Syllabus:

• Prelims & Mains – CURRENT EVENT

Context: A Special Court of Economic Offences in Bengaluru rejected the bail plea of Kannada actor Ranya Rao, who was arrested for allegedly smuggling over 14 kilograms of gold on a flight from Dubai to Bengaluru.

Background: –

• Directorate of Revenue Intelligence (DRI) officials called it one of the biggest seizures of gold at Bengaluru airport in recent times.

Key takeaways

• Until its repeal in 1990, the Gold (Control) Act, 1968, curbed gold imports and placed heavy restrictions on the acquisition, possession, and disposal of gold in India. However, with liberalisation in 1990s, the government modified its approach, imposing an import duty on gold.
• Now, gold imports are largely governed under the Customs Act, 1962, and by the Central Board of Indirect Taxes and Customs (CBIC). 
• The customs duty for gold may differ depending on the amount of gold carried by a passenger and the duration spent abroad before traveling back to India, as per the Baggage Rules, 2016 (issued under the Customs Act).
• Under these rules, a man residing abroad for over a year may carry up to 20 grams of jewellery duty free (with a value cap of Rs 50,000) and a woman may similarly carry up to 40 grams (with a cap of Rs 1 lakh). 
• The CBIC also has specific guidelines for Indian passengers returning from Dubai after residing there for over six months, allowing them to carry up to 1 kg of gold as long as the applicable customs duty is paid.
• In 2003, the Supreme Court held that any article imported without complying with the relevant conditions or restrictions must be considered a “prohibited good”. Such goods are liable to be confiscated under Section 111 and punished under Section 112 of the Customs Act. 
• The punishment may include a fine of up to the value of the goods. Section 135 provides a punishment of up to 7 years imprisonment if the market price of the smuggled goods exceeds Rs. 1 lakh.
• Smuggling is also punishable under Section 111 (Organised Crime) of the Bharatiya Nyaya Sanhita, 2023, which punishes “trafficking in illicit goods” with imprisonment of at least five years, extendable to life imprisonment. 
• The UAPA also carries the same punishment for smuggling as a “terrorist act” under Section 15 if it causes “damage to the monetary stability of India”.

Source: Indian Express

Syllabus:

• Prelims & Mains – ECONOMY

Context: The Sovereign Green Bonds (SGrBs) in India has received a luke response. The two new SGrBs worth Rs 10,000 crore auctioned in November and January faced muted response as bonds valued at Rs 7,443 crore remained unsold. This came despite a rule change allowing NRIs and foreign portfolio investors to participate without restrictions.

Background: –

• The government’s inability to raise adequate proceeds through bonds increases fiscal constraints.

Key takeaways

• A bond is an instrument to borrow money. A bond could be floated/issued by a country’s government or by a company to raise funds. 
• Since government bonds (referred to as G-secs in India, Treasury in the US, and Gilts in the UK) come with the sovereign’s guarantee, they are considered one of the safest investments. As a result, they also give the lowest returns on investment (or yield).
• The yield of a bond is the effective rate of return that it earns. But the rate of return is not fixed — it changes with the price of the bond.

Sovereign Green Bonds

• Sovereign green bonds (SGrBs) are those that are issued by sovereign entities, like the Government of India, which formulated a framework for issuing such bonds in 2022. 
• The framework defines “green projects” as those that encourage energy efficiency in resource utilisation, reduce carbon emissions, promote climate resilience, and improve natural ecosystems.

Masala Bonds

• Masala Bonds are rupee-denominated bonds i.e. the funds would be raised from the overseas market in Indian rupees. 
• According to RBI, any corporate, body corporate, and Indian bank is eligible to issue rupee-denominated bonds overseas.
• Advantages of Masala Bonds :
  • Lower Cost of Borrowing: Interest rates may be lower compared to domestic borrowing.
  • Diversification of Funding Sources: Enables Indian companies to access global capital markets.
  • Boosts Rupee Internationalization: Encourages wider acceptance of the Indian rupee in global finance.
  • Foreign Investors Bear Currency Risk: If the rupee depreciates, investors receive fewer dollars upon conversion, making it riskier for them.

Social Impact Bonds

• Social Impact Bonds (SIBs) are innovative financial instruments designed to fund social programs through a results-based approach. 
• Unlike traditional bonds, SIBs do not provide fixed returns to investors. Instead, returns are linked to the achievement of predefined social outcomes (e.g., reducing unemployment, improving public health, or enhancing education).
• How SIBs Work?
  • Government/Authority Identifies a Social Issue: A government or public sector entity defines a social problem that needs intervention.
  • Investors Provide Upfront Capital: Private investors or philanthropic organizations fund the project.
  • Service Providers Implement the Program: Non-profits or social enterprises execute interventions to achieve the desired impact.
  • Independent Evaluation: Third-party assessors measure the project’s success based on pre-agreed metrics.
  • Outcome-Based Repayment: If the project meets its goals, the government repays investors with a return. If the project fails, investors may lose part or all of their investment.
• Key Features
  • Pay-for-Success Model: Government pays only if the intervention achieves measurable results.
  • Risk Transfer: Shifts financial risk from the public sector to private investors.
  • Encourages Innovation: Service providers have flexibility in implementing evidence-based solutions.
• Examples of Social Impact Bonds : India’s Educate Girls Development Impact Bond (2015): Focused on improving girls’ education in Rajasthan.

Source: Indian Express

Syllabus:

• Prelims & Mains – SCIENCE & TECHNOLOGY

Context: Scientists from the Indian Institute of Astrophysics (IIA) have reported observations of a flareless coronal mass ejection (CME) from the solar atmosphere with the Visible Emission Line Coronagraph (VELC) instrument onboard Aditya-L1 mission.

Background:

• The Aditya-L1 mission is India’s first scientific mission dedicated to studying the sun.

Key takeaways

• Coronal Mass Ejections (CMEs) are massive bursts of solar plasma and magnetic fields ejected from the Sun’s corona into space. They are often associated with solar flares and can have significant effects on Earth’s magnetosphere.

Causes of CMEs:

• Intense magnetic field activity in the Sun’s corona.
• Reconnection of magnetic field lines leading to explosive energy release.
• Increased solar activity, particularly during solar maximum (the peak of the Sun’s 11-year solar cycle).

Impact of CMEs on Earth:

• Geomagnetic Storms: When CMEs interact with Earth’s magnetosphere, they can cause geomagnetic storms, leading to disturbances in satellite communications and GPS signals.
• Auroras: High-energy charged particles from CMEs interact with Earth’s atmosphere, creating bright auroras (Northern and Southern Lights).
• Disruptions in Power Grids & Communication: Intense CMEs can induce electric currents in power grids, potentially causing large-scale blackouts.
• Radio communications, especially HF (High Frequency) bands, can experience disruptions.
• Satellite Damage: CMEs can increase the radiation exposure of satellites, leading to malfunctions or permanent damage.
• Health Risks to Astronauts: Increased radiation exposure from CMEs poses health risks to astronauts in space.

Source: The Hindu

Syllabus:

• Prelims – CURRENT EVENT

Context: UN Secretary-General Antonio Guterres has announced the ‘UN80 Initiative’.

Background: –

• While announcing the initiative, Mr. Guterres said that the world is facing challenges on every front. He also voiced concern over shrinking resources and liquidity crisis amid an environment of uncertainty and unpredictability.

Key takeaways 

• The UN80 Initiative is a comprehensive reform program launched by United Nations Secretary-General António Guterres as the organization approaches its 80th anniversary. 
• This initiative aims to enhance the UN’s efficiency, effectiveness, and responsiveness to global challenges.

Key Objectives of the UN80 Initiative:

• Identify Inefficiencies and Improvements: Rapidly pinpoint areas where the UN can optimize its operations to work more effectively.
• Review Implementation of Mandates: Thoroughly assess how mandates from member states are executed, especially given their significant increase in recent years.
• Strategic Structural Review: Conduct a comprehensive evaluation to implement deeper structural changes and realign programs within the UN System.

Rationale Behind the Initiative:

• The UN faces multiple challenges, including escalating conflicts, persistent poverty, human rights violations, and the rapid advancement of unregulated technologies like artificial intelligence.
• The UN has been grappling with a liquidity crisis for at least the past seven years, primarily because not all member states pay their dues in full or on time.

Leadership and Implementation:

• The UN80 Initiative will be spearheaded by Under-Secretary-General for Policy, Guy Ryder, leading a task force comprising top officials from across the UN system. The initiative encompasses all UN entities, including those based in Geneva, Nairobi, and Vienna.

Source: News On Air

Syllabus:

• Prelims – CURRENT EVENT

Context: Global cooperation and balanced policies are critical to preventing economic fragmentation and safeguarding long-term growth amid growing trade uncertainty, the UN Conference on Trade and Development (UNCTAD) has said.

Background: –

• Coming even as tariff wars look set to intensify in the face of proposed reciprocal tariffs by the U.S., the UNCTAD report said world trade saw record expansion to $33 trillion in 2024. 

Key takeaways

• Established: 1964
• Headquarters: Geneva, Switzerland
• Parent Organization: United Nations General Assembly (UNGA)
• India is a founding member and benefits from UNCTAD’s trade and investment research.

Functions & Role

• Assists developing nations in integrating into the global economy.
• Provides policy advice, technical assistance, and research on trade and development issues.
• Publishes key reports like:
  • Trade and Development Report
  • World Investment Report
  • Technology and Innovation Report
  • Digital Economy Report
• Focuses on issues like trade policies, investment flows, economic inequality, digital economy, and debt sustainability.

Key Initiatives

• Global System of Trade Preferences (GSTP): It is a preferential trade agreement, currently encompassing 42 members signed in 1988 with the aim of increasing trade between developing countries. It was negotiated within the framework of UNCTAD.
• eTrade for All Initiative: Supports digital trade in developing countries.
• Creative Economy Programme: Encourages cultural and creative industries.

Source: The Hindu

Q1.) With reference to Coronal Mass Ejections (CMEs), consider the following statements:

1. CMEs are massive eruptions of plasma and magnetic fields from the Sun’s corona.
2. CMEs travel at speeds up to 3,000 kilometers per second and can impact Earth’s magnetosphere.
3. The Aditya-L1 mission has been designed specifically to study the Sun and its CMEs, with the Visible Emission Line Coronagraph (VELC) playing a key role.

Which of the statements given above is/are correct?

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2, and 3

Q2.) Which of the following correctly describes the UN80 Initiative?

(a) A United Nations effort to reform its internal structures and improve operational efficiency as it approaches its 80th anniversary.
(b) A global economic cooperation framework aimed at strengthening trade among developing nations.
(c) A UN Security Council initiative for peacekeeping and conflict resolution worldwide.
(d) A new climate agreement focusing on carbon neutrality by 2080.

Q3.) Consider the following statements regarding UNCTAD:

1. UNCTAD is a permanent intergovernmental body of the United Nations established to promote international trade and economic development.
2. It publishes the annual “World Economic Outlook” report.
3. Its headquarters is located in Geneva, Switzerland.

Which of the statements given above is/are correct?

(a) 1 and 3 only
(b) 2 and 3 only
(c) 1 and 2 only
(d) 1, 2, and 3

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

ANSWERS FOR ’  Today’s – Daily Practice MCQs’ will be updated along with tomorrow’s Daily Current Affairs

Q.1) – b

Q.2) – b

Q.3) – b