DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam –16th May 2024

Syllabus

• Prelims – Economy

Context: India VIX, which is an indicator of the market’s expectation of volatility over the near term, surged past the 21 mark on Tuesday (May 14).

Background:-

• The rise shows that fear among traders or market participants on the expected volatility is more now, as compared to 15 days earlier. Currently, the fear among the market players is coming from the outcome of the ongoing Lok Sabha elections.

About INDIA VOLATILITY INDEX (VIX)

• The Volatility Index, VIX or the Fear Index, is a measure of the market’s expectation of volatility over the near term.
• Volatility is often described as the ‘rate and magnitude of changes in prices’ and in finance often referred to as risk. Usually, during periods of market volatility, the market moves steeply up or down and the volatility index tends to rise. As volatility subsides, the Volatility Index declines.
• The Volatility Index is a measure of the amount by which an underlying index is expected to fluctuate in the near term, (calculated as annualised volatility, denoted in percentage e.g. 20 per cent) based on the order book of the underlying index options.
• India VIX is a volatility index computed by the NSE based on the order book of NIFTY Options. For this, the best bid-ask quotes of near and next-month NIFTY options contracts, which are traded on the F&O segment of NSE are used.
• India VIX indicates the investor’s perception of the market’s volatility in the near term i.e. it depicts the expected market volatility over the next 30 calendar days.
• The higher the India VIX values, the higher the expected volatility and vice versa, as per NSE.
• In May so far, the India VIX has risen by around 53 per cent to above 20. On Tuesday, the index touched a high of 21.88 in afternoon trades.
• The India VIX has risen amid concerns over the results of the ongoing elections. The market participants said a lower voter turnout ratio in this election may have some impact on the BJP’s seat count.

Additional Information

• The Chicago Board of Options Exchange (CBOE) was the first to introduce the volatility index for the US markets in 1993 based on S&P 100 Index option prices. In 2003, the methodology was revised and the new volatility index was based on S&P 500 Index options.
• ‘VIX’ is a trademark of the CBOE, and Standard & Poor’s has granted a license to NSE, with permission from the CBOE, to use such a mark in the name of the India VIX and for purposes relating to the India VIX

Source: Indian Express

Syllabus

• Prelims – Current Event

Context: The new coronavirus variant called KP.2 — nicknamed FLiRT — that has been linked to rising cases of Covid-19 in the United States, United Kingdom, and South Korea, has been in circulation in India since November 2023, genomic surveillance data show.

Background:

• About 250 KP.2 sequences have been reported so far by INSACOG, the country’s genome sequencing consortium.

Key Takeaways

• 2 is a descendant of the JN.1 variant of the virus. It is a sub-variant of the Omicron lineage with new mutations.
• FLiRT, the nickname of KP.2, is based on the letters representing two immune escape mutations that allow the virus to evade antibodies.
• FLiRT is characterised by its ability to evade immunity from vaccines and previous infections. Its symptoms are similar to those of earlier variants, including fever, cough, fatigue, and digestive issues.
• The US Center for Disease Control and Prevention (CDC) notes that there are currently no indicators suggesting that KP.2 would cause more severe illness than other strains.
• However, FLiRT has a heightened transmission rate and, like its parent JN.1, it is likely to drive a wave of infections. Also, the infections are likely to spread silently — because without severe symptoms, most people are unlikely to get themselves tested.

India’s Case

• A little more than half of the 250 KP.2 genomes sequenced by INSACOG — 128 sequences — were from Maharashtra. The highest number of KP.2 sequences were found in March.
• India has been reporting the highest proportion of KP.2 sequences in the world, global data show.
• 2 sequences made up 29% of Covid-19 sequences uploaded by India to the Global Initiative on Sharing All Influenza Data (GISAID), the world’s largest repository of these sequences, over the last 60 days.
• However, JN.1 continues to be the dominant variant of SARS-CoV-2 in the country.

Source: Indian Express

Syllabus

• Prelims – Polity

Context: The Supreme Court ruled on Tuesday that advocates cannot be held liable under the Consumer Protection Act of 1986 for deficiency in service. The court ruled that a complaint to this effect against an advocate was not maintainable before a consumer forum.

Background:

• The Supreme Court overturned a 2007 ruling by the National Consumer Disputes Redressal Commission (NCDRC) which said services provided by lawyers fell under the Consumer Protection Act.

About CONSUMER PROTECTION ACT 2019 :

• The Act was enacted on August 9, 2019, and came into force in July 2020, replacing the previous Consumer Protection Act, 1986.
• It was introduced in response to the evolving needs of consumers in the digital age, and aims to provide timely and effective administration and settlement of consumer disputes.

Salient Features

• Defining “E-commerce” and expanding the scope of “Consumer”: As compared to CPA 1986, the definition of “Consumer” has been broadened under CPA 2019 .E-commerce has been specifically mentioned and is defined as buying and selling of goods/services/digital products online.
• Unfair contracts: Earlier, a consumer could file a complaint only for an unfair trade practice or restrictive trade practice adopted by the trader/service provider. However, there were numerous instances where consumers, left with little option, entered into agreements/contracts that were unilateral and arbitrary in nature. Thus, to protect the interests of these consumers, “unfair contracts” has been added as a ground for filing complaints in the present Act.
• Place of filing complaints: CPA 1986 required consumers to file complaints (in Forums) only at places where the opposite party had its office. However, CPA 2019 allows complainant to file a complaint in the area where he/she resides/ works.
• Renaming of the Forums: Earlier, the consumer courts at district level were termed as “forums” and at the state and national level as “commissions”. Giving two different names created confusion.Thus, to eliminate the ambiguity around the terms, the district forums have been renamed as district commissions under CPA 2019.
• Central Consumer Protection Authority (CCPA): CPA 2019 establishes a Central Consumer Protection Authority (to be termed as Central Authority) that will promote, protect and enforce the rights of consumers as a class.
• Misleading Advertisements: A provision, authorising the CCPA to issue directions and levy penalties against deceptive advertisements under CPA 2019 (Section 21), is an important one.CCPA can impose a penalty of up to Rs. 10 lakhs, which may extend up to Rs. 50 lakhs in case of subsequent violations.
• Pecuniary Jurisdiction: According to CPA 1986, consumers seeking compensation of Rs. 20 lakhs and less were to approach the district forums, from Rs. 20 lakhs to Rs. 1 crore the state commissions, and above Rs. 1 crore, the national commission. However, under the present Act, in order to facilitate easy access for consumers from districts and to ensure quick disposal of cases, the pecuniary jurisdiction has been increased to upto Rs. 1 crore for district commissions, from Rs. 1 crore to Rs. 10 crores for state commissions and above Rs. 10 crores for national commission.
• Product Liability: We have not had any laws/regulations to govern product liability and thus, introduction of a separate chapter on product liability in CPA 2019 is of great significance. Product liability refers to the responsibility of a product manufacturer/seller of any product or service to compensate for any harm caused to the consumer by such defective product manufactured/sold or due to deficiency in services.

Source: Citizen Consumer And Civic Action Group

Syllabus

• Mains – GS 2, GS 3

Context: The Union Home Ministry on Tuesday extended the ban on the LTTE by five more years for fostering a separatist tendency among the masses and enhancing the support base for it in the country, particularly in Tamil Nadu, besides threatening the territorial integrity of India.

Background:

• The Centre has imposed the ban invoking the sub-sections (1) and (3) of section 3 of the Unlawful Activities (Prevention) Act, 1967.

Key takeaways :

• The Home ministry noted that the LTTE is an association based in Sri Lanka but has supporters, sympathisers and agents in the territory of India.
• In a gazetted notification, the Home Ministry noted that the LTTE is an association based in Sri Lanka but has supporters, sympathisers and agents in the territory of India.
• ‘The Central government is of the opinion that the LTTE is still indulging in activities which are prejudicial to the integrity and security of the country. Even after its military defeat in May 2009 in Sri Lanka, the LTTE has not abandoned the concept of Eelam (an independent country for Tamils) and has been clandestinely working towards the Eelam cause by undertaking fundraising and propaganda activities and the remnant LTTE leaders or cadres have also initiated efforts to regroup the scattered activists and resurrect the outfit locally and internationally’, the notification stated.
• The pro-LTTE groups/elements continue to foster a separatist tendency amongst the masses and enhance the support base for LTTE in India and particularly in Tamil Nadu, which will ultimately have a strong disintegrating influence over the territorial integrity of India.
• The Home ministry said the group’s objective for a separate homeland (Tamil Eelam) amounts to cession and secession of a part of the territory of India from the Union and thus falls within the ambit of unlawful activities.
• LTTE sympathisers living abroad continue to spread anti-India propaganda among Tamils holding India responsible for the defeat of the LTTE, which, if not checked, is likely to develop a sense of hate among the Tamil populace towards the central government and the Indian Constitution.

Additional Information:

• The LTTE was founded in 1976 by Velupillai Prabhakaran with the goal of creating an independent Tamil Eelam out of Sri Lanka.
• From clashes with the Sri Lankan military, the LTTE in the early 80s launched a fullscale nationalist insurgency in the north and east of the country, carrying out a string of major terrorist attacks against both military and civilian targets.
• India’s relationship with the LTTE was complex — from providing support to the guerrillas initially to sending the Indian Peacekeeping Force (IPKF) to Sri Lanka from 1987 to 1990.
• The LTTE pioneered suicide bombing as a weapon of terror, and in 1991, an LTTE suicide bomber killed Rajiv Gandhi in an attack on Indian soil.
• India first banned the LTTE after the assassination of Rajiv Gandhi; the ban was last extended for five years in 2014.

Source: Indian Express

Syllabus

• Mains – GS 2

Context: The Smart Cities Mission (SCM), a flagship programme of the NDA-1 government, has taken a back seat in this year’s list of poll promises and achievements.

Background:

• SCM was announced in June 2015.

What was the SCM? :

• The SCM had two main aspects: area-based development consisting of three components — redevelopment (city renewal), retrofitting (city improvement), and green field projects (city extension); and pan-city solutions based on ICT. These further comprised some six categories that would include e-governance, waste management, water management, energy management, urban mobility, and skill development.
• Around ₹2 lakh crore was kept aside for the mission, with public-private partnerships (PPP) an important driver of the same.
• The mission that was to be completed in 2020, was given two extensions till June 2024. Additionally, to make the mission effective, a business model of governance was adopted bypassing the existing models of city governance in the country.
• An SPV (special purpose vehicle) led by a bureaucrat or a representative of an MNC, and other major stakeholders was created and registered under the Companies Act. The elected council, thus, had little role in the governance structure.

What is the status of the SCM?

• The Urban Ministry’s dashboard as of April 26, exhibits that 8,033 projects sanctioned under the SCM have seen a fall in the total outlay from the expected ₹2 lakh crore to ₹1,67,875 crore, which is 16% less than the projected capital flow in 100 cities.
• The dashboard also states that the SCM grant funded 5,533 projects worth ₹65,063 crore that have been completed, while 921 projects worth ₹21,000 crore are still ongoing.
• As many as 400 projects being undertaken by about 10 cities under the Mission are unlikely to meet the extended deadline of June 2024.
• Interestingly, the funding pattern shows that not more than 5% has come through the PPP route.

Where did the SCM falter?

• The selection of 100 cities on a competitive basis was flawed due to the diversity in existing urban realities. The scheme was divorced from the ground realities of urban India — the urbanisation here is dynamic and not static like the West.
• The SCM became an exclusionary scheme wherein not more than 1% of a city’s geographical area was selected for development. For example, Chandigarh which received ₹196 crore in the first tranche under the SCM spent it on smart water meters, a Wi-Fi zone, and solid waste management programmes all ploughed into one pocket-sector 43.
• According to two major reports by McKinsey, to make Indian cities liveable, a capital expenditure of $1.2 trillion is required by 2030. In this context, ₹1,67,875 crore is less than $20 billion in nine years. This comes to around 0.027 % of the total requirement in urban India. Hence, there was little traction for this scheme.
• Additionally, the SPV model designed for smart cities was not aligned with the 74th Constitutional Amendment, which led to many cities objecting to the governance structure. The design, according to critics, was too top-bottom.
• Urban India, according to the World Bank has more than 49% of the population living in slums. In the name of executing smart city projects, there was displacement of people living in poorer localities.
• Another major consequence of the SCM has been enhanced urban flooding. Some of the towns which have historically never been flooded were made vulnerable because of infrastructure development projects that spoiled or dismantled the water channels and contours.

Source: Hindu

Syllabus

• Mains – GS 2

Context: India’s renewed focus on developing the Andaman and Nicobar Islands (ANI) underscores their strategic significance in the Indo-Pacific region.

Background:

• The transformation of India’s Look East policy into a robust Act East policy, a realisation of the critical importance of ocean power, and the rapid enhancement in the capabilities of the Chinese People Liberation Army (PLA) Navy, have brought a degree of seriousness to the imperative of developing Indian island territories in general, and the Andaman and Nicobar group in particular.

Strategic Importance of the A&N Islands:

• It is located 700 nautical miles southeast of the Indian mainland, the Andaman and Nicobar Islands add 300,000 sq. km to India’s exclusive economic zone, with the potential for undersea hydrocarbon and mineral deposits.
• The islands’ strategic location astride the Malacca Strait, makes them a crucial asset for India’s ability to monitor and project power in the Indo-Pacific region. The Malacca Strait is a critical maritime choke point, with more than 90,000 merchant ships carrying about 30% of the world’s traded goods passing through it annually.
• The islands share maritime boundaries with Myanmar, Thailand, Indonesia, and Bangladesh, giving India substantial ocean space under the United Nations Convention on the Law of the Sea (UNCLOS) in terms of exclusive economic zone and continental shelf.
• The islands can serve as the first line of defence against any attempt from the East to undermine India’s maritime security, especially in the face of China’s growing influence in the Indo-Pacific region.
• Port Blair can become a regional hub for navies to collaborate on disaster relief, medical aid, counter-piracy, search and rescue, and other maritime security initiatives.

Issues/Challenges for developing of the A&N Islands:

• The shift from India’s Look East policy to a stronger Act East policy, along with the growing recognition of the significance of maritime power and the increasing capabilities of the Chinese PLA Navy, has underscored the need to develop Indian island territories, especially the Andaman and Nicobar group.
• Lack of political prioritisation until recently, with the realisation of the islands’ strategic importance only now.
• Challenges of distance from the mainland and difficulties in developing infrastructure.
• Complex environmental clearance procedures and regulations on forest and tribal conservation.
• Coordination challenges due to the involvement of multiple ministries and agencies. The conflict between long-term strategic vision and immediate political gains.

Strategic infrastructure development that is required in A&N Islands:

• Ensuring comprehensive maritime domain awareness and surveillance over the islands.
• Bolstering deterrence capabilities against any naval misadventures from the East.
• Developing infrastructure to support India’s maritime economy, especially in the southern group of islands.
• Improving transportation and connectivity to facilitate development and tourism. Developing Galathea Bay transhipment port on Great Nicobar Island.
• The plan to connect the A&N Islands to the mainland through Submarine Optical Fibre Cable (OFC) needs revitalisation. This will provide cheaper and better connectivity and access to Digital India’s benefits.
• Enhancing transportation and connectivity for development and tourism.
• The military must increase forces and deploy the appropriate assets at the Andaman Nicobar Command (ANC) to maintain island security. This includes basing surveillance and fighter aircraft there, as well as conducting frequent detachments.
• Exploring partnerships with the Quad and Indo-Pacific Oceans Initiative (IPOI) for development initiatives.
• Seeking infrastructure development concessions akin to those on India’s northern borders.

Source: Indian Express

Q1.) Consider the following statements about the Consumer Protection Act 2019:

1. The Act applies to all goods and services, covering all sectors whether they are private, public, or cooperative.
2. The act provides for an Alternate Dispute Resolution Mechanism through mediation.
3. It has no provision covering misleading advertisements.

How many of the statements given above are correct?

1. Only one
2. Only two
3. All three
4. None

Q2.)  The word FLiRT recently seen in news is :

1. A new coronavirus variant.
2. A cyber attack through Social media platforms
3. An early warning system for fire hazards
4. A type of Suicide drone

Q3.) Consider the following statements about India Volatility Index (VIX)

1. India VIX is a volatility index computed by the SEBI based on the order book of NIFTY Options.
2. It is a measure of the market’s expectation of volatility over the long
3. India VIX typically subsides ahead of events like elections that could have a major impact on the market’s trajectory.

How many of the statements given above are correct?

1. Only one
2. Only two
3. All three
4. None

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

ANSWERS FOR ’  16th May 2024 – Daily Practice MCQs’ will be updated along with tomorrow’s Daily Current Affairs.st

Q.1) – c

Q.2) – a

Q.3) – a