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  • Foreign Policy Watch: India-United States

    US Treasury keeps India on currency watch list

    | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    India is one of the 11 countries on the US Treasury’s ‘Monitoring List’ with regard to their currency practices for the first time in the Biden administration.

    What is Currency Manipulation?

    • Currency manipulation refers to actions taken by governments to change the value of their currencies relative to other currencies in order to bring about some desirable objective.
    • The typical claim – often doubtful – is that countries manipulate their currencies in order to make their exports effectively cheaper on the world market and in turn make imports more expensive.

    Why do countries manipulate their currencies?

    • In general, countries prefer their currency to be weak because it makes them more competitive on the international trade front.
    • A lower currency makes a country’s exports more attractive because they are cheaper on the international market.
    • For example, a weak Rupee makes Indian exports less expensive for offshore buyers.
    • Secondly, by boosting exports, a country can use a lower currency to shrink its trade deficit.
    • Finally, a weaker currency alleviates pressure on a country’s sovereign debt obligations.
    • After issuing offshore debt, a country will make payments, and as these payments are denominated in the offshore currency, a weak local currency effectively decreases these debt payments.

    US treasury’s criteria

    To be labelled a manipulator by the U.S. Treasury:

    • Countries must at least have a $20 billion-plus bilateral trade surplus with the US
    • foreign currency intervention exceeding 2% of GDP and a global current account surplus exceeding 2% of GDP

    Implications for India

    • India has traditionally tried to balance between preventing excess currency appreciation on the one hand and protecting domestic financial stability on the other.
    • India being on the watch list could restrict the RBI in the foreign exchange operations it needs to pursue to protect financial stability.
    • This comes when global capital flows threaten to overwhelm domestic monetary policy.
    • The two most obvious consequences could be an appreciating rupee as well as excess liquidity that messes with the interest rate policy of the RBI.
    • Indian policymakers have to be sensitive to the unpredictable nature of policy-making in the US under Trump, especially concerning global trade.

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  • Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

    What is the Whitest Paint?

    Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    Engineers in the US have created what they are calling the whitest paint yet.

    What is the whitest paint?

    • The researchers created an ultra-white paint pushing the limits of how white paint can be.
    • This older formulation was made of calcium carbonate, while the new one is made up of barium sulphate, which makes it more white.
    • The newer paint is whiter and keeps the surface areas it is painted on cooler than the formulation before this could.
    • If this new paint was used to cover a roof area of 1,000 square feet, it may be able to get a cooling power of 10 kilowatts.
    • Most ovens use up about 2.3 kilowatts to run for an hour and a 3 ton 12 Seasonal Energy Efficiency Ratio (SEER) air conditioner uses up about 3 kilowatts to run for an hour.

    The researchers have claimed that this paint may be the closest equivalent to the blackest black paint called “Vantablack” which is able to absorb up to 99.9 per cent of visible light.

    What determines if a colour absorbs or reflects light?

    • To understand how this works one needs to note that whenever an object is seen by the eye, it is either because of sunlight or the artificial light in the room.
    • This light is made up of seven different colours (Violet, Indigo, Blue, Green, Yellow, Orange and Red or VIBGYOR).
    • Specifically, light is made up of wavelengths of different colours.
    • If an individual is looking at a sofa that is green, this is because the fabric or material it is made up of is able to absorb all the colours except green.
    • This means that the molecules of the fabric reflect the green coloured wavelengths, which is what the eye sees.
    • Therefore, the colour of any object or thing is determined by the wavelength the molecules are not able to absorb.

    Try this PYQ:

    Q.Rainbow is produced when sunlight falls on drops of rain. Which of the following physical phenomena are responsible for this?

    1. Dispersion
    2. Refraction
    3. Internal reflection

    Select the correct answer using the codes given below:

    a) 1 and 2 only

    b) 2 and 3 only

    c) 1 and 3 only

    d) 1, 2 and 3

    What determines which wavelength of light will be reflected and absorbed?

    • This is dependent on how electrons are arranged in an atom (the building block of life, an atom is made up of electrons, protons and neutrons.
    • These three particles make up everything in the known universe from mountains, planets, humans to pizza and cake).
    • In contrast, if an object is black, it is because it has absorbed all the wavelengths and therefore no light is reflected from them.
    • This is the reason that darker objects, as a result absorbing all wavelengths tend to heat up faster (during absorption the light energy is converted into heat energy).

    So, what makes the paint so white?

    There are two features:

    1. One is the paint’s high concentration of a chemical compound called barium sulfate, which is also used to make photo paper and cosmetics white.
    2. The second feature is that the team has used different sized particles of this chemical compound, which means different sizes scatter different amounts of light.

    In this way, the varying size of particles of the compound makes sure that the paint can scatter more of the light spectrum from the sun.

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  • Global Geological And Climatic Events

    La Soufriere volcanic eruption

    National Parks/WS | Enviro & Biodiversity | Mains Paper 1: Geographical Features & Their Location

    Sulphur dioxide (SO2) emissions from La Soufriere volcano eruption in the Caribbean have reached all the way to India.

    Why in news?

    • Its eruption has sparked fear of increased pollution levels in the northern parts of India and acid rain.
    • Volcanic plumes can cause aviation and air quality hazards.

    La Soufriere

    • It is an active stratovolcano on the Caribbean island of Saint Vincent in Saint Vincent and the Grenadines.
    • It is the highest peak in Saint Vincent and has had five recorded explosive eruptions since 1718.

    Impact of such eruptions

    • Volcanic emissions reaching the stratosphere can have a cooling effect on global temperatures.
    • The most significant climate impacts from volcanic injections into the stratosphere come from the conversion of sulphur dioxide to sulphuric acid, which condenses rapidly in the stratosphere to form fine sulphate aerosols.
    • The aerosols increase the reflection of radiation from the Sun back into space, cooling the Earth’s lower atmosphere or troposphere.

    Try this PYQ:

    Q.Which of the following adds/add carbon dioxide to the carbon cycle on the planet Earth?

    1. Volcanic action
    2. Respiration
    3. Photosynthesis
    4. Decay of organic matter

    Select the correct answer using the code given below:

    (a) 1 and 3 only

    (b) 2 only

    (c) 1, 2 and 4 only

    (d) 1, 2, 3 and 4

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  • New Species of Plants and Animals Discovered

    Tiki Formation in Madhya Pradesh

    Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    The Tiki Formation in Madhya Pradesh, a treasure trove of vertebrate fossils, has now yielded a new species and two genera of cynodonts, small rat-like animals that lived about 220 million years ago.

    Tiki Formation

    • The Tiki Formation is a Late Triassic geologic formation in Madhya Pradesh.
    • Dinosaur remains are among the fossils that have been recovered from the formation, although none have yet been referred to a specific genus.
    • Phytosaur remains attributable to the genus Volcanosuchus have also been found in the Tiki Formation.
    • The genera Tikiodon, Tikitherium and Tikisuchus and species Rewaconodon tikiensis, Hyperodapedon tikiensis and Parvodus tikiensis have been named after the Tiki Formation.

    Findings of the new study

    • The fossil teeth were studied for size, crown shape, structure of the cusps and compared with previously reported cynodonts.
    • Cynodonts are important in evolutionary studies as this group ultimately gave rise to the present-day mammals.
    • By studying their molar and premolar teeth, we see how they slowly evolved and modified.
    • Their crown shape shows that these animals are actually intermediate forms that are very near to the mammalian line of evolution.
    • Cynodonts and living mammals both belong to a group of egg-laying vertebrates (amniotes) called synapsids.
    • The close relationship of cynodonts with living mammals is seen in their bones.

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  • Cyber Security – CERTs, Policy, etc

    The march towards an equitable data economy

    op-ed snap | Science Tech | Mains Paper 3: Indian Economy

    The article explains the data governance norms we need to adopt to secure better societal outcomes.

    Whatsapp privacy issue

    • New terms of service circulated by WhatsApp, caused a stir among the user.
    • It informed users that data about chats with business accounts would be shared with Facebook.
    • These policies seemed unfair to India as they were not applicable to the European Union (EU), given their strong data protection policies.

    Acceptable levels of data exchange

    • Default norms provide power to the tech platforms to collect, analyse and monetize data with complete control.
    • This undergirds business models that seem undesirable for society—with harms to privacy and free speech.
    • Global discussions about alternatives to the “exchange of data for free services” are becoming nuanced.

    3 Norms in the data governance

    1) Recognition of individual and collective rights related to data

    • It was generally accepted that extraction of data to access free services was a fair exchange with individuals.
    • Emergence of existential threats related to privacy and democracy have highlighted the role of guaranteeing human and civil rights.
    • There has been significant global progress through regulations on individual data rights.
    • A United Nations Conference on Trade and Development (UNCTAD) report claims that 128 of 194 countries have put in place legislations for data protection and privacy.
    • However, this protection is insufficient as it is centered on individuals and does not account for safety of groups.
    • The next wave of data governance ideas will seek to protect collective harms and build on the foundation of individual agency and control.

    2) Data sovereignty

    • One-size-fits all global norms of data governance are changing and being replaced by region-specific ideas.
    • Greater acceptance for “data sovereignty” assertions across India and Europe is a welcome shift towards crafting governance that is respectful of local nuances and inclusive of civic participation.
    • The EU general data protection regulation (GDPR) had created an early lighthouse example.
    • On the other hand, the US has adopted a light regulation approach—there is no comprehensive country-wide data protection law.
    • Closer home, India is finalizing the contours of a country-wide and cross-sector personal data protection bill, which reflects local norms.

    3) Value creation for all stakeholders

    • So far, data economy has operated in a completely unregulated space, creating a “winner takes all” market, with concentrated profits and little contribution to local taxes.
    • A healthy economy requires value creation for all stakeholders.
    • As tech platforms take up the profitable role of acting as the gateway to all information and social connections, they have a greater accountability and responsibility to contribute to the economy.
    • India’s digital tax through the 2% “equalization levy” is an attempt to make the tech giants pay for revenues earned in India.

    Consider the question “What should be norms of data governance we must adopt for achieving better societal outcomes?”

    Conclusion

    Formal adoption of regulations and setting up of enforcement institutions will lead to meaningful progress in the right direction.

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  • A multipolarity, scripted by the middle powers

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Four middle powers: India, Japan, China and Turkey anchor the world to multipolarity. The article deals with this issue.

    New cold war

    • In respect of three crucial relationships, namely China, Russia and Iran, Mr. Biden is following in the footsteps of his predecessor.
    • Mr. Biden has also extended his firm backing for the “Indo-Pacific” and the associated alignment — the Quadrilateral Security Dialogue, or Quad for short.
    • The U.S. continues to view China as its principal adversary on the world stage and that it will use the Quad to challenge China in the Indo-Pacific.
    • The U.S.’s hostility for Russia goes back to the latter’s war with Ukraine and the occupation of Crimea in 2014, followed by allegations of Russian cyber-interference in the U.S. presidential elections of 2016.
    • U.S. animosity has encouraged China and Russia to solidify their relations.
    • The two countries have agreed to harmonise their visions under the Eurasian Economic Union sponsored by Russia and China’s Belt and Road Initiative (BRI).
    • This idea has now been subsumed under the ‘Greater Eurasian Partnership’ to which both are committed.
    • Thus, the new Cold War is now being reflected in a new geopolitical binary — the Indo-Pacific versus Eurasia.

    How middle powers can play an important role

    • Four nations, Japan, Iran, Turkey and India, which, as “middle powers”, have the capacity to project power regionally, build alliances, and support (or disrupt) the strategies
    • But all four seems to be already aligned.
    • Japan and India are part of the Quad and have substantial security ties with the U.S.
    • Iran has found strategic comfort with the Sino-Russian alliance.
    • Turkey, a NATO member, has found its interests better-served by Russia and China rather than the U.S. and its European allies.
    • So, why the uncertainty? The main reason is that, despite the allure, the four nations are not yet prepared to join immutable alliances.

    Why the middle powers are reluctant to join alliances

    1) India’s China concerns

    • India has been expanding defence ties with the U.S. since 2016, by massive defence purchases and agreements on inter-operability and intelligence-sharing and frequent military exercises, as also the elevation of the Quad to ministerial level.
    • This might have signalled to China that India was now irreversibly in the U.S. camp.
    • But China has a point: while the Quad has made India a valuable partner for the U.S. in the west Pacific, neither the U.S. nor the Quad can address the challenges it faces at its 3,500-kilometre land border with China. 
    • Moreover, the U.S.’s intrusive approach on human rights issues ensures that India will need to manage its ties with China largely through its own efforts while retaining Russia as its defence partner.

    2) Sino-Japan relations

    • Japan has an ongoing territorial dispute with China relating to the Senkaku Islands in the East China Sea.
    • But there is more to Sino-Japanese relations: in 2019, 24% of Japanese imports came from China, while 19% of its exports went to China, affirming the adage.

    3) Why Iran is reluctant

    • The crippling sanctions on Iran and the frequent threats of regime change make it a natural ally of the Sino-Russian axis.
    • However, its strategic culture eschews long-term security alignments.

    4) Why Turkey is reluctant to join

    • Turkey is steady distancing from its western partners and increasing geopolitical, military and economic alignment with Russia and China.
    • But Turkey still wishes to keep its ties with the U.S. intact and retain the freedom to make choices.
    • Its “New Asia” initiative involves the strengthening of east-west logistical and economic connectivity backed by western powers and China.

    Consider the question “What are the factors India need to consider as it deepens its involvement in the Quad?” 

    Conclusion

    As the clouds of the new Cold War gathers over the world, these four nations could find salvation in “strategic autonomy” — defined by flexible partnerships, with freedom to shape alliances to suit specific interests at different times.

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  • Insolvency and Bankruptcy Code

    How IBC is moving away from promotor averse approach

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    The Insolvency and Bankruptcy Code was amended recently taking into account its creditor centric approach.

    Introducing pre-packs for MSMEs

    • IBC was amended last week, through an ordinance.
    • The amendment sought to address a structural weakness in India’s resolution architecture by introducing the concept of pre-packs for micro, small and medium enterprises (MSMEs).
    • The pre-packaged framework involves a privately negotiated contract between the promoters of a financially distressed firm and its financial creditors to restructure the company’s obligations.
    •  This contract is negotiated within the IBC architecture but before the commencement of insolvency proceedings.
    • Once accepted by creditors, the plan must be presented to the National Company Law Tribunal (NCLT) for approval.

    How this framework is different from the existing framework

    • A firm’s promoters could have submitted a resolution plan even after it enters the insolvency proceedings, subject to restrictions imposed under Section 29A which clarifies all those who are ineligible for submitting the resolution plan.
    • So, the difference in the new framework essentially boils down to the following.

    1) Control of the firm

    • Under the IBC, upon the initiation of insolvency proceedings, control of a firm is taken away from promoters, and a resolution professional is appointed.
    • Now, during the restructuring, the promoter, through the pre-pack, retains control over the firm.
    • So effectively, we have transitioned from a “creditor-in-control” model of resolution to a “debtor-in-control” model of restructuring.
    • This amendment, which creates a framework for restructuring, without the promoter losing control over the firm, addresses a lacuna in the IBC.

    2) Issue of price discovery

    • In this arrangement, the is an absence of an open bidding process, such as during the resolution phase.
    • This might raise questions over price discovery, especially if value maximisation for creditors is the yardstick to measure the efficacy of IBC.
    • This marks a fundamental change in the IBC framework.

    Why the changes were needed

    • The IBC, while it has strengthened the position of the creditors, had swung to an extreme.
    • The resolution architecture as it stood prior to this amendment was perceived as being too creditor-centric.
    • Wresting control from the “errant” promoter, comes with its own set of consequences.
    • The notion that all business failure is due to the connivance of promoters needs to be reconsidered.
    • Firms may be unable to pay their obligations simply because the economic cycle has turned.
    • Or projects have not materialised as expected.
    • Of the 2,422 cases closed since IBC came into being, 46.5 per cent of the firms have gone into liquidation, while a resolution plan has been accepted in only 13.1 per cent of the cases.
    • This indicates liquidation bias.
    • At a time when there aren’t enough buyers in the economy, the IBC process would lead to significant value destruction.

    How it will benefit both creditor and promotors

    • Promoters get to hold on to their firms, and exit the process with more manageable obligations, making this an attractive proposition.
    • For creditors, considering the liquidation bias in IBC, as long as the value of the restructured obligation is greater than the liquidation value it makes sense to choose this option.
    • Moreover, this entire process remains outside the restructuring framework of the central bank.
    • And, considering that the pre-packs encompass all financial creditors, as opposed to RBI’s restructuring schemes which deal only with banks.
    • This takes into account the concerns of other financial creditors as well.

    Consider the question “How far IBC has succeeded in improving the insolvency regime in India? How the concepts of pre-packs is different from the previous system?

    Conclusion

    This approach will help clarify issues, bring about greater certainty to the process. And, once the creases are ironed out, it will create a permanent mechanism for restructuring debts.

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  • Women empowerment issues – Jobs,Reservation and education

    State of World Population Report 2021

    IOCR | Indian Society | Mains Paper 1: Role Of Women & Women Organization

    The United Nations Population Fund’s (UNFPA) flagship State of World Population Report 2021 titled ‘My Body is My Own’ was recently launched.

    State of World Population Report 2021

    • The State of World Population report is UNFPA’s annual flagship publication.
    • It has been published yearly since 1978.
    • It highlights emerging issues in the field of sexual and reproductive health and rights, bringing them into the mainstream and exploring the challenges and opportunities they present for international development.

    Key findings of the 2021 report

    This is the first time a UN report has focused on bodily autonomy, defined as the power and agency to make choices about your body without fear of violence or having someone else decide for you.

    • The report measures both women’s power to make their own decisions about their bodies and the extent to which countries’ laws support or interfere with a woman’s right to make these decisions.
    • The data show a strong link between decision-making power and higher levels of education.

    The report shows that in countries where data are available:

    • Only 55 per cent of women are fully empowered to make choices over health care, contraception and the ability to say yes or no to sex.
    • Only 71 per cent of countries guarantee access to overall maternity care.
    • Only 75 per cent of countries legally ensure full, equal access to contraception.
    • Only about 80 per cent of countries have laws supporting sexual health and well-being.
    • Only about 56 per cent of countries have laws and policies supporting comprehensive sexuality education.

    In essence, hundreds of millions of women and girls do not own their own bodies. Their lives are governed by others.

    The report also documents many other ways that the bodily autonomy of women, men, girls and boys is violated, revealing that:

    • Twenty countries or territories have “marry-your-rapist” laws, where a man can escape criminal prosecution if he marries the woman or girl he has raped.
    • Forty-three countries have no legislation addressing the issue of marital rape (rape by a spouse).
    • More than 30 countries restrict women’s right to move around outside the home.
    • Girls and boys with disabilities are nearly three times more likely to be subjected to sexual violence, with girls at the greatest risk.

    Solutions: the power to say yes, the right to say no

    • The report shows how efforts to address abuses can lead to further violations of bodily autonomy.
    • For example, to prosecute a case of rape, a criminal justice system might require a survivor to undergo an invasive so-called virginity test.
    • Real solutions, the report finds, must take into account the needs and experiences of those affected.

    Indian scenario

    • In India, according to NFHS-4 (2015-2016), only about 12% of currently married women (15-49 years of age) independently make decisions about their own healthcare, while 63% decide in consultation with their spouse.
    • For a quarter of women (23%), it is the spouse that mainly takes decisions about healthcare.
    • Only 8% of currently married women (15-49 years) take decisions on the use of contraception independently, while 83% decide jointly with their spouse.
    • Information provided to women about the use of contraception is also limited — only 47% of women using a contraceptive were informed about the side effects of the method, and 54% of women were provided information about other contraceptives.

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  • Financial Inclusion in India and Its Challenges

    National Pension System (NPS)

    Schemes | Indian Society | Mains Paper 2: Government Scheme/Policies

    The National Pension System (NPS) will no longer compel investors to convert 40% of their accumulated retirement corpus into an annuity.

    An annuity is a long-term investment that is issued by an insurance company and is designed to help protect you from the risk of outliving your income. Through annuitisation, your purchase payments (what you contribute) are converted into periodic payments that can last for life.

    Why such a move?

    • Poor yields on annuities and high inflation are translating into negative returns.
    • Since annuities are taxable, deducting the tax and factoring in inflation means annuities are yielding negative returns.

    Try this PYQ:

    Q.Who among the following can join the National Pension System (NPS)?

    (a) Resident Indian citizens only

    (b) Persons of age from 21 to 55 only

    (c) All-State Government employees joining the services after the date of notification by the respective State Governments

    (d) All Central Governments Employees including those of Armed Forces joining the services on or after 1st April 2004

    National Pension Scheme (NPS)

    • NPS is a government-sponsored pension scheme. It was launched in January 2004 for government employees.
    • It was extended to all citizens of Indian on a voluntary basis from May 2009 and to corporates in December 2011 and to Non-Resident Indians in October 2015.
    • PFRDA is the statutory authority established by an enactment of the Parliament, to regulate, promote and ensure orderly growth of the NPS and pension schemes to which this Act applies.
    • The scheme allows subscribers to contribute regularly in a pension account during their working life.
    • On retirement, subscribers can withdraw a part of the corpus in a lump sum and use the remaining corpus to buy an annuity to secure a regular income after retirement.

    Who can join NPS?

    • Any Indian citizen between 18 and 60 years can join NPS.
    • The only condition is that the person must comply with know your customer (KYC) norms.
    • An NRI can join NPS. However, the account will be closed if there is a change in the citizenship status of the NRI.
    • Now, any Indian citizen, resident or non-resident and OCIs are eligible to join NPS till the age of 65 years.

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  • New Species of Plants and Animals Discovered

    Species in news: Azhdarchid Pterosaurs

    Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    Azhdarchid pterosaurs, the giant reptiles that flew in the skies nearly 65 million years ago, had necks longer than that of a giraffe (i.e. more than 6fts).

    What are pterosaurs?

    • Pterosaurs are reptiles that are close cousins of dinosaurs, the first animals after insects to evolve powered flight.
    • Some pterosaurs were as large as an F-16 fighter jet, while others were as small as a paper aeroplane.
    • Pterosaurs went extinct about 65-66 million years ago (end of the Cretaceous period) and while they did not leave any of their descendants behind.
    • One reason for this is that few pterosaurs lived in places where fossils tend to form, because of which their bones are preserved poorly.

    Revise the geological timescale from your NCERT textbook.

    Azhdarchid pterosaurs

    • They are one type of pterosaur and one of the distinguishing characteristics about them is how big they were, especially their long necks.
    • Some of these pterosaurs were the largest animals to have flown in the sky, with wingspans greater than 30 feet.
    • The name azhdarchid, as per a blog on Scientific American comes from Azhdarcho, a Central Asian form named by Russian ornithologist and palaeontologist in 1984.

    What have the researchers found?

    • Researchers involved in this study were curious about how the reptile’s long neck functioned and how it was able to support the pterosaur’s body, allowing them to capture and eat heavy prey animals.

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