DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 2nd March 2021

Archives

(PRELIMS + MAINS FOCUS)

Concern over Bond yields 

Part of: GS Prelims and GS – III – Economy

In news

• Rising yields on government securities (G-secs) or bonds in the USA and India have raised concern over the negative impact on other assets like stock markets, gold.
• The yield on 10-year bonds in India moved up from the recent low of 5.76% to 6.20% in line with the rise in US yields, sending concerns through the stock market. 

Important value additions 

• Bond yield is the return an investor gets on that bond or a particular G-sec.
• Factors affecting the yield: Monetary policy of the RBI (interest Rates), fiscal position of the government and its borrowing programme, global markets, economy, and inflation.
• A fall in interest rates makes bond prices rise, and bond yields fall. 
• Rising interest rates cause bond prices to fall, and bond yields to rise.
• So, a rise in bond yields means interest rates in the monetary system have fallen, and the returns for investors have declined.

Pakistan to Remain on FATF ‘Grey List ’

Part of: GS Prelims and GS-II- International Relations

In news:

• Financial Action Task Force (FATF) has decided to keep Pakistan on its terrorism financing “grey list”.

Key takeaways 

• Pakistan must demonstrate in taking action against UN-designated terrorists and their associates to get removed from the grey list. 
• Once Pakistan completes three unfulfilled tasks, decision will be taken on its present status in June.
• Pakistan has failed to fulfil six out of 27 obligations of the FATF. 

Important value additions 

• The FATF is an inter-governmental body set up in 1989. 
• Objective: To combat money laundering, terror financing and other related threats to the international financial system.
• Currently, it has 39 members.
• Pakistan has been on the grey list since June 2018.

Related articles:

FATF report flags wildlife trade

FATF decides to keep Pakistan on its grey list

United Nations Committee for Development Policy (CDP) 

Part of: GS Prelims and GS-II- International Relations

In news:

• The United Nations Committee for Development Policy (CDP) has recommended Bangladesh to be removed from the category of Least Developed Country (LDC). 

Key takeaways 

• Bangladesh has fulfilled the eligibility criteria in terms of per capita income, human assets and economic and environmental vulnerability.
• This is the second consecutive time since 2018 that the CDP has made recommendation for Bangladesh. 

• The CDP decides on the LDC status of a country based on three criteria- (1) per capita income; (2) human assets index and economic vulnerability index.
• A country must achieve at least two of the three criteria at two consecutive triennial reviews to be considered for graduation.
• The proposal will be sent to the United Nations Economic and Social Council (ECOSOC) for endorsement in June to be finally approved by the UN General Assembly (UNGA) in September 2021.

• Impacts: (1) Preferential provisions in export, provision of subsidy to agriculture and infant industries and access to climate finance are likely to stop after transition from LDC; (2) enhanced confidence of international financial bodies, improved credit rating and higher FDI are expected to benefit Bangladesh after the transition period is completed.

Important value additions 

The Committee for Development Policy 

• It is a subsidiary body of the United Nations Economic and Social Council (ECOSOC). 
• Function: To provide independent advice to the Council on development policy issues. 
• The Committee is also responsible for deciding which countries can be considered least developed countries (LDCs).
• The Committee has 24 members, nominated in their personal capacity by the United Nations Secretary-General and appointed by ECOSOC for a period of three years.

Do you know? 

• Bangladesh will get time upto 2026 to prepare for the transition to the status of a developing country. 
• Usually countries are given three years for transition but this year due to the Corona pandemic, Bangladesh has been given five years for the process.

Channapattana toy makers 

Part of: GS Prelims and GS-III- GI tag; Economy

In news:

• The Channapattana toy makers were in news recently. 

Source: Deccan Herald 

Important value additions 

• Channapatana is a city in Karnataka, India.
• The city is famous for its wooden toys and lacquerware.
• Channapatna is also called Town of toys (“Gombegala nagara”).
• The origin of toys is dated back to Tipu Sultan’s reign. 
• These toys have been given Geographical Indication tag. 

Related articles:

• What is a GI tag?
• GI tag can help ST entrepreneurs thrive

Maritime India Summit 2021

Part of: GS Prelims and GS- III – Defence and Security

In news:

• Indian Prime Minister will inaugurate ‘Maritime India Summit 2021’ on 2nd March. 

Key takeaways 

• Organized by: Ministry of Ports, Shipping and Waterways
• Denmark is the partner country for the three-day summit.
• The Summit will visualize a roadmap for India’s Maritime sector for next decade. 
• It will work to propel India to the forefront of the Global Maritime Sector.
• Eminent speakers from several countries shall attend the Summit. 

TLR 7/8: Covaxin’s Key molecule developed by Indian lab 

Part of: GS Prelims and GS- III – Sci & Tech; Achievements of Indians

In news:

• The Indian Institute of Chemical Technology (IICT), a Council for Scientific and Industrial Research (CSIR) lab helped in the development of key molecule for COVAXIN. 

Key takeaways 

• Covaxin is the indigenous vaccine developed by the Bharat Biotech International Limited.
• It is a highly purified, whole virion, inactivated SARS-Cov-2.
• It has been formulated with ‘Algel-IMDG’, which contains chemically absorbed TLR7/8 as an adjuvant onto aluminium hydroxide gel to generate the requisite type of immune responses without damaging the body.

Related articles:

Towards an effective vaccination distribution policy

Miscellaneous

Suryakiran Aerobatic Team (SKAT)

• The Suryakiran Aerobatic Team (SKAT) will perform at an airshow at the Galle Face in Colombo from March 3 to 5 as part of the 70th anniversary celebrations of the Sri Lankan Air Force (SLAF).

• The team was formed in 1996 with Kiran Mk-II aircraft. 
• SKAT team was resurrected in 2015 with the Hawk advanced jet trainers.
• The SKAT team, also known as 52 Squadron or The Sharks, is based in Bidar.

(Mains Focus)

EXECUTIVE/ GOVERNANCE

Topic:

• GS-2: Structure, organization and functioning of the Executive 
• GS-2: Important aspects of governance, transparency and accountability, e-governance- applications 

Lateral Entry into bureaucracy

Context: UPSC has recently issued an advertisement seeking applications from individuals, who would make a “lateral entry” into the government secretariat.

Key features of Lateral Entry Advertisement

• Vacancies: Three posts of Joint Secretary and 27 of Director in central government 
• Time Period: These jobs would be contracted for three to five years. 
• The basic qualification for a Joint Secretary lateral entrant is 15 years of work experience, and for Directors it is 10 years of work experience.
• Reservations: These posts were “unreserved”, meaning were no quotas for SCs, STs and OBCs.

What is ‘lateral entry’ into government?

• The term lateral entry relates to the appointment of specialists, mainly those from private sector, in government organisations.
• These ‘lateral entrants’ would be part of the central secretariat which in the normal course has only career bureaucrats from the All India Services/ Central Civil Services
•  Niti Aayog Recommendation: NITI Aayog, in its three-year Action Agenda, and the Sectoral Group of Secretaries (SGoS) on Governance in its report submitted in February 2017, recommended the induction of personnel at middle and senior management levels in the central government. 

What is the government’s reasoning for lateral entry?

• Domain Expertise: The government’s idea is to bring in domain expertise from the private sector to the Central administration which helps address the complexity of present day administration

• Augments the availability of manpower: The government also faces a shortage of IAS (Indian Administrative Service) officers working on deputation in the Centre, this option of lateral entrants will help address this problem.

• To induct competitiveness: Another objective of inducting specialists is to improve efficiency and create competition in governance delivery which is criticised for being status-quoist and conservative in its functioning.
• Aligned with Liberalisation Policy:  After liberalisation in 1991, markets are playing critical role in administration. In such environment, regulatory capacity of govt. is critical which depend upon the up to date knowledge of administrators, which require fresh intake from private sector.
• Participatory Governance: In the present times governance is becoming more participatory and multi actor endeavour, thus lateral entry provides stakeholders such as the private sector and non-profits an opportunity to participate in governance process.

Has the government so far made any ‘lateral entry’ appointments?

• The new ad is for the second round of such recruitments. Earlier, the government had decided to appoint experts from outside the government to 10 positions of Joint Secretary in different Ministries/Departments and 40 positions at the level of Deputy Secretary/Director.
• The ad for the Joint Secretary-level appointments, issued in early 2018, attracted 6,077 applications; after a selection process by the UPSC, nine individuals were recommended for appointment in nine different Ministries/Departments in 2019.

Why is lateral entry sometimes criticised?

• Lack of Reservation: Groups representing SCs, STs and OBCs have protested the fact that there is no reservation in these appointments.
• Issue of transparency: The key to the success of lateral entry would lie in selecting the right people in a manner which is open and transparent. The selection process conducted by credible Constitutional body like UPSC partly address this problem.
• Incoherence in Value System: Private sector approach is profit oriented on the other hand motive of Government is public service. This is also a fundamental transition that a private sector person has to make while working in government.
• Internal Resistance: Lateral entry is faces resistance from serving Civil Servants who would have worked within the system for years and in line for occupying such top level posts. A lateral entry can thus be met with resistance from the existing bureaucrats
• Conflict of interest: The movement from private sector raises issues of potential conflict of interest. This issue requires stringent code of conduct for entrants from private sectors to ensure conflict of interest is not detrimental to public good.
• Lack of specific criteria: The criteria laid out in the advertisement were broad-based, and so failed to provide a narrow window to attract people of eminence or domain experts in the fields advertised for.
• Lack of Institutionalised Process: Lateral entry is being done on temporary and ad hoc basis. This cannot be a sustainable model of human resource management. 

Conclusion

• An intensive training program for entrants from the private sector to civil services need to be formulated which help them understanding the complex nature of work in Government.
• There is also a need to institutionalize the process of induction of outside talent into the government.

Connecting the dots:

• Mission Karmayogi

GOVERNANCE/ ECONOMY

Topic:

• GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation 
• GS-3: Indian Economy and its challenges

Revising Food Security Act

Context: The NITI Aayog recently circulated a discussion paper on a proposed revision in the National Food Security Act (NFSA), 2013

What is NFSA?

• Right based framework: The NFSA provides a legal right to persons belonging to “eligible households” to receive foodgrains at subsidised price– rice at Rs 3/kg, wheat at Rs 2/kg and coarse grain at Rs 1/kg — under the Targeted Public Distribution System (TPDS). 
• Beneficiaries: Under sub-section (1) of Section 3 of the Act, the term “eligible households” comprises two categories — “priority households”, and families covered by the Antyodaya Anna Yojana (AAY). 
• Benefits: Priority households are entitled to receive 5 kg of foodgrains per person per month, whereas AAY households are entitled to 35 kg per month at the same prices.
• Coverage: The Act has prescribed the coverage under “eligible households” — 75% of the rural population and up to 50% of the urban population. On the basis of Census 2011 figures and the national rural and urban coverage ratios, 81.35 crore persons are covered under NFSA currently.
• The percentage coverage under the Targeted Public Distribution System in rural and urban areas for each State shall, subject to sub-section (2) of section 3, be determined by the Central Government.
• The total number of persons to be covered in such rural and urban areas of the State shall be calculated on the basis of the population estimates as per the census of which the relevant figures have been published.
• Demand from States: Thus, the number of NFSA beneficiaries was frozen in 2013. However, given the population increase since then, there have been demands from the states and union territories to update the list by ensuring an annual updating system under NFSA, 

Why has NITI Aayog proposed?

• Revision of Coverage Ratios: NITI Aayog has suggested that the national rural and urban coverage ratio be reduced from the existing 75-50 to 60-40. if this reduction happens, the number of beneficiaries under the NFSA will drop to 71.62 crore (on the basis of the projected population in 2020).
• Revision of CIP: Prices at which food is issued to beneficiaries are called central issue prices (CIPs). A revision of CIPs is one of the issues that have been discussed by NITI Aayog.

What is the implication of the revision for the Centre and the states?

• To make these changes in the law, the government will have to amend sub-section (2) of Section 3 of the NFSA. For this, it will require parliamentary approval
• Saving in Food Subsidy Bill: If the national coverage ratio is revised downward, the Centre can save up to Rs 47,229 crore (as estimated by the NITI Aayog paper). However, the move may be opposed by some of the states.
• Increased fiscal burden if not revised: On the other hand, if the rural-urban coverage ratio remains at 75-50, then the total number of people covered will increase from the existing 81.35 crore to 89.52 crore that will result in an additional subsidy requirement of Rs 14,800 crore

Conclusion

States need to deliberate the proposals made by NITI Aayog by keeping in mind the food security of people and its ability to withstand additional fiscal burden.

Connecting the dots:

• COVID and Food Security

(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 FATF was founded to tackle which of the following?

1. Money laundering
2. Terror financing
3. Illegal trade of exotic species
4. Both (a) and (b)

Q.2 Consider the following statements regarding bond yields:

1. A fall in interest rates makes bond prices rise, and bond yields fall. 
2. Rising interest rates cause bond prices to fall, and bond yields to rise.

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 The Committee for Development Policy is a subsidiary body of which of the following?

1. United Nations International Children’s Emergency Fund
2. United Nations Economic and Social Council
3. World Health Organisation
4. International Monetary Fund

ANSWERS FOR 1st March 2021 TEST YOUR KNOWLEDGE (TYK)

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