IAS UPSC Prelims and Mains Exam – 25th April 2019

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(PRELIMS+MAINS FOCUS)

Potato farmers cry foul as PepsiCo sues them

Part of: GS Mains II and III and Prelims – Welfare/social issue; Farmers’ issue; IPR issues

In news:

• Multi-billion dollar conglomerate PepsiCo sued four Gujarati farmers, asking them to pay ₹1.05 crore each as damages for ‘infringing its rights’ by growing the potato variety used in its Lays chips.
• Farmers groups have launched a campaign calling for government intervention.
• According to the farmer groups, the law allows them to grow and sell any variety of crop or even seed as long as they don’t sell branded seed of registered varieties, and warned that the case could set a precedent for other crops.

Do you know?

• The issue: alleged infringement of intellectual property rights (IPR) of a plant variety registered under the Protection of Plant Varieties and Farmers’ Rights (PPV&FR) Act, 2001.
• FL 2027, also called FC5 – is a variety of potato on which PepsiCo claimed exclusive rights by virtue of a Plant Variety Certificate (PVC) under the Act.
• India had designed a sui generis law in compliance with the WTO’s TRIPS Agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights), which is the PPV&FR Act, 2001. Under this statute, farmers’ apriori rights with regard to seeds and planting material have been clearly protected under Section 39 of the said Act.

‘10 Pak.-based terrorists had role in cross-LoC trade’

Part of: GS Mains III – Economy; Security issues

In news:

• Ten Pakistan-based terrorists have been found involved in funneling illegal weapons, narcotics and fake currency into the Valley after the government suspended cross-Line of Control (LoC) trade between Jammu and Kashmir and Pakistan-occupied Kashmir (PoK).
• The Ministry of Home Affairs had cited misuse by militants as the reason for shutting down the trade.
• Firms under the control of some militants were doing LoC trade with Indian trading firms operated by their own relatives on the Indian side.
• The channel of LoC trade, meant to facilitate exchange of goods of common use between local populations, was being exploited to fund illegal and anti-national activities in Jammu & Kashmir.

Army to build tunnels to store ammunition

Part of: GS Mains III – Defence or Security

In news:

• Indian Army is planning to construct underground tunnels for storage of ammunition along the border with China and Pakistan.
• Public Sector Undertaking NHPC Limited is being roped in for the purpose.
• Underground storage offers improved safety, easier camouflage from enemy observation and satellite imagery and protection from enemy strikes like those seen during the aerial engagement on February 27, a day after the Balakot air strike when Pakistan Air Force jets targeted Indian army installations along the Line of Control (LoC).
• These tunnels will be built in high altitude areas in the Northern and Eastern borders.

Libor transition opens up avenues for IT majors

Part of: GS Prelims and Mains III – Economy and issues related to it

In news:

• The London Interbank Offered Rate (Libor) transition opens up a sizeable business opportunity for large consulting firms such as PwC, KPMG, EY and Deloitte and also for global IT firms, including leading players in India.
• Individual banks, financial institutions and lending houses are expected to spend anything from $50 million to upwards of $100 million a year for the next two years until the migration is completed by the end of 2021. Analysts say IT will be 50% of this opportunity.
• Regulators globally have asked firms to move away from Libor to other alternate, risk-free rates (RFRs). Derivatives, bonds, mortgages, loans, mutual funds, securities, underwriting, deposits, advances, pension funds and contracts, worth $370 trillion, are currently linked to the scam-hit Libor.
• Opportunities around the migration include assessment of current exposure to Libor, design, development and implementation of new products based on new rates, creation of new valuation models, creation of fresh legal documents and policy frameworks. The transition involves a code replacement towards new benchmark rate.
• The Libor marketplace is very large and it comprises of banks and all large lending agencies, including country lending from the World Bank and Asian Development Bank.
• As far as the business opportunities are concerned, all financial products that are currently linked to Libor would be moved to an optimum benchmark. This would require remodeling, predicting tax implications, contractual changes and system infrastructure including processes and controls. The change would also involve designing new products or remodeling existing products.

Another Y2K wave

• For technology companies, Libor transition is like another Y2K wave and it involves creating new systems, processes and platforms to support the entire migration.
• However Libor conversion would provide opportunity in systems integration, compliance, and customization of packaged apps for meeting reporting needs and related consulting in the short term.
• Majority of large banks and trading houses, including Bank of America, Bank of England, Merrill Lynch, JP Morgan Chase, Morgan Stanley and Japanese banks have started working on Libor transition.
• However, Indian banks are yet to start any work towards migration as the regulator is yet to make any announcement in this regard.

Do you know?

• In 2017 the UK’s Financial Conduct Authority (FCA) announced that after 2021 it would no longer persuade or compel panel banks to submit the rates required to calculate LIBOR.
• LIBOR is a benchmark interest rate at which major global lend to one another in the international interbank market for short-term loans.
• LIBOR, which stands for London Interbank Offered Rate, serves as a globally accepted key benchmark interest rate that indicates borrowing costs between banks.
• The rate is calculated and published each day by the Intercontinental Exchange (ICE).

Why is LIBOR being replaced?

• There are concerns about manipulation of LIBOR. Manipulation included both reporting low rates to make the bank look stronger than it was and reporting false rates to profit on LIBOR-based financial products.
• In June 2012, the CFTC announced that it was levying a large fine against a bank on the LIBOR panel for manipulating LIBOR along with another benchmark rate based on the results of an investigation that had begun in 2008.
• Ultimately, several large institutions that were implicated payed substantial fines, and several senior bank executives, including the CEOs of two large banks, resigned.2 Additional controversy arose when it was revealed that the Federal Reserve Bank of New York had communicated its concerns about LIBOR manipulation to the Bank of England four years earlier, in 2008.
• Concerns about the potential for LIBOR manipulation were amplified by the thinness of the market on which the reference rate was based. For a variety of reasons, including post-crisis credit concerns and downgrades, copious liquidity provided by QE-swollen central bank balance sheets, and regulatory changes, banks have significantly reduced their short-term unsecured borrowing and Schrimpf and Sushko.
• In 2018, the Federal Reserve Board estimated that only six or seven transactions occurred in the one- and three-month tenors (the most used tenors) at banks on the dollar LIBOR panel, with even fewer transactions at longer tenors.

Magic milk: fighting infections with a clue from the echidna

Part of: GS Mains II and III and Prelims – Health issue; Animal in news; Science and Technology

In news:

• Scientists at the Council of Scientific & Industrial Research – Centre for Cellular and Molecular Biology (CSIR-CCMB) here have isolated an anti-microbial protein found in the milk of an egg-laying mammal.
• The protein promises to serve as an alternative to antibiotics used on livestock.
• Echidnas, also known as spiny anteaters, are unique egg-laying mammals found only in Australia and New Guinea.
• Their young hatch from eggs at a very early stage of development and depend completely on mother’s milk. But the mammary glands of the echidnas are devoid of nipples, forcing the young ones to lick milk from the mother’s body surface and potentially making them vulnerable to micro-organisms.
• However, nature protects its own. The milk of the echidna has a protein that can puncture the cell membranes of multiple bacterial species, thus destroying the source of infection. It can then be used to fight infections.

Pic: https://d39gegkjaqduz9.cloudfront.net/TH/2019/04/25/DEL/Delhi/TH/5_18/cae181a8_2894254_1_mr.jpg

• The scientist pointed out that there is a rise of superbugs due to the indiscriminate use of antibiotics by the animal husbandry industry to raise livestock.
• The superbugs can cause mastitis, an infection of the mammary gland, in dairy animals.
• The team has been able to show that the protein from echidna milk is effective against mastitis-causing bacteria.

China announces plan to build moon station in 10 years

Part of: GS Prelims – International affairs; Science and Technology; Space missions

In news:

• China plans to send a manned mission to the moon and to build a research station there within the next decade.
• China aims to achieve space superpower status and took a major step towards that goal when it became the first nation to land a rover on the far side of the moon in January.
• It now plans to build a scientific research station on the moon’s south pole within the next 10 years.
• Beijing plans to launch a Mars probe by 2020 and confirmed that a fourth lunar probe, the Chang’e-5, will be launched by the end of the year.

(MAINS FOCUS)

SOCIAL/ECONOMY

TOPIC: General studies 1 and 2

• Women empowerment
• Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
  

General studies 3

• Indian economy and employment; Gender parity; Women participation in workforce
• Conservation, Environmental pollution and degradation, environmental impact assessment.
• Water Pollution, Wastewater management
  

Empowering women through safe water

Context:

• Citizens dwelling in the areas, where use of contaminated underground water is prominent to meet the demand of their basic needs, are on the verge of getting more prone to water pollution related disorders.
• Nearly 2 lakh people die every year in India because of consuming contaminated drinking water.

Do you know?

• Surface water contamination receives a lot of attention because of the visible pollution of this water.
• In India, 19 states have reported fluoride contamination of water and groundwater in at least 10 states is contaminated with arsenic.
• Of the 10 states that have arsenic contamination, 7 – West Bengal, Jharkhand, Bihar, Uttar Pradesh, Assam, Manipur and Chhattisgarh – have reported contamination level that is above the permissible limit of 10 micrograms per litre (µg/L.)
• Consumption of arsenic contaminated drinking water can lead to cancer. It can also cause arsenicosis, a condition that is as sinister as it sounds, manifesting as skin lesions, pigmentation changes and an abnormal thickening of the skin.
• Excessive fluoride may cause fluorosis that can cause discolouration of teeth or can lead to skeletal deformities. It can also cause damage to neurological, muscular and gastrointestinal systems.
• Several studies have linked exposure to uranium in drinking water to chronic kidney disease.

Relationship between women and water

• Women have traditionally been water bearers, walking miles, lugging water home. They are disproportionately burdened with unpaid tiresome domestic work, care for the sick, robbing them of opportunities to learn skills and be employed.
• According to a World Bank report, India ranks 120 among 131 countries in female labour force participation rates.
• The economic contribution of women in India stands at 17% of GDP, which is lesser than half of the global average.
• Therefore, their participation is important for an economy to grow sustainably.
• Small water enterprises (SWEs) can play an important role in fostering women entrepreneurship and ensuring their economic participation in the nation’s development.
• SWEs can provide opportunities to women to turn from water bearers to water managers, improving availability and accessibility of safe drinking water, earning livelihood, and improving their quality of life.

Role of Safe Water Network India (SWNI)

• Promoting the concept of SWEs, the Safe Water Network India (SWNI) took up the initiative to empower grass-roots women—self-help groups or slum-level federation by empowering them with skills, deploying technology, and reducing their work hours to mainstream them into an economic activity, thus changing their historical role from water carriers to safe water managers.
• SWNI is a nonprofit organization

Conclusion:

• Despite India’s notable GDP growth rate, a huge population is underutilised. (especially women)
• Engaging women in the management of SWEs can help achieve the twin objectives of women’s empowerment and provision of safe drinking water to the communities, contributing to UN Sustainable Development Goals 6 (Clean Water), 5 (Gender Equality) and 8 (Decent Work and Economic Growth).
• Investment in SWEs provide an opportunity to women, particularly in rural areas, to improve the health of communities and earn livelihoods.
• More initiatives need to be taken to create gender parity in the economy. It’s the collective responsibility of the government and society to realise the goal of a more inclusive, sustainable and prosperous future.

Connecting the dots:

• Discuss some of the important initiatives needed to be taken to create gender parity in the economy.
• The absence of women from the start up ecosystem in India is a worrisome sign for the economic empowerment of women. What strategies should be adopted to address the existing gender asymmetry? Discuss.
• Economically empowered women can contribute better to the developmental process. Do you agree? Comment. In this regard, examine the benefits of engaging women in the management of Small water enterprises (SWEs).

INTERNATIONAL/ECONOMY

TOPIC: General studies 2

• India and its neighbourhood- relations.
• Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
• Effect of policies and politics of developed and developing countries on India’s interests
• Important International institutions, agencies and fora- their structure, mandate

General studies 3

• Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Beyond the free trade idealism

Context:

• The U.S. has begun trade skirmishes with India. It objects to India increasing import duties on electronic product and desires India to cut back duties on U.S.-made motorcycles.
• With the WTO thought-about to be within the medical care unit, it’s imperative to use basic principles to reshape a trade regime that’s fair to all.

Free Trade Idealism

• According to this idealism, if each person would do only what he or she does better than everyone else and all would trade with each other, everyone’s welfare will increase. Also, the size of the global economic pie would be larger because there will be no inefficiencies.
• Dani Rodrik has estimated that for every unit of overall increase in global income, six or seven units of incomes will have to be shuffled around within.
• Moreover, according to this theory, people should not start producing what others are already producing, because they will produce less efficiently until they learn to do it well.
• According to this theory of free trade, Indians should not have bothered to learn how to produce trucks, buses and two-wheelers when the country became independent. They should have continued to import them from American, European and Japanese companies.
• Free trade purists say that easy import of products from other countries increases consumer welfare. Consumers everywhere welcome a lowering of import barriers because it brings products into their shops they could only dream of before.
• Milton Friedman had observed that, in international trade, exports help companies and imports help citizens. Therefore, resistance to free trade does not come from consumers. It generally comes from companies which cannot compete.

Concerns with extreme free trade idealism:

• Free trade hampers the domestic producer of developing countries which lack competitiveness due to infrastructure; technology etc. and which is not at par with developed countries. This will have impact on job and which ultimately impact on consumers too, because, to benefit from easy imports, citizens need incomes to buy the products and services available. Therefore, they need jobs that will provide them adequate incomes. Domestic producers can provide jobs.
• For example, after liberalization in 1990s, India’s shows impressive GDP growth, however it is not generating enough employment for India’s large youth population.
• India’s economy should have been a powerful job generator, instead the employment elasticity of India’s growth — the numbers of jobs created per unit of GDP growth — is among the lowest in the world.

The way ahead:

• A developing country needs a good ‘industrial policy’ to accelerate the growth of domestic production, by building on its competitive advantages; and by developing those capabilities, it can compete with producers in countries that ‘developed’ earlier.
• The scope of ‘industry’ must be broadened to include all sectors that can build on India’s competitive advantages. For example, the tourism and hospitality industry, taking advantage of India’s remarkable diversity of cultures and natural beauty, has the potential to support millions of small enterprises in all parts of the country.
• India’s policy-makers must find a way for economic growth to produce more income-generating opportunities for Indian citizens. While India seeks to capture larger shares of global markets, India’s own billion-plus citizens’ economy can become a stimulus for growth of millions of enterprises. If citizens earn more, they can spend more.
• The ‘Employment and Incomes Policy’ should guide the Industrial Policy to where investments are required, and also what is expected from those investments to produce more income-generating opportunities for young Indians.
• Production and technology must be indigenised in phased manufacturing programmes.
• The WTO’s governance needs to be overhauled to promote the welfare of citizens in all countries, especially poorer ones, rather than lowering barriers to exports of companies in rich countries in the guise of free trade idealism.
• Indian economists, distracted by the mathematics of universal basic incomes, should return to the fundamentals of economic growth — more opportunities to earn incomes from productive work with development of new capabilities.
• A robust ‘Incomes and Employment Policy’, supported by an imaginative Industrial Policy, must guide India’s trade policy.

Connecting the dots:

• The issues of free trade policy are too complex to be wrapped up in the slogan “liberalise trade”. Discuss.
• Critically evaluate India’s Free Trade Policy in the post-reform period.

(TEST YOUR KNOWLEDGE)

Model questions: (You can now post your answers in comment section)

Note:

• Featured Comments and comments Up-voted by IASbaba are the “correct answers”.
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Q.1) The “Heavenly Palace” which is expected to go into orbit in 2022 is associated with which country?

1. Unites States of America
2. India
3. Russia
4. China

Q.2) ‘London Interbank Offer Rate (LIBOR)’ is computed for which of the following currencies?

1. Euro (EUR)
2. Japanese yen (JPY)
3. Pound sterling (GBP)
4. Canadian dollar (CAD)
5. Swedish krona (SEK)
6. Swiss franc (CHF)

Select the correct code:

1. 1, 2 and 3 Only
2. 1, 2, 3 and 6 Only
3. 3, 5 and 6 Only
4. All of the above

Q.3) Monotremes are a subdivision of mammal. The unique feature of Monotremes is

1. They don’t have hair on their skin.
2. They lay eggs instead of giving birth.
3. They don’t have sweat glands.
4. They fertilise the egg outside the female’s body.

Q.4) Echidnas are robust creatures and found in various environments. Which of the following statements are correct regarding Echidnas?

1. They usually have much lower body temperatures than other mammals
2. Their back feet points backwards which help them to dig burrows.
3. They lay eggs but keep their young ones in the mother’s pouch.

Select the code from below:

1. 1 and 2
2. 2 and 3
3. 1 and 3
4. All of the above

Q.5) Consider the following statements about Echidna

1. They have spines like a porcupine
2. They are Marsupials
3. They are only found in Central India

Select the incorrect statements

1. 1 and 2
2. 2 and 3
3. 1 and 3
4. All of the above

Q.6) Which of the following can be found as pollutants in the drinking water in some parts of India?

1. Arsenic
2. Fluoride
3. Formaldehyde
4. Sorbitol
5. Uranium

Select the correct answer using the codes given below:

1. 1 and 2 only
2. 2, 4 and 5 only
3. 1, 2 and 5 only
4. 1, 2, 3, 4 and 5

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