DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam –30th May 2024

Syllabus

• Prelims – ECONOMY

Context: Amid tight liquidity conditions and sluggish growth in deposits, banks turned to mobilising funds through issuing certificates of deposit (CDs) in the financial year 2023-2024, which saw a surge of 31 per cent in CD issuance compared to the previous year.

Background:-

• Deposit growth of banks was 13.1 per cent year-on-year till March 8 (excluding the impact of the merger of HDFC with HDFC Bank) which was lower than the credit growth of 16.5 per cent.

About Certificate of Deposit

• A CD is a contract between depositors and the approved bank or financial institution. The depositor lends the money to the bank, and in exchange, the bank provides interest to the depositor for a set time.
• At the time the instrument reaches maturity, depositors can redeem their funds.
• CDs are given in a dematerialised format. It is governed by the Reserve Bank of India (RBI), which establishes the rules for purchasing CDs.
• Certificate of Deposits (CDs) may be issued by:
  • Scheduled Commercial Banks;
  • Regional Rural Banks; and
  • Small Finance Banks.
  • Select all-India Financial Institutions that have been permitted by the RBI to raise short-term resources within the umbrella limit fixed by the RBI.
• CDs may be issued at a discount on face value but may also be issued as coupon bearing instruments. CDs may also be issued on a fixed / floating rate basis provided the interest rate on the floating rate CD is reset at periodic rests agreed to at the time of issue and is linked to a benchmark published by a Financial Benchmark Administrator or approved by the Fixed Income Money Market and Derivatives Association of India (FIMMDA) for this purpose.
• Like a fixed deposit (FD), a CD’s purpose is to denote in writing that you have deposited money in a bank for a fixed period and that bank will pay you interest on it based on the amount and duration of your deposit.

Features of CD

• Banks:
  • CDs shall be issued in minimum denomination of ₹5 lakh and in multiples of ₹5 lakh thereafter.
  • The tenor of a CD at issuance shall not be less than seven days and shall not exceed one year.
• Financial Institutions:
  • FIs can issue CDs for a period not less than 1 year and not exceeding 3 years from the date of issue.
• A certificate of deposit is fully taxable under the Income Tax Act.
• Loans cannot be granted against CDs, unless specifically permitted by the Reserve Bank.

Source: RBI

Syllabus

• Prelims & Mains – SCIENCE, ENVIRONMENT & AGRICULTURE

Context: A court in the Philippines recently revoked biosafety permits for commercial propagation of genetically modified golden rice and Bt eggplant.

Background:

• The decision is circulating in the international media, as proponents of GM crops have claimed the decision may have disastrous consequences for children with vitamin A deficiency, ignoring the safety violations noted by the court.

About Golden Rice

• Golden Rice is a new type of rice that contains beta carotene (provitamin A, a plant pigment that the body converts into vitamin A as needed). This compound is what gives this grain its yellow-orange or golden color, hence its name.
• Golden Rice is developed through genetic engineering. While ordinary rice does produce beta carotene, it is not found in the grain. Thus, scientists used genetic engineering to add the compound to the grain – a minor tweak that improved the grain’s nutritive value.
• The beta carotene in Golden Rice, which was made possible by the addition of two new enzymes, is identical to the beta-carotene found in green leafy and yellow-colored vegetables, orange-colored fruit, and even in many vitamin supplements and food ingredients.
• Like ordinary rice, Golden Rice does not require any special cultivation practices, and generally has the same yield and agronomic performance.
• While vitamin A can be obtained from food products and supplements, challenges regarding their availability, accessibility, and affordability make it difficult to address the problem of vitamin A deficiency (VAD).
• As rice is a staple food in many vitamin A-deficient communities in Asia, Golden Rice can be a significant help in improving these areas’ vitamin A status once the grain becomes available for public consumption.

Source: International Rice Research Institute

Syllabus

• Prelims – SCIENCE

Context: Genetically modified (GMO) mosquitoes were released in Djibouti, East Africa on May 23, 2024 to fight malaria.

Background:

• This is the first time a genetically engineered mosquito has been released in East Africa and the second time on the African continent.Burkina Faso in West Africa conducted the first ever release of genetically modified mosquitoes in Africa

Key Takeaways

• The release is part of the ‘Djibouti Friendly Mosquito Programme’ started two years ago to stop the spread of Anopheles stephensi, an invasive species of mosquito.
• In 2012, when Anopheles stephensi was first detected in Africa, Djibouti reported 27 cases of malaria. By 2020, the country’s malaria caseload had crossed 73,000.
• This highly invasive mosquito had migrated to Africa from South Asia and the Arabian Peninsula.
• The invasive mosquito has continued to spread to other countries in the African continent, with cases reported in Ethiopia and Sudan in 2016, Somalia in 2019 and Nigeria in 2020.
• Unlike other malaria-carrying mosquitoes in Africa that primarily breed in rural areas, Anopheles stephensi is well adapted to the urban environment. This characteric is particularly dangerous for Djibouti, where 70 per cent of the population live in the capital city and are exposed to the malaria vector. It bites both during the day and at night and is resistant to chemical insecticides.
• To combat these urban invaders, Oxitec, a biotechnology company developed a method that uses mosquitoes to fight mosquitoes. They have released genetically altered male mosquitoes carrying a special gene that prevents their female offspring from reaching adulthood.
• The laboratory-produced mosquitoes carry a “self-limiting” gene that prevents female mosquito offspring from surviving to adulthood when they mate.
• Only their male offspring survive but would eventually die out, according to the scientists behind the project.
• The method targets female mosquitoes, which are responsible for malaria transmission. By reducing the female mosquito population, scientists hope to significantly decrease the spread of the disease. Male mosquitoes do not bite and therefore cannot transmit malaria.

About Malaria

• Malaria is a disease caused by a parasite. The parasite is spread to humans through the bites of infected mosquitoes.
• Anopheles mosquitoes are the type of mosquito that transmit malaria from one person to another. Not all Anopheles mosquitoes have malaria, but if they bite a person with malaria, they can become infectious. Once they bite another person, this continues the cycle of spreading malaria from mosquito to people.
• There are 5 Plasmodium parasite species that cause malaria in humans and 2 of these species – P. falciparum and P. vivax – pose the greatest threat.

Source: Down To Earth

Syllabus

• Prelims – Current Event

Context: Zimbabwe has launched the world’s newest currency – the ZiG. The new gold-backed currency called the ZiG, or Zimbabwe Gold, has come into effect from April 5, 2024 and will co-circulate with other foreign currencies in the economy.

Background:

• The introduction of ZiG is an attempt to mitigate the currency instability and hyperinflation that has plagued the country for decades.

Key Takeaways

• The ZiG stands out as a new currency backed by gold reserves, ensuring its value is supported by the physical gold held by the government. ZiG notes and coins will be available and issued in denominations: 1ZiG, 2ZiG, 5ZiG, 10ZiG, 20Zig, 50ZiG, 100ZiG, and 200ZiG, with the gold backing aims to provide stability and prevent currency devaluation.

Transition from Zimbabwean Dollars to ZiG Banknotes and Coins:

• Zimbabwe has grappled with high inflation, with rates surpassing 500% in recent years. Following this, the country relied on various currencies, primarily the US dollar, leading to limited control over its economy.
• The collapse of the Zimbabwean dollar in 2009, with hyperinflation peaking at 5 billion per cent, marked one of the most severe currency crashes in history. The ZiG, now the sixth currency used by Zimbabwe, has been in circulation since April 5, 2024.
• Banks in Zimbabwe have been converting the previous national currency, the Zimbabwe dollar, into ZiGs, aiming to promote simplicity, certainty, and predictability in monetary and financial matters, Additionally, will circulate alongside other foreign currencies in the economy.
• Zimbabwe central bank governor has committed that the amount of currency in circulation will be backed by equivalent value in gold (or foreign exchange) in order to prevent the currency losing value like its predecessors.

Source: Indian Express

Syllabus

• Prelims – GEOGRAPHY

Context: Recently, a new dispute has emerged between Russia and Estonia, centered around the removal of navigation markers on the Narva River, which forms part of the border between the two countries.

Background:

• The conflict between Ukraine and Russia has not only strained relations between the two countries but has also aggravated tensions with Russia’s neighbouring nations.

About ESTONIA :

• Estonia, officially the Republic of Estonia, is a country by the Baltic Sea in Northern Europe.
• It is bordered to the north by the Gulf of Finland across from Finland, to the west by the sea across from Sweden, to the south by Latvia, and to the east by Lake Peipus and Russia.
• In 1940 it was forcibly incorporated into the U.S.S.R. as one of its constituent republics. Estonia remained a Soviet republic until 1991, when, along with the other Baltic states, it declared its independence.
• The territory of Estonia consists of the mainland, the larger islands of Saaremaa and Hiiumaa, and over 2,300 other islands and islets on the eastern coast of the Baltic Sea, covering a total area of 45,335 square kilometres.
• Tallinn, the capital city, and Tartu are the two largest urban areas of the country.
• Estonia is a developed country, with a high-income advanced economy, ranking 31st (out of 191) in the Human Development Index.
• With a population of just around 1.4 million, it is one of the least populous members of the European Union, the Eurozone, the OECD, the Schengen Area, and NATO.

NARVA RIVER

• The Narva flows 77 kilometres north into the Baltic Sea and is the largest Estonian river by discharge. A similar length of land far to the south, together with it and a much longer intermediate lake, Lake Peipus, all together nowadays form the international border between Estonia and Russia.
• Removal of Navigation Buoys: During the Ukraine war, Russia and Estonia recalled their ambassadors in protest. After President Vladimir Putin came to power for the fifth time, Russia removed 24 out of 50 navigation buoys from the Narva River, which demarcates the border between Estonia and Russia. This move has raised concerns about border security and territorial integrity.
• The Narva River is a vital shipping route for Estonia, and any disruption due to territorial disputes could have significant economic repercussions. Russia’s opposition to floating markers on the river raises concerns about its intentions and could be seen as a strategic move to intimidate Estonia and its NATO allies.

Source: Financial Express

Syllabus

• Mains – GS 2

Context: On 1 January 2024, the BRICS group (Brazil, Russia, India, China and South Africa) was expanded to include five new countries. Grouping has become a 10-nation body now with Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates joining it as new members. This represents a new phase in the bloc’s development and gives it greater economic and demographic weight.

Background:

• In August, the top BRICS leaders at the grouping’s summit in Johannesburg approved a proposal to admit six countries, including Argentina, into the bloc with effect from January 1.However, Argentina’s new President Javier Milei announced withdrawing his country from becoming a member of the BRICS

Significance of BRICS Expansion:

• The expansion signifies a growing alignment of geopolitical and economic agendas within the BRICS. It incorporates major global oil producers near crucial trade chokepoints, such as the Suez Canal and the Strait of Hormuz and Bab-al Mandab Strait.
• Expanding BRICS opens up new horizons of economic and people-to-people connections. India, Iran, and Russia are already developing the International North-South Transport Corridor.
• The inclusion of two African countries strengthens the ongoing efforts to promote integration, development, and growth through the African Continental Free Trade Area.
• The induction of 4 major Middle East Players- Egypt, Iran, UAE, and Saudi gives BRICS a major boost – as these countries have been at odds with each other.
• BRICS will greatly push forward the agenda for reform in the present system of multilateralism, where Western powers play a dominant role.

Issues/Challenges to BRICS regarding Reforms and Expansion:

• The rapid expansion of members could dilute the original purpose of the BRICS grouping, especially if China is seen as taking a dominant position in the grouping.
• It is believed by many that the expansion of BRICS is a political manoeuvre to advance China’s vision of international order.
• As the BRICS, an economic grouping, becomes more strategic and political, India may find its balancing act with the Quad, Shanghai Cooperation Organization, and Indo-Pacific Economic Framework more difficult.
• Tensions between different countries may now make BRICS more unwieldy to run, akin to SAARC, due to tensions between India and Pakistan. Egypt and Ethiopia continue to dispute the management of the Nile River.
• A clearly defined membership criteria has not been put in the public domain.
• The sanctions Iran faces might make intra-BRICS trade more difficult to grow- both Russia and Iran are now off the SWIFT system.
• With expanded BRICS, we are seeing a new wave of “minilateralism” — a style of diplomatic engagement that gives prominence to small- and medium-sized coalitions of like-minded states. One problem with minilateralism is that it threatens to further erode our means of global collective action needed to tackle the massive threats posed to humanity today.

Way Forward to India:

• India needs to strategically balance its ties with the Western powers, especially the US since the expanded BRICS will also include Iran (sanctioned by the US). However, the expansion could advance Indian interests, giving India more clout with a set of nations with which it is keen to expand relations.
• India needs to balance the strategic influence that China exerts in the BRICS grouping with its economic diplomacy and its relations with Russia and Iran.
• BRICS expansion means India’s increased influence and added opportunity to collaborate on the problems of the Global South.
• India should push for institutionalising intra-BRICS trade in the national currencies of members via the Indian payment mechanisms and systems. This will also indirectly encourage the idea of the Internationalization of the Rupee.
• The inclusion of major oil-producing Middle Eastern powers such as Saudi Arabia and UAE in BRICS increases the opportunity for energy diversification and better energy pricing for India.
• Advocating a clear membership criterion for BRICS will help ease India’s concerns about who could be future members of the BRICS.

Source: Business Standard

Q1.) Consider the following statements about Golden Rice

1. Golden Rice is a type of rice that contains beta carotene.
2. Like ordinary rice, Golden Rice does not require any special cultivation practices, and generally has the same yield and agronomic performance.
3. As rice is a staple food in many vitamin C-deficient communities in Asia, Golden Rice can be a significant help in improving these areas’ vitamin C status

How many of the statements given above are correct?

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

Q2.) Consider the following statements

1. Banks can mobilise funds through issuing certificates of deposit (CDs).
2. A certificate of deposit is fully taxable under the Income Tax Act.
3. Banks are allowed to grant loans against CDs, unless specifically barred by the Reserve Bank.

How many of the statements given above are correct?

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

Q3.) Anopheles stephensi ,recently heard in news is

1. A highly invasive mosquito which caused malaria outbreaks in Africa.
2. Mosquitoes which transmits Kala Azar
3. Mosquitos Responsible for Dengue outbreaks in Northern America
4. None of the above

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

ANSWERS FOR ’  30th  May 2024 – Daily Practice MCQs’ will be updated along with tomorrow’s Daily Current Affairs.st

Q.1) – c

Q.2) – c

Q.3) – a