
    • It flows through Kapkot, Bageshwar, and Seraghat towns before discharging into the Sharda River at Pancheshwar at the India—Nepal border.
    • Lower Ghaghara is also popularly known as Sarayu in India.
    • Especially while it flows through the city of Ayodhya, the birthplace of legendary Rama.

     

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  • What are Non-convertible Debentures?

    Several companies have announced public issues to raise funds through non-convertible debentures.

    What are Debentures?

    • Debentures are long-term financial instruments issued by a company for specified tenure with a promise to pay fixed interest to the investor.
    • They can be held by individuals, banking companies, primary dealers other corporate bodies registered or incorporated in India and unincorporated bodies.
    • Their types include:
    1. Convertible debentures (CDs): They are a type of debentures that can be converted into equity shares of the company.
    2. Non-convertible debentures (NCDs): They are defined as the type of debentures that cannot be converted into equity shares of the company.

    What are NCDs?

    • Some debentures have a feature of convertibility into shares after a certain point of time at the discretion of the owner.
    • The debentures which can’t be converted into shares or equities are called non-convertible debentures (or NCDs).
    • They are debt financial instruments that companies use to raise medium- to long-term capital.

    Benefits offered by NCDs

    • At a time when fixed deposit rates are in low single digits, these NCD offerings look lucrative.
    • NCDs offer interest rates between 8.25–9.7%.

    Risks posed

    • Although NCDs are generally considered safe fixed-income instruments, some recent defaults have made investors cautious.
    • NCDs can be either secured by the issuer company’s assets, or unsecured.
    • Certain issuers, with credit rating below investment grade, had in the past issued both a secured NCD and another unsecured one through the same offer document, with different credit ratings.
    • The risk is high in the case of unsecured NCDs, even though they offer high-interest rates.
    • Credit rating of the issuer is a key factor to consider before investing in any NCD.

     

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