IAS UPSC Prelims and Mains Exam – 25th April 2020

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(PRELIMS + MAINS FOCUS)

Anthurium flowers: Indoor air purifiers

Part of: GS Prelims and GS-III – Biodiversity and Indigenous Technology

In News:

• National Innovation Foundation-India (NIF) has recently boosted new varieties of Anthurium, a flower with high market value.
• These flowers which help to purify air are cultivated by a lady innovator from Kerala.

Important value additions:

Anthurium

• It is a vast group of beautiful blooming plants available in a wide range of colors.
• These are large beautiful flowers. 
• These have better shelf life and good market value.
• They remove harmful airborne chemicals like formaldehyde, ammonia, toluene, xylene, and allergens.
• Due to Its importance of removing toxic substances from the air, NASA has placed it in the list of air purifier plants.

National Innovation Foundation-India

• It is India’s national initiative to strengthen the grassroots technological innovations and outstanding traditional knowledge. 
• Mission: To help India become a creative and knowledge-based society. 
• It was set up with the support of Honey Bee Network.
• NIF supports grassroots innovations which are developed by individuals and local communities in any technological field without any help from formal sector. 
• It also tries to ensure that such innovations spread widely through commercial and/or non-commercial channels which will help in generating material or non-material incentives for the innovators. 

Daily Current Affairs IAS | UPSC Prelims and Mains Exam – 25th April 2020

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Draft Electricity Act (Amendment) Bill 2020, released 

Part of: GS Prelims and GS-II – Governance; GS-III – Infrastructure (Energy)

In News:

• Ministry of Power has released draft Electricity Act(Amendment) Bill 2020 to amend the Electricity Act, 2003 to introduce key reforms in the Power Sector.

Major amendments proposed in the Electricity Act are as follows:

Direct Benefit Transfer: It is proposed that tariff be determined by Commissions without taking into account the subsidy. Subsidy will be given directly by the government to the consumers.

Establishment of Electricity Contract Enforcement Authority: A Central Enforcement Authority headed by a retired Judge of the High Court is proposed to be set-up with powers of the Civil Court to enforce contracts related to purchase or sale or transmission of power between a generating, distribution or transmission companies.

Establishment of adequate Payment Security Mechanism: It is proposed to empower Load Dispatch Centres to oversee the establishment of adequate payment security mechanism before scheduling dispatch of electricity, as per contracts.

Strengthening of the Appellate Tribunal (APTEL): It proposes to increase the strength of APTEL to 7 members apart from the Chairperson so that multiple benches can be set-up to facilitate quick disposal of cases. 

National Renewable Energy Policy: It is proposed to provide for a policy document for the development of electricity from renewable sources of energy. 

Cross border trade in Electricity: Provisions have been added to facilitate and develop trade in electricity with other countries.

Franchisees and Distribution sub licensees: Distribution Companies may engage Franchisees or Sub-Distribution Licensees to distribute electricity on its behalf in a particular area. 

Miscellaneous 

NanoBlitz 3D

• It is developed by the scientists from International Advanced Research Centre for Powder Metallurgy and New Materials (ARCI), an autonomous institute under the Department of Science &Technology. 
• It is an advanced tool for mapping nano-mechanical properties of nano materials like multi-phase alloys, composites, and multi-layered coatings.
• It enables the performance of a large array, typically consisting of 1000s high-speed nano-indentation tests. 
• Each indentation test takes less than one second to measure hardness and elastic modulus of a given material.
• It provides capabilities to carry out advanced data analysis. 

Daily Current Affairs IAS | UPSC Prelims and Mains Exam – 25th April 2020

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Kasowal Bridge

• Border Roads Organisation (BRO) has constructed and opened a new permanent bridge on the ‘Ravi River’ connecting Kasowal enclave in Punjab to the rest of the country.
• The 484-meter bridge was built by Border Roads Task Force (BRTF) of Project Chetak.
• The enclave was previously connected via temporary bridge of limited load capacity which had to be dismantled every year prior to the Monsoon. 

(MAINS FOCUS)

GOVERNANCE/ WELFARE

Topic: General Studies 2:

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

Troughs and crests in the pandemic response

Context: COVID-19 pandemic has proven the ultimate stress test for governance systems across the globe

What are the different stages that governments have adopted to tackle pandemic?

First Stage: 

• Early recognition of the threat and the decision to lock down society.
• Lockdown is aimed at buying time, of flattening the epidemic curve, so that public health facilities are not over-burdened
• The period is also used to secure the personal protective equipment (PPE) and medical supplies necessary to save lives

Second Stage

• Measured opening up of lockdown to slowly ease the burden on the economy by permitting restricted business activity 
• This ensures that livelihoods and supply chains can be restored.
• This stage can be successful if accompanied by a war-footing expansion of testing capacity so that new infections can be identified and isolated at once

Final Stage

• Mass vaccination programme 
• Full rebuilding of economic and social life through fiscal and monetary measures

What are the limitations of contemporary governance systems?

1. Opportunistic and Nationalistic politicking 

• • This involves xenophobic (dislike against people from other countries) posturing by governments Ex: US President terming virus as Chinese Virus
  • This is done to deflect the criticism of government’s measures by stirring up emotions of people
  • It prevents robust and multidimensional international cooperation between nations.
  • It undermines epidemiologists, medical community and research scientists from sharing knowledge about disease & its cure

2. Lack of whole-of-government strategy

• • Pandemic response requires political will and legitimate leadership, failure of which results in weak & uncoordinated response to pandemic
  • Ex: Germany where States enjoy lot of power, Chancellor Angela Merkel was able to mobilize the entire system which has led to success story in Europe
  • However, in US where states also enjoy lot of powers, US President was not forthcoming in mobilization of entire system which led to massive spread of disease

3. Weak public health systems due to policies in recent decades

• • Kerala, which has consistently ranked at the top of State rankings for health expenditures, was successful in tackling the pandemic

How has India fared in epidemic response?

• Being in the first stage of response, India has successfully flattened epidemic curve
• India’s outreach to SAARC for a coordinated regional response was appreciated. 
• India realises the importance of multilateralism for tackling this global issue and has called for global coordination in vaccine discovery
• There has also been strong political will in mobilising the entire system to tackle the pandemic (PM consultation with all Chief Ministers of States)
• However, the communalisation of pandemic by few is threatening the social fabric of country

Conclusion

It is to be seen if India will have successful second stage in pandemic response

Connecting the dots:

• SAARC and BIMSTEC – which is best suited for India?
• Impact of Nationalistic revival on globalisation

ECONOMY/ GOVERNANCE

Topic: General Studies 3:

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

COVID-19: Impact on Mutual Funds (Franklin Templeton issue)

Context: Franklin Templeton (FT) Mutual Fund, the ninth largest in India, decided to close its six managed credit funds, which had combined assets under its management of around Rs 28,000 crore (25% of its total assets)

It cited reduced liquidity in the bond markets caused by the COVID-19 pandemic as reason for closure of these MF schemes.

What is Mutual Fund?

• It is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds and other assets. 
• Mutual funds are operated by professional money managers, who allocate the fund’s assets and attempt to produce income for the fund’s investors.

Daily Current Affairs IAS | UPSC Prelims and Mains Exam – 25th April 2020

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Merits of Mutual Funds

• It is professional managed financial vehicle
• The fund managers invest the pooled money in diversified assets which reduces the risk
• They are liquid enabling investors to sell the Mutual Funds in short time.

Disadvantages of a Mutual Fund

• High and opaque management fees and operating expenses
• Loss of Control by investors
• Mutual Funds are vulnerable to market volatility

Why did FT announce closure of the MF schemes?

• It was because these MF schemes had 65% of the portfolio investment in bonds that are AA rated or below

• These lower rated bonds offer higher return but also carry a higher risk.
• During the times of crisis, these type of bonds are least sought after, meaning their depreciation is quicker
• As a result, the fund managers will not be able to service the interest & principal payment to the investors

What does the closure of Mutual Fund schemes by FT, mean for investors?

• It essentially means that Franklin Templeton MF will first liquidate the assets in the schemes and then return the money to investors
• However, FT may find it difficult to get a buyer for the low-rated assets in the portfolio, so investors may have to wait
• Additionally, if they find a buyer, the sale will happen at reduced valuation meaning loss for investors on their capital investment

Impact of the Franklin Templeton issue

• It is unprecedented indicating the impact of COVID-19 lockdown on financial system
• On Fund managers: They may now prefer the safety of more liquid higher rated paper, leading to further stress in the bond markets
• On Investors: It breaks investor confidence in mutual funds.
• On Saving Habits: It will push people to adopt informal means of saving Ex: Gold purchases, which is not in the long-term interest of circular economy
• On Credit availability: Debt funds are a key source of funding of corporates which might get further squeezed due to such types of stress in system
• On Society: It can create a panic among public leading to distrust on such financial instruments

Way Ahead

• Investors need to look at the quality of the companies where their investments
• Monitoring of the situation and timely action on it by fund managers
• RBI and SEBI must ensure adequate liquidity to intermediaries.
• Awareness among citizens that such cases are isolated ones and there is no threat to MF ecosystem

Connecting the dots:

• Punjab and Maharashtra Cooperative Bank  (PMC) Crisis
• IL&FS liquidity crisis
• Yes Bank crisis

(TEST YOUR KNOWLEDGE)

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

Note: 

• Correct answers of today’s questions will be provided in next day’s DNA section. Kindly refer to it and update your answers. 
• Comments Up-voted by IASbaba are also the “correct answers”.

Q.1 Consider the following statements regarding Anthurium:

1. It removes harmful airborne chemicals. 
2. NASA has placed it in the list of air purifier plants.

Which of the above is/are correct?

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

Q.2 With regard to recently released Draft Electricity Act (Amendment) Bill, 2020, consider the following statements:

1. Central Enforcement Authority headed by a retired Judge of the Supreme Court. 
2. There are no provisions to facilitate trade in electricity with other countries.

Which of the above is/are correct?

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

Q.3 NanoBlitz 3D has been recently developed by which of the following?

1. An autonomous Institute under Department of Science and Technology 
2. Ministry of Defence 
3. Defence Research and Development Organisation 
4. NASA

Q.4 Kasowal Bridge was constructed recently on which of the following river?

1. Ravi
2. Sutlej 
3. Chenab 
4. Jhelum

ANSWERS FOR 24th April 2020 TEST YOUR KNOWLEDGE (TYK)

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