Current Affairs 21 February, 2025

Daily Current Affairs Quiz
21 February, 2025

International Affairs

1. India-US Bilateral Talks

Context:

India is in the process of gearing up for bilateral talks with the U.S. after discussions between Prime Minister Narendra Modi and former U.S. President Donald Trump. Let me break it down for you more precisely.

Preparations for Bilateral Trade Agreement (BTA)

Key Developments

• Preliminary discussions among the Commerce Department and other government ministries have commenced.
• The purpose is to understand sector specific concerns, trade dynamics, and India’s strategic priorities.
• Ministries have been advised to consider:
  • India’s prospective trade concessions (tariff reductions, market access).
  • What India can ask for in return from the U.S. (favorable terms, market access).

Meeting Outcomes

• The first round of sectoral discussions has already been held with the Department of Heavy Industries concerning the automotive sector.
• More inter ministerial meetings are scheduled for next week.
• Industry consultations will follow after broad contours of the trade deal are laid out.

Way Forward

• The pace of negotiations should pick up once the U.S. administration’s trade counterparts are appointed.
• The Indian government, in the meantime, is readying itself to put reciprocal tariffs and trade negotiations in place before high level talks.

2. Tariff Obstacles to India Electronics Export Targets

Context:

President Donald Trump, with the reciprocal tariffs, might bring an obstacle in India’s ambitions to achieve $500 billion in electronics production by 2030, with $200 billion worth of exports.

Key Highlights:

• The US is the largest market for India’s electronics export, with 33% of total exports made to the US in FY24.
• Electronics is the third largest export category for India, with exports of $22.54 billion during the period April November 2024, just behind engineering and petroleum products.
• The average tariffs set by the US on electronics imports are really much lower (very slightly over 1%) than the average tariff of 9% in India on 477 Harmonized System (HS) Code items.
• Almost 80% of US imports of electronics are free of import duty, and India on average charges 8% more tariffs.

Industry Reactions

• The industry associations are preparing a comprehensive analysis for the evaluation of the potential impact on the government.
• Policymakers will have to decide on a course of action to lessen possible export losses and maintain its competitiveness in international markets.

What’s on the Horizon?

• The government could engage in trade negotiations with the US or undertake changes in domestic policies to offset the tariff burden.
• To fulfill its audacious growth targets, the Indian electronics sector may need more diversified export markets and more local incentives.

National Affairs

1. SC Stays Lokpal’s Order on HC Judges

Context:

The recent Supreme Court stay on the Lokpal’s order which has brought High Court judges under its jurisdiction is of serious legal and constitutional concern and merits proper deliberation.

Lokpal and Lokayukta

The Lokpal is an anti-corruption body in India that investigates allegations of corruption against public officials. The word “Lokpal” is Sanskrit for “defender of the people”.

How does the Lokpal work?

• The Lokpal is a statutory body established by the Lokpal and Lokayuktas Act of 2013.
• The Lokpal has a chairperson and up to eight members, including at least four judicial members.
• The jurisdiction of the Lokpal includes the Prime Minister, ministers, Members of Parliament, and government employees.
• The chairperson of the Lokpal is empowered to transfer cases to benches.

What is the major difference between the Lokpal and the Lokayukta?

• While the Lokpal is a national institution, the Lokayukta is a state institution.
• Both the Lokpal and the Lokayukta are headed by a panel of judges or retired judges.
• Both the Lokpal and the Lokayukta have the power to investigate and file prosecution against corrupt practices.
• History
  • In the fourth Lok Sabha, the first Lokpal Act was brought into conceptualization in 1968.
  • Coined first in 1963 by Dr. L.M.Singhvi.

Recent Updates of the Supreme Court

The Independence of Judiciary Under Threat

• A threat to judicial independence was underlined by the Supreme Court bench consisting of Justices B.R. Gavai, Surya Kant, and A.S. Oka, emphasizing the Lokpal and its interpretation.
• In fact, an independent judiciary is one of the basic features of the Constitution and, therefore, must be maintained for the sake of separation of powers and the executive, legislature, and judiciary.

Disturbing Expansion of Jurisdiction of the Lokpal

• Lokpal and Lokayuktas Act of 2013 was to eliminate public corruption among official classes, including ministers and bureaucrats.
• Yet the judges emerge somewhere in the law as a gray area, just shy of being swept under the expression of public servants in the Lokpal’s jurisdiction.
• The Lokpal order of January 27, under then-chair Justice A.M. Khanwilkar (retired Supreme Court judge), found that High Court judges were public servants liable for investigation under the Act.
• Such interpretation, considered by the Supreme Court, is problematic and legally ill-founded.

The Case Whose Complaints Triggered the Controversy

• There was a complaint against a High Court judge to the effect that:
• The judge influenced an Additional District Judge to decide in favor of a private company.
• The company had been a client of the judge when they were a practicing lawyer.
• Based on this allegation, Lokpal ruled that High Court judges were covered by its jurisdiction, prompting interference from the Supreme Court.

What Consequences Are There For Lawyers And Or Constitutional Law?

• If the Lokpal walks into a matter involving judges, it would create a demeritorious precedent to interfere with executive matters in the judiciary.
• What Is In Place To Guarantee Accountability For Judges?
  • Judges are impeached under a fair process contained in Article 124 and 217 of the Constitution for proving cases of misconduct.
  • Cases pertaining to corruption of judges are primarily resolved through internal systems of the Supreme Court and relevant High Court.
• Which are the expected legal issues?
  • Would these judges amount to public servants under the present act dealing with corruption?
  • If they do, who should investigate – the Lokpal, CBI, or an agency overseeing the judiciary?

Supreme Court stays are considered to be a loud judicial protest against outside control in Lokpal’s affairs. Maintaining independence of judges, we can hardly therefore permit the Lokpal to investigate judges. The hearing on March 18 will provide important groundwork for a legal precedent, which is expected to shape their future inter-relationship of judiciary-anti corruption ombudsman.

2. Majorana 1

Context:

Microsoft recently announced the Majorana 1 chip in a bold gesture toward practical quantum computing, which they now claim remains “years, not decades” away. In fact, Microsoft is now in good company with Google and IBM, which have also made large strides in the area.

Highlights of Majorana 1

• Breakthroughs in Quantum Computing
  • Quantum computers can solve problems exponentially faster than classical ones, with enormous applications in medicine, materials science, finance, and AI.
  • The primary challenge is error prone qubits, which limit their practical use.
• What Is Special About Majorana 1?
  • MS claims that the chip works more stably and is less error prone than current quantum architectures.
  • It works with the Majorana fermion, that is, a theoretical subatomic particle proposed in the 1930s.
  • If proven, this means we might have a fault tolerant quantum computer sooner than expected.
• Doubts and Outside Verification
  • Physicist from Harvard Philip Kim called it an exciting development but some scientists have reservations.
  • Experts stated that there is a need for more conclusive proof to verify that Majorana 1 performs as claimed.

Impact on Quantum Computing

• This specific instance can expedite further technologies in drug discovery, climate modeling, and cryptography.
• The suggestion from Microsoft of being “years, not decades” away from quantum advantage positions us for a possible technological revolution in the not too distant future.

Majorana 1 from Microsoft could serve as a ”game changer,” but its full possible performance remains uncertain due to www open source independent verification. Should that prove possible, Microsoft would then be placed in the forefront of the quantum computing race along with Google and IBM.

3. I&B Ministry Issues Advisory to OTT Platforms

Context:

This advisory indicates that the government is becoming increasingly watchful regarding OTT platforms such as Netflix, Amazon Prime Video, and Disney+ Hotstar, specifically with regards to content regulation and age-related classification as mentioned in the IT Rules of 2021.

Key Points of the Advisory

• OTT platforms should refrain from streaming any content that is within the definition of illegal content (obscene, pornographic, vulgar).
• Age classification and parental control have to be applied for such content that is for adult audiences.
• Action was initiated because of complaints received from Members of Parliament, statutory bodies, etc.

The grievance-redressal set-up entails a three-stage settlement under the IT Rules:

1. Complaint is resolved at the level of the platform.
2. Then moves to self-regulatory body.
3. Finally, grievance enters the Union Government’s Inter-departmental Committee.

Increasing Concern Regarding Content Available on OTT Platforms

• In December 2024, the Ministry of I&B had warned the OTT platforms against those shows promoting drugs.
• The Supreme Court directed the government to address obscene content on social media.
• The advisory will pertain to contents curated for OTT platforms, not to user-generated platforms such as YouTube.

Legal Framework for Regulation of Content

• The advisory mentions various Acts:
  • Indecent Representation of Women (Prohibition) Act, 1986
  • Bharatiya Nyaya Sanhita, 2023
  • Protection of Children from Sexual Offences Act
  • IT Act, 2000 (criminalizing obscene/pornographic content)

Consequences for OTT Platforms & Viewers

• Stronger implementation of content control and age-related restrictions.
• Possible self-censorship on the part of streaming services to avoid legal troubles.
• Heightened government regulation on defining what is ‘obscene’ or ‘vulgar.’

This shift denotes a larger circumstance where India is regulating digital content, often in implementation of a balance between free expression and societal concerns regarding online content.

The Draft Digital Personal Data Protection Rules 2025

4. The Prime Minister Internship Scheme (PMIS) Phase-2

Context:

The Prime Minister Internship Scheme (PMIS) enters its second pilot stage, expanding to reach as many youths in India as possible with industry exposure and experience from the real world. More than 115,000 internships are being rolled out under the PMIS in the first year within 25 sectors by leading industry partners like Reliance, HDFC Bank, Indian Oil, and Maruti Suzuki.

Key Highlights:

• Massive Budget Boost
  • A government fund allocation of ₹10,831 crore for the scheme in FY 2025-26 is an indicator of its commitment towards workforce development.
• Internships by State
  • Tamil Nadu: 14,585
  • Maharashtra: 13,664
  • Gujarat: 11,690
  • Karnataka: 10,022
  • Uttar Pradesh: 9,027
• Income Support
  • Joining bonuses of ₹6,000 through direct benefit transfer.
  • Monthly stipend of ₹5,000 (₹4,500 from government, ₹500 from company’s CSR funds)
  • Insurance provided by PM Jeevan Jyoti Bima & PM Suraksha Yojana.

Who Is Out? Who Is In?

• For example, the scheme, which provides short term training experience, excludes IIT/IIM graduates, Chartered Accountants, Management Accountants.
• Specifically, family income is below ₹8 lakh a year, and there are no government employed family members, so the individuals are eligible to apply.

ONGC’s Strategy: Preparing Interns to Work in the Energy Sector

• India’s largest oil and gas company, ONGC, has recently offered 6,000 internships under PMIS, but the company does not have enough applicants to fill those openings. The ONGC views this whole PMIS activity as a pipeline for skilled manpower especially for off shore rigs and drilling platforms.
• Interns are expected to be certified and placed as Operations and Maintenance (O&M) personnel to ensure better safety and efficiency of oil fields.
• To improve the quality of the workforce, ONGC will take over from contractors that provide many inadequately trained personnel.

Innovating Energy Green: Renewables from ONGC

• Complementing its efforts to improve the workforce, ONGC has pioneered the green energy agenda with large investments toward the green hydrogen, biogas, and renewables:

Green Hydrogen

• Successfully completed Pilot Project in Mehsana, Gujarat.
• Plans to produce 40-50 kg of hydrogen per day in Bengaluru.
• Upcoming projects for green hydrogen plants in Andhra Pradesh & Karnataka.

Expansion of Biogas and Renewables

• 15 CBG plants for compressed biogas are still in the initial stages and are part of a government mandate requiring a total of 25.
• By FY 2025-26, the ONGC NTPC Green joint venture will initiate solar and wind energy projects together.
• A much larger project of 1 gigawatt solar & wind power, along with battery storage for 24/7 energy supply, is in the works.

Way Forward

• Peak Hour Power Supply
  • ONGC will take advantage of peak hour energy demand to guarantee higher revenues and ensure national energy security.
• Strategic Renewable Acquisitions
  • The company is currently scouting for green energy assets through both organic and inorganic development approaches.
• Startups and Innovations
  • ONGC finances entrepreneurial startups within the energy sector through breaking disruptive solutions efforts for long term sustainment of these efforts.

As PMIS empowers youth and ONGC transforms the energy sector, the nation will build a stronger workforce while making bold moves in the renewables space. This dual strategy also meets with India’s long term economic and energy sustainability goals, leading to a ready future workforce and a greener energy map.

Banking/Finance

1. Open Market Operation (OMO) amidst Liquidity Shortage

Context:

More than ₹1.87 lakh crore was offered for purchase under Open Market Operation (OMO) auction by Reserve Bank of India , exceeding its notified ₹40,000 crore by an overwhelming figure.

Highlights of the OMO Auction

• The cutoff prices on bonds were set below secondary market prices because of excessive demand.
• According to market sources, PSU banks were the chief players.
• It already bought government securities worth ₹1 trillion via OMO auctions.

Why does the RBI carry out OMOs?

• The RBI is stepping in with durable liquidity through bond purchase in view of continued liquidity deficit in the banking system for as long as nine consecutive weeks.
• The net liquidity deficit as was ₹1.77 trillion, as reported by RBI sources.
• The central bank injected ₹1.33 trillion through an overnight Variable Rate Repo (VRR) auction conducted on Thursday.
• A14 day VRR auction of ₹75,000 crore is on the calendar.

Impact on Bond Markets

• Corporate bond yields are rising despite RBI’s Monetary Policy Committee (MPC) cutting rates by 25 bps.
• Government bond yields are stable because of active bond purchasing by the RBI via OMOs.
• The gap widened between corporate and government bond yields by 25 bps.
• Short term yields have moved farther up the scale than long term yields, hence creating an inverted yield curve.

What next? More Liquidity Measures Expected

In a scenario where tight liquidity conditions besiege the banking system, market experts suspect more OMOs would be held at intervals in the near future.

• RBI measures to inject durable liquidity include:
  • Further OMOs
  • Cut in Cash Reserve Ratio (CRR)
  • Reducing incremental CRR
  • Foreign Exchange buy sell swaps
  • Long term repo operations

As the RBI goes on with its liquidity support measures, the focus will be around the way these interventions affect bond yields, banking liquidity, and credit conditions. Market participants remain attuned to future OMO announcements as they assess the direction in which the central bank will steer its way through the ongoing liquidity crisis.

2. RBI Weighs Some Relief for New India Co-op Bank Depositors

Context:

The Reserve Bank of India (RBI) is working on a new plan to set a figure for withdrawal under special conditions for depositors of the troubled New India Cooperative Bank to allow personal and medical emergencies financing, sources revealed Thursday.

Key Highlights:

• Proving emergency basis of withdrawal by depositor will be the watching criterion for assessing with drawability.
• The maximum limit of withdrawal will be up to ₹5 lakh, matching the limit for deposit insurance.
• This step follows the imposition of restrictions by the RBI on the bank last week, when deposit withdrawals and giving loans were barred for a period of six months due to liquidity concerns.
• There is no clarity if bank will resume working after this term, sources said.

Regulatory Context

• Currently deposits up to ₹5 lakh are insured by a default bank within a of a bank failure. Current payout is expected in 90 days.
• The RBI has appointed an administrator who will look into the working and financial health of the bank.
• The central bank has not yet responded to the media on the all encompassing matter.

This Is All About the Depositors

• People with dire medical or personal financial crises can be given limited access to their funds.
• The future of New India Cooperative Bank still stands very much uncertain, with no plan for a clear revival so far.
• They can keep abreast with any RBI update and possibly look out for other banking arrangements to secure the fate of their finances.

This goes to show that the RBI really handles banking crisis carefully, though howsoever lit upon the manner, it offers a small measure of relief to all the infected bank depositors.

3. Sebi Proposes Fast Track Follow on Offer for REITs and InvITs

Context:

The Securities and Exchange Board of India (Sebi) sought a framework for fast track follow on public offers (FPOs) to be formulated by Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to introduce efficiency in the method of raising funds.

Summary of the Proposal

• Fast Track Follow On Offers
  • This would simplify and speed up the fund raising process for REITs and InvITs.
  • Provide easier quicker access to capital markets for existing listed trusts.
• Lock In Obligations for Preferential Allotments
  • 15% of units allotted to sponsors and sponsor groups shall, however, be locked in for three years from the date of trading approval.
  • The remaining units shall be locked in for one year from the date of trading approval.
• Public Consultation
  • Sebi invited public comments on these proposals up to March 13.

Greater and Better Mobility

• Enhance capital raising flexibility for REITs and InvITs.
• Consider better governance and stability with lock in restrictions on sponsor holdings.
• Strengthening investor trust in REITs and InvITs as credible alternative investment channels.

History

• Following an initial public offering (IPO), follow on public offers (FPOs) become important tools through which further funds can be raised.
• SEBI has been working towards improving liquidity and transparency in the alternative investment market.

What Next?

• Sebi now would evaluate public comments and finalize the framework.
• If these modifications are implemented, then one can achieve greater efficiency in raising funds and enticing institutional participation in REITs and InvITs.

Follow-on Public Offer (FPO)

A “Follow-on Public Offer” (FPO) is a process where a company that is already listed on a stock exchange issues new shares to the public, allowing them to raise additional capital for business expansion, debt reduction, or other strategic purposes, essentially offering more shares to the market after their initial public offering (IPO) where they first went public. 

Key points about FPOs:

• Existing company:Unlike an IPO, an FPO is conducted by a company that is already listed on a stock exchange. 
• Raising capital:The primary purpose of an FPO is to raise additional funds by selling new shares to the public. 
• Investor access:Both existing shareholders and new investors can participate in an FPO. 
• Dilutive vs. Non-dilutive:FPOs can be dilutive (when new shares are issued, potentially lowering existing shareholder value) or non-dilutive (when existing private shares are sold publicly). 

Why companies use FPOs:

• Increase liquidity: To make more shares available for trading, potentially improving market liquidity. 
• Fund growth initiatives: To finance new projects, acquisitions, or expansion into new markets. 
• Debt reduction: To pay off existing debt obligations. 

Economy

1. Economic Growth in a Supply Demand Balance

Context:

This analysis juxtaposes the growth paths of India and China while underscoring investment as one of the most promising drivers of economic growth.

Economic Growth in a Supply Demand Balance Understanding

• On the other hand, GDP stands for the value added by the production of goods and services and aggregate demand makes sure that all these goods and services are bought.
• Inflation (in excess of demand) or an economic slowdown would result from the imbalance in supply and demand.

Components of Aggregate Demand

• Household Private Consumption Willingness of individuals to pay for certain goods/services.
• Private Investment Expenses incurred by firms and households for capital goods.
• Government expenditure on behalf of citizens for their public services and infrastructure.
• Net Exports (Exports Imports) Contribution through International trade.

Investment: the Multiplier Resource

• Investment is a strong multiplier for the economy.
• However, a ₹100 investment in infrastructure can generate about ₹125 in GDP through spillover effects (creating jobs, launching businesses, increasing productivity).
• Public investments (highways, railways) that use more multipliers in less developed countries.
• Consumption driven growth have no such high multiplicative factors increase in consumption does not augur well for production and income growth.

India vs. China: Diverging Investment Approaches

• 1990s: India and China had similar per capita incomes (~1.5% of U.S. levels).
• 2023: per capita income in China becomes five times higher than in India because it used investment ratio derived from increasing GDP.
• Investment as a %age of GDP:
  • China: 41.3% (2023), peak value of over 44.5% (2013).
  • India: 30.8% (2023) from 2012.
  • Heavy post 2008 state led investment in China was directed toward building infrastructure, artificial intelligence, renewable energy, and manufacturing.
• Growth in India is consumption driven (~60.3% of GDP in 2023) with lower investment and is running a trade deficit.

The Challenges with Over India Growth Model

• Models based on consumption as a driver for growth are slow and fallacious in nature these are more effective at reaching out to the middle and upper classes.
• Private sector defers investment due to low confidence. “Animal spirits” are quite subdued.
• Neither has the government stepped in with adequate public investment necessitating stimulus.

Public investment should step up to give confidence to the private sector.
Increase spending in critical areas such as infrastructure, green energy, and advanced manufacturing.
Lower dependence on consumption led growth to avert inequalities.

Facts To Remember

1. Rekha Gupta takes over as 9th Chief Minister of Delhi

Bharatiya Janata Party MLA Rekha Gupta took oath as the ninth Chief Minister of Delhi at the Ramlila Maidan.

2. Indian archers set under-21 World record

The Indian men’s compound team, comprising Kushal Dalal, Manav Ganeshrao Jadhao and Ganesh Mani Ratnam Thirumuru, has set a new under-21 world record by aggregating 2129 points in the qualification round of the Asia Cup World ranking tournament, Stage-1, in Bangkok.

3. India Showcases Defence Innovation & Strengthens Global Ties at IDEX and NAVDEX 2025

India’s participation in IDEX and NAVDEX 2025 concludes today, reaffirming the country’s commitment to global security cooperation, indigenous defence innovation, and strategic partnerships in the international defence landscape.

4. Out-of-pocket health expenditure drops to 39% in decade: Health Minister

Union Health Minister J P Nadda has said that out-of-pocket health expenditure has declined from 64 per cent to around 39 per cent in the last ten years. Addressing the 12th edition of the International Health Dialogue 2025 in New Delhi, Mr Nadda said, the Pradhan Mantri Jan Arogya Yojana, along with the services provided under the National Health Mission and other schemes has led to the decline of out-of-pocket health expenditure.

5. Indian biologist Purnima Devi Barman named TIME’s ‘Woman of the Year’

Indian biologist and wildlife conservationist Purnima Devi Barman has been named “Woman of the Year” by Time magazine. The list honours “extraordinary leaders” working toward a better, more equal world. Purnima Devi, 45, is the only Indian woman on the list.

6. US President Trump’s loyalist Kash Patel elected as FBI Director

United States President Donald Trump’s loyalist Kash Patel has been elected as the 9th Director of the Federal Bureau of Investigation (FBI), which is America’s premier federal law enforcement agency. The Senate narrowly voted to confirm Mr Patel’s appointment last night. In a social media post, Mr Patel thanked President Trump and Attorney General Bondi for their support.

7. MEA Flags Concerns Over USAID Funding, Assures Safety of International Students

The External Affairs Ministry today said that the recent statements about USAID funding are troubling and lead to concerns about foreign interference in India’s internal affairs. Briefing media in New Delhi this afternoon, Ministry spokesperson Randhir Jaiswal said relevant departments and agencies are looking into this matter. He said this while replying to a query on US President Donald Trump’s remarks about USAID funding.

8. India extends Chief Economic Adviser Nageswaran’s term until March 2027

India’s Chief Economic Adviser V Anantha Nageswaran’s term has been extended by two years until March 2027, according to a government order.