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GS Paper: GS3

  • Govt. proposes new SEZ Law

    The government has proposed to replace the existing law governing Special Economic Zones (SEZs) with new legislation to enable States to become partners in ‘Development of Enterprise and Service Hubs’.

    Why amend SEZ Act, 2005?

    • Units in SEZs used to enjoy 100% income tax exemption on export income for the first five years, 50% for the next five years, and 50% of the ploughed back export profit for another five years.
    • SEZs now have started losing their sheen after the imposition of minimum alternate tax and the introduction of a sunset clause for the removal of tax incentives.
    • The new act will cover all large existing and new industrial enclaves to optimally utilize the available infrastructure and enhance the competitiveness of exports.
    • The government will also undertake reforms in customs administration of SEZs with a view to promote ease of doing business.

    What are SEZs?

    • A Special Economic Zone (SEZ) is an area in which the business and trade laws are different from the rest of the country.
    • SEZs are located within a country’s national borders, and their aims include increasing trade balance, employment, increased investment, job creation, and effective administration.
    • To encourage businesses to set up in the zone, financial policies are introduced.
    • These policies typically encompass investing, taxation, trading, quotas, customs, and labor regulations.
    • Additionally, companies may be offered tax holidays, where upon establishing themselves in a zone, they are granted a period of lower taxation.

    SEZs in India

    • The SEZ policy in India first came into inception on April 1, 2000.
    • The prime objective was to enhance foreign investment and provide an internationally competitive and hassle-free environment for exports.
    • The idea was to promote exports from the country and realize the need for a level playing field must be made available to the domestic enterprises and manufacturers to be competitive globally.
    • Subsequently, the SEZ Act 2005, was enacted to provide the umbrella legal framework, covering all important legal and regulatory aspects of SEZ development as well as for units operating in SEZs.

    Who can set up SEZs? Can foreign companies set up SEZs?

    • Any private/public/joint sector or state government or its agencies can set up an SEZ.
    • Yes, a foreign agency can set up SEZs in India.

    What is the role of state governments in establishing SEZs?

    • A representative of the state government, who is a member of the inter-ministerial committee on private SEZ, is consulted while considering the proposal.
    • Before recommending any proposals to the ministry of commerce and industry (department of commerce), the states must satisfy themselves that they are in a position to supply basic inputs like water, electricity, etc.

    Are SEZs controlled by the government?

    • In all SEZs, the statutory functions are controlled by the government.
    • The government also controls the operation and maintenance function in the central government-controlled SEZs. The rest of the operations and maintenance are privatized.

    Are SEZs exempt from labor laws?

    • Normal labor laws are applicable to SEZs, which are enforced by the respective state governments.
    • The state governments have been requested to simplify the procedures/returns and for the introduction of a single-window clearance mechanism by delegating appropriate powers to development commissioners of SEZs.

    Who monitors the functioning of the units in SEZ?

    • The performance of the SEZ units is monitored by a unit approval committee consisting of a development commissioner, custom, and representative of the state government on an annual basis.

    What are the special features for business units that come to the zone?

    • Business units that set up establishments in an SEZ would be entitled to a package of incentives and a simplified operating environment.
    • Besides, no license is required for imports, including second-hand machinery.

    How do SEZs help a country’s economy?

    • SEZs play a key role in the rapid economic development of a country.
    • In the early 1990s, it helped China and there were hopes that the establishment in India of similar export-processing zones could offer similar benefits – provided, however, that the zones offered attractive enough concessions.
    • Traditionally the biggest deterrents to foreign investment in India have been high tariffs and taxes, red-tapism, and strict labor laws.
    • To date, these restrictions have ensured that India has been unable to compete with China’s massively successful light-industrial export machine.

     

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  • PM’s Development Initiative for North East (PM-DevINE)

    Union Budget 2022-23 provided for a new scheme, Prime Minister’s Development Initiative for North East (PM-DevINE) will be implemented through the North-Eastern Council.

    PM-DevINE

    • It will fund infrastructure, in the spirit of PM GatiShakti, and social development projects based on felt needs of the northeast.
    • This will enable livelihood activities for youth and women, filling the gaps in various sectors.
    • While the Central Ministries may also pose their candidate projects, priority will be given to those posed by the States.

    Some of the projects to be implemented are:

    1. Dedicated Services for the Management of Paediatric and Adult Haemotolymphoid Cancers in North East India, Guwahati
    2. Construction of Aizawl bypass on western side, gap funding for passenger ropeway system for Pelling to Sanga-Choeling in West Sikkim
    3. Gap funding for eco-friendly Ropeway (Cable Car) from Dhapper to Bhaleydhunga in South Sikkim
    4. Pilot project for the construction of Bamboo Link Road at different locations in various districts in Mizoram

     

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  • What is UNCITRAL Model for Cross-Border Insolvency?

    The Economic Survey 2021-22 has called for a standardized framework for cross-border insolvency as the Insolvency and Bankruptcy Code (IBC) at present does not have an instrument to restructure firms involving cross-border jurisdictions.

    What is the Insolvency and Bankruptcy Code (IBC)?

    • The IBC, 2016 is the bankruptcy law of India that seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy.
    • It is a one-stop solution for resolving insolvencies which previously was a long process that did not offer an economically viable arrangement.
    • The code aims to protect the interests of small investors and make the process of doing business less cumbersome.

    Cross-border insolvency proceedings

    • Cross-border insolvency proceedings are relevant for the resolution of distressed companies with assets and liabilities across multiple jurisdictions.
    • A framework for cross border insolvency proceedings allows for:
    1. Location of such a company’s foreign assets
    2. Identification of creditors and their claims
    3. Establishing payment towards claims and
    4. Process for coordination between courts in different countries

    Current status of foreign stakeholders and courts in other jurisdictions under IBC

    • Foreign creditors can make claims against a domestic company.
    • However, the IBC currently does not allow for automatic recognition of any insolvency proceedings in other countries.
    • Current provisions do not allow Indian courts to address the issue of foreign assets of a company being subjected to parallel insolvency proceedings in other jurisdictions.

    What is the UNCITRAL Model?

    • The UNCITRAL model is the most widely accepted legal framework to deal with cross-border insolvency issues.
    • It has been adopted by 49 countries, including the UK, the US, South Africa, South Korea, and Singapore.
    • It is designed to assist States in reforming and modernizing their laws on the arbitral procedure so as to take into account the particular features and needs of international commercial arbitration.

    Key provisions

    This law works on four main principles: access, recognition, cooperation and coordination:

    1. Direct access to foreign insolvency professionals and foreign creditors to participate in or commence domestic insolvency proceedings against a defaulting debtor.
    2. Recognition of foreign proceedings & provision of remedies.
    3. Cooperation between domestic and foreign courts & domestic and foreign insolvency practitioners.
    4. Coordination between two or more concurrent insolvency proceedings in different countries: The main proceeding is determined by the concept of Centre of Main Interest (COMI).

    Implications for India

    • The framework for cross-border insolvency adopted in India may like in the case of some other countries require reciprocity from any country which seeks to have its insolvency proceedings recognised by Indian courts.
    • This would allow Indian proceedings for foreign corporate debtors to be recognised in foreign jurisdictions.

    How is IBC different from the model law?

    • Many countries that adopt the UNCITRAL model law do make certain changes to suit their domestic requirements.
    • The Indian cross-border insolvency framework excludes financial service providers from being subjected to cross-border insolvency proceedings.
    • This is because many countries exempt businesses providing critical financial services, such as banks and insurance companies, from the provisions of cross-border insolvency frameworks.

    Back2Basics: UNCITRAL

    • It is an affiliate organization to the UN made up of business and legal professionals.
    • This group develops model standards and procedures for dealing with issues affecting international business.
    • Perhaps most notably, UNCITRAL promulgated the Convention on International Sale of Goods (CISG).
    • The CISG is a model law commonly used as the governing provisions in contracts between parties from different nations.

     

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  • What is Design Linked Incentive (DLI) Scheme?

    India has invited applications from 100 domestic companies, startups, and small and medium enterprises to become a part of the design-linked incentive (DLI) scheme.

    What is the DLI scheme?

    • Aims to provide financial and infrastructural support to companies setting up fabs or semiconductor making plants in India.
    • It aims to attract existing and global players as it will support their expenditures related to design software, IP rights, development, testing, and deployment.
    • Centre for Development of Advanced Computing (CDAC), a scientific society operating under MeitY, will serve as the nodal agency for the implementation of the DLI scheme.

    Components of the scheme

    It has three components which are

    1. Chip Design infrastructure support: C-DAC will set up the India Chip Centre to host the state-of-the-art design infrastructure (viz. EDA Tools, IP Cores, and support for MPW (Multi Project Wafer fabrication) & post-silicon validation) and facilitate its access to supported companies.
    2. Product Design Linked Incentive: Reimbursement of up to 50% of the eligible expenditure subject to a ceiling of Rs. 15 Crore per application will be provided as financial support to the approved applicants who are engaged in semiconductor design.
    3. Deployment Linked Incentive: An incentive of 6% to 4% of net sales turnover over 5 years subject to a ceiling of Rs. 30 Crore per application will be provided to approved applicants whose semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design are deployed in electronic products.

    Why need such a scheme?

    Ans. Growing semiconductor demand in India

    • The semiconductor industry is growing fast and can reach $1 trillion dollars in this decade. India can grow fast and reach $64 billion by 2026 from $27 billion today.
    • Mobiles, wearables, IT, and industrial components are the leading segments in the Indian semiconductor industry contributing around 80% of the revenues in 2021.
    • The mobile and wearables segment is valued at $13.8 billion and is expected to reach $31.5 billion in 2026.

    A boost to semiconductor manufacturing

    • The sudden surge in demand for chips and semiconductor components has underpinned the need to establish a robust semiconductor ecosystem in India.
    • Several sectors, including auto, telecom, and medical technology suffered due to the unexpected surge leading to the scarcity of chips manufactured by only a few countries.
    • The inception of new companies will help in meeting the demand and supply and encourage innovation in India.

    What are other countries doing to be dominant in the race of chip-making?

    • Currently, semiconductor manufacturing is dominated by companies in the U.S., Japan, South Korea, Taiwan, Israel, and the Netherlands.
    • They are also making efforts in solving the chip shortage problem.
    • The US wants to bring manufacturing back to America and reduce the country’s reliance on a small number of chipmakers based largely in Taiwan and South Korea.
    • These chipmakers produce up to 70% of the world’s semiconductors.

    Challenges in India

    • No incubation: In India, more than 90% of global companies already have their R&D and design centers for semiconductors but never established their fabrication units.
    • Strategic sector: Although India has semiconductor fabs in Mohali and Bangalore, they are purely strategic for defense and space applications only
    • Capital requirement: Setting up fabs is capital intensive and needs investment in the range of $5 billion to $10 billion.
    • Lack of supportive policies: Lack of investments and supportive government policies are some of the challenges to setting up fabs in India.
    • Geopolitical limitations: A combination of capital and the geopolitical situation comes into play to build new fabs.

    Way forward

    • Further incentivization: Schemes like the DLI are crucial to avoid high dependencies on a few countries or companies.
    • Raw material supply: Several gases and minerals which are a part of the global semiconductor supply chain are produced in India.
    • Large talent pool: Availability of highly-skilled engineers for semiconductor manufacturing.

    Conclusion

    • The 21st century will be an era of Digital revolution signifying an increased use of mobile phones and computer devices. This enhanced usage can be met only with a robust availability of semiconductor chips that sustains their functioning. Therefore India needs to focus on the indigenous development of semiconductors in order to realize its digital potential and emerge as a strong power in the present era.

     

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  • What is Pegasus Spyware Controversy?

    A New York Times report has claimed that the Indian government had bought the Pegasus Spyware in 2017.

    What is Pegasus?

    • Pegasus is a spyware developed by NSO Group, an Israeli surveillance firm that helps spies hack into phones.
    • In 2019, when WhatsApp sued the firm in a U.S. court, the matter came to light.
    • In July 2021, Amnesty International, along with 13 media outlets across the globe released a report on how the spyware was used to snoop hundreds of individuals, including Indians.
    • While the NSO claims its spyware is sold only to governments, none of the nations have come forward to accept the claims.

    Why is Pegasus so lethal?

    • What makes Pegasus really dangerous is that it spares no aspect of a person’s identity.
    • It makes older techniques of spying seem relatively harmless.
    • It can intercept every call and SMS, read every email and monitor each messaging app.
    • Pegasus can also control the phone’s camera and microphone and has access to the device’s location data.
    • The app advertises that it can carry out “file retrieval”, which means it could access any document that a target might have stored on their phone.

    Dysfunctions created by Pegasus

    • Privacy breach: The very existence of a surveillance system, whether under a provision of law or without it, impacts the right to privacy under Article 21 and the exercise of free speech under Article 19.
    • Curbing Dissent: It reflects a disturbing trend with regard to the use of hacking software against dissidents and adversaries. In 2019 also, Pegasus software was used to hack into HR & Dalit activists.
    • Individual safety: In the absence of privacy, the safety of journalists, especially those whose work criticizes the government, and the personal safety of their sources is jeopardised.
    • Self-Censorship: Consistent fear over espionage may grapple individuals. This may impact their ability to express, receive and discuss such ideas.
    • State-sponsored mass surveillance: The spyware coupled with AI can manipulate digital content in users’ smartphones. This in turn can polarize their opinion by the distant controllers.
    • National security: The potential misuse or proliferation has the same, if not more, ramifications as advanced nuclear technology falling into the wrong hands.

    Snooping in India:  A Legality check

    For Pegasus-like spyware to be used lawfully, the government would have to invoke both the IT Act and the Telegraph Act. Communication surveillance in India takes place primarily under two laws:

    1. Telegraph Act, 1885: It deals with interception of calls.
    2. Information Technology Act, 2000: It was enacted to deal with surveillance of all electronic communication, following the Supreme Court’s intervention in 1996.

    Cyber security safeguards in India

    • National Cyber Security Policy: The policy was developed in 2013 to build secure and resilient cyberspace for India’s citizens and businesses.
    • Indian Computer Emergency Response Team (CERT-In): The CERT-In is responsible for incident responses including analysis, forecasts, and alerts on cybersecurity issues and breaches.
    • Indian Cyber Crime Coordination Centre (I4C): The Central Government has rolled out a scheme for the establishment of the I4C to handle issues related to cybercrime in the country in a comprehensive and coordinated manner.
    • Budapest Convention: There also exists Budapest Convention on Cybercrime. However, India is not a signatory to this convention.

    Issues over government involvement

    • It is worth asking why the government would need to hack phones and install spyware when existing laws already offer impunity for surveillance.
    • In the absence of parliamentary or judicial oversight, electronic surveillance gives the executive the power to influence both the subject of surveillance and all classes of individuals, resulting in a chilling effect on free speech.

    Way forward

    • The security of a device becomes one of the fundamental bedrock of maintaining user trust as society becomes more and more digitized.
    • Constituting an independent high-level inquiry with credible members and experts that can restore confidence and conduct its proceedings transparently.
    • The need for judicial oversight over surveillance systems in general, and judicial investigation into the Pegasus hacking, in particular, is very essential.

    Conclusion

    • We must recognize that national security starts with securing the smartphones of every single Indian by embracing technologies such as encryption rather than deploying spyware.
    • This is a core part of our fundamental right to privacy.
    • This intrusion by spyware is not merely an infringement of the rights of the citizens of the country but also a worrying development for India’s national security apparatus.

     

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  • What is Reverse Repo Normalization?

    In a recent report, the State Bank of India, which is the largest public sector bank in the country, has stated that the stage is set for a reverse repo normalization.

    What is Monetary Policy Normalisation?

    The RBI keeps tweaking the total amount of money in the economy to ensure smooth functioning by two types of policies:

    (I) Loose Monetary Policy

    When the RBI wants to boost economic activity it adopts a so-called “loose monetary policy”.

    There are two parts to such a policy:

    1. RBI injects more money (liquidity) into the economy: It does so by buying government bonds from the market. As the RBI buys these bonds, it pays back money to the bondholders, thus injecting more money into the economy.
    2. RBI also lowers the interest rate: it charges banks when it lends money to them; this rate is called the repo rate. Lower interest rates and more liquidity, together, are expected to boost both consumption and production in the economy.

    (II) Tight Monetary Policy

    • It involves the RBI raising interest rates and sucking liquidity out of the economy by selling bonds (and taking money out of the system).
    • When any central bank finds that a loose monetary policy has started becoming counterproductive in reducing inflation, the central bank “normalizes the policy” by tightening the monetary policy stance.

    What is Reverse Repo?

    • An interest rate that the RBI pays to the commercial banks when they park their excess “liquidity” (money) with the RBI.
    • The reverse repo, thus, is the exact opposite of the repo rate.
    • Under normal a circumstance, that is when the economy is growing at a healthy pace, the repo rate becomes the benchmark interest rate in the economy.
    • That’s because it is the lowest rate of interest at which funds can be borrowed.
    • As such, the repo rate forms the floor interest rate for all other interest rates in the economy — be it the rate you pay for a car loan or a home loan or the interest you earn on your fixed deposit, etc.

    How does Reverse Repo fit into policy normalization?

    • Imagine a scenario where the RBI pumps more and more liquidity into the market but there are no takers of fresh loans.
    • This is because the banks are unwilling to lend or because there is no genuine demand for new loans in the economy.
    • In such a scenario, the action shifts from repo rate to reverse repo rate because banks are no longer interested in borrowing money from the RBI.
    • Rather they are more interested in parking their excess liquidity with the RBI. And that is how the reverse repo becomes the actual benchmark interest rate in the economy.

    What does reverse repo normalization mean?

    • Simply put, it means the reverse repo rates will go up.
    • Over the past few months, in the face of rising inflation, several central banks across the world have either increased interest rates or signaled that they would do so soon.
    • In India, too, it is expected that the RBI will raise the repo rate.
    • But before that, it is expected that the RBI will raise the reverse repo rate and reduce the gap between the two rates.
    • In the immediate aftermath of Covid, RBI had increased this gap.

    Implications of such policy

    • Incentivize commercial banks to park excess funds with RBI, thus sucking some liquidity out of the system.
    • The next step would be raising the repo rate.
    • This process of normalization, which is aimed at curbing inflation, will not only reduce excess liquidity but also result in higher interest rates across the board in the Indian economy.
    • This will help reduce the demand for money among consumers (since it would make more sense to just keep the money in the bank) and make it costlier for businesses to borrow fresh loans.

    Try this PYQ from CSP 2020:

    Q.If the RBI decides to adopt an expansionist monetary policy, which of the following it would NOT do?

    1. Cut and optimize the statutory liquidity ratio
    2. Increase the Marginal Standing Facility Rate
    3. Cut the Bank Rate and Repo Rate

    Select the correct answer using the code given below:

    (a) 1 and 2 only

    (b) 2 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

     

    [wpdiscuz-feedback id=”sr109h9q0i” question=”Please leave a feedback on this” opened=”1″]Post your answers here:[/wpdiscuz-feedback]

     

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  • Species in news: Septemeranthus

    A new genus of a parasitic flowering plant has recently been discovered from the Nicobar group of islands.

    Septemeranthus

    • The genus Septemeranthus grows on the plant species Horsfieldia glabra (Blume) Warb.
    • The parasitic flowering plants have a modified root structure spread on the stem of the tree and are anchored inside the bark of the host tree.
    • It has a distinct vegetative morphology, inflorescence architecture and floral characters.
    • The leaves of the plant are heart-shaped with a very long tip and the ovary,fruit and seeds are ‘urceolate’ (earthen pot-shaped).
    • Birds consume viscous seeds of this new genus and seeds have potential of pseudo viviparous germination that deposit on the leaves and branches of their same plant which is already attached to host plants.

    Key features

    • They need a host tree or shrub in order to thrive and exhibit a worldwide distribution in tropical as well as temperate habitats.
    • They are important in forest ecology, pathology and medicine.
    • They play an important role as they provide food for frugivorous birds.

    Try this PYQ from CSP 2019:

    Q.Recently, there was a growing awareness in our country about the importance of Himalayan nettle (Girardinia diversifolia) because it is found to be a sustainable source of

    (a) anti-malarial drug

    (b) bio-diesel

    (c) pulp for paper industry

    (d) textile fibre

     

     

    [wpdiscuz-feedback id=”8znatcwsr5″ question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

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  • How budget can generate higher growth, jobs

    Context

    Although the impact of Omicron is less on the economy, the loss of GDP in the last two years is high. Also note that the pre-Covid year FY20 had a low base with 4 per cent growth of GDP. Therefore, the need to focus on higher growth in the forthcoming budget and in the medium term, that is, beyond India@75, is obvious.

    Challenges in creating quantity and quality of jobs in the economy

    • Unemployment rate is high in both rural and urban areas;
    • Decline in work participation rates, particularly for women;
    • Recovery in employment is still below the levels of the pre-Covid period.
    • 85 per cent of the workforce is still in informal sector.
    • Lack of skill: Less than 5 per cent of India’s workforce has formal skill training.
    • Need for structural change: Manufacturing and services need structural change.
    • Focus on MSME sector is needed for higher employment.

    Policies needed to achieve higher economic growth and jobs

    1] Capital expenditure and infrastructure

    • The government outlined an infrastructure project pipeline worth more than Rs 102 lakh crore and asset monetisation pipeline of Rs 6 lakh crore to be implemented in the medium term.
    • Continuing focus on infrastructure and capex by the government is important as it is a key driver for the “future of India”.

    2] Focus on export growth

    • It is well known that rise in exports is one of the main engines of growth and also important for employment creation.
    • Export growth in India has increased and is expected to reach $400 billion by the end of FY22.
    • One worrying aspect of India’s export performance is the failure in expanding the share of labour intensive products in the export basket.
    • Protectionist trade policy: However, one problem in recent years is that India’s trade policy has become more protectionist by increasing import tariffs.
    • Join RCEP: India should also join the Regional Comprehensive Economic Partnership (RCEP) for integrating our industries with the value chains in Asia.

    3] Manufacturing and service sector growth

    • The share of manufacturing in GDP and employment has hardly increased over time.
    • Production Linked Incentive (PLI) schemes can improve performance.
    • However, more efforts are required to improve the manufacturing sector.
    •  Similarly, there are a lot of opportunities for India in the service sector.
    • Brand and customer centricity are important here.
    • India can also think of more business in the service sector.
    • Growing startups including unicorns in manufacturing and services is part of this effort.

    4] Banking reforms

    • Banking reforms are important as bank credit growth is a key indicator of economic growth.
    • Low credit-to-gdp ration in India: Credit to GDP ratio in India is only around 55 per cent compared to 100 per cent and 150 per cent in many other countries.
    • Credit should flow to all categories of economic agents like firms, households etc.
    •  The bad bank, a key initiative of the last budget, is yet to take shape.
    • The role of fintech companies in the financial sector has increased significantly.
    • They may not be able to replace banks although they are competing on payments.
    • The banks also have to focus now on ESG (environment, social and governance) while giving credit.
    • Big technology and digital push is also needed for banks.

    5] Deal with K-shaped recovery

    • The K-shaped recovery of the economy is still continuing.
    • The policies have to focus on giving a push to the MSME sector, increasing investment in agriculture and rural infrastructure, a social sector push including bridging divides in health and education, social protection measures like foodgrain distribution, cash transfers, MGNREGA in rural areas, urban employment guarantee schemes etc.
    • This will also create demand for the economy.

    Conclusion

    In the near term, fiscal policy has to play an important role in achieving the objectives of growth and jobs by expanding fiscal space while the fiscal deficit can be stabilised in the medium term. Increase in private investment may take some more time.

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  • What is Pollution-Under-Control (PUC) Certificate?

    Delhi govt will soon make PUC certificate mandatory for fuel at filling stations.

    What is PUC Certificate?

    • The PUC certificate is a document that any person driving a motor vehicle can be asked to produce by a police officer in uniform authorized by the state government.
    • These issue certificates if a vehicle is found complying with the prescribed emission norms.
    • Since the Motor Vehicles (Amendment) Act, 2019 came into force, PUC certificate has been made mandatory.
    • A PUC certificate contains information such as the vehicle’s license plate number, PUC test reading, date on which the PUC test was conducted and the expiry date.

    How is a pollution control check carried out?

    • The computerized model for pollution check was developed by the Society of Indian Automobile manufacturers.
    • A gas analyzer is connected to a computer, to which a camera and a printer are attached.
    • The gas analyzer records the emission value and sends it to the computer directly, while the camera captures the license plate of the vehicle.
    • Subsequently, a certificate may be issued if the emission values are within the limits.

    Fines for non-compliance

    • The test costs between Rs 60 and Rs 100.
    • The validity of the test is one year for BS IV vehicles and three months for others.
    • The fine for PUC violations has now gone up to Rs 10,000; it used to be Rs 1,000 for the first offence and Rs 2,000 for subsequent violations before the amendments came into force.

     

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  • NeoCov Coronavirus found in Bats

    NeoCov coronavirus found in bats may pose threat to humans in the future, scientists caution.

    Coronavirus: A quick backgrounder

    • Coronaviruses are a large family of viruses that are known to infect animals and humans.
    • They are largely categorized into four genera — alpha, beta, gamma, and delta.
    • Broadly speaking, alpha and beta coronaviruses commonly infect mammals such as bats and humans, while Gamma and Delta mainly infect birds.

    Infecting humans: Through ‘Zoonotic Spillover’

    • While animals, including bats, are generally considered as the reservoirs of coronaviruses, rarely spillover events could occur.
    • It is possible for viruses that infect animals to jump to humans, a process which is known as zoonotic spillover.
    • Many major infectious diseases, including COVID-19, is widely thought to be a result of spillover.

    COVID-19 Pandemic

    • SARS-CoV-2, the coronavirus responsible for the COVID-19 pandemic, belongs to the genus of beta coronavirus.
    • It is in fact the 7th type of coronavirus known to infect and cause severe disease in humans.

    How does it affect humans?

    • How a coronavirus latches onto special receptors on host cells depends on a key part of the virus known as its receptor-binding domain.
    • The differences in the receptor-binding domain of coronaviruses are therefore what determine the type of host receptor the virus will use and thus the host that it will be able to infect.
    • There are currently 4 well-characterized receptors for coronaviruses, including ACE2, which is used by SARS-CoV and SARS-CoV-2, and DPP4 used by MERS-CoV.

    What is NeoCoV?

    • NeoCoV is a bat coronavirus that was first identified in 2011.
    • It was identified in a species of bats known as Neoromicia, which is where the name NeoCoV was derived from.
    • Commonly known as aloe bats, this species is distributed in the Afro-Malagasy region.
    • NeoCoV shares an 85% similarity to MERS-CoV in the genome sequence, making it the closest known relative of MERS-CoV.

    Does NeoCoV infect humans and cause high mortality?

    • It is important to note that inherently, NeoCoV cannot interact with human receptors, implying that in its current form the virus cannot infect humans.
    • NeoCoV does not infect humans yet and has thus not caused any deaths.

    What does the preprint say and why is it important?

    • The study reports that despite their similarity, MERS-CoV and NeoCoV use different receptors to infect cells.
    • The bat coronavirus NeoCoV was found to use bat ACE2 receptors for efficiently entering cells.
    • The interaction between NeoCoV and bat ACE2 receptors is different from what is seen in other coronaviruses that utilize ACE2.
    • However, specific mutations artificially created in the receptor-binding domain of NeoCoV can enhance its efficiency to interact with human ACE2 receptors.
    • These mutations have not yet been seen in NeoCov isolates from natural settings.

    Conclusion

    • SARS-CoV-2 is not the first coronavirus to infect humans and cause large disease outbreaks, nor is it likely to be the last.
    • The study highlights that through further adaptation, coronaviruses like NeoCoV or other related viruses could potentially gain the ability to infect humans.

    Way forward

    • To prevent future outbreaks, it will thus be important to monitor this family of viruses for potential zoonosis while continuing research efforts on understanding the complex receptor usage of different coronaviruses.
    • Genomic surveillance of human and animal viruses is, therefore, the key to understanding the spectrum of viruses, and possibly provides early warning to potential spillover events.

     

    Try this question from CSP 2021:

    Q. The term ACE2′ is talked about in the context of:

    (a) genes introduced in the genetically modified plants

    (b) development of India’s own satellite navigation system

    (c) radio collars for wildlife tracking

    (d) spread of viral diseases

     

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