Current Affairs 19 & 20 January 2025

Daily Current Affairs Quiz
19 & 20 January, 2025

International Affairs

1. Generalized System of Preferences (GSP)

The Generalized System of Preferences is a program allowing developing countries to export specific products to developed countries with reduced or eliminated customs duties. The GSP program was designed to promote the growth of developing countries and reduce poverty in these countries.

• How it works
  • Developed countries grant GSP preferences to beneficiary developing countries.
  • The beneficiary developing countries export eligible products to the developed countries.
  • The developed countries either reduce or abolish customs duties on the eligible products.
• Advantages
  • GSP facilitates the economic development of developing countries.
  • GSP assists new exporters in entering markets while the established exporters increase their market share.
  • GSP assists importers in reducing costs and becoming more competitive.
• Eligibility
  • An import must be on the list of GSP-eligible articles to qualify for GSP.
  • The import must be imported directly from a beneficiary developing country.
• Countries providing GSP
  • Australia
  • Canada
  • European Union (EU)
  • Japan
  • New Zealand
  • United States (US)

India-US GSP

The United States (US) removed India’s Generalized System of Preferences (GSP) on June 5, 2019. GSP is a facility that provides developing countries with an opportunity to export goods to the US without paying duty.

• Why was India’s GSP status withdrawn?
  • The US felt India was not giving fair access to its market.
  • The US was concerned about India’s dairy and medical device industries.
  • The US had problems with India’s e-commerce policy and data localization rules.
• What was the impact of the withdrawal?
  • The withdrawal impacted India’s export-oriented sectors such as pharmaceuticals, textiles, agricultural products, and automotive parts.
• How did India react?
  • India presented a solution to the US’s demands but the US refused it.
  • India regarded the matter as part of the normal process and continued building up its relationship with the US.

2. European Free Trade Association (EFTA)

Context:

A meeting held between Mr. Goyal and Maros Sefcovic, European Commissioner for Trade and Economic Security in Brussels.

Background

India signed a free trade pact on March 10 2024, India EFTA Trade Pact with a group of European nations — Switzerland, Norway, Iceland and Liechtenstein — committing to reduce tariffs, while New Delhi will receive $100 billion in investments over the next 15 years.

• The four countries Iceland, Liechtenstein, Norway, and Switzerland represent non-European Union nations that comprise EFTA.
• Established in 1960 to promote free trade and economic integration.
• However, it also poses challenges to a more integrated and prosperous global economy.
• Main tasks include maintaining and developing the EFTA Convention, managing the EEA Agreement, and developing EFTA’s worldwide network of free trade agreements.
• Mission: Promote free trade and economic integration for the benefit of its four member states and global trading partners.
• Member States: Open, competitive economies committed to progressive liberalization of trade in multinational arena and free trade agreements.

European Free Trade Association (EFTA)

• It was founded in the year 1960. It was intended to form an alternative trade bloc for the European states that could not join the EEC.
• Their main functions are to maintain and progress the EFTA Convention, manage the Agreement on the European Economic Area (EEA Agreement), and develop EFTA’s network of free trade agreements around the globe.

Trading of EFTA with India

India exported USD 1.92 billion worth of goods to EFTA countries in 2022-23, and imports stood at USD 16.74 billion.

• Total trade between India and EFTA has been worth USD 18.65 billion so far.
• The largest trading partner of India is Switzerland, followed by Norway for trade purposes.
• India has finalized a Trade and Economic Partnership Agreement with the European Free Trade Association in March 2024.

Trade and Economic Partnership Agreement (TEPA)

The objectives:

• Reduction of Tariffs and non-Tariff Barriers
  • Reduction of tariffs and non-tariff barriers in generation of trade and investment opportunities between India and EFTA.
• Market Access for Service Providers and Investors
  • Conditions for market access for service providers and investors in a predictable and fair manner.
• Increased Cooperation
  • Increased cooperation regarding the protection and enforcement of intellectual property rights.
  • Tied trade facilitation and customs cooperation, as well as mechanisms for disputes resolution.

Coverage:

• 14 chapters covering, trade in goods, rules of origin, IPRs, trade in services, investment promotion, government procurement, technical barriers to trade, and trade facilitation.

Key Take-Aways:

• Investment and employment promotion are now upon EFTA.
• EFTA provides market access on 92.2% of tariff lines amounting to 99.6% of India’s exports.
• EFTA’s market access offer includes 100% on non-agri products and concession on Processed Agricultural Products (PAP).
• A total of 105 sub sectors are offered by India to EFTA being state parties include commitments by Switzerland, Norway, Liechtenstein, and Iceland.

Importance of India-EFTA Deal

Economic Growth and Employment Generation:

• Investment Boost:
  • Based on FDI, the deal is expected to attract about 100 billion US dollars within the next 15 years, which is extremely significant for infrastructure development, upgradation of technology, and generating employment.
• Trade Promotion:
  • It establishes parameters for services exports in the following sectors: IT services, business services, personal services, cultural services, sporting and recreational services, other education services, audio-visual services, and so forth.
• Geopolitical Importance:
  • Sweetens the already strong economic bond of India with Europe toward a multipolar trade landscape of the world.
• Knowledge Sharing and Innovations:
  • This will provide a framework for collaborative transfer in the field of technology, getting access to cutting-edge technologies in precision engineering, health sciences, renewable energy, innovative areas, and R&D.

• Precedent Act:
  • Template for Future Deals: Template for all similar deals that could be signed now with other European nations like the UK and possibly extended to the EU as well.
• Free Trade Champion:
  • Relishes India’s champion status in free trade and furthered foreign investment influx.

Beyond Trade: Long-Term Benefits

• Seamless Processes:
  • Part of the agenda are intellectual property rights, services trade, and government procurement.
• Sustainable Development:
  • This treaty stipulates provisions on the improvement of sustainable development practice concerning trade-investment.

Important Issues: India-EFTA Agreement

• Exclusion from FTA:
  • Sensitive sectors like agriculture and dairy are excluded from tariff reductions by India.
• USD 100-Million Legal Commitment:
  • In case of failure to comply with the commitment, India would have an opportunity to re-balance or suspend duty concessions to the four countries.
• Data Exclusivity:
  • This addition of IP barrier called data exclusivity can possibly delay this manufacture of generic versions of new medicines, biologics, and preventive HIV therapy.
• Income Level Gap:
  • Making per capita incomes very disparate between India and EFTA countries-enough to justify the demands of level playing fields for the latter.
• Non-Tariff Barriers (NTBs):
  • Need to simplify NTBs such as divergent product standards and technical regulations.
• Domestic Politics:
  • Some Indian industries would raise issues about the loss of jobs or unfair competition.

Suggested Solutions:

• Investment Protection:
  • This agreement should entail investment clauses that cover protection.
• Phased Reductions:
  • Tariff reduction may be gradual for vulnerable sectors, for example, agriculture.
• Compensation Package:
  • These may be greater than adequate compensation packages for these affected industries in order to remove their concerns and allow restructuring as necessary.
• Mechanism for Trade-Related Dispute Settlement:
  • Have a good working mechanism regarding trade-related disputes.
• Streamlining Regulatory Gaps:
  • Reduce non-tariff barriers; establish MRAs; institute joint technical committees.
• Building Capacity:
  • In service delivery and customs infrastructure and logistics networks, the training establishes programs for customs officials and businesses.
• Foster Collaboration:
  • Regular stakeholder dialogues, sharing knowledge, so that the concerns may be assuaged and achieved transparency.

India-EU Relation

3. India-Oman FTA

Context:

India is not seeking customs duty concessions on over 100 product categories such as liquor, and cigarette in the proposed free trade agreement (FTA) with Oman, which is under negotiations between the two countries, sources said.

Free Trade Agreement (FTA) 

An FTA is an agreement between two or more countries that reduce or remove trade barriers. The main purpose of an FTA is to increase trade between the participating countries.

• What do FTAs do?
  • Reduce trade barriers: FTAs reduce or remove tariffs and other barriers to trade in goods and services.
  • Create a predictable trading environment: FTAs create a more transparent and predictable environment for trade and investment.
  • Protect intellectual property: FTAs protect IPRs.
  • Protect investors: FTAs safeguard investors.
  • Establish free trade zones: FTAs create free trade zones. Importing and exporting goods and services become more straightforward.
• What does FTAs encompass?
  • Goods: agricultural, industrial, and other products.
  • Services: banking, construction, and trading.
  • Investment
  • Intellectual property rights (IPRs)
  • Procurement by government
  • Competition policy

4. Nigeria Joins BRICS!

Context:

Nigeria has become a partner state of the BRICS group of emerging market powers.

BRICS

National Affairs

1. SVAMITVA Scheme

Context:

Prime Minister Narendra Modi distributed over 65 lakh property cards to rural families in more than 50,000 villages across 12 States and UTs under the Centre’s SVAMITVA (Survey of Villages and Mapping with Improvised Technology in Village Areas) scheme.

2. Take-Home Ration (THR)

Context:

The Jharkhand government started the distribution of ‘Shishu Shakti’ packets, an enhanced version of the take-home ration (THR) for severely malnourished children, with the aim of making the State malnutrition-free, an official said.

Take Home Ration (THR)

Take Home Ration (THR) is a program in India. It provides fortified rations to pregnant women, lactating mothers, and children. The program falls under the Integrated Child Development Services (ICDS) scheme. It is a report that was released by NITI Aayog and the World Food Program.

• Eligibility
  • Pregnant and lactating women, Children from 6 months to 3 years, Severely malnourished children from 3 to 6 years, and Identified adolescent girls.
• Benefits
  • Provides a wholesome and diversified food basket and Ensures nutrition of eligible families.
• Distribution
  • Distributed through Anganwadi Centers (AWCs) and Dry rations are distributed once a month.
• Why it’s important
  • Good nutrition is the root for leading a healthy life
  • Malnutrition leads to disease, morbidity, and unequal opportunity

3. The Integrated Child Development Services (ICDS)

The ICDS is a government initiative in India, offering healthcare, nutrition, and education for children up to six years old and their mothers. The ICDS was introduced in 1975 with the purpose of improving the nutritional condition of children and reducing child health problems.

ICDS Scheme

• Launched by the Ministry of Women and Child Development in 1975.
• Early childhood care and development programme.

Schemes Under ICDS

• Anganwadi Services Scheme
  • Supplementary nutrition, pre-school non-formal education, and health check-ups.
• Pradhan Mantri Matru Vandana Yojana
  • ₹ 5,000 in three installments through direct benefit transfer during pregnancy and for lactating women.
• National Creche Scheme
  • Day-care facilities for children aged 6 months to 6 years of working women.
• Scheme for Adolescent Girls
  • Improves nutrition and status and empowers young girls with skills on life skills education, home skill education, along with iron and folic acid supplementations, besides health checkups and referral services.
• Child Protection Scheme
  • Improves child well-being through reduction in difficulties and vulnerabilities.
• POSHAN Abhiyaan
  • Focuses to reduce stunting, undernutrition, anemia, and low birth weight.

ICDS Objectives

• Nutritional & Health Improvement
  • Health improvement and nutrition and health of the children.
• Child Development
  • Facilitates the right psychological, physical, and social development.
• Risk Reduction
  • Decreases mortality, morbidity, malnutrition, and school dropout rates.
• Policy Coordination
  • Promotes coordination between departments for child development.
• Adolescent Girls Empowerment
  • Educates and empowers adolescent girls.

Other Comparable Government Initiatives

• National Health Mission (NHM)
  • Improves health systems for reproductive, maternal, neonatal, child, adolescent health, and communicable/non-communicable diseases.
• Mid Day Meal Scheme
  • Serves cooked, hot food to all school going children.
• National Nutrition Strategy
  • Set out the strategic roadmap towards attaining reduction in all under-nutrition 2030.

4. “RNA Damage Drives Acute Sunburn” Study

Key Highlights:

• UV light causes damage to the mRNA in skin cells, which then triggers a wave of cellular responses.
• Such damage activates ribosomes and induces the ribotoxic stress response (RSR).
• Ribotoxic Stress Response (RSR)
  • The RSR is recognized as a surveillance mechanism responding to the presence of RNA damage with inflammatory signaling, recruitment of immune cells, and inflammation of the skin.
  • Confirms the crucial role of ZAK gene in RNA damage responses.

What is Sunburn?

Sunburned skin looks red, painful, and damaged due to too much exposure in the sun. The ultraviolet (UV) rays from the sun or a tanning bed burn your skin when you get a sunburn. You don’t have to spend a whole day at the beach or swimming pool to get a sunburn. Multiple sunburns can cause premature skin aging and skin cancer.

Ribosomes

Ribosomes are molecular machines that synthesize proteins in all cells. They are made of RNA and protein, and are found in the cytoplasm of cells.

• How ribosomes work
  • Ribosomes read the messenger RNA (mRNA) sequence.
  • They translate the genetic code into a string of amino acids.
  • The amino acids are added to a growing protein chain.
  • When the ribosome reaches a stop codon, it releases the finished protein.
• Types of ribosomes
  • 70S ribosomes: Prokaryotic cells that include bacteria and archaea.
  • 80S ribosomes: Eukaryotic cells that include plants, animals, and fungi.
• Number of ribosomes in a cell
  • The number of ribosomes in a cell depends on the level of its activity in protein synthesis.
  • Growing cells contain numerous ribosomes.
  • One eukaryotic cell may have as many as 10 million ribosomes.
• Discovery of ribosomes
  • George E. Palade discovered the first ribosomes in 1955.
  • He won the Nobel Prize in 1974.

The Ribotoxic Stress Response (RSR)

The ribotoxic stress response pathway is a mechanism that senses for stress in cells and initiates stress response programmes. RSR is involved with cell death and inflammation, though it also plays some role in regulation of metabolism.

• How it work?
  • The pathway is activated following ribosomal stalling or collision, and the protein MAP3K ZAKα senses the stressed state and can activate the stress-associated mitogen-activated protein (MAP)-kinases p38 and JNK.
  • The activated p38 and JNK kinases mediate cell death through pyroptosis and apoptosis, respectively.
• What it Does?
  • The RSR is involved in the acute effects of sunburn responses.
  • The RSR modulates metabolic responses in cells, nematodes, and mice.
  • The RSR modulates blood sugar control, stress hormone production, and survival under starvation conditions.
• What causes it?
  • The RSR can be induced by exogenous or endogenous stress signals, plant and microbial toxins, or cell-intrinsic factors.

Genome Genome India Project

5. Jallikattu (Sallikkattu)

Context:

A total of 83 people were injured in the jallikattu organised at Mukkanipatti village in Pudukottai district and Pallapatti village in Tiruchi district. 

Jallikattu (Sallikkattu)

Jallikattu (or Sallikkattu), also known as Eru Taḻuvuṭal and Manju-virattu is an Indian event where a zebu bull is released into a crowd, and people try to grab the large hump on the bull’s back while it tries to escape. It is mostly practiced in southern Tamil Nadu during Pongal celebrations on Mattu Pongal day. Animal rights organizations have called for a ban on the sport due to incidents of injury and death. It was banned several times by the Supreme Court of India but a fresh ordinance was issued in 2017 to make it continue its sporting activities.

6. Initiatives by TRAI Against Spam

• Regulatory Enforcement:
  • TRAI monitors telecom services, and spam messages are officially called Unsolicited Commercial Communications (UCC). 
  • Established the Do-Not-Disturb (DND) register in 2007 to spam block for subscribers.
  • Implementation: DND App introduced as the user registration process and reporting the spam.
  • Imposed Telecom Commercial Communication Customer Preference Regulation (TCCCPR), 2018 to deter telemarketers from misusing DND.

Blockchain in Anti-Spam Measure

• It provides immutability and traceability of information, thus tamper-proof.
• Utilized for maintaining a distributed ledger of registered SMS senders and their message format.
• Features of Blockchain Implementation:
  • Sender IDs instead of using random phone numbers for SMS.
  • Strengthened in 2024 for better traceability of messages.

Efficacy of Measures

• Less spam communications from the companies that follow the rules.
• More accountability and traceability using blockchain.
• Challenges:
  • Changing spamming strategies and increasing scam calls from other countries using VoIP.

Other Government Initiatives

• Sanchar Saathi Portal:
  • The Chakshu reporting site for suspected fraudulent calls and messages is featured.
• Telecom Security Operation Centre:
  • Real-time monitoring of suspicious internet and telecom traffic.
• Public-Private Partnerships:
  • Telcos like Airtel tag international calls and employ AI to identify and mark “Suspected Spam.”
• Future
  • Further strengthening in regulations to be enforced by 2025.
• Adoption of AI and Data Analytics:
  • Partnering with telcos to identify fraud calls in real time.
• Concentration on International Spam:
  • Protocol enhancement to curtail fraudulent VoIP-based international calls.

7. Beti Bachao, Beti Padhao (BBBP) Scheme

It was launched in January 2015 with the aim to address sex selective abortion and the declining child sex ratio which was at 918 girls for every 1,000 boys in 2011.

• Ministry
  • This is a joint initiative of the Ministry of Women and Child Development, Ministry of Health and Family Welfare and Ministry of Human Resource Development.
• Implementation
  • The programme is being implemented across 405 districts in the country.
• Main Objectives:
  • Prevention of gender-biased sex-selective elimination.
  • Survival & protection of the girl child.
  • Education & participation of the girl child.
  • Protection of rights of Girl children.
• Performance Analysis:
  • Sex Ratio at Birth
    • Sex Ratio at Birth (SRB) has increased by 16 points from 918 (2014-15) to 934 (2019-20), as per the Health Management Information System (HMIS) data.
  • Notable Examples (Districts)
    • Mau (Uttar Pradesh) from 694 (2014-15) to 951 (2019-20),
    • Karnal (Haryana) from 758 (2014-15) to 898 (2019-20),
    • Mahendergarh (Haryana) 791 (2014-15) to 919 (2019-20), etc.
• Health:
  • ANC Registration
    • Percentage of 1st Trimester ANC (AnteNatal Care) Registration has shown an improving trend from 61% in 2014-15 to 71% in 2019-20.
  • Institutional Deliveries
    • Percentage of Institutional Deliveries has shown an improving trend from 87% in 2014-15 to 94% in 2019-20.
• Education:
  • Gross Enrolment Ratio (GER)
    • GER for girls at the secondary level in schools has increased from 77.45 (2014-15) to 81.32 (2018-19) as per provisional data through Unified District Information System for Education (UDISE).
  • Toilet for girls
    • Percentage of schools with functional separate toilets for girls has improved from 92.1% in 2014-15 to 95.1% in 2018-19.
• Attitudinal Change:
  • The BBBP scheme has been actively bringing the focus on the important issues of female infanticide, lack of education amongst girls and deprivation of rights of girl children on a life continuum.
  • BetiJanmotsav is one of the crucial programs being celebrated in every district.

Other Initiatives for Girl Children

• UJJAWALA:
  • It is a Holistic Scheme for Prevention of Trafficking and Rescue, Rehabilitation and Re-Integration of Victims of Trafficking for Commercial Sexual Exploitation .
• Kishore Health Card:
  • These health cards are maintained at the AnganWadi centres (AWCs). Record the information relating to the weight, height, Body Mass Index (BMI) of Adolescent Girls (AGs).
• Scheme for Adolescent Girls (SAG).
• Sukanya Samridhi Yojana, etc.

8. Ayushman Bharat Digital Health Account (ABHA)

Context:

The National Health Authority (NHA) has asked the National Medical Commission (NMC) to direct all medical colleges and government and private hospitals to register all patients for an Ayushman Bharat Digital Health Account (ABHAID).

Ayushman Bharat Digital Health Account (ABHA)

Ayushman Bharat Digital Health Account is a 14-digit number, which allows the people to safely store and share their health records. It’s part of the Ayushman Bharat Digital Mission (ABDM), a government initiative to improve India’s digital healthcare infrastructure.

• Benefits of ABHA
  • Access to healthcare: ABHA makes it easy for people to access medical treatments and healthcare facilities.
    • ABHA ensures that health records are stored and shared in a secure manner.
  • Trusted Identity: ABHA sets up a trusted identity for every individual which can be used by health care services providers and payers.
  • Personal health records: ABHA allows individuals to create and maintain a personal health record.

Ayushman Bharat – Pradhan Mantri Jan Aarogya Yojana (AB-PMJAY)

Banking/Finance

1. Business Correspondents (BCs)

Context:

The Department of Financial Services (DFS) has called a meeting of the monitoring committee on the functioning of business correspondents (BCs) 

Business Correspondent (BC)

A Business Correspondent (BC) is a representative of the bank, who offers banking services to people in the unorganized sectors. BCs are an important constituent of financial inclusion, which means making banking accessible to everyone.

• What does a BC do?
  • Open a person’s bank account, Process a loan application, Deposit money and withdraw money, and many other financial services.
• How does a BC function?
  • BCs make use of the mobile phone in the facilitation of the services provided by a bank
  • A customer may make a transaction after he/she makes an electronic signature and/or thumb impression.
  • For each transaction the BC completes, it is compensated.
• Why do BCs matter?
  • BCs can facilitate a bank’s penetration of previously unreachable locations.
  • BCs enable low-cost delivery of banking services.

Key Agenda Items:

• Review of outdated commission rates, which have not been adjusted for inflation or rising operational costs.
• Discussion on the waiver of penalties for BCs to ease financial burdens.
• Exploration of creating an infrastructure and equity fund for corporate BCs.

Scrutiny of C. S. Setty Report (December 2022)

• Enhancement in BCs service portfolios, Commission-Sharing structure which should be more transparent and non-biased, Rebalance Commission rates to regions, Group BCs under various heads as per the service capabilities, Improvement in the Financial Liquidity issues of BCs

Issues in Business Correspondent (BC)

• Static Commission Rates:
  • The BC profitability gets impacted, mainly in rural and semi-urban areas.
• High Attrition:
  • BCs have a very high attrition rate due to low commissions and operational demands.
• Limited Value-Added Services:
  • BCs operate mostly on cash-in, cash-out operations and get limited training to offer more financial products.

Capacity-Building and Governance

• Need better training of the field staff and development of a larger pool of skilled trainers.
• Increase in Digital Banking Units (DBUs)

Source: Business Standard

2. Credit Costs (CCs)

Context:

Private sector banks that announced their earnings for the October-December quarter (Q3) of 2024-25 (FY25) reported a rise in credit costs due to higher provisions, mainly for unsecured retail loans.

Credit Costs

Credit costs are the sum of the sum that a lender demands from the borrower as repayment, over and above the amount taken. They comprise interest, fees, and other charges related to a credit agreement.

What Constitutes Credit Costs?

• Interest
  • The amount a lender charges for lending money. It is usually expressed as a rate related to principal and applied to the loaned sum.
• Fees
  • Compulsory charges such as loan processing fees, late payment fees, or any other service-related charges that the financier may levy.
• Taxes
  • Any tax charged, which could be associated with the credit contract and will be dependent on jurisdiction.
    

How to Calculate Credit Costs

• Sum total amount payable:
  • Include all these components: principal or the actual borrowed amount, interest, fees, taxes, and commission.
• Subtract the loan taken:
  • The amount remaining after the credit cost is calculated between the sum of total amounts payable and the principal.
• Reduce the time it takes to pay off the balance of the loan, which in turn reduces the time you will spend on interest paid. This helps reduce total credit cost.

Source: Business Standard

3. Real Effective Exchange Rate (REER)

Context:

The Real Effective Exchange Rate (REER) of the rupee moderated in December to 107.20 after hitting a peak of 108.14 in November, latest data released by the Reserve Bank of India (RBI) showed. The REER was 103.66 in January 2024.

Real Effective Exchange Rate (REER): Background and Formula

The Real Effective Exchange Rate (REER) is the value of a country’s currency relative to a basket of other currencies, adjusted for inflation. A country’s REER can be indicative of such factors about the country’s outward position and macroeconomic condition.

How REER is Calculated

• Nominal Effective Exchange Rate (NEER):
  • It is the ratio of a country’s currency value to a weighted average of other currencies.
  • The weightings are based on the trade relationships a country has with its major trading partners.
• Price Deflator:
  • The REER is adjusted for inflation using a price deflator.
  • The deflator is usually a consumer price index and is an indicator of changes in the domestic cost level.
• Formula:
  • REER = (Nominal Effective Exchange Rate) / (Price Deflator)

What REER is Used For

• Determining External Imbalances:
  • The REER can be used to determine if there are any imbalance in a country’s external trade.
• High REER
  • A high REER may indicate that a country’s currency is overvalued, making its exports less competitive.
• Low REER
  • A low REER may indicate that the currency is undervalued, which could be detrimental to the country’s purchasing power.
• Currency Valuation:
  • REER is used to determine whether a currency is misvalued. A large deviation from the equilibrium REER may indicate currency misalignment.
• Economic Crises Indicator:
  • Some economists also view the REER as a precursor to economic crises, especially for countries facing chronic imbalances in their current account.
    End

Determinants of REER

• Trade Flows:
  • The REER changes with variations in trade flows between a country and its trade partners, influencing its currency’s relative competitiveness.
• Fluctuations:
  • A change in trade pattern (due to trade agreements, tariffs) is a reason for fluctuations in REER.
• Inflation:
  • Because the REER has inflation adjustment, any relative inflation between countries will influence the value.
• Interest Rates:
  • A change in a country’s interest rates may affect its currency value and subsequently its REER.
• The greater the inflation level of a country compared with that of its trading partners, the lower the country’s REER will be, this indicates that the country lost external competitiveness.
• Higher interest rates may attract capital inflows, strengthening the currency and affecting the REER.

Source: Business Standard

4. India’s Insolvency and Bankruptcy Code (IBC)

Context:

The Insolvency and Bankruptcy Code, 2016 (IBC) is a significant economic reform in India aimed at structured insolvency resolution. Initially seen as a tool to help India’s business standing, the law has evolved, addressing issues related to institutional capacity and procedural efficiency. The recent Supreme Court of India judgment in Jet Airways has highlighted structural issues in India’s insolvency regime.

The Insolvency and Bankruptcy Code, 2016

The Insolvency and Bankruptcy Code, 2016, is a legislation that pertains to the Indian insolvency resolution of individuals, partnership firms, and corporations. It was enacted in the year 2016 and has been called as the exit law of India.

• Purpose
  • The code builds a single law for insolvency and bankruptcy. It helps creditors recover dues and reduces bad loans.
  • It promotes entrepreneurship and credit availability. This code will maximize the value of assets.
• Features
  • Instituted the Insolvency and Bankruptcy Board of India (IBBI)
  • Introduced a committee of creditors (COC) and adjudicating authorities (AA)
  • Instituted time-bound processes.
  • Established judicial discipline
• Pillars
  • Information utilities, Information professionals, Adjudicating authority, and Insolvency and Bankruptcy Board of India (IBBI).

Issue and Drawbacks

Too much of work burden for over-stretched NCLT and NCLAT to tackle matters both under IBC as well as Companies Act.

• Poor Institutional Design:
  • The NCLT’s design is archaic and not suited to the needs of modern insolvency.
• Lack of Domain Expertise:
  • Members often lack specialized knowledge for handling complex insolvency cases, a concern highlighted by the Supreme Court in the Jet Airways case.
• Procedural Inefficiencies:
  • Mandatory hearings for all applications cause delays, and sparse adoption of alternative dispute resolution methods further clog the system.
• Erosion of Judicial Integrity:
  • The accountability of some of the members of NCLT/NCLAT towards some Supreme Court orders undermines the judicial hierarchy.

Proposed Reforms

• Specialized Institutional Design:
  • Hybrid bench model and some infrastructural strengthening.
• Procedural Innovations:
  • Mandatory mediation, as a precursor to filing insolvency applications.
• Capacity Building:
  • Domain expertise of the tribunal members will be enhanced with proper training.
• Judicial Accountability:
  • Mechanisms to enforce compliance with higher court orders need to be strengthened and monitoring of tribunal operations tightened.

Source: The Hindu

Agriculture

1. National Policy Framework on Agricultural Marketing (NPFAM)

Context:

Both factions of the Samyukt Kisan Morcha (SKM and SKM – non political) have decided to hold joint agitations against the Union Government’s draft National Policy Framework on Agricultural Marketing (NPFAM) as the next stage of their protests.

National Policy Framework on Agricultural Marketing (NPFAM)

The National Policy Framework on Agricultural Marketing (NPFAM) is a draft policy that aims to improve agricultural marketing in India. The policy was released by the Union Agriculture Ministry for public comments. 

Vision of the Policy

• Objective:
  • To create a vibrant marketing system where all classes of farmers gain access to the market of their choice and gain the best possible price for their produce.
• Critical Objectives:
  • Enhance the performance and competitiveness of markets.
  • Provide multiple marketing channels that are transparent, infrastructure-enabled, and digital technology-intensive.
  • Develop agriculture value chain-based marketing.

Key Features

Private Wholesale Markets

• Promotion:
  • Gives the private sector the opportunity to establish wholesale markets for agriculture products.
• Status Today:
  • There already exist 125 private wholesale markets in five states.

Direct Purchases

• Direct Procurement:
  • Empowers processors, exporters, organized retailers, and bulking buyers with the right to purchase directly at the farm-gate.

Corporate Post-Harvest Infrastructure

• Alternative:
  • Replaces market yards by corporate warehouses and silos which provide better storage and handling conditions.

Integrated National Market

• System Setup:
  • This will provide a single, integrated market charge and trading license system that provides hassle-free trading.

More Choices in Marketing

• Cold Storage: It will declare silos and cold storage as deemed market yards for easy marketing opportunities

E-Trade

• Private Platforms:
  • It encourages setting up and operating private e-trading platforms for better access to markets

Contract Farming

• Agri-Processing Linkage:
  • It facilitates agro-processing, exporting, and trading units to enter into agreements with farmers and Farmer Producer Organizations (FPOs).

Federal Committee

• Empowered Committee:
  • The empowered agricultural marketing reform committee to be constituted along with state agriculture ministers for uniformity.

Empowerment of GrAMs

• GrAMs Development:
  • 300 Grameen Agricultural Markets (GrAMs) would be developed every year with a focus on their strengthening.

Modernization

• Technological Integration:
  • Modernize the supply chain with cutting-edge technologies such as blockchain, AI, and machine learning.

Digital Marketing

• Making the Current e-NAM into a Full Digital Marketing Platform:
  • Upgrade the existing e-NAM to an entirely transparent Digital Marketing Platform.

Policy Justification

Income to the Farmer

• Farmer Accesibility
  • Build an ecosystem wherein farmers find access to their preferred markets easy and receive fair value for their products.
• Price Stabilization
  • Increase the possibilities of reducing uncertainty of market as well as of price instability in order to empower farmers to guess their incomes beforehand.
• More Efficient Markets
  • Increase marketing competition through applying various channels by which all exchange related to the trade will have more transparency; therefore, more efficient market efficiency will be obtained and improved market output.
• Integrated Output Management
  • Integrated production and marketing processes by providing digital public infrastructures like Blockchain and internet portals for smooth performance.
• Address Unsustainability of APMCs
  • APMCs should operate as service providers to the value chain of agriculture rather than the centers for charging fees to the market.
• Learn from New Patterns of Marketing   
  • Institute  End-to-End Value Chain Centric Infrastructure(VCCI), and  digital infrastructure  in order to better adapt to changes in market structures.

Problems with the Policy

• Inadequate Research and Studies
  • There are no independent studies of the private wholesale markets working on effectiveness and problems.
    End

• Lack of Fairness to Farmers
  • Farmers would not have bargaining power among the private storage infrastructures during the price volatility period.
    End

• No Surplus Sharing
  • There is no such stipulation in the regulatory clauses that the traders should share surplus with farmers.

• Homogeneous Policy
  • The one-size-fits-all approach will overlook the variegated requirements and expectations of farmers in each state.

• Impact on Federalism
  • The creation of the Empowered Committee may be undermining the states’ authority to regulate and monitor agricultural marketing in their jurisdiction.

• Absence of Price Guarantee
  • There is no assurance of minimum support prices (MSP) or minimum support during distress sale and the farmers can be left at the mercy of adverse forces.

Way Forward

• Mechanism for Price Guarantee
  • Include price guarantee mechanisms that provide minimum levels of income protection to farmers at the time of distress sale.

• State Flexibility to Change the Policy
  • Allow the states to make changes to the policy according to their regional agricultural needs and circumstances.
• Analysis of Private Markets’ Performance
  • Analyze private markets to examine if the interest of farmers can be enhanced by improving operation or management.

• Regulation of Private Sector Participation
  • Installation of regulations over entry and performance of corporate as well as private players in the agricultural marketing space and fair competitiveness.

2. Seaweed Farming in India

Seaweed farming in India is an inexpensive and less laborious activity that may help coastal communities find an alternate source of income. Seaweed is high in vitamins and minerals and finds applications in food, cosmetics, and fertilizers.

How is seaweed farmed in India?

• Seed collection:
  • Seed stock is collected from natural waters or grown from vegetative propagation
• Cultivation:
  • Seaweed is grown in small patches of intertidal sand flats
• Harvesting:
  • Seaweed is harvested and utilized in the different industries

What varieties of seaweeds are cultured in India?

• Red Seaweed:
  • Gelidiella acerosa, Gracilaria edulis, G. dura are cultured for agar
• Brown Seaweed:
  • Sargassum wightii, Turbinaria conoides are cultured for alginates
• Kappaphycus alvarezii:
  • Cultivated for carrageenan
• Eucheuma denticulatum:
  • Cultivated in Tamil Nadu and Kerala

Where are the seaweeds cultivated in India?

• Tamil Nadu:
  • Has most seaweeds with 180 species in Mandapam village
• Goa:
  • Shallow areas for seaweed farming
• Karnataka:
  • Seaweed industries
• Andhra Pradesh:
  • Seaweed industries
• Gujarat:
  • Seaweed industries

Growing Demand and Cultivation

• Seaweed cultivation is on the rise for food-processing, pharmaceutical, and cosmetics industries.
• Coastal states are boosting seaweed farming, generating new employment avenues.

Global Advancement in Seaweed Production

• It has the leaders China, Indonesia, Korea, Philippines, Japan, Malaysia, Zanzibar, and Chile.
  Seaweed Characteristics
• It is the naturally occurring essential to coastal ecosystems.
• Uses
  • The foods and habitat to marine lives. ‘
  • Used for humans and animal feed.
  • The same also act as bio-fertilizers.
• Therapeutic Uses
  • Some are of therapeutic uses that have good applications in nutraceuticals, cosmetics, and pharmaceuticals.
• Economic Use of Seaweeds
  • Seaweeds are incorporated into the manufacture of processed foods, animal feeds, toothpastes, and skincare products.
  • Agar, an algal, obtained from red algae, is a vegetarian substitute for gelatin, a thickener, a preservative, and an inhibitor of ice crystallization in frozen foods.

Indian Seaweed Sector: Current Situation

• In India, about 9.7 million tonnes of seaweed are available yearly, and out of this, only 34,000 to 35,000 tonnes are used.
• The government has targeted the production of one million tonnes of seaweed by 2025.
  Government Policies
• PMMSY has presented itself for promoting the cultivation of seaweed by establishing nurseries for sea weed, seed banks, tissue culture labs, and special markets.

Research and Facilitation

• The Central Marine Fisheries Research Institute, Kochi, has been identified as the nodal agency for seaweed farming in India.

Challenges in Seaweed Industry

• The development of the seaweed industry in India is still very low, and less than 50 units are operational.

State Initiatives

• Tamil Nadu aims to become a modern industrial destination for seaweeds. It offers eco-friendly investment opportunities along with single-window facilities.

Pradhan Mantri Matsya Sampada Yojana (PMMSY)

PMMSY, introduced as part of the ‘Atma Nirbhar Bharat’ package, aims to develop the sustainable and responsible fisheries sector in India. The scheme is implemented in all States and Union Territories for five years from FY 2020-21 to FY 2024-25.

• Launch
  • The Pradhan Mantri Matsya Sampada Yojana (PMMSY) was launched in September 2020
• Ministry
  • Department of Fisheries, Ministry of Fisheries, Animal Husbandry, and Dairying.
• Features
  • The scheme provides insurance coverage, financial assistance, and a Kisan Credit Card (KCC) to fishermen.
• Umbrella scheme with two components
  • Central Sector Scheme and Centrally Sponsored Scheme.
• Objective
  • The objectives include enhancing fish production and productivity, modernizing the value chain, generating employment, enhancing contribution to agricultural GVA and exports, ensuring social, physical, and economic security, and building a robust fisheries management and regulatory framework.
• Status
  • The fisheries sector contributes to national income, exports, food and nutritional security, and employment generation.
  • As of 2023, projects worth Rs 14,654.67 crore have been approved under PMMSY.
• India’s Status in Fisheries
  • India is the 3rd largest fish producer and the 2nd largest aquaculture producer globally, with fish production reaching an all-time high of 16.25 MMT during FY 2021-22.

Facts To Remember

1. The Hindu launches Surf & Dive at lit fest

Shashi Tharoor, MP and writer, launched The Hindu’s latest product, Surf & Dive, a print offering that gives readers in-depth coverage across a range of issues through long-form reads.

2. EPFO to let employees correct personal details using Aadhaar number

In a significant reform that would ease the burden on subscribers, the Employees Provident Fund Organisation (EPFO) has simplified the process of joint declaration on the EPFO portal by allowing employees to self-correct errors in their personal details.

3. Shah, Naidu to take part in NDRF Raising Day celebrations today

The 10th battalion of the National Disaster Response Force (NDRF) will celebrate the 20th Raising Day on its premises at Kondapavuluru in Gannavaram mandal of Krishna district, Andhra Pradesh.

4. India women power past Nepal, clinch title in style in kho kho WC

The Indian women won the inaugural kho kho World Cup in New Delhi on Sunday, easing past Nepal 78-40 in the final. The dominant display from the home side was consistent with its superiority right through the tournament.

5. Indian men beat Nepal in final to ring in the double cheer

India completed the double at the kho kho World Cup as the men followed the women in lifting silverware in New Delhi.

6. Two titles each for Matthai & Tarushi

Philippos Matthai and Tarushi Vikram won two National titles apiece in the FMSCI Indian National Rally Sprint Championship 2024 organised by the Madras Motor Sports Club at the Madras International Circuit.

7. Axelsen and Young stamp their class

Viktor Axelsen and An Se Young lived up to their pre-tournament favourites tag, registering comprehensive one-sided wins to clinch men’s and women’s India Open badminton titles respectively here on Sunday.

8. India improves ease of doing business, expands social security for informal sector workers: Union Minister Mandaviya

Union Labour and Employment Minister, Dr. Mansukh Mandaviya has said, India has improved the ease of doing business by attracting Foreign Direct Investment from multinational corporations

9. 24 companies selected under PLI scheme for White Goods

Government has said, 24 companies have been selected under the Production Linked Incentive, PLI Scheme for White Goods (Air Conditioners and LED Lights) with a committed investment of three thousand 516 crore rupees.

10. India-Sri Lanka finalise energy price for Sampur solar plant

India and Sri Lanka have finalised the price per unit for energy from the Sampur solar power plant to further strengthen energy cooperation between the two countries.

11. EPFO simplifies process of updating personal details

Employees’ Provident Fund Organization (EPFO) has simplified the online process of updating member profiles. The members whose Universal Account Number has already been validated through Aadhaar can update their profile with name, date of birth, gender, nationality, father or mother’s name, date of joining and date of leaving themselves without the requirement of uploading any document.