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Type: Prelims Only

  • Exercise INIOCHOS-23

    iniochos

    The Indian Air Force (IAF) will be participating in a multi-national air exercise called Exercise INIOCHOS-23, which will be hosted by the Greece Air Force.

    Ex. INIOCHOS-23

    • Exercise INIOCHOS-23 will be conducted at the Andravida Air Base in Greece.
    • The IAF will be participating with four Su-30 MKI and two C-17 aircraft.
    • The objective of the exercise is to enhance international cooperation, synergy, and interoperability among the participating Air Forces, as stated by the IAF in a statement.

    Strategic significance

    • The exercise will be conducted in a realistic combat scenario involving multiple types of air and surface assets
    • This will provide valuable insight into each other’s best practices and enable the participating contingents to interact professionally.

     

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  • Windfall Tax back on local crude oil

    windfall

    The government has revised a windfall tax on domestically-produced crude oil. According to an official notification, the windfall tax rate of Rs 6,400 per tonne.

    What is a Windfall Tax?

    • Windfall taxes are designed to tax the profits a company derives from an external, sometimes unprecedented event — for instance, the energy price-rise as a result of the Russia-Ukraine conflict.
    • These are profits that cannot be attributed to something the firm actively did, like an investment strategy or an expansion of business.
    • The US Congressional Research Service (CRS) defines a windfall as an “unearned, unanticipated gain in income through no additional effort or expense”.
    • One area where such taxes have routinely been discussed is oil markets, where price fluctuation leads to volatile or erratic profits for the industry.

    Features of Windfall Tax

    • Imposed on unanticipated and unearned gains: Windfall tax is imposed on the profits or gains that a company earns from external events or factors beyond their control, which they did not actively seek or pursue.
    • One-time tax: It is typically imposed as a one-time tax retrospectively, over and above the normal rates of tax, and is not a regular or ongoing tax.
    • Imposed on specific sectors or industries: Windfall taxes are usually imposed on specific sectors or industries where there is a significant increase in profits due to external factors such as price fluctuations, supply disruptions, or changes in regulations.
    • Rationale for imposition: The imposition of windfall taxes is based on the rationale of redistributing unexpected gains, funding social welfare schemes, and creating a supplementary revenue stream for the government.
    • Design problems: Introducing windfall taxes may suffer from design problems, given their expedient and political nature.
    • Potential impact on investment: Windfall taxes may lead to uncertainty in the market and negatively impact future investment, as companies may feel uncertain about investing in a sector with an unstable tax regime.

    When did India introduce this?

    • In July 2022, India announced a windfall tax on domestic crude oil producers who it believed were reaping the benefits of the high oil prices.
    • It also imposed an additional excise levy on diesel, petrol and air turbine fuel (ATF) exports.
    • Also, India’s case was different from other countries, as it was still importing discounted Russian oil.

    How is it levied?

    • Governments typically levy this as a one-off tax retrospectively over and above the normal rates of tax.
    • The Central government has introduced a windfall profit tax of ₹23,250 per tonne on domestic crude oil production, which was subsequently revised fortnightly four times so far.
    • The latest revision was on August 31, when it was hiked to ₹13,300 per tonne from ₹13,000.

    Reasons for re-introduction

    • There have been varying rationales for governments worldwide to introduce windfall taxes like:
    1. Redistribution of unexpected gains when high prices benefit producers at the expense of consumers,
    2. Funding social welfare schemes, and
    3. Supplementary revenue stream for the government

    Issues with imposing such taxes

    • Design problems: Windfall taxes may suffer from design problems, given their expedient and political nature. There is also the issue of determining what constitutes true windfall profits and who should be taxed, which raises questions about the threshold for exemption of smaller companies.
    • Potential impact on investment: Windfall taxes may lead to uncertainty in the market and negatively impact future investment, as companies may feel uncertain about investing in a sector with an unstable tax regime.
    • Internalization of potential taxes: Introducing a temporary windfall profit tax may reduce future investment since prospective investors may internalize the likelihood of potential taxes when making investment decisions.
    • Threshold for exemption of smaller companies: Determining the threshold for exemption of smaller companies raises questions about which companies should be taxed and what level of profit is normal or excessive.
    • Difficulty in determining true windfall profits: There is also the issue of determining what constitutes true windfall profits, as it may be challenging to differentiate between profits attributable to external events versus those attributable to a company’s active investment strategy or business expansion.

     

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  • How Web3 differs from Web2?

    web

    Central idea: The article discusses the key features of Web3, including its decentralized nature, peer-to-peer transactions, and greater control over data and digital assets for users.

    What is Web3?

    • Web3, also known as Web 3.0, is the next generation of the World Wide Web that emphasizes decentralization, security, and user privacy.
    • It is essentially a vision of the internet where users have more control over their data, identities, and online interactions.
    • It is built on blockchain technology, which enables peer-to-peer transactions without the need for intermediaries such as banks, governments, or other third parties.
    • This decentralized approach to the web allows for greater transparency and trust, as well as more secure and private transactions.
    • Web3 technologies include blockchain platforms like Ethereum, IPFS (InterPlanetary File System) for distributed file storage, decentralized identity systems like uPort, and decentralized marketplaces like OpenBazaar.

    Features of Web 3

    Feature

    Web3

    Web2

    Centralisation

    		 Decentralised Centralised

    Intermediaries

    		 Peer-to-peer Rely on intermediaries

    Data ownership and control

    		 Users have control Large corporations have control

     

    Challenges for Web3:

    Challenge

    Scalability

    		 Current blockchain infrastructure can only handle a limited number of transactions per second.

    User Adoption

    		 Despite being around for over a decade, blockchain technology is still relatively unknown to the general public.

    Interoperability

    		 Web3 is being developed by different organisations, each with their own unique vision for the technology, leading to challenges in integration.

    Complexity

    		 Technical expertise is required to use and understand Web3, which may be a barrier for some users.

     

    Examples of Web3 use:

    Use

    Cryptocurrencies

    		 Built on blockchain technology, cryptocurrencies enable secure, decentralised transactions without the need for intermediaries.

    Decentralised Finance

    		 Aims to build a new financial system on top of blockchain technology. DeFi applications enable users to borrow, lend, and trade crypto.

    Decentralised storage

    		 Used to create decentralised social networks and develop decentralised identity verification systems.

     

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  • Repeating radio signal detected from nearby Exoplanet YZ Ceti b

    ceti

    Central idea: Astronomers have detected a repeating radio signal from the YZ Ceti exoplanet that suggests the presence of a magnetic field around it.

    What is YZ Ceti b?

    • YZ Ceti b is an earth-sized exoplanet (a planet that orbits a star other than our sun).
    • It is located barely 12 light-years from Earth, and it rotates around a small red dwarf star called YZ Ceti.

    How was the discovery made?

    • The researchers had to make multiple rounds of observations before they could detect the radio signals from the star YZ Ceti, which seemed to match the orbital period of the planet YZ Ceti b.
    • From this, they deduced that the signals were a result of the interaction between the planet’s magnetic field and the star.

    Why does the magnetic field matter?

    • Intense bursts of energy from the YZ Ceti star-exoplanet exchange produce spectacular auroral lights, similar to the energy surges from the sun that disrupt telecommunications on earth.
    • The radio waves confirmed the existence of an exoplanetary magnetic field.
    • This can only be produced if the exoplanet orbits very close to its parent star and has its own magnetic field to influence the stellar wind and generate the signals.

    What’s the implication for YZ Ceti b?

    • The small orbit of YZ Ceti b indicates that the planet takes just a couple of earth days to circle its star.
    • Nearly half of all the stars visible in the sky could potentially harbor rocky, earth-sized planets in habitable orbits around them.
    • Astronomers indicated that the possibility of the existence of a magnetic field on the Earth-like exoplanet, called YZ Ceti b, probably hints at the habitability of life on that planet.

    How common are such magnetic fields?

    • Planetary scientists have never been able to identify magnetic fields on smaller, rocky exoplanets until now.
    • The survival of a planet’s atmosphere may depend on its having, or not having, a strong magnetic field, since the field protects its atmosphere from being eroded by the charged particles blowing in from its star.

     

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  • What are Stablecoins?

    stablecoins

    The US Congress (Parliament) has made another attempt to create a legislative framework for the increasingly popular stablecoins, a sort of cryptocurrency that is pegged to a particular commodity or currency.

    What are Stablecoins?

    • Stablecoins are cryptocurrencies designed to maintain a stable value, typically by being pegged to a stable asset such as the US dollar.
    • Investing in stablecoins can help mitigate market volatility because they are less susceptible to price fluctuations than other cryptocurrencies such as Bitcoin or Ethereum or any other.

    Types of stablecoins

    Fiat-backed stablecoins Backed by reserves of fiat currency held in a bank account or other secure location. Example: Tether (USDT)
    Commodity-backed stablecoins Backed by reserves of a physical commodity, such as gold or silver. Example: PAX Gold (PAXG)
    Algorithmic stablecoins Use algorithms or smart contracts to maintain a stable value. Example: Dai stablecoin (DAI)

     

    How can Stablecoin mitigate market volatility?

    Explanation
    Hedging against volatility
    • Help investors hedge against volatility and reduce their risk exposure.
    • Pegged to a stable asset, which can provide a haven during market turbulence.
    • If the value of Bitcoin or Ethereum drops suddenly, investors can move their funds into stablecoins to protect their portfolio from further losses.
    Greater flexibility in transferring funds
    • Greater flexibility and convenience compared to traditional fiat currencies.
    • Quickly and easily transferred between wallets and exchanges, making them ideal for cross-border transactions.
    • Investors take advantage of investment opportunities in other markets and avoid currency exchange fees and delays.
    Arbitrage trading
    • Used for arbitrage trading, which involves buying an asset in one market and selling it in another market for a higher price.
    • As stablecoins are pegged to a stable asset, investors can quickly move funds between exchanges without worrying about price fluctuations, making arbitrage trading easier and potentially more profitable.

     

    What are the risks?

    Explanation
    Stability of the asset
    • Stablecoins are reliant on the stability of the asset they are pegged to.
    • If the value of that asset drops, it can lead to a drop in the stablecoin’s value as well.
    • This could result in losses for investors who hold the stablecoin.
    Transparency and regulation
    • There are concerns over the transparency and regulation of stablecoin issuers.
    • This could result in a loss of trust in the stablecoin and a subsequent drop in its value.
    • There is no proper regulation and oversight.
    • There is a risk that stablecoin issuers may engage in fraudulent or unethical behaviour, which could lead to losses for investors.
    • It is important for investors to carefully assess the reputation and credibility of the stablecoin issuer before investing in a stablecoin.

     

     

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  • Indian scientists identify and probe EMIC waves

    emic

    Central idea

    • Scientists working at the Indian Antarctic Station, Maitri, have identified and probed Electromagnetic Ion Cyclotron (EMIC) waves to study their characteristics.
    • The study aims to understand the impact of energetic particles in the radiation belts on low orbiting satellites.

    About Indian Antarctic Station, Maitri

    Description
    Name Maitri Antarctic Station (Friendship Research Centre)
    Establishment 1984
    Location Schirmacher Oasis, East Antarctica
    Distance from other stations 5 km away from Novolazarevskaya Station
    Purpose Conducting scientific research as part of the Indian Antarctic Programme
    Features Second permanent research station of India in Antarctica
    Named by Then-PM Indira Gandhi
    First camp commander Squadron Leader D.P. Joshi
    First huts Completed in 1989 by the IV Antarctica Expedition

     

    What are EMIC Waves?

    • Electromagnetic Ion Cyclotron (EMIC) waves are a type of plasma wave that occurs in the Earth’s magnetosphere.
    • They are caused by the interaction of energetic particles in the radiation belts with the Earth’s magnetic field.
    • These waves have frequencies in the range of a few hundred hertz to a few kilohertz and are known to play an important role in the acceleration and loss of energetic particles in the Earth’s magnetosphere.
    • The study of EMIC waves is important for understanding the effects of space weather on satellite communication and navigation systems.

    Identification and study of EMIC waves

    • A team of scientists from the Indian Institute of Geomagnetism (IIG) analysed data collected between 2011 and 2017 by the Induction Coil Magnetometer.
    • The device was installed at the Indian Antarctic station Maitri to bring out several aspects of the ground observation of the EMIC waves.

    Significance of the study

    • This study is important to improve our understanding of EMIC wave modulation and how they interact with energetic particles that impact satellites and their communication.
    • It could help understand the impact of energetic particles in the radiation belts on low orbiting satellites and lead to improved satellite communication systems.

    Back2Basics:  Indian Antarctic Programme

    • It is a scientific program run by the National Centre for Antarctic and Ocean Research under the Ministry of Earth Sciences.
    • It was launched in 1981 and since then India has been operating research stations in Antarctica.
    • It gained global acceptance with India’s signing of the Antarctic Treaty and subsequent construction of the Dakshin Gangotri Antarctic research base in 1983, superseded by the Maitri base from 1989.
    • The program conducts research in areas such as geology, oceanography, atmospheric sciences, and earth sciences.
    • India currently operates two permanent research stations in Antarctica – Maitri and Bharati.
    • The program also has plans to set up a third research station called ‘Siddhanta’ in the coming years.
    • Apart from conducting research, the program also engages in logistics support, environmental monitoring, and outreach activities.

     

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  • ISRO to launch TeLEOS-2 Satellite

    teleos

    The Indian Space Research Organisation (ISRO) will launch Singapore’s TeLEOS-2 satellite this week, from the Satish Dhawan Space Centre in Sriharikota.

    What is TeLEOS-2?

    • TeLEOS-2 is a Singaporean Earth Observation satellite built by ST Electronics (Satellite Systems).
    • It carries a made-in-Singapore Synthetic Aperture Radar (SAR) capable of providing 1 m resolution data.
    • It will be equipped with a 500 GB onboard recorder for recording the data captured and a high speed 800 Mbps downlink.
    • In 2015, ISRO launched TeLEOS-1, the first Singapore commercial Earth Observation Satellite, which was launched into a low Earth orbit for remote sensing applications.
    • ISRO has so far launched nine satellites belonging to Singapore.

    About the launch vehicle: PSLV-CA

    • The PSLV-CA was manufactured by ISRO with the first launch on 2007-04-23.
    • CA means “Core Alone”, model premiered on 23 April 2007.
    • PSLV-CA has 15 successful launches and 0 failed launches with a total of 15 launches.
    • The CA model does not include the six strap-on boosters used by the PSLV standard variant.
    • The fourth stage of the CA variant has 400 kg less propellant when compared to its standard version.
    • It currently has the capability to launch 1,100 kg to a 622 km Sun-synchronous orbit.

     

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  • Plant ‘cries’: Recalling Jagadish Chandra Bose

    bose

    Central idea

    • A recent discovery by researchers from Tel Aviv University in Israel, that plants make distinct sounds in the ultrasonic range when faced with stress, made headlines around the world.
    • However, Indians who had grown up hearing about Jagadish Chandra Bose’s work, more than a century ago, on plant physiology and their ability to feel pleasure and pain, were not surprised.

     

    Details
    Who was JC Bose? – Born in 1858 in Mymensingh, Bengal.

    – A polymath who made significant contributions to physics, biophysics, and plant physiology

    – Graduated from Calcutta University with honors in physics and studied in London and Cambridge.
    Notable works – Developed sensitive instruments for wireless telegraphy and demonstrated the first-ever wireless transmission of microwaves in 1895.

    – Showed that plants produce electrical signals in response to stimuli and made significant contributions to biophysics.
    Recognition & Controversy – Despite his contributions, he was not awarded a Nobel Prize, which many believe he deserved.

    – Refused to obtain patents for his work and rejected the idea of making money from science.

    – Claimed that even inanimate inorganic matter could respond to stimulus and regarded plants as intermediates in a continuum between animals and non-living materials, which was not easily accepted by his contemporaries.
    Legacy and Significance – Founded the Bose Institute, a premier research institute in India.

    – The crater Bose on the Moon is named after him.

    – Regarded as one of India’s greatest scientists, and his legacy continues to inspire future generations of scientists.
    Significance – Bose’s work on plant physiology and biophysics was ahead of his time and not fully understood by his contemporaries.

    – However, over the years, much of his work has been confirmed.

     

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  • What is the Consumer Confidence Index (CCI)?

    confidence

    Central idea

    • The Consumer Confidence Survey was conducted in the first half of March 2023 across 19 cities.
    • This article analyses the survey results, released this month, and breaks down the findings under different sections.

    What is Consumer Confidence Survey?

    • The Reserve Bank of India (RBI) conducts a Consumer Confidence Survey to measure consumers’ perceptions of the prevailing economic situation.
    • The survey is conducted across various cities and measures consumer confidence on parameters such as the economy, employment, price, income, and spending.
    • The survey consists of questions regarding consumers’ sentiments over various factors in the current situation and future.

    Here are a few parameters that help aggregate overall confidence:

    1. Spending: The consumer is asked about the willingness to spend on major consumer durables, purchasing vehicles, or real estate. This measures the overall spending scenario on necessities as well as luxuries for the next quarter.
    2. Employment: The consumer is asked about current and future ideas on employment situations, joblessness, job security, which reflects the sentiments of the current or expected employment in the country.
    3. Inflation: The consumer is asked about interest rates and levels of prices of all goods, tracking the price expected by consumers and their spending on basic necessities.

    About the Consumer Confidence Index (CCI)

    • CCI is a survey that is conducted every two months to measure how optimistic or pessimistic the consumers are regarding their financial situation.
    • The index measures the change in consumer perception on the financial situation in the last year and the future expectations index measures what the consumer thinks about his financial situation in the coming one year.
    • The main variables of the survey are: Economic situation, Employment, Price Level, Income and Spending.

    Current perceptions of the survey

    • The survey estimates current perceptions and a year-ahead expectations on the economy, employment, price, income, and spending.
    • The results show that consumer confidence continues to recover from its historic low of mid-2021, but still remains pessimistic at 87.0, a 2.2 point increase from previous results.
    • The assessment of inflation conditions improved for the current period reflecting a higher confidence in prevailing economic conditions.
    • With regards to spending, sentiments were positive with signs of improvement compared to the last round conducted in January 2023.

    What does this imply?

    • The survey shows that while consumer confidence is slowly recovering, it still remains pessimistic.
    • The survey results indicate positive sentiments on employment and spending, but a marginal dip in the country’s future economic situation.
    • Credit growth numbers indicate a rise in consumer spending.
    • The upcoming state and general elections could have an impact on the economy, and it remains to be seen how it will play out.

     

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  • Mapping India’s Export Hotspots

    export

    Central idea: The article discusses the top exporting districts in India and their contribution to the country’s overall exports. It also provides information on the top exported commodities in each district.

    Top Exporting Districts in India

    Rank District State Share of India’s Exports
    1 Jamnagar Gujarat 24%
    2 Surat Gujarat 4.5%
    3 Mumbai Suburban Maharashtra 4.5%
    4 Dakshina Kannada Karnataka –
    5 Devbhumi Dwarka, Bharuch, Kachchh Gujarat –
    6 Mumbai Maharashtra –
    7 Kancheepuram Tamil Nadu –
    8 Gautam Buddha Nagar Uttar Pradesh –

     

    Top Exporting Districts in Each State

    • Map 1 shows the district that formed the highest share of a State’s exports in FY23.
    • The size of the circle in the map corresponds to the value of exports.
    • Most top exporting districts in the north-eastern States formed as much as 90% of a State’s exports, while some top exporting districts formed only around 20% of a State’s exports.

    Top Exported Commodities

    • Jamnagar’s dominance can be attributed to the fact that it formed a lion’s share of India’s surging petroleum exports, while Kancheepuram’s most exported commodity was smartphones.
    • Map 1 also lists the top exported commodity of the top exporting districts in each State.

    Top Exporting Districts for Each Commodity

    • Maps 2A-2F show the top five exporting districts for the top six commodities exported by India.
    • They include petroleum products, precious stones and jewellery, rice, wheat and other cereals, smartphones and electronic parts, vehicles other than railways, and pharmaceutical products.

    Share of Top Exporting Commodity

    • Table 3 shows the share of the top exporting commodity of the top exporting district in India’s total exports.
    • For instance, Jamnagar’s petroleum products export formed 67% of India’s total exports for that commodity, while Surat’s precious stones and jewellery exports formed 36% of India’s total exports for that commodity.