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  • Phobos: The closest and biggest moon of Mars

    The Mars Colour Camera (MCC) onboard ISRO’s Mars Orbiter Mission (MOM) has captured the image of Phobos, the closest and biggest moon of Mars.

    Try this question from CSP 2017:

    Q.Which region of Mars has a densely packed river deposit indicating this planet had water 3.5 billion years ago?

    (a) Aeolis Dorsa (b) Tharsis (c) Olympus Mons (d) Hellas

    About Phobos

    • Phobos is the innermost and larger of the two natural satellites of Mars, the other being Deimos.
    • Both moons were discovered in 1877 by American astronomer Asaph Hall.
    • Phobos is a small, irregularly shaped object with a mean radius of 11 km and is seven times as massive as the outer moon, Deimos.
    • Phobos is largely believed to be made up of carbonaceous chondrites.
    • The violent phase that Phobos has encountered is seen in the large section gouged out from a past collision (Stickney crater) and bouncing ejecta.

    Back2Basics: Mars Orbiter Mission (MOM)

    • The MOM also called Mangalyaan is a space probe orbiting Mars since 24 September 2014. It was launched on 5 November 2013 by the Indian Space Research Organisation (ISRO).
    • It aims at studying the Martian surface and mineral composition as well as scans its atmosphere for methane (an indicator of life on Mars).
    • It is India’s first interplanetary mission and it made it the fourth space agency to reach Mars, after Roscosmos, NASA, and the European Space Agency.
    • It made India the first Asian nation to reach Martian orbit and the first nation in the world to do so on its maiden attempt.
    • It was initially meant to last six months, but subsequently, ISRO had said it had enough fuel for it to last “many years.”

  • Safety net of income post Covid

    Providing a minimum basic income post-Covid will require some novel approach. This article proposes an approach with the mix of direct cash transfer and changes in the employment guarantee scheme.

    Non-universal targeted programs

    •  It is true that a universal schemes are easy to implement.
    • Non-universal targeted programmes face the problem of identification.
    • Narrowly-targeted programmes will run into complex problems of identification.
    • And the problem of identification gives rise to exclusion and inclusion errors.

    How to solve identification problem

    • There are three proposals which meet the objective of providing a minimum basic income.
    • 1) Give cash transfers to all women above the age of 20 years.
    • 2) Expand the number of days provided under MGNREGA.
    • 3) Have a national employment guarantee scheme in urban areas.
    • In all the three proposals, there is no problem of identification.
    • A combination of cash transfers and an expanded employment guarantee scheme can provide a minimum basic income.

    1) Cash transfer to all women

    • One way of doing it will be to give it to all women say above the age of 20.
    • This is an easily identifiable criterion because the Aadhaar cards carry the age of the person.
    • The female population above the age of 20 is around 42.89 crore.
    • Making available a minimum of Rs 4,000 annually as a cash transfer to all of them will cost Rs 1.72 lakh crore.
    • Which is 0.84 per cent of GDP.
    • The cost of the scheme to the government will be less if the well-off women choose not to take the cash transfer.

    2) Expanding MGNREGA

    • The Act guarantees 100 days of employment.
    • At present, MGNREGA is availed of only for 50 days of employment.
    • One way to help the poor and informal workers is to strengthen it.
    • The government needs to increase the number of days under the scheme from 100 to 150 in rural areas.

    3) Employment guarantee scheme for urban areas

    •  Introducing Employment Guarantee Act in urban areas would help also provide income.
    • Providing employment for 150 days instead of 100 days will also prove beneficial.

    Some facts and figures

    • In 2019-20, the government spent Rs 67,873 crore for providing 48 days of employment to 5.48 crore of rural households.
    • Out of this, the wage expenditure was Rs 48,762 crore.
    • The government has increased the per day wage rate from Rs 182.1 in 2019-20 to Rs 202.5 in 2020-21.
    • So, the estimated expenditure for 150 days of employment to 5.48 crore households in rural areas and 2.66 crore households in urban areas — together they account for 33 per cent of total households in the country.
    •  The additional expenditure needed for the new proposal proposal is Rs 1.9 to 2.5 lakh crore.
    • This additional expenditure is around 1 to 1.22 per cent of GDP.
    •  The total cost of the three proposals would be Rs 4.9 lakh crore or 2.4 per cent of GDP.

    But the total cost could be lower

    •  As the Employment Guarantee Programme is a demand-based programme, the number of days availed could be lower.
    •  This is happening even now.
    • Second, on cash transfers, some women, particularly from richer classes, may voluntarily drop out of the scheme.
    • Alternatively, we can provide that everyone receiving cash transfer must declare that her total monthly income is less than Rs 6,000 per month.

    Where the additional money will come from

    • Removing all exemptions in our tax system would give enough money.
    • Tax experts advocate removing exemptions so that the basic tax rate can be reduced.
    • Perhaps, out of the Rs 4.2 lakh crore which is needed, Rs 1 lakh crore can come out of phasing out of some of the expenditures.
    • While another Rs 3 lakh crore must come out of raising additional revenue.
    • Some of the non-merit subsidies, another item of expenditure, can be eliminated.

    Consider the question “What are the issues non-universal schemes faces? Suggest the ways to do with the issue of identification which such schemes face.”

    Conclusion

    In the post-COVID-19 situation, we need to institute schemes to provide a minimum income for the poor and vulnerable groups and trying the mixed approach of cash transfer to women and modification of Employment Guarantee Acts could do that.

  • Biodiversity Governance: The agreements and laws that help enforce it

  • International Thermonuclear Experimental Reactor (ITER) Project

    The heavy engineering division of L&T dispatched a giant Cryostat lid, to International Thermonuclear Experimental Reactor (ITER) site in France from its Hazira unit in Gujarat.

    Try this MCQ:

    Q.With reference to International science projects, consider the following:

    1. Large Hadron Collider (LHC)– The God Particle
    2. Thirty Metre Telescope (TMT) – The World’s Most Advanced Telescope
    3. International-Thermonuclear-Experimental-Reactor (ITER) – Fusion Energy
    4. Facility for Antiproton and Ion Research (FAIR) – Antiproton and Ion Research

    Which of the above projects have India’s active participation?

    a) 1 only

    b) 2 and 3 only

    c) 1, 3 and 4 only

    d) All of them

    ITER Project

    • ITER is international nuclear fusion research and engineering megaproject, which will be the world’s largest magnetic confinement plasma physics experiment.
    • The goal of ITER is to demonstrate the scientific and technological feasibility of fusion energy for peaceful use.

    Minutes of the project

    • The project is funded and run by seven member entities—the European Union, India, Japan, China, Russia, South Korea and the United States.
    • The EU, as host party for the ITER complex, is contributing about 45 per cent of the cost, with the other six parties contributing approximately 9 per cent each.
    • Construction of the ITER Tokamak complex started in 2013 and the building costs were over US$14 billion by June 2015.

    How does it work?

    • ITER is the most complex science project in human history. The ITER aims to use a strong electric current to trap plasma inside a doughnut-shaped enclosure long enough for fusion to take place.
    • Hydrogen plasma will be heated to 150 million degrees Celsius, ten times hotter than the core of the Sun, to enable the fusion reaction.
    • The process happens in a doughnut-shaped reactor, called a tokamak 1, which is surrounded by giant magnets that confine and circulate the superheated, ionized plasma, away from the metal walls.
    • The superconducting magnets must be cooled to -269°C (-398°F), as cold as interstellar space.
    • Scientists have long sought to mimic the process of nuclear fusion that occurs inside the sun, arguing that it could provide an almost limitless source of cheap, safe and clean electricity.
    • Unlike in existing fission reactors, which split plutonium or uranium atoms, there’s no risk of an uncontrolled chain reaction with fusion and it doesn’t produce long-lived radioactive waste.

    Back2Basics: Nuclear Fusion

    • Nuclear fusion is the process of making a single heavy nucleus (part of an atom) from two lighter nuclei. This process is called a nuclear reaction.
    • The nucleus made by fusion is heavier than either of the starting nuclei. It releases a large amount of energy.
    • Fusion is what powers the sun. Atoms of Tritium and Deuterium (isotopes of hydrogen, Hydrogen-3 and Hydrogen-2, respectively) unite under extreme pressure and temperature to produce a neutron and a helium isotope.
    • Along with this, an enormous amount of energy is released, which is several times the amount produced by fission.
    • Scientists continue to work on controlling nuclear fusion in an effort to make a fusion reactor to produce electricity.

    How it is different from nuclear fission?

    • Simply put, fission is the division of one atom into two (by neutron bombardment), and fusion is the combination of two lighter atoms into a larger one (at a very high temperature).
    • Nuclear fission takes place when a large, somewhat unstable isotope (atoms with the same number of protons but a different number of neutrons) is bombarded by high-speed particles, usually neutrons.

  • Tillari Conservation Reserve

    The Maharashtra state forest department on declared 29.53 sq. km area of Dodamarg forest range in Sindhudurg district as ‘Tillari Conservation Reserve’.

    Note the differences between Conservation Reserves and Community Reserves. Their shuffled meanings can be asked directly in statements based MCQs.

    Tillari Conservation Reserve

    • This area is known to serve as a corridor and even as a habitat for the population of tigers and elephants moving between the three states of Goa, Karnataka and Maharashtra.
    • The 38-km-long Dodamarg wildlife corridor that connects Radhanagari Wildlife Sanctuary in Maharashtra to Bhimgad Wildlife Sanctuary in Karnataka frequently witnesses elephant and tiger movement.
    • Tillari will be the seventh corridor in the state to be declared as a ‘conservation reserve’.

    What are Conservation Reserves?

    • They denote protected areas which typically act as buffer zones to or connectors and migration corridors between established national parks, wildlife sanctuaries and reserved and protected forests.
    • Such areas are designated if they are uninhabited and completely owned by the Government of India but used for subsistence by communities if part of the lands is privately owned.
    • Administration of such reserves would be through local people and local agencies like the gram panchayat, as in the case of communal forests.

    What are Community Reserves?

    • They are the first instances of private land being accorded protection under the legislature.
    • It opens up the possibility of communally owned for-profit wildlife resorts, and also causes privately held areas under non-profit organizations like land trusts to be given protection.
    • These protected area categories were first introduced in the Wildlife (Protection) Amendment Act of 2002 − the amendment to the Wildlife Protection Act of 1972.
    • These categories were added because of reduced protection in and around existing or proposed protected areas due to private ownership of land, and land use.

  • Reforming Digital policy

    Pandemic has been ravaging the economies across the globe but digital services have escaped the onslaught and are thriving. For India, this could be an opportunity. This article highlights the importance of the sector and how some proposed measures could have an adverse impact on the sector.

    Emerging trends in economies

    • Economic growth has dropped, and the competition for foreign investment is intensifying.
    • There are national campaigns to shift supply chains and the urgent necessity to reverse recessionary trends.
    • The United Nations Conference on Trade and Development just released its latest World Investment Report.
    • The report projected that FDI to developing Asian economies could drop by as much as 45%.

    Why digital services would beat this trend

    • Digital services have become critical to every 21st century economy.
    • Digital services are filling gaps when national or global emergencies interrupt more traditional modes of commerce.
    • It enables access to and delivery of a wide array of products across multiple sectors.

    How it matters for India

    • India offers undeniable potential for innovative homegrown start-ups.
    • India has a huge and increasingly digitised population.
    • Indian government policies will be key determinants in how quickly and at what level the economy attracts new investment.
    • Fostering innovation, and expanding its exporting prowess will also matter.

    Three pending measure

    • Three pending reform measures under consideration are-
    • 1) Personal Data Protection Bill (PDPB).
    • 2) The e-commerce policy.
    • 3) The Information Technology Act Amendments.

    Issues with these measures

    • These regulatory reforms seem to emphasise a focus on protecting the domestic market for domestic companies.
    • It also prioritises government access to data.
    • It may be difficult to reconcile these approaches with India’s strong interest in i) promoting data privacy ii) protecting its democratic institutions iii) encouraging FDI and India’s position as a global leader in information technology.

    India-US trade relationship issue

    • The India-U.S. trade relationship is uncertain.
    • The bilateral relationship is an important factor for greater trade and investment in digital services.
    • India and the U.S. are yet to conclude negotiation on a bilateral trade agreement that could address some digital services issues.
    • The U.S. just initiated a “Section 301” review.
    • The review seeks whether digital services taxes in 10 countries constitute “unfair” trade measures, including India’s equalisation levy.

    Consider the question “Digital services have become critical to every 21st-century economy and more so for Indian economy. In light, highlight the salience of digital services for the Indian economy and what are the issues that could affect the growth trajectory of the sector in India?”

    Conclusion

    Post-COVID-19 international cooperation and approaches to good governance in the digital sphere will be top-priority initiatives. The steps India takes now could well establish itself as a true global leader.

  • ‘Accelerate Vigyan’ Scheme

    To provide a single platform for research internships, capacity building programs and workshops across the country, the Science and Engineering Research Board (SERB) has launched a new scheme called ‘Accelerate Vigyan’ (AV).

    Note the following things about the ‘Accelerate Vigyan’ Scheme:

    1) Implementing agency/ Nodal Ministry

    2) Primary objective

    3) Target beneficiaries

    4) Its components

    ‘Accelerate Vigyan’ Scheme

    • Accelerate Vigyan (AV) strives to provide a big push to high-end scientific research and prepare scientific manpower which can venture into research careers and knowledge-based economy.
    • The primary objective of this scheme is to give more thrust on encouraging high-end scientific research and preparing scientific manpower, which can lead to research careers and knowledge-based economy.
    • AV will initiate and strengthen mechanisms of identifying research potential, mentoring, training and hands-on workshop on a national scale.
    • The aim is to expand the research base in the country, with three broad goals – consolidation / aggregation of all scientific training programs, initiating High-end Orientation Workshops and creating opportunities for Research Internships.

    Components of AV

    1) ABHYAAS

    • It is an attempt to boost research and development in the country by enabling and grooming potential PG/PhD students by means of developing their research skills in selected areas across different disciplines or fields.
    • It has two components: High-End Workshops (‘KARYASHALA’) and Research Internships (‘VRITIKA’).
    • This is especially important for those researchers who have limited opportunities to access such learning capacities/facilities/infrastructure.

    2) SAMOOHAN

    • Mission ‘SAMOOHAN’ marks the beginning of Accelerate Vigyan.
    • It aims to encourage, aggregate and consolidate all scientific interactions in the country under one common roof.
    • It has been sub-divided into ‘SAYONJIKA’ and ‘SANGOSHTI’.
    • SAYONJIKA is an open-ended program to catalogue the capacity building activities in science and technology supported by all government funding agencies in the country.
    • SANGOSHTI is a pre-existing program of SERB.

  • Central Zoo Authority (CZA)

    The Environment Ministry has reconstituted the Central Zoo Authority (CZA) to include an expert from the School of Planning and Architecture, Delhi, and a molecular biologist.

    Note following things about CZA:

    1)Its constitution under any Act

    2)Composition

    3)Roles and functions

    About CZA

    • The CZA is the body of the government responsible for oversight of zoos constituted under the section 38A of Wild Life (Protection) Act 1972.
    • The main objective of the authority is to complement the national effort in the conservation of wildlife.
    • Standards and norms for housing, upkeep, health care and overall management of animals in zoos have been laid down under the Recognition of Zoo Rules, 1992.

    Roles & Functions

    • The Authority’s role is more of a facilitator than a regulator.
    • It, therefore, provides technical and financial assistance to such zoos which have the potential to attain the desired standard in animal management.
    • Primary function– grant of recognition and release of financial assistance.
    • It also regulates the exchange of animals of endangered category Listed under Schedule-I and II of the Wildlife (Protection) Act among zoos.
    • Exchange of animals between Indian and foreign zoos is also approved by the Authority before the requisite clearances under EXIM Policy and the CITES permits are issued by the competent authority.
    • The Authority also coordinates and implements programmes on capacity building of zoo personnel, planned breeding programmes and ex-situ research including biotechnological intervention for the conservation of species for complementing in-situ conservation efforts in the country.

    Composition

    • Apart from the chairman, it consists of 10 members and a member-secretary.
    • Almost all of them are officials in the Environment Ministry and NGO experts are those who are wildlife conservationists or retired forest officers.

  • How much forex reserve is too much

    India’s foreign exchange reserves touched an unprecedented level. Being reserves, the reserves also represent the lost opportunity. This article examines the reasons for and utility of maintaining huge reserves.

    Reasons for surge in the forex reserves

    • The recent forex reserves surge was a result of two things:
    • 1) Foreign institutional investors reinvested in the Indian market in May-June after they exited their positions in panic in March.
    • 2) A global fall in fuel prices has reduced India’s oil import bill, allowing it to save up forex reserves.

    But why does India keeps huge forex reserves- 3 possibilities

    • Sufficiency of forex reserves is sometimes measured on how many months’ worth of imports a country can afford.
    • While six months is considered sufficient.
    • The RBI in December 2019 said it had enough to sustain for 10 months, the forex reserves were then $0.4 trillion.
    • Today, the cover is 12 months!
    • This is despite having a sufficient credit line from the IMF, should there be a credit shock.
    • So, there are 3 possibilities for why government maintains such huge reserves.
    • 1) Excess forex reserves are likely the government’s contingency fund, in case the economy suddenly topples.
    • The pandemic has increased the government’s insecurity.
    • 2) Another possibility is that the government is accumulating these reserves as “Plan-B” savings should its strategic disinvestment plans fail.
    • 3) Forex reserves are also likely a way for India now to maintain its global rating.
    • The fundamental use of India’s foreign exchange should be to ensure the Rupee (INR) stability.

    Stability of Rupee

    •  Despite steadily rising reserves, INR fluctuated between 77 and 75 against the US dollar in the last two months.
    • INR has become one of Asia’s worst currencies.
    • The RBI may allow it to devalue further to support its balance sheet,
    • Devaluation would enable it to transfer a big chunk of its realised profits as dividend to the starving government.

    Lost opportunity

    • It is understandable for oil-rich countries to maintain high forex reserves.
    • A single oil trade hiccup can derail their economy.
    • Economists have theorised that holding high forex reserves is unnecessary.
    • In fact, not using them to finance mega infrastructure projects are lost opportunities.
    • And yet the Indian government has held these reserves in liquid, possibly for its feared D-day.

    Perils of using forex reserves as emergency funds

    •  Over-reliance on these floating funds to stimulate the economy might be poorly informed.
    • The potential of these funds to switch direction [i.e. they could exit as fast] should not be underestimated.
    • In March alone, foreign institutional investments in India fell by Rs 65,000 crore.
    • India’s foreign exchange reserves registered this impact.
    • Reversing the dip, investments went up in May and now in June with some big corporate deals.
    • If the government intends to use forex reserves as an emergency fund, it should ensure that they do not shrink just when they are most needed.

    Consider the question “India’s foreign exchange reserves touched new height recently. This also giver rise to the argument of lost opportunity. In light of this discuss the utility of maintaining foreign exchange reserves and issue of optimum level of foreign exchange reserves.”

    Conclusion

    Maintaining high foreign exchange reserves definitely entails cost. The cost-benefit analysis and the lost opportunity must be the basis for deciding the level of the reserves.

  • Stamp Duty on Mutual Fund Purchases

    The Amendments in the Indian Stamp Act, 1899 has been brought through Finance Act 2019 for Rationalized Collection Mechanism of Stamp Duty across India with respect to Securities Market Instruments.

    Up till now, we knew that stamp duties are levied on property transactions, registrations etc. With the Finance Act 2019, the stamp duties are also levied on Mutual Funds.

    What is Stamp Duty?

    • Stamp duty is a legal tax payable in full and acts as evidence for any sale or purchase of a property. It is payable under Section 3 of the Indian Stamp Act, 1899.
    • The levy of stamp duty is a state subject and thus the rates of stamp duty vary from state to state.
    • The Centre levies stamp duty on specified instruments and also fixes the rates for these instruments.
    • It is usually paid by the buyer with regardless of agreement and in case of property exchange, both seller and the buyer has to share the stamp duty equally.
    • A stamp duty paid instrument/document is considered a proper and legal instrument/document and has evidentiary value and is admitted as evidence in courts.

    What is the move?

    • Beginning July 1, all shares and mutual fund purchases will attract a stamp duty of 0.005 per cent and any transfer of security will attract a stamp duty of 0.015 per cent.
    • The government had introduced changes to the Stamp duty Act last year by introducing a uniform rate of stamp duty on the trading of shares and commodities.
    • All categories of mutual funds (except for ETFs) will attract stamp duty for the first time.
    • Shares purchased by individuals at stock exchanges were charged stamp duty at different rates by respective states.

    Where all will it be applicable?

    • The stamp duty will be applicable on all transactions, including shares, debt instruments, commodities and all categories of mutual fund schemes.
    • As for mutual funds, it will be applicable on all fresh purchases, including the fresh monthly purchases in previously registered Systematic Investment Plans.
    • It will also be applicable if investors switch from one scheme to another and also in case of dividend reinvestment transactions.
    • Transfers of units from one Demat account to another, including market/off-market transfers, will also attract stamp duty.

    How does it impact the investor?

    • The impact on long-term investments by a retail investor is nominal.
    • Since the stamp duty will be charged a one-time charge, if an investor invests Rs 1 lakh in a mutual fund scheme or in stock and holds it for two years, he will have to pay a duty of only Rs 5.
    • In fact, it will be marginally lower as the stamp duty is applicable on the net investment value i.e gross investment amount less than any other deduction like transaction charge.
    • There is no duty at the time of redemption.

    What about big investors?

    • The impact is higher for investors with short-term investment horizons such as banks and corporates who invest in liquid and overnight schemes of mutual funds.

    How much revenue can it generate for the government?

    • In the financial year 2019-20, the mutual fund industry mobilized aggregate funds of over Rs 188 lakh crore.
    • A high portion of that was in overnight funds or liquid funds.
    • A 0.005 per cent stamp duty on this amount works out to Rs 940 crore.
    • If the industry continues to mobilise funds to the tune of Rs 190 lakh crore or higher, it will generate revenues of nearly Rs 1,000 crore for the government from mutual fund transactions itself.

    Back2Basics: Mutual Funds

    • MF is a trust that collects money from a number of investors who share a common investment objective.
    • Then, it invests the money in equities, bonds, money market instruments and/or other securities.
    • Each investor owns units, which represent a portion of the holdings of the fund.
    • The income/gains generated from this collective investment are distributed proportionately amongst the investors after deducting certain expenses, by calculating a scheme’s “Net Asset Value or NAV.
    • It is one of the most viable investment options for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
    • All funds carry some level of risk. With mutual funds, one may lose some or all of the money invested because the securities held by a fund can go down in value.