DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 5th AUGUST 2020

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  • August 5, 2020
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Suspension of H-1B visas and its impact

Part of: GS Prelims and Mains II – Foreign policies affecting India’s interests; Diaspora 


  • US President on June 23 suspended the H­1B visas, along with other types of foreign work visas, until the end of 2020 to protect American worker. 
  • Trump administration announced that it won’t tolerate firing of Americans for cheap foreign labour. 
  • This would be a major set back for the Indians as a majority of the H-1B visas were allotted to Indians. 

Impact on Indians 

  • Suspending H-1B and other work visas is likely to affect the movement of skilled professionals, and to have impact on Indian nationals and industry 
  • People-to-people linkages, as well as trade and economic cooperation in technology and innovation sectors, are an important dimension in the US-India partnership. 

According to a domestic rating agency –  

  • Suspension of the H1-B visas by the US will cost domestic IT firms Rs 1,200 crore and have a marginal 0.25-0.30 per cent impact on their profitability. 

What is a H-1B visa? 

  • The H-1B is a visa in the United States under the Immigration and Nationality Act, which allows US employers to temporarily employ foreign workers in speciality occupations.  
  • A speciality occupation requires the application of a specialised knowledge and a bachelor’s degree or equivalent of work experience.  
  • The duration of a stay is three years and can be extended up to six years. Once this period is over, the visa holder will need to re-apply. 

Operation Gibraltar 

Part of: GS Prelims and Mains II and III – India and Pakistan relations; Security issues 


  • Operation Gibraltar was the codename given to the strategy of Pakistan to infiltrate Jammu and Kashmir, and instigate the locals in starting a rebellion against Indian rule there. 
  • Pakistan specifically chose this name to draw a parallel to the Muslim conquest of Spain that was launched from the port of Gibraltar. 

Do you know? 

  • In August 1965, Pakistan Army’s troops disguised as locals, entered Jammu and Kashmir from Pakistan with the goal of fomenting an insurgency among Kashmiri Muslims. However, the strategy went awry from the outset due to poor coordination, and the infiltrators were soon discovered. 
  • The operation sparked the Indo-Pakistani War of 1965, the first major engagement between the two neighbours since the Indo-Pakistani War of 1947. 

India-Pakistan: Concerns 

Part of: GS Mains II – India and its neighbours; International Relations 

In news: 

  • Pakistan Prime Minister unveiled a “new political map” of Pakistan that includes the entire erstwhile state of Jammu and Kashmir as well as Junagadh in Gujarat. 
  • Indian government has dismissed the new Pakistan map as a “political absurdity”. 

Do you know? 

  • Such maps were published in 1947-48 when Mohammed Ali Jinnah was Pakistan’s first governor general. 

FATF meeting soon 

  • Ahead of the crucial Financial Action Task Force (FATF) meetings in October, India to highlight Pakistan’s inaction. 
  • Pakistan’s performance in acting against terror-­financing infrastructure will be assessed. 

Kerala’s gold smuggling case

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


  • National Investigation Agency (NIA) probe revealed that the initial funds for obtaining gold was raised by persons with dubious antecedents and the funds were sent abroad through hawala channel. 

Money laundering 

  • Money laundering is the processes by which large amounts that are illegally obtained is given the appearance of having originated from a legitimate source.   
  • Some crimes such as illegal arms sales, terror funding, smuggling, corruption, drug trafficking and the activities of organized crime including tax evasion produce huge money which is required to be ‘laundered’ to make it look clean. 

Common avenues for money laundering in India: 

  • Hawala: Hawala is an alternative or parallel remittance system. In Hawala networks the money is not moved physically. For ex: A typical Hawala transaction would be like a resident in USA of Indian origin doing some business wants to send some money to his relatives in India. The person has option either to send the money through formal channel of banking system or through the Hawala system. The commission in Hawala is less than the bank charges and is without any complications for opening account or visit the bank, etc. The money reaches in to the doorstep of the person’s relative and the process is speedier and cheaper. 
  • Shell companies: These are fake companies that exist for no other reason than to launder money. They take in dirty money as “payment” for supposed goods or services but actually provide no goods or services; they simply create the appearance of legitimate transactions through fake invoices and balance sheets. 
  • Structuring Deposits: Also known as smurfing, this method entails breaking up large amounts of money into smaller, less-suspicious amounts. The money is then deposited into one or more bank accounts either by multiple people (smurfs) or by a single person over an extended period of time 
  • Third-Party Cheques: Utilizing counter cheques or banker’s drafts drawn on different institutions and clearing them via various third-party accounts. Since these are negotiable in many countries, the nexus with the source money is difficult to establish. 
  • Credit Cards: Clearing credit and charge card balances at the counters of different banks. 
  • Insurance Sector: The internal channels of laundering money are agent/broker premium diversion, reinsurance fraud and rented asset schemes etc. Phony insurance companies, offshore/unlicensed Internet companies, staged auto accidents, vertical and senior settlement fraud are external channels of money laundering. 
  • Open Securities Market: the securities markets, which are known for their liquidity, may also be targeted by criminals seeking to hide and obscure illicit funds. 
  • Cyber-crimes:  identity theft, illegal access to e-mail, and credit card fraud are coming together with money laundering and terrorist activities. Large amounts of money is now stored in digital form. 
  • Illicit stock options: Example:  Consider an investor ‘A’ who has incurred significant capital gains in a year. In order to offset these gains, they use illiquid stock options to book losses. The counterparty to these contracts, say investor ‘B’, books profit in these options. B already has an arrangement with A wherein he retains around 10-15 per cent of the profits made and transfers rest of the money to ‘A’ through non-banking channels. 

Measures taken by the government to plug in the legal loopholes: 

  • The Income Tax Act, 1961 
  • The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA)  
  • The smugglers and Foreign Exchange Manipulators Act, 1976 (SAFEMA) 
  • The Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPSA) 
  • The Benami Transactions (Prohibition) Act, 1988 
  • The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988. 
  • The Foreign Exchange Management Act, 2000, (FEMA) 
  • Prevention of Money Laundering Act (PMLA), 2002 
  • The Financial Intelligence Unit – India (FIUIND) 
  • India is also a full time member of the Financial Action Task Force (FATF) which is responsible for setting global standards on anti-money laundering and combating the financing of illegal activities. 
  • The KYC policies followed by banks. 

COVID vaccine likely by mid-2021: WHO scientist 

Part of: GS Prelims and Mains II – Health/Social issue; International Organization 


  • WHO’s chief scientist Soumya Swaminathan said that a realistic timeline to start receiving the first million doses of COVID vaccine is mid­2021. 
  • She also warned that it might take longer “as it is not easy to understand the virus completely.” 

COVAX initiative 

  • It aims at having two billion doses of the vaccine by the end of 2021. 
  • COVAX Facility is a mechanism to ensure free, rapid and equitable access to COVID­19 vaccines across the world. 

Do you know? 

  • Around 27 vaccines are in clinical trials, and another 150 odd are in pre­clinical testing. 

SC directs States to provide support to senior citizens 

Part of: GS Mains II – Social/Welfare issue; Role of Judiciary 

In news: 

  • Supreme Court directed the States to provide care, support and priority medical treatment for senior citizens, especially those living alone or quarantined, amid the pandemic.  
  • Many elderly persons were battling loneliness and depression.  
  • The lockdown and social isolation imposed had left many of them in the grip of anxiety. 
  • Senior citizens who are aged above 60 years and especially those with medical conditions are particularly susceptible to infections during this period. 

Education during pandemic 

Part of: GS Mains II – Social/Welfare issue; Education; Vulnerable section 


According to the United Nation’s policy brief – 

  • Almost 24 million children are at risk of not returning to school next year due to the economic fallout of COVID­19. 
  • The educational financing gap is also likely to increase by one third. 
  •  More than 1.6 billion learners across the world have been affected by the disruption of the education system. 
  • Vulnerable populations in low-income countries to be hit harder and longer. 
  • UNESCO estimates that 23.8 million additional children and youth may drop out or not have access to school next year due to the pandemic’s economic impact alone. 

Alcohol cess 

Part of: GS Prelims and Mains III – Economy and taxation 


  • The ‘unscientific’ introduction of the COVID­19 cess on wine, beer and spirits had impacted all stakeholders. 
  • Steep rise in the consumer price led many consumers shift to low-­priced, low-­quality products, and even moonshine, all of which have huge health and socio­economic ramifications. 
  • The pandemic cess has adversely impacted the States revenue too as the cess had hit sales volumes. 



Topic: General Studies 2:

  • Issues and challenges pertaining to the federal structure
  • Indian Constitution—historical underpinnings, evolution, features, amendments, significant provisions 

Three-language formula: History and Analysis

Context: Tamil Nadu has objected to the three-language formula advocated in the National Education Policy (NEP) 2020 

A Brief History of Language Politics in India 

  • In the Constituent Assembly, Hindi was voted as the official language of the Union by a single vote. At the same time, it gave States the liberty to independently decide their official language. 
  • However, it provided that the use of English language would continue for 15 more years, and after 15 years, Parliament can enact a law to provide for continued use of English language for specified purposes. 
  • The Constitution also asked the government to appoint a commission at the end of five and ten years respectively to make recommendation with regards to progressive use of Hindi language. 
  • As the end of the fifteen years drew closer, there were widespread protests in the southern states, particularly against promotion/imposition of Hindi Language 
  • Keeping in mind the protests, Official Language Act was enacted in 1963 which provided for continued use of English alongside Hindi indefinitely.  

Three Language Formula 

  • The teaching system across various regions in the country was not uniform.  
  • Whereas Hindi was the general medium of instruction in the north, regional languages and English were the media of instruction in other parts.  
  • This led to chaos and created difficulties for inter-state communication.  
  • Therefore, in order to uniformize the system, in 1968 the New Education Policy derived a middle path called the Three-Language Formula 
    • In Hindi-speaking states, the formula translated into learning Hindi, English and a modern Indian language (preferably south Indian).  
    • For students in non-Hindi speaking states, it mandated lessons in Hindi, English and the regional language  
  • The three functions which the three language formula sought to serve, were  
    • Accommodating group identity 
    • Affirming national unity 
    • Increasing administrative efficiency 
  • Incidentally, the NPE 1986 made no change in the 1968 policy on the three-language formula and the promotion of Hindi and repeated it verbatim. 

What has been the progress of Three Language Formula? 

  • Since education is a state subject, the implementation of the formula lay with the states. Only a few states had adopted the formula in principle. 
  • In many of the Hindi-speaking states, Sanskrit became the third language instead of any modern Indian language (preferably south Indian language).This defeated the purpose of Three Language formula to promote inter-state communications 
  • In non-Hindi speaking state such as Tamil Nadu a two-language formula was adopted and did not implement the three language formula 

Why has Tamil Nadu historically opposed Hindi Language? 

  • Language being the vehicle of Culture is protected vociferously by civil society & politicians in the State. Any attempt at diluting the importance of Tamil language is viewed as an attempt at homogenisation of culture. 
  • An important aspect of the opposition to Hindi imposition is that many in Tamil Nadu see it as a fight to retain English.  
  • English is seen as a bulwark against Hindi as well as the language of empowerment and knowledge.  
  • There is an entrenched belief in certain sections of society that the continued attempts to impose Hindi will eventually lead to elimination of English, global link language. 
  • However, voluntary learning of Hind has never been restricted in the State. The patronage for the 102-year-old Dakshina Bharat Hindi Prachar Sabha, based in Chennai, proves this.  
  • Only compulsion is met with resistance.  

What has been the impact on India due to Language Politics? 

  • Allegation of Imposition of Hindi: In Non-Hindi speaking states Hindi is mandated as third language however, it a difficult task as at least in 20 out of 28 states Hindi is not the natural language. This leads to misconstruing promotion of Hindi as imposition. 
  • Identity Politics: Language, from the very birth of the independent India, remained a contentious issue and as a result it has become tied with the identity politics. 
  • Reactionary Policies: States have often implemented reactionary policies against the centre’s enthusiasm to promote Hindi.  
  • For example, Kerala, Tamil Nadu, and West Bengal made it compulsory to learn their state languages across schools in the respective states 
  • Domino Effect: Such reactionary policies have a domino effect which jeopardizes other administrative functions and center-state relations. 

What does NEP 2020 say about the Three Language Formula? 

  • Medium of Instruction: Wherever possible, the medium of instruction until at least Grade 5, but preferably till Grade 8 and beyond, will be the home language/mother tongue/local language/regional language. 
  • The three-language formula will continue to be implemented while keeping in mind the need to promote multilingualism as well as promote national unity. 
  • NEP also stated that there will be a greater flexibility in the three-language formula, and no language will be imposed on any State. 
  • The three languages learned by children will be the choices of States, regions, and of course the students themselves, so long as at least two of the three languages are native to India. 

What is the Criticism of NEP 2020 with regards to Language? 

  • As opposed to the previous policy, the current draft suggests the introduction of languages at the primary level itself. This is criticized on the ground that it will be Cognitive burden on young children to learn languages 
  • Back Door Entry for Hindi: Tamil Nadu which is having two language policy in State opposes the continuation of Three Language Policy as they fear this would eventually pave the way for Hindi to enter the State through the back door. 
  • Scarcity of Teachers of non-Hindi Languages: Several linguistic activists and educationists observed that the move would eventually end up in students being forced to learn Hindi because of scarcity of teachers in other languages 
  • Discrimination in Funds: The Centre has allotted 50 crore for development of Hindi, while no such funds are given to other languages. 

Is the Criticism valid? 

  • Out of necessity, many in the Tamil Nadu State have picked up conversational Hindi to engage with the migrant population that feeds the labour needs of society. Teaching the same in schools is thus not a threat to native language 
  • There is this counter-argument that Tamil Nadu is depriving students of an opportunity to learn Hindi, touted as a national link language.  
  • Unlike the National Education policy-1968 which mandated teaching of Hindi in non-Hindi speaking States, the latest NEP does not explicitly mention the ‘third’ language shall be Hindi. 
  • This means, apart from Tamil and English, students must learn any one of Indian languages.   


India’s federal nature and diversity demand that no regional language is given supremacy over another. 


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


  • 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”.

Q1. Consider the following statements: 

  1. Alcohol is a subject under ‘State List’ 
  2. It is under Eight Schedule of Constitution of India 
  3. Alcohol consumption and its affects comes in direct conflict with articles 21 and 47 of Indian Constitution 

Select the correct code 

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

Q2. India is a member of which of the following? 

  1. Organisation for Economic Co-operation and Development 
  2. Financial Action Task Force on Money Laundering 
  3. International Transport Forum 
  4. Nuclear Energy Agency 

Select the correct statements 

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

Q3. Operation Gibraltar is associated with

  1. Initiative to turn all major airports of country carbon neutral. 
  2. Initiative to set up solar panels on Major River routes to conserve water from evaporation and also generate electricity. 
  3. India’s massive repatriation operation to bring back stranded Indians from different parts of the world. 
  4. Strategy of Pakistan to infiltrate Jammu and Kashmir. 

Q4. Hawala transactions relate to payments 

  1. received in rupees against overseas currencies and vice versa without going through the official channels 
  2. received for sale/transfer of shares without going through the established stock exchanges 
  3. received as commission for services rendered to overseas investors/buyers/sellers in assisting them to get over the red tape and/or in getting preferential treatment 
  4. made to political parties or to individuals for meeting election expenses 

Q5.  Given below are the statements regarding Financial Action Task Force (FATF), select the INCORRECT statements among them. 

  1. It is a body governed by UN which is involved in setting standards for anti-money laundering and combating financing of terrorism. 
  2. India is a member party to FATF. 

Choose the correct answer using the codes below: 

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


1 A
2 C
3 B

Must Read

About H1B Visas by US:

The Hindu

About Human Rights in the valley:

The Hindu

About Jammu & Kashmir changed status:

The Indian Express

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