IAS UPSC Prelims and Mains Exam – 29th August 2019

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(PRELIMS + MAINS FOCUS)

Eastern Economic Forum (EEF)

Part of: GS Prelims and GS Mains II – International Organisations

In News

• Mr. Modi has been invited by Mr. Putin as the chief guest of the EEF to be held in Vladivostok (in Russia’s Far East) on September 5.
• EEF is an international forum held each year, which was established by decree of the President Putin in 2015 to support the economic development of Russia’s Far East 
• The Russian Far East comprises the eastern Russian territory between Lake Baikal in eastern Siberia and the Pacific Ocean. This region bordering China is rich in mineral resources like diamonds, borax materials, gold, tungsten, fish and seafood
• In EEF, India and Russia are likely to seal a military logistics support agreement, the Agreement on Reciprocal Logistics Support (ARLS),
• ARLS will facilitate access to each other’s’ military facilities for exchange of fuel and provisions on mutual agreement, simplifying logistical support and increasing operational turnaround.
• A pact may be signed where Russia will construct six nuclear power plants in India, apart from the six being set up in Kudankulam in Tamil Nadu.

Do you know?

• India signed the Logistics Exchange Memorandum of Understanding (LEMOA) with the U.S. in August 2016
• Russia has assured that it be delivering the S-400 Triumph air defence missile system to India by 2023 despite the US pressure on New Delhi not to acquire the system.
• America has threatened to impose sanctions on India (for S-400 defence deal) under the CAATSA (Countering America’s Adversaries Through Sanctions Act) legislation

Anti-microbial resistance

Part of: GS Prelims and Mains GS-II – Issues relating to Health

In News

• The government has commissioned a ₹9.3 crore study to check antibiotic resistance in along the entire length of the river Ganga.
• Agencies involved: Motilal Nehru Institute of Technology, Allahabad; the National Environmental Engineering Research Institute (NEERI), Nagpur; Sardar Patel Institute of Science & Technology, Gorakhpur and two private companies Phixgen and Xcelris Labs.
• The aim of the research project is to indicate the type of “contamination” (sewage and industrial) in the river and “threat to human health (antibiotic resistance surge) and identifying sources of Eschericia coli
• Eschericia coli is a type of bacteria that lives in the gut of animals and humans. Though it is harmless, some species have been linked to intestinal disease as well as aggravating antibiotic resistance.

Do You know?

• Residues of antibiotics reach water bodies through waste discharged from households and industries
• These antibiotics in water lead to evolution of bacteria that are resistant to antibiotics, which then grow in numbers and spread in the environment.
• Research has shown that levels of resistance genes that lead to “superbugs” (antibiotic-resistant) were about 60 times greater during the pilgrimage months of May and June than at other times of the year.

Sisir Kumar Mitra

Part of: GS Prelims and GS Mains III – Science & Technology

In News

• Chandrayaan-2 took photos of various craters on the moon while it was flying over its north pole. 
• One of the craters it scanned over was a lunar impact crater named Mitra, after the noted Indian physicist, Sisir Kumar Mitra
• The Working Group for Planetary System Nomenclature (WGPSN), an arm of the International Astronomical Union (IAU) had named the crater after Mitra in 1970.
• Mitra was the first to introduce radio communication in India and was pioneer in the field of Ionospheric Science and Radio Technology.
• The ionosphere is a region of the upper atmosphere which extends from 60 km to several thousand kilometres above the earth. 
• Ionosphere reflects short radio waves, enabling transmission to be made around the curved surface of the earth by sky waves, and its presence is vital for long-distance radio communication. 
• Other Indian scientists who have their names etched on the moon is Dr Vikram Sarabhai.

Jan Aushadhi Sugam

Part of: GS Prelims and GS Mains II – e-governance

In News

• Union Minister for Chemicals launched a mobile application “Jan Aushadhi Sugam”to enable people to search Jan Aushadhi generic medicine stores.
• The app also enables search of Janaushadhi generic medicines, analyse product comparison of Generic vs Branded medicine in form of MRP & overall Savings, etc
• Government also announced that “Jan Aushadhi Suvidha Oxo-Biodegradable Sanitary Napkin” will now be available at only One Rupee per pad (earlier cost was Rs 2.50 per pad).
• Jan Aushadhi Suvidha comes with a special additive, which makes it biodegradable when it comes in contact with oxygen after being discarded.

Do You know?

• About 28 million girls are reported to be leaving education because of lack of availability of good quality Sanitary Napkin” pads at reasonable cost.
• Jan Aushadhi Suvidha is being made available for sale in more than 5500 PMBJP (Pradhan Mantri Bhartiya Jan Aushadhi Pariyojana) Kendras across the country.
• Bureau of Pharma PSUs of India (BPPI) is the implementing agency of PMBJP
• BPPI was established as an independent society in December, 2008 under the Department of Pharmaceuticals, Government of India.

(MAINS FOCUS)

ECONOMY

TOPIC: General Studies 3

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

RBI transfer surplus to government of India

Context:

• The Central Board of the Reserve Bank of India (RBI) decided to transfer a sum of ₹1,76,051 ($24.4 billion)  crore to the Government of India (Government) comprising of ₹1,23,414 crore of surplus for the year 2018-19 and ₹52,637 crore of excess provisions identified as per the revised Economic Capital Framework (ECF).

To understand what the transfer is, we must first understand where the funds come from. The central bank has three different funds that together comprise its reserves. These are the

• Currency and Gold Revaluation Account (CGRA), largest and makes up the significant bulk of the RBI’s reserves.
• The Contingency Fund (CF) and
• The Asset Development Fund (ADF).

Why Government wanted it?

• The government has argued that relatively lower transfers crimped public spending for infrastructure projects and social sector programmes, considering the pressure to meet deficit targets and to provide space for private firms to borrow.

How does the RBI generate surplus?

• A significant part comes from RBI’s operations in financial markets, when it intervenes for instance to buy or sell foreign exchange;
• Open Market operations, when it attempts to prevent the rupee from appreciating;
• As income from government securities it holds;
• As returns from its foreign currency assets that are investments in the bonds of foreign central banks or top-rated securities;
• From deposits with other central banks or the Bank for International Settlement or BIS;besides lending to banks for very short tenures and management commission on handling the borrowings of state governments and the central government.
• RBI buys these financial assets against its fixed liabilities such as currency held by the public and deposits issued to commercial banks on which it does not pay interest.

What can the government do with this huge surplus?

• The money is transferred to the Consolidated Fund of India from which salaries and pensions to government employees are paid and interest payments done, besides spending on government programmes. 
• The large payout can help the government cut back on planned borrowings and keep interest rates relatively low.
• Besides, it will provide space for private companies to raise money from markets.
• And if it manages to meet its revenue targets, the windfall gain can lead to a lower fiscal deficit. 
• The other option is to earmark these funds for public spending or specific projects, which could lead to a revival in demand in certain sectors and boost economic activity.

What did the Jalan Committee recommend?

• The Jalan Committee, as it was called informally, is actually called the Expert Committee to Review the RBI’s Extant Economic Capital Framework.
• The committee recommended that the RBI maintain a Contingent Risk Buffer — which mostly comes from the CF — of between 5.5-6.5% of the central bank’s balance sheet.
• Since the latest CF amount was about 6.8% of the RBI’s balance sheet, the excess amount was to be transferred to the government.
• The committee also decided, for the year under consideration, to use the lower limit of 5.5% of the range it recommended.
• So, basically, whatever was excess of 5.5% of the RBI’s assets in the CF was to be transferred. That amount was ₹52,637 crore.
• Regarding the RBI’s economic capital levels — which is essentially the CGRA — the committee recommended keeping them in the range of 20-24.5% of the balance sheet.
• Since it stood at 23.3% as of June 2019, the committee felt that there was no need to add more to it, and so the full net income of the RBI — a whopping ₹1,23,414 crore — should be transferred to the Centre.
• That ₹1.23 lakh crore plus the ₹52,637 crore is what comprises the ₹1.76 lakh crore that the RBI has decided to transfer to the government.
• It must be noted that this ₹1.76 lakh crore includes the ₹28,000 crore interim dividend earlier transferred to the Centre and does not come over and above it.
• Recommendation on a profit distribution policy has been endorsed by the Central Board meaning a more transparent and rule-based payout from next year, as in many other central banks, which could help narrow differences between the government and RBI.

Conclusion:

• The bottom line however remains unchanged. India’s economy has weakened in the last few years. To reverse this trend, government needs to unleash a new round of reforms which encompass factors of production such as land, labour and capital.

Connecting the dots:

• Why RBI’s surplus corpus transfer raises more questions? Discuss

POLITY

TOPIC:General Studies 2:

• Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
• Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

Reconstituting and Reforming the Law Commission of India

In news:

• The government is yet to take a call on reconstituting the Law Commission. The last commission had gone out of office a year.
  The Law Commission of India — the oldest amongst the national-level bodies — remains an odd one even in its 65th year.

Background:

• Law Commission of India is an executive body established by an order of the Government of India. Its major function is to work for legal reform. Its membership primarily comprises legal experts, who are entrusted a mandate by the Government. The Commission is established for a fixed tenure and works as an advisory body to the Ministry of Law and Justice.
• In the eighth year of Independence, the Government of India decided to revive the British legacy of appointing law commissions to study, research and report on legal matters specified in their terms of reference. 
• The first commission was set up in 1955.
• Reports of the commission are generally written individually by members including the chairman and placed before the full commission for discussion and adoption.

Issues:

• Unlike its sister organisations, established much later, it has no fixed composition, no defined eligibility criteria for its chair and members, and no set functions — everything rests on the government’s will.
•  The terms of reference are specified afresh each time it is reconstituted as if it were an ad hoc body.  Three of the other national commissions those for the Scheduled Castes, Scheduled Tribes and Backward Classes, are now regulated by the Constitution and there is a parliamentary charter for each of the national commissions for human rights, minorities, women, children and safai karmcharis.
• Though the commission’s job requires research-oriented juristic learning, which cannot essentially be the outcome of judicial experience, the commission has been a haven for retired judges. 
• Members of the commission are also generally drawn from the judiciary, and the member-secretary is always from the bureaucracy. 

Way forward and Conclusion:

• If the commission has to work without regard for extra-legal and political considerations it must have a governing statute defining its powers and responsibilities, and limitations.
• Before constituting the 22nd Law Commission —the institution should be placed under a proper parliamentary charter. 

The government should determine by legislation, the composition, tenure, functions and work procedure of the Law Commission. It should be a predominantly jurists’ commission, not a retired judges’ collective with a sprinkling of legal scholarship and jurisprudential expertise.

Connecting the dots:

Discuss the importance of the National Commission of India. The commission despited being one of the oldest is yet to be revamped. Comment.

(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) Consider the following statements about Eastern Economic Forum

1. EEF is an international forum established by Russia in 1991 to support the economic development of Russia’s Far East 
2. The Russian Far East comprises the eastern Russian territory between Lake Baikal in eastern Siberia and the Pacific Ocean

Which of the statement(s) given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Q.2) Consider the following statements about Eschericia coli (E-Choli) 

1. It is a type of virus that which infects humans through mosquito bites
2. It has been linked to intestinal disease as well as aggravating antibiotic resistance.

Which of the statement(s) given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Q.3) Consider the following statements about Pradhan Mantri Bhartiya Jan Aushadhi Pariyojana

1. The aim of the scheme is to make healthcare affordable by providing generic medicines through Jan Aushadi Kendras
2. It is being implemented by Union Ministry of Health and Family welfare

Which of the statement(s) given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

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