DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 11th October 2022

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  • October 11, 2022
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Modhera Sun Temple

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  • Prelims – Art and Culture

Context: Prime Minister of India recently witnessed the 3D light and sound show explaining the importance of the centuries-old Sun temple built during the Chalukya dynasty.

About Sun Temple at Modhera:

  • It was built in 1026-27 CE during the reign of Bhima I of the Solanki dynasty and is a protected monument maintained by Archaeological Survey of India.
  • The temple complex is divided into three components:
    • Gudhamandapa, the shrine hall,
    • Sabhamandapa, the assembly hall and
    • Kunda, the reservoir.
  • The temple is suspected to have been built to commemorate the defense of Modhera by Bhima I against Mahmud of Ghazni.
  • The temple complex is built in Maru-Gurjara style also known as Solanki style.
  • The exclusively carved temple complex and the magnificently sculpted kund are jewels in the art of masonry of the Solanki period apparently which was also known as the Golden Age of Gujarat.

Modheshwari Mata Temple:

  • The temple is located near the ruins of famous Sun Temple, where another original place of worship is situated below the step-well.
  • This temple is very famous amongst the Modh clan of Gujarat as Goddess Modheshwari is considered as the deity of the Modh clan.
  • The Goddess Modheshwari is believed to be a form of Goddess Parvati and is known for having 18 arms with each arm carrying various weapons to protect the clan from danger.

Other Important Sun Temples in India:

  • Sun Temple at Konark, Odisha
  • Martand Sun temple, Kashmir
  • Katarmal Sun Temple, Uttarakhand
  • Dakshinarkaa temple Gaya, Bihar
  • Bhramanya temple, Unao, Madhya Pradesh
  • Surya Prahaar temple, Assam
  • Suryanar Kovil Temple at Kumbakonam in Tamil Nadu
  • Suryanarayana temple at Arasavalli, Andhra Pradesh

Source: Hindustan Times

Previous Year Questions

Q.1) Consider the following pairs:

King                                     Dynasty

  1. Nannuka                              Chandela
  2. Jayashakti                           Paramara
  3. Nagabhata II                      Gurjara-Pratihara
  4. Bhoja                                   Rashtrakuta

How many pairs given above are correctly matched? (2022)

  1. Only one pair
  2. Only two pairs
  3. Only three pairs
  4. All four pairs

Q.2) Consider the following events in the history of India :

  1. Rise of Pratiharas under King Bhoja
  2. Establishment of Pallava power under Mahendravarman – I
  3. Establishment of Chola power by Parantaka – I
  4. Pala dynasty founded by Gopala

What is the correct chronological order of the above events, starting from the earliest time?  (2020)

  1. 2-1-4-3
  2. 3-1-4-2
  3. 2-4-1-3
  4. 3-4-1-2

U.N. Peacekeeping Forces

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  • Prelims – International Relations

Context: U.N. Peacekeeping chief in an interview says that Troop- and police-contributing countries need to be very much in the loop and involved in the process of making decisions on peacekeeping, and have been making a lot of efforts to improve the geographical diversity of nations providing the forces.

About UN Peace keeping forces:

  • The first time UN Peacekeeping Forces were first deployed in 1948 when the UN Security Council authorized the deployment of UN military observers to the Middle East.

Three basic principles of UNPKF:

  • Consent of the parties:
    • UN peacekeeping operations are deployed with the consent of the main parties to the conflict. This requires a commitment by the parties to a political process.
  • Impartiality:
    • United Nations peacekeepers should be impartial in their dealings with the parties to the conflict, but not neutral in the execution of their mandate.
  • Non-use of force except in self-defense and defence of the mandate:

UN peacekeeping operations are not an enforcement tool. However, they may use force at the tactical level, with the authorization of the Security Council, if acting in self-defense and defence of the mandate.

  • UNPKF brings together the General Assembly, the Security Council, the Secretariat, troop and police contributors and the host governments in a combined effort to maintain international peace and security.
  • The Security Council to determines when and where a UN peace operation should be deployed.
  • The Security Council establishes a peace operation by adopting a Security Council resolution. The resolution sets out that mission’s mandate and size.
  • The Security Council can vote to extend, amend, or end mission mandates as it deems appropriate.
  • Currently there are 12 UN peacekeeping operations deployed on three continents.

UNITED NATIONS MILITARY OBSERVER GROUP IN INDIA AND PAKISTAN (UNMOGIP) is deployed in Jammu & Kashmir to supervise the ceasefire between India and Pakistan on 24 January of 1949.

  • The UN Peacekeeping force is supplemented by personnel from member nations on a volunteer basis.

Department of Peace Operations (DPO):

  • DPO provides political and executive direction to UN peacekeeping operations around the world and maintains contact with the Security Council, troop and financial contributors, and parties to the conflict in the implementation of Security Council mandates.

Women, Peace, and Security is a key commitment of the Action for Peacekeeping initiative

  • Through UN Security Council resolution 1325, ensuing resolutions, as well as the Action for Peacekeeping (A4P) Declaration of Shared Commitments, the UN has called for an expansion of the role and contribution of women in its operations, including of uniformed women peacekeepers.
  • The Action for Peacekeeping (A4P) initiative views the Women, Peace, and Security agenda as critical to enhancing peacekeeping operations’ performance through supporting women’s full participation in peace processes and making peacekeeping more gender-responsive, including through increasing the number of civilian and uniformed women in peacekeeping at all levels and in key positions.
  • A4P has been signed by 152 Member States, a number of which have come forward to specifically champion implementation of A4P’s WPS commitment: Bangladesh, Canada, Finland, Germany, Ireland, Italy, Norway, South Africa, and the United Kingdom.

Source: The Hindu

Nobel Prize in Economics 2022

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  • Prelims – Current Affairs

In news: The Economics Prize for 2022 has gone to Ben Bernanke, Douglas Diamond and Philip Dybvig for their research related to how banks function.

  • The foundations of this research were laid by them in the early 1980s


  • Modern banking research clarifies the importance & vulnerabilities of banks, role of banks in the economy especially during a financial crisis.
  • Their analyses have been of great practical importance in regulating financial markets and dealing with financial crises.
  • The laureates’ insights have played an important role in ensuring crises such as covid pandemic did not develop into new depressions with devastating consequences for society.

Ben S Bernanke:

  • Bernanke demonstrated how failing banks played a decisive role in the global depression of the 1930s. The collapse of the banking system explains why the downturn was not only deep, but also long-lasting.
  • It added the importance of well-functioning bank regulation.
  • Conflict: savers want instant access to their money in case of unexpected outlays, while businesses and homeowners need to know they will not be forced to repay their loans prematurely. This creates the fundamental problem of volatility in banks and vulnerability to shocks such as in case of bank runs.

Douglas W Diamond and Philip H Dybvi:

  • The model captures the central mechanisms of banking, as well as its weaknesses.
  • They argue, that banks emerge as natural intermediaries that help ease liquidity.
  • They discuss how banks need to be more careful about assessing the loans they give out, or how bailing out banks in crisis might turn out to be and how the financial markets should be regulated to fulfil their function – channelling savings to productive investments without causing recurring crises – is a question that researchers and politicians continue to wrestle with.
  • This reduces the risk of financial crises developing into long-term depressions with severe consequences for society, which is of the greatest benefit to us all.


  • A bank run may happen where many savers try to withdraw their money at once, which can lead to a bank’s collapse. For example, when people were unable to withdraw their money from a few rural banks in China earlier this year, they witnessed bank runs.

About Nobel Prize:

  • Nobel Prizes are a group of five separate prizes awarded to “those who have conferred the greatest benefit to humankind.
  • Named after, Alfred Nobel, a Swedish chemist, engineer, and industrialist most famously known for the invention of dynamite.
  •  Nobel Prizes were first awarded in 1901.
  • The prizes carry a cash award of 10 million Swedish kronor (nearly $900,000).
  • The money comes from a bequest left by the prize’s creator, Alfred Nobel, who died in 1895.

Source: Indian Express

VLC Media Player blocked

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  • Prelims – Science & Technology

In News: The Ministry of Electronics and IT (MeitY) ordered the blocking of the website of VLC Media Player after it found that the site was communicating with servers of a previously banned app by the ministry which was transferring sensitive personal data of Indians to a “hostile country”.

  • The request to block was sent by the Home Ministry.
  • The action was taken under Section 69(A) of the Information Technology Act.
  • Following which, VideoLan sent a legal notice to MeitY and DoT, to know the reasons and demanding a copy of the blocking order.


  • VideoLAN is the non-profit based out of France that operates VLC Media Player.
  • Indian banned VideoLan’s URL i.e. videolan.org, from where the VLC Media Player software could be downloaded.
  • However, the VLC Media Player software is available for download on Google and Apple’s app stores.
  • The ministry using “open-source threat intelligence reports” concludes that VLC Media Player was used by a China-backed hacking group called ‘Cicada’ for carrying out cyber-attacks.
  • VideoLan’s website was “communicating” with an app called Onmyoji Arena and the data collected by the site was transferred through this app to a “hostile country”.
  • Onmyoji Arena, was one of the 54 apps that MeitY had ordered to block for alleged Chinese-links and for posing a national security risk to India.
  • These threat intelligence reports also purportedly revealed a malicious campaign from hackers associated with the Chinese government who were using VLC Media Player to “launch a custom malware loader”.
  • In cybersecurity parlance, a loader is essentially a malicious code used for communication between the attacker and the compromised system.

Information Technology Act 2000 (IT Act):

  • It is the primary law in India dealing with cybercrime and electronic commerce.
  • Secondary legislation includes the Intermediary Guidelines Rules 2011 and the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
  • It deals with electronic commerce, Digital Signatures, prevention of cybercrimes and e-governance.
  • It applies to the whole of India
  • It also has a Cyber Appellate Tribunal to resolve disputes.
  • Section 69(A): Power to issue directions for blocking for public access of any information through any computer resource; in the interest of sovereignty and integrity of India, defence of India, security of the State, friendly relations with foreign States or public order or for preventing incitement to the commission of any cognizable offence. Examples include Chinese-app TikTok ban
  • Section 67(A): Punishment for publishing or transmitting of material containing sexually explicit act, etc., in electronic form
  • Section 66 E: Punishment for violation of privacy
  • Section 66F: Punishment for cyber terrorism
  • Section 66C: Punishment for identity theft
  • Criticisms:  restriction of free speech and fundamental rights

Source: Indian Express

Climate Change

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  • Prelims – Environment

In News: A study, conducted by researchers from University of Tasmania and University of Bonn discovered ancient sedimentary DNA (seda DNA).

  • An international team studied fragments of deoxyribonucleic acid or DNA during the International Ocean Discovery Program, an international, multi-drilling platform research program., in the Scotia Sea, north of the Antarctic continent.
  • This DNA is a million years old and makes it possible to study the responses of ocean ecosystems to climate change.


  • Seda DNA analysis is a new technique that helps decipher ‘who’ has lived in the ocean in the past and ‘when’.
  • This comprises by far the oldest authenticated marine seda DNA to date.
  • Marine seda DNA analyses can be expanded to hundreds of thousands of years, opening the pathway to the study of ecosystem-wide marine shifts and changes to paleo-productivity throughout many ice-age cycles.
  • It can help study long-term responses of ocean ecosystems to climate change, as demonstrated by the study Ancient marine sediment DNA reveals diatom transition in Antarctica.


  • Antarctica is one of the most vulnerable polar regions and susceptible to climate change on Earth. West Antarctica is one of the fastest-warming regions globally. So, studying the frozen continent’s past and present responses to environmental and climate change is therefore critical and urgent.
  • The study can help assess current and future changes in marine life around Antarctica.
  • Understanding how Southern Ocean organisms respond to climate variability is necessary to predict how the Antarctic marine ecosystem will evolve in the near future.
  • Global warming causes an increase in ocean productivity around Antarctica.
  • Amongst the detected organisms were diatoms as key primary producers whose DNA was detected back to half a million years. Diatoms were consistently abundant during warm climatic periods. The last such change in the food web of the Scotia Sea occurred about 14,500 years ago.
  • These periods of natural climate change can also give insight into the current and future human-induced climate warming and how the ecosystem might respond to it.

Source: Down to Earth

Previous Year Question

Q.1) The formation of ozone hole in the Antarctic region has been a cause, of concern. What could be the reason for the formation of this hole (2011)

  1. Presence of prominent tropospheric turbulence; and inflow of chlorofluorocarbons
  2. Presence of prominent polar front and stratospheric clouds; and inflow of chlorofluorocarbons
  3. Absence of polar front and stratospheric clouds; and inflow of methane and chlorofluorocarbons.
  4. Increased temperature at polar region due to global warming

Human-Animal conflict

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  • Prelims – Environment

In News: Tiger T-104 was put down by the forest department of Bihar in the Valmiki Tiger Reserve according to protocol laid down by National Tiger Conservation Authority (NTCA) for man-eater tigers, on the orders of the Chief Wildlife Warden (CWW) of Bihar.

  • The tiger in question was a three-year-old male, who had killed 10 people in the district.
  • Four years ago, Avni or T1, the man-eating tigress of Yavatmal district in Maharashtra, had been similarly eliminated after she mauled 13 people to death.
  • Tiger is listed under Schedule 1 of the Wild Life (Protection) Act, 1972 (WLPA).

Valmiki Tiger Reserve (VTR):

  • It is the 18th tiger reserve of India, situated in the North West corner of the State of Bihar, in West Champaran district of the state.
  • In north, the protected areas are bordered by Nepal while the Indian state Uttar Pradesh bounds the Wildlife Sanctuary from western side.
  • VTR comprises of the Valmiki National Park and Valmiki Wildlife Sanctuary.
  • The pristine forest and wilderness of VTR is an excellent example of Himalayan Terai landscape.
  • The VTR forest area covers 901.07 sq km, out of which Wildlife Sanctuary is 880.78 sq km. and National Park is about 335.64 sq. km.
  • VTR is one of the eleven Level 1 Tiger Conservation Units (TCU) in the Indian sub- continent, where long term survival of Tigers (Panthera tigris) is possible.
  • The Reserve has also been designated as Important Bird Area (IBA) by the Indian Bird Conservation Network.
  • Fauna: Tigers, sloth bear, leopard, Indian gaur, hyena, wild dogs, blue bull, leopard cat, wildcat, fishing cat, Himalayan pan. The dolphin & gharial are present in Gandak river.
  • Flora: Bhabar Dun Sal Forest, Dry Siwalik Sal Forest, West Gangetic Moist Mixed Deciduous Forest.

Wildlife Protection Act (WPA) 1972:

  • In India, wildlife conservation and protection are maintained under the Wildlife (Protection) Act, 1972.
  • The Act is a product of the times when environmental jurisprudence was rapidly developing in India with due credit to judicial activism.
  • The current Act is comprehensive and protects all kinds of animals – amphibians to birds, mammals, and reptiles and specified plants that cannot be destroyed and damaged without the approval of the government.
  • Powers to the State Governments: to protect and preserve animals and birds as per Section 3 including prohibition on the capturing, killing, selling, buying, possessing of the animals including their plumage (feathers) and to grant licenses.
  • The Central Government is empowered to appoint the Director of Wildlife Preservation.
  • The State Government is required to appoint the Chief Wildlife Warden(CWW), Wildlife Wardens, and Honorary Wildlife Wardens.
  • Hunting and poaching are prohibited under the Act with exceptions such as special permission may be granted by CWW for purposes like education, scientific research, etc.
  • Constitution of the National Board for Wildlife with the PM as its chairperson.
  • 6 schedules include protection to both animals and plants including Vermin (specified in Schedule five)
  • Recognition of Protected Areas (PAs) such as Wildlife Sanctuaries and National Parks.

Source:  Down to Earth

Previous Year Question

Q.1) Among the following Tiger Reserves, which one has the largest area under “Critical Tiger Habitat”? (2020)

  1. Corbett
  2. Ranthambore
  3. Nagarjunsagar-Srisailam
  4. Sunderbans

Q.2) Consider the following statements:

  1. Animal Welfare Board of India is established under the Environment (Protection) Act, 1986.
  2. National Tiger Conservation Authority is a statutory body.
  3. National Ganga River Basin Authority is chaired by the Prime Minister.

Which of the statements given above is/are correct?

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

Private Investment

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  • Prelims – Economy
  • Mains – GS 3 (Economy)

Context: Recently Finance Minister rightly flagged concerns about sluggish corporate investment, despite the government’s business-friendly stance, including a reduction in the corporate tax.

  • The reduction, effected in 2019, lowered the rate for existing companies to 22% from 30% and for new manufacturing companies to 15% from 25%. However, the corporate investment rate, i.e., investment as a share of the national income, has barely budged.

Capital Formation:

  • Capital formation is a term used to describe a country’s net capital accumulation over an accounting period. The term refers to capital goods additions such as equipment, tools, transportation assets, and electricity.
  • Countries require capital goods to replace older ones used in the production of goods and services.
  • Production falls if a country is unable to replace capital goods as they reach the end of their useful lives.
  • In general, the higher an economy’s capital formation, the faster it can grow its aggregate income.

Decline of private capital formation:

  • The NDA government’s first pronouncements in 2014 had conveyed that it desired a shift away from a state-driven model of economic development. If this was to be, the private sector would take the lead in driving the economy. The government aimed to improve the ease of doing business in India.
  • As private capital formation last peaked in 2011–12, its decline is something that the present government inherited.
    • However, it has had no success in turning it around. Though it has not allowed public investment to slip, that has not been enough under the circumstances.
    • Either ideological predilection regarding the size of the government or the straitjacket imposed by the Fiscal Responsibility and Budget Management Act (FRBMA) have held back the government from expanding it.
  • Since 2014 the upsurge in public investment had long since ended and agricultural growth had become erratic.
    • Finally, with the global financial crisis and the slowing of the world economy, export growth declined. These added up to a slowing of the exogenous drivers of demand, and private investors could not but have seen that the situation was not likely to turn positive soon.
  • Based on the situation in 2014, India’s investors would have been fully rational in anticipating a not-so-rosy future for the economy unless some exogenous factors were to turn favorable, or the government were to act decisively to energize the situation through public investment.
  • They would have seen that demonetization, with the attendant digitization, and the roll out of the GST could not have done much for the growth of demand.

Impact of COVID-19:

  • While the government has for long nursed an aversion to the government playing a role in capital formation, the experience during the pandemic seems to have brought about a change of mind.
  • The Union Budget of 2022 was defined by a historic increase in the allocation for capital spending. This could have a positive effect on private investment, but past experience suggests that it could take time to play out.
  • So, the expansion in public investment may have to be sustained for sufficiently long.
  • Even the fiscally conservative International Monetary Fund has suggested that public investment can play the role of an engine of growth for the developing economies.
  • The sustained growth needed to kindle private investment may require that the current public investment thrust be sustained for at least half a decade.

Stepping up public investment:

  • The one lever that the government could have pulled as it watched private investment decline was to step up public investment.
  • Since 1947, every turning point of growth in India was preceded by a significant shift upward of the public investment rate.
  • It suggests that crowding in, rather than crowding out, characterizes the relationship between public and private capital formation in India.

(Crowding-in is a phenomenon that occurs when higher government spending leads to an increase in economic growth and therefore encourages firms to invest due to the presence of more profitable investment opportunities.)

Way forward: Two aspects would remain crucial even if the government were to find the will to maintain its current pace.

  • It is important to choose the right projects focusing on productivity-enhancing infrastructure. Here, some tied transfer of funds to the States would be desirable, as they are better placed to identify such investment.
  • Inflation can derail a high public investment programme due to the disaffection it generates. Its control would require a step-up in the growth of agricultural produce other than the superior cereals.
    • In fact, this should be seen as an opportunity to end India’s import dependence on edible oils and the persisting shortfall in the supply of vegetables. Only a supply-side thrust can permanently end food inflation.

Though this government may have inherited the sluggish private investment, it must reflect upon whether its own actions may have adversely affected the investment climate.

Source:   The Hindu

Previous Year Questions

Q.1) In India, which of the following can be considered as public investment in agriculture?

  1. Fixing Minimum Support Price for agricultural produce of all crops
  2. Computerization of Primary Agricultural Credit Societies
  3. Social Capital development
  4. Free electricity supply to farmers
  5. Waiver of agricultural loans by the banking system
  6. Setting up of cold storage facilities by the governments.

In India, which of the following can be considered as public investment in agriculture? (2020)

Select the correct answer using the code given below:

  1. 1, 2 and 5 only
  2. 1, 3, 4 and 5 only
  3. 2, 3 and 6 only
  4. 1, 2, 3, 4, 5 and 6

Online gaming market in India

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  • Prelims – Governance
  • Mains – GS 2 (Governance)

Context: An inter-ministerial task force, set up by the Ministry of Electronics and Information Technology (MeitY) to propose legislation to regulate online gaming, has proposed the creation of a central regulatory body for the sector, clearly defining what games of skill and chance are, and bringing online gaming under the purview of the Prevention of Money Laundering Act, 2002.

The online gaming market in India:

  • e-Sports: These are video games that were played privately or on consoles in video game stores in the 1990s, but are currently played online in a structured manner between professional players, either individually or in teams.
  • Fantasy sports: These are games in which the player selects a team of real sports players from several teams and earns points based on how well the players perform in real life. For example,
  • Online casual games:
    • These could be skill-based, where the outcome is heavily impacted by mental or physical skill or chance-based, where the outcome is heavily influenced by some randomized activity, such as rolling a die.
    • A game of chance may be considered as gambling if players bet money or anything of monetary value.

Size of online gaming market in India:

  • The Indian mobile gaming industry’s revenue is predicted to exceed $1.5 billion in 2022 and reach $5 billion by 2025.
  • Between 2017 and 2020, the industry in India increased at a compound annual growth rate (CAGR) of 38%, compared to 8% in China and 10% in the US.
  • According to a FICCI report, transaction-based games revenue increased by 26% in India, while the number of paying players increased from 80 million in 2020 to 95 million in 2021 (by 17%).

Need for a central law to regulate online gaming:

  • Lack of regulatory oversight:
    • Online gaming exists in a regulatory grey area and there is no comprehensive legislation with respect to its legality or its boundaries.
  • Also, there is currently no regulatory framework to govern various aspects of online gaming companies such as –
    • Having a grievance redressal mechanism, Protection of data and intellectual property rights, and prohibiting misleading advertisements.
    • Online gaming is a state subject (Under Entry 34, List II ‘Gambling’ and ‘Betting’):
  • However, state governments have stated that it is extremely difficult for them to implement some restrictions, such as geo-blocking specific apps or websites within their state’s borders.
  • Societal concerns: A number of reported incidences of persons losing big amounts of money on online games, resulting to suicides in various parts of the country.

Recommendations of the task force:

  • Nodal ministry to regulate online gaming:
    • The task force has suggested that MeitY may act as the nodal ministry to regulate online gaming, except for the e-sports category on which the Department of Sports can take the lead.
    • The Consumer Affairs Ministry can regulate the sector for unfair trade practices.
  • A central-level law for online gaming:
    • This should apply to both real money and free games of skill, such as e-sports, online fantasy sports contests, card games, etc.
    • Casual games with no real money element in the form of stakes may be exempt from such rules unless they have a large number of users in India.
  • Creating a regulatory body for the online gaming industry:
    • This body will establish what constitutes a game of skill or chance, and will certify various gaming forms, as well as pursue compliance and enforcement.
  • Establishing a three-tier dispute resolution mechanism:
    • This will be similar to that prescribed under the Information Technology (IT) Rules, 2021 for online streaming services.
  • Bringing online gaming platforms under the scope of the Prevention of Money Laundering Act, 2002:
    • These platforms will also be treated as ‘reporting entities’ under the Act of 2002, and will be required to report suspicious transactions to the Financial Intelligence Unit-India.
  • This means that any online gaming platform (domestic or foreign) offering real money online games to Indian users will need to be a legal entity incorporated under Indian law.
  • Betting apps can be included under the proposed Digital India Law:
    • Many offshore betting and gambling websites which are illegal in India have become popular among Indian users, as they allow users to transact in Indian rupees through internet banking, UPI, and popular wallets.
    • Despite being based outside India, some of these websites are widely advertised in Indian media.
  • On the aspect of prohibiting games of chance (gambling websites or apps), the proposed Digital India Act (which would replace the IT Act) can include it in the list of prohibited user harms that will not be permitted.

Source:  Indian Express

Pilot launch of e-rupee for specific use cases

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  • Prelims – Economy
  • Mains – GS 3 (Economy)

Context: Recently, the Reserve Bank of India (RBI) indicated that it will soon commence limited pilot launches of e-rupee (e`), or Central Bank Digital Currency (CBDC) or digital rupee, for specific use cases.

Key details:

  • It has hinted at two broad categories for the use of e-rupee — retail and wholesale.
  • It will take the payment system in the country to a new level where the common people and businesses will be able to use the digital currency seamlessly for various transactions.
  • The central bank said that the development of CBDC could provide the public a risk-free virtual currency that will give them legitimate benefits without the risks of dealing in private virtual currencies.
  • The approach for issuance of CBDC will be governed by two basic considerations:
    • to create a digital rupee that is as close as possible to a paper currency and to manage the process of introducing digital rupee in a seamless manner.
    • The central bank also feels that it is desirable for CBDCs to have offline capabilities to make it a more attractive and accessible medium of payment for a wide category of users.

About E-rupee:

  • E-rupee is the same as a fiat currency and is exchangeable one-to-one with the fiat currency.
  • Only its form is different.
  • It can be accepted as a medium of payment, legal tender, and a safe store of value.
  • The digital rupee would exchangeable one-to-one appear as liability on a central bank’s balance sheet.

What are the types of e-rupees?

Based on the usage and the functions performed by the digital rupee and considering the different levels of accessibility, CBDC can be demarcated into two broad categories

General purpose (retail) (CBDC-R)

  • Retail CBDC is an electronic version of cash primarily meant for retail transactions.
  • It will be potentially available for use by all — private sector, non-financial consumers, and businesses — and can provide access to safe money for payment and settlement as it is a direct liability of the central bank.

Wholesale (CBDC-W)

Wholesale CBDC is designed for restricted access to select financial institutions.

It has the potential to transform the settlement systems for financial transactions undertaken by banks in the government securities (G-Sec) segment, inter-bank market and capital market more efficiently and securely in terms of operational costs, use of collateral and liquidity management.

Forms of CBDC

  • The central bank says e-rupee, or CBDC, can be structured as token-based or account-based.
  • A token-based CBDC would be a bearer instrument like banknotes, meaning whosoever holds the tokens at a given point in time would be presumed to own them.
  • In a token-based CBDC, the person receiving a token will verify that his ownership of the token is genuine.
  • A token-based CBDC is viewed as a preferred mode for CBDC-R as it would be closer to physical cash.
  • An account-based system would require maintenance of record of balances and transactions of all holders of the CBDC and indicate the ownership of the monetary balances.
  • In this case, an intermediary will verify the identity of an account holder.
  • This system can be considered for CBDC-W.

Model for issuance:

There are two models for issuance and management of CBDCs under the RBI’s consideration:

Direct model (single tier model)

  • In the direct model, the central bank will be responsible for managing all aspects of the digital rupee system such as issuance, account-keeping, and transaction verification.

Indirect model (two-tier model)

  • An indirect model would be one where the central bank and other intermediaries (banks and any other service providers), each play their respective role.
  • In this model, the central bank will issue CBDC to consumers indirectly through intermediaries and any claim by consumers will be managed by the intermediary.

What are the advantages of e-rupee?

  • Reduction in operational costs involved in physical cash management
  • Fostering financial inclusion
  • Bringing resilience, efficiency, and innovation in the payments system
  • It will add efficiency to the settlement system
  • Boost innovation in cross-border payments space
  • Provide the public with uses that any private virtual currencies can provide, without the associated risks.

Can e-rupee be transacted in offline mode?

  • The offline functionality as an option will allow CBDC to be transacted without the internet and thus enable access in regions with poor or no internet connectivity.
  • It will also create digital footprints of the unbanked population in the financial system, which will facilitate the easy availability of credit to them.
  • In the offline mode, the risk of ‘double-spending’ will exist because it will be technically possible to use a CBDC unit more than once without updating the common ledger of CBDC.
  • But it can be mitigated to a larger extent by technical solutions and appropriate business rules including monetary limits on offline transactions.

About Fiat Money:

  • Fiat money is a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.
  • The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing government, rather than the worth of a commodity backing it.
  • Most modern paper currencies are fiat currencies.

MUST READ:  Central Bank Digital Currency

Source:  Indian Express

Previous Year Questions

Q.1) Consider the following statements:

  1. Tight monetary policy of US Federal Reserve could lead to capital flight.
  2. Capital flight may increase the interest cost of firms with existing External Commercial Borrowings (ECBs).
  3. Devaluation of domestic currency decreases the currency risk associated with ECBS.

Which of the statements given above are correct? (2022)

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

India-Maldives relations

Open in new window


  • Mains – GS 2 (International Relations)

In News: ‘India Out’ campaign in Maldives has fueled anti-India public sentiments.

  • In October 2020, the opposition coalition of Maldives officially launched a challenge to the bilateral relationship through what it called the ‘India Out’ campaign.
  • The campaign seeks to exploit anti-India sentiments amidst allegations of India’s expansionist ambitions.
  • ‘India Out’ aims to fuel more hatred by creating scepticism for India’s investments in Maldives, the defence partnerships between the two, and India’s net-security provisions.
  • Local news outlets closely affiliated with the opposition—such as Dhiyares, its English edition The Maldives Journal, and the Maldives News Network (MNN), have played a vital role in the campaign.

Domestic Politics of Maldives:

  • Beginning of an autocratic regime (1978-2008) – Gayoom’s nomination as president of Maldives. The period was characterised by a lack of space for democratic dissent.
  • Emergence of democratic constitutional reforms in 2005 & Gayoom’s electoral defeat
  • India’s defence cooperation with Maldives attracted criticism from the opposition, who said Maldives was compromising its sovereignty and making space for Indian influence and presence in the island state.
  • Finding China to be a sound option for economic and political survival, Yameen went on an anti-India spree to further nationalist sentiments.
  • In 2018, his government asked India to withdraw its helicopters and operatives from the country, accusing them of espionage and violating sovereignty. India’s hesitancy to withdraw its helicopters within the given time escalated the anti-India rhetoric.
  • However, after 2018, there was a renewed focus on the ‘India First’ policy

China’s influence:

  • In 2014, Maldives welcomed President Xi Jinping for a visit he made to court support for the Belt and Road Initiative (BRI) project.
  • Maldives leased islands and infrastructure projects to China and the two signed a Free Trade Agreement.
  • There were also negotiations to establish a Joint Ocean Observation Centre, which would give China more relevance in the region.
  • In return, China offered Maldives mega-infrastructure projects and loans, most of them under opaque terms and conditions.
  • By the end of 2018, it was estimated that Maldives had borrowed around US$ 1.5 billion from China.


  • India and Maldives have shared diplomatic, defence, economic, and cultural relations for the past six decades.
  • Located in a crucial geographical position in the Indian Ocean, Maldives is vital to India’s strategy for the Indian Ocean and its neighbourhood. For its part, Maldives reaps benefits from India’s economic assistance and net security provision.

Importance of Maldives for India:

  • Maldives’ proximity to the west coast of India (barely 70 nautical miles away from  Minicoy and 300 nautical miles away  from India’s West coast)
  • Its situation at the  hub of commercial sea‐lanes running through Indian Ocean (particularly the 8° N and 1 ½° N channels)
  • Located between world’s busiest trade routes i.e., Strait of Malacca and Suez Canal
  • Issues of piracy and smuggling
  • Maritime security
  • Radicalisation in the form of influence of ISIS
  • Chinese domination and influence

Political relations:

  • India was among the first to recognize Maldives and establish diplomatic relations with, after its independence in 1965.
  • India established its mission at the level of CDA in 1972 and resident High Commissioner in 1980.
  • Maldives opened a full-fledged High Commission in New Delhi in November 2004, at that time one of its only four diplomatic missions worldwide.
  • India promptly assisted Maldives during 1988 under ‘Operation Cactus’ to abort a coup against autocratic regime.
  • Since establishment of diplomatic relations, almost all the Prime Ministers of India visited the Maldives.

Bilateral Assistance:

  • Indira Gandhi Memorial Hospital: established in 1986 in Male with an estimated cost of Rs. 42.5 crore. IGMH now serves as the most advanced tertiary care hospital in Maldives and is easily the most visible symbol of India’s assistance to the Maldives.
  • Faculty of Engineering Technology (FET): was set up as a grant-in-aid project in 1996. It has a capacity to train at least 200 students a year in various technical/vocational disciplines.
  • Tsunami-related assistance: During 2004 Indian Ocean Tsunami, India was the first country to rush relief and aid to the Maldives. INS Mysore carried relief materials and facilities. The total cost of assistance approximately Rs. 36.39 crores.
  • Covid-19 related assistance: ‘Travel Bubble’ and India and the Maldives on Saturday agreed to mutually recognise the COVID-19 vaccine certificates issued by each other.

Defence relations:

  • Dornier aircraft was finalised in 2020.
  • Under the agreement, India would deploy 25 unarmed personnel to operate the Dornier aircraft, and train seven Maldivian pilots, observers and engineers to operate the same.
  • The 25 unarmed personnel will be commanded by the Maldivian defence forces.
  • India will cover only the logistics cost of the aircraft and the Indian military personnel; Maldives will look after the operations of the Dornier aircraft.
  • The Maldivian government asserted that this agreement will help better monitor the Maldives’ EEZ, improve its maritime security, and limit illegal trafficking.
  • The Uthuru Thilafalhu (UTF) agreement was signed in 2021
  • India will help develop and maintain a coastguard harbour and dockyard for Maldives and provide professional, technical and logistical support for a period of 15 years.
  • To help improve maritime security by letting the Maldives National Defence Force (MNDF) dock, maintain, and repair its coast guard vessels.
  • In 2009, India gifted Maldives with a helicopter and the two sides signed a defence cooperation agreement for joint surveillance and patrols in the Indian Ocean. They also discussed establishing a network of 26 radars.
  • A Comprehensive Action Plan for Defence was signed in 2016 to consolidate defence partnership

Economic relations:

  • India and Maldives signed a trade agreement in 1981, which provides for export of essential commodities.
  • India‐Maldives  bilateral  trade  crossed  the  $  300  mn  mark  for  the  first  time  in  2021, reaching an impressive $ 323.29 mn.
  • India’s support to Greater Male Connectivity project include a $400  million  LoC  &  $100  million  grant,  renewal  of  essential commodities  trade agreement, and,  financial assistance of USD 250 million.
  • The State Bank of India has been playing a vital role in the economic development of the Maldives since 1974 by providing loan assistance for promotion of island resorts, export of marine products and business enterprises such Taj Group of India runs Taj Exotica Resort.
  • In 2010, GMR Infrastructure (India) and KLIA (Malaysia) consortium took over the Male International Airport on a 25 -year BOT contract to renovate and expand the largest and most important airport in the country.
  • India signed an agreement for 25-MW solar energy project in the Upper Southern province.
  • India has been the largest tourist source market for Maldives for two years in a row. A total of 291,787 Indian tourists travelled to the island nation in 2021, representing 22 per cent market share.
  • Maldives received US$150m currency swap facility from India in 2020.
  • in 2008 and 2011, a Standby Credit Facility of US$100 million each was given to Maldives.

Disaster management:

  • 2014 Male water crisis: Emergency cooperation such as ‘Operation Sanjeevni’ and ‘Operation Neer’ to help Maldives
  • Hydrographic Survey: The two countries signed a Memorandum of Understanding for hydrographic surveying in June 2019, with the first activities beginning in January 2021.
  • The survey aimed at identifying the seabed and mapping the physical features of the islands, reefs, sandbanks, and lagoons of the Maldives and the coastal waters and Exclusive Economic Zones

Cultural Relations:

  • Indians are the second largest expatriate community in the Maldives with a total strength of around 28000; consisting of doctors, nurses and technicians, teachers, construction workers, tailors, etc.
  • In 2009, a Maldivian Rock Band participated in the South Asian Bands Festival in New Delhi


  • Anti-India sentiments: The ‘India Out’ campaign has been effective in coordinating between different sources—political parties, social media, media, and China—and intensifying the anti-India sentiments more than ever.
  • Conspiracy theories of India’s expansionist ambitions: Hydrographic survey may allow India to have in-depth knowledge of Maldivian waters, ports and harbours, and thereby access seabed and critical navigational information and challenge the country’s security.
  • The opposition claimed that the under the UTF agreement, government has allowed India to establish a military base in the Maldives
  • Chinese investments and activities in Maldives: The political and financial links and incentives created by China have continued to bear advantages for China and its geopolitical ambitions.

Way forward:

  • Focus on ‘India First’ policy of Maldives to strengthen relations.
  • Prime Minister Modi attended  the inauguration  ceremony  of  President Ibrahim  Mohamed Solih in 2018 as the only HoS/HoG indicating strong relations.

Source: Observer Research Foundation

Baba’s Explainer – Centre and State powers over Water Resources

Centre and State powers over Water Resources


  • GS-2: Federal Issues
  • GS-2: Inter-state river water disputes

Context: Recently, Delhi Chief Minister urged Prime Minister to solve the long-pending Sutlej-Yamuna Link Canal issue between Punjab and Haryana, saying, “It’s the duty of the Centre to ensure water for Punjab and Haryana, not to make them fight”.

  • Apart from Punjab, many states like Tamil Nadu, Kerala, Karnataka have complained of inadequate disbursal of funds by Centre, claiming that the delay has caused stalling of important dam projects.
  • Moreover, States have often accused the Centre of hogging the credit for several such developments achieved by State governments in their area.
  • Subjects like electricity, water resources, law and order, judiciary, and finance have a power overlap between Centre and States in the Constitution – leading to a tussle between the Centre and States.

Read Complete Details on Centre and State powers over Water Resources

Daily Practice MCQs

Daily Practice MCQs

Q.1) With reference to Indian cultural history, consider the following statements:

  1. Sun Temple at Modhera was built during the reign of Bhima I of the Solanki dynasty.
  2. The temple is suspected to have been built to commemorate the defense of Modhera by Bhima I against Mahmud of Ghazni.
  3. The temple complex is built in Maru-Gurjara style.

Which of the above statements are correct?

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

Q.2) Consider the following statements:

  1. The Information Technology Rules (IT Rules), 2021 replaced the Information Technology Act, 2000.
  2. The IT Rules 2021 are the primary legislation for blocking websites.

Which of the above statements are correct?

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

Q.3) National Tiger Conservation Authority (NTCA) has been constituted under which act

  1. Environment Protection Act, 1986
  2. Biological Diversity Act, 2002
  3. Wildlife Protection Act, 1972
  4. Forest Conservation Act, 1980

Comment the answers to the above questions in the comment section below!!

ANSWERS FOR ’11th October 2022 – Daily Practice MCQs’ will be updated along with tomorrow’s Daily Current Affairs.

ANSWERS FOR 10th October – Daily Practice MCQs

Answers- Daily Practice MCQs

Q.1) –  a

Q.2) – d 

Q.3) – b

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