22 Apr 2020: UPSC Exam Comprehensive News Analysis

A. GS 1 Related
SOCIAL ISSUES
1. The ‘nowhere people’ of COVID-19 need better legal safeguards
B. GS 2 Related
HEALTH
1. Drug for sepsis to be tested for COVID-19
INTERNATIONAL RELATIONS
1. ‘Pakistan removes names from terrorism watch list’
2. Beijing names disputed islands
C. GS 3 Related
ECONOMY
1. Why are oil prices in negative terrain?
ENVIRONMENT AND ECOLOGY
1. Humans to blame for pandemic
D. GS 4 Related
E. Editorials
INTERNATIONAL RELATIONS
1. Putting the SAGAR vision to the test
SOCIAL ISSUES
1. A change in migrant policy
ECONOMY
1. Futures shock
F. Prelims Facts
G. Tidbits
1. Assam begins releasing ‘foreigners’ to decongest six detention centres
2. AIIMS deploys robots in COVID-19 ward
3. Child abuse complaints rise during lockdown
4. Denied alcohol, many take to ‘arishtams’
5. Martyr status for officials who died of virus: CM
6. COVID India Seva launched
7. UN: global hunger could double due to COVID-19
8. SEBI eases norms on IPO, rights issues
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions

A. GS 1 Related

Category: SOCIAL ISSUES

1. The ‘nowhere people’ of COVID-19 need better legal safeguards

Context:

The migrant workers’ plight during the lockdown has exposed the inadequacies of the Inter-State Migrant Workmen Act, 1979.

 Inter-State Migrant Workmen Act, 1979:

• Inter-State Migrant Workmen Act, 1979 (ISMW Act) was drawn up after repealing the Orissa Dadan Labour Act, 1975.
• The ISMW Act defines inter-State migrant workman as any person who is recruited by or through a contractor.

Concerns:

• The definition of a migrant as per the ISMW Act keeps away any migrant workman out of the ambit if he is not brought in through a licensed contractor.
  • It is common knowledge that most of the migrant workmen are not routed through licensed contractors.
  • This small catch, in the definition, has been sufficient to exclude bulk of the migrant workmen from getting any benefit out of the Act.
• Furthermore, the Act is only applicable to any establishment in which five or more inter-State migrant workmen are employed.
  • In reality, only a minuscule proportion of migrant workmen are placed under such establishments these days.
  • So, if the establishment doesn’t come under the purview of the Act, its migrant employees, numbering less than five, cease to be migrants, legally, even though they may actually be one.

Details:

• The Unorganised Workers’ Social Security (UWSS) Act, 2008 was enacted to provide for social security and welfare of unorganised workers.
  • The Act defines unorganised workers as home-based worker, self-employed worker or wage worker in the unorganised sector.
• The Government of India has, in the recent past, introduced a host of social security schemes.
  • Pradhan Mantri Shram Yogi Maan-dhan Yojana is meant to ensure old age protection for unorganised workers.
  • Atal Pension Yojana has been launched under the National Pension System.
  • Pradhan Mantri Jeevan Jyoti Bima Yojana is a life insurance scheme.
  • Pradhan Mantri Suraksha Bima Yojana is an accident insurance scheme.
  • Pradhan Mantri Jan Arogya Yojana aims at providing health cover.
  • The UWSS Act itself has two very vitally useful features, viz., (a) Registration of unorganised workers, and (b) Portable smart I-card with a Unique Worker’s Identification Number.
• The coverage of these useful provisions and schemes, however, is still sub-optimal thereby making the need for legal safeguards and welfare measures for migrants has become pressing and urgent.

Way forward:

The following suggestions may require urgent consideration:

• Repealing of the ISMW Act, 1979 forthwith and replacing it with a new act, or alternatively, enlarging the scope of the UWSS Act to include legal entitlements, to define the migrant workman as a subset, to provide for contingencies of livelihood loss and to make the Act legally enforceable.
• Universalisation of registration and issuance of Aadhaar-based UWIN (Unique Worker’s Identification No.) would serve multiple objectives.
• Schemes like MNREGA, PDS and Ujjwala need to be made portable.
  • Geofencing of different benefits can be done so that a migrant workman can choose location-wise benefits for himself and his family from a matrix available.
• A comprehensive database must be created, of the migrant workers’ source and destination, demography, employment patterns and skill sets.
  • It would help in skill development and providing for social security benefits.
  • It would also be useful in planning for mass transit of migrant labour, and preparing for any contingency plan in abnormal situations.

Conclusion:

• Issues related to migrant workmen have complex Centre-State and inter-State dimensions.
• The Inter-State Council, set up under Article 263 of the Constitution, may be a more appropriate forum to effectively and comprehensively deal with larger issues related to migrant workmen.
• It’s time to initiate a legal platform that means business to the migrant workmen, and replace the antiquated law of 1979 that seems to have outlived its utility.
• The entitlements and benefits for the migrant workers have an unquestionable economic, legal and moral basis.
• There is a need for the policymakers to ensure a better legal framework which doesn’t leave the migrant workers high and dry yet again during tough situations.

B. GS 2 Related

Category: HEALTH

1. Drug for sepsis to be tested for COVID-19

Context:

• In a race for cure, existing drugs are being used in trials to fight COVID-19.
• Sepsivac – a drug jointly developed by the Ahmedabad-based Cadilla Pharmaceuticals and the Council for Scientific and Industrial Research (CSIR), will be tested in 50 COVID-19 patients at the All-India Institute of Medical Sciences in Delhi and Bhopal, and Post Graduate Institute of Medical Education and Research, Chandigarh.

Details:

• Sepsivac was originally developed for treating sepsis by a class of pathogens called gram negative bacteria.
  • Gram negative bacteria are known to cause life-threatening infections.
  • Given the similarities in the immune-system response in critically ill COVID-19 patients, it is theorised, the therapy could stimulate a benign response.
• A large quantity of cytokines – chemicals signalling the presence of an infection are produced in the early stages of the body’s response against an infection to stimulate the production of antibodies.
• However, cytokines also cause inflammation of organs and can be counter-productive in protecting the body.
• Keeping them in check is the goal of the so called immuno-modulators, or medicines like Sepsivac.
• The drug uses the Mycobacterium w (formally known as mycobacterium indicus pranii) as it produces a different immune-system response.

Advantages:

• The advantage is that there is a readymade product that can be put into trials. It has already got an approval for phase-3 [large trials] and can be scaled up if needed.
• Previous randomised trials in sepsis patients showed 11% absolute reduction and 55.5% relative reduction in mortality.
• It is claimed that Sepsivac reduces the days on ventilator, in ICU and hospitals and incidence of secondary infection.

C. GS 3 Related

Category: ECONOMY

1. Why are oil prices in negative terrain?

Context:

• Prices of West Texas Intermediate (WTI), the American benchmark for crude oil, fell to less than zero on 20^th April 2020 trade.
• The price of a barrel of WTI fell to minus $37.63 a barrel. What this means is that sellers have to pay buyers to get rid of their crude.
• This is unprecedented in the oil market, even accounting for its notoriety for being volatile.

Why did prices fall like this?

• WTI oil is traded as futures contracts in the NYMEX (New York Mercantile Exchange) where traders buy and sell monthly futures.
  • The sellers of such futures will have to deliver a barrel of crude oil at the contracted price in the contracted month just as buyers will have to take delivery at the contracted date.
  • As with all trading in commodities, there’s a huge speculative participation in oil futures trading too.
  • So speculators buy and sell contracts with no intention of taking delivery (in the case of buyers) or offering delivery (in the case of sellers) of the physical oil, on the contracted date.
  • These speculators have to unwind their positions on the contract expiry date. If they fail to do so, they will have to take physical delivery of the crude oil on the contracted date.
  • The term Unwind Position refers to when a trader systematically closes out a trade.
• Speculators who did not want to take delivery in May proceeded to unwind their positions, leading to the massive fall in prices.
  • It could be that these were financial speculators who never take physical delivery and hence closed their contracts.
  • Or, these could also be delivery-based traders backing out as the bottom has fallen off demand for oil.
• The bottomline is that prices fell as demand for oil is falling and the world, especially America, is running out of storage space.

May WTI futures prices went negative but June futures prices are still at $20.43 a barrel. Why?

• Traders expect demand to recover by June as lockdowns are lifted across the world and economic activity resumes.
• Traders also expect that storage space may be created as existing inventory is drawn down.
• America is also talking of adding to their strategic storage by taking advantage of the low prices. This could create demand for oil.
• Finally, contract expiry for June contracts has given speculators more time to speculate.

What are contango trades in the oil market?

• Contango trades happen when traders anticipate a surge or rise in demand and value the commodity higher for the future.
• For instance, while May oil futures are negative and June is at $20.43 a barrel, November futures for the same grade of oil have ended at a hefty $31.66 a barrel.

Can the traders buy cheap oil now and store them for release in future when demand and prices rise?

• The traders are resorting to such a practice now.
• Such a practice became famous during Iraq’s invasion of Kuwait in 1990 when a trader took massive positions at cheap prices ahead of the invasion and sold them when prices rose after the invasion.
• Oil was stored in tankers floating on the sea and unloaded at considerably higher prices. Traders are doing the same now.
• Year-long hiring contracts for VLCC (very large crude carriers) that can store up to 2 million barrels of oil are soaring through the roof.
  • According to a report in the Wall Street Journal, VLCC hiring charges for year-long contracts are now at $72,500 a day, compared to $30,500 a day, a year ago.

The prices of Brent grade are still at $20.58 a barrel for May futures. What’s the reason for the difference?

• Brent oil has traditionally quoted higher than WTI with the difference being about $6-7 a barrel between the two.
• Brent is a superior grade produced in the North Sea off the British coast and is the accepted benchmark for this part of the world.
  • The market that it serves is considerably larger than that of the United States and demand is, therefore, higher.
• Transporting oil from the U.S. to Asia is not economical thus limiting the scope for the WTI grade.
• Refineries in Europe are configured for Brent rather than WTI.
• Prices of Brent are therefore, always higher than that of WTI.
• Importantly, unlike WTI futures on NYMEX, Brent futures traded in London can be settled by cash when the contract expires. In other words, a trader who has bought oil for May delivery is not forced to take physical delivery of the oil but can settle the contract in cash.
  • This difference between WTI and Brent has ensured that Brent futures will not crash like that of WTI.

How is India benefiting from this price crash?

• The oil import bill will fall sharply this fiscal year, giving tremendous relief to the government on the external account front.
  • With merchandise exports from India badly hit due to the lockdown in the West, foreign exchange earnings are under pressure. With oil prices falling and foreign exchange outgo reducing, the pressure on the current account balance is off.
  • In fact, India may be looking at a positive balance in the current account if global economic recovery is quick and the exports recover.
• India is quietly building up its strategic reserves, taking advantage of the cheap prices.
  • India has a capacity to hold over 39 million barrels of oil at its strategic reserves in Visakhapatnam, Mangalore and Padur, near Udupi.
  • These are underground salt caverns converted and built to store crude oil.

D. GS 4 Related

Nothing here for today!!!

E. Editorials

Category: INTERNATIONAL RELATIONS

1. Putting the SAGAR vision to the test

Context:

• India has been recently granted observer status in the Indian Ocean Commission (IOC).

Background:

Indian Ocean Commission:

• The Indian Ocean Commission is an intergovernmental organisation founded in 1982. It is headquartered in Ebene, Mauritius.
• It comprises of five small-island states in the Western Indian Ocean: the Comoros, Madagascar, Mauritius, Reunion (a French department), and Seychelles.
• Over the years, the IOC has emerged as an active and trusted regional actor, working in and for the Western Indian Ocean and implementing a range of projects.

Details:

Maritime security in Indian Ocean:

• Despite the high-level counter-piracy presence of naval forces from the EU, the Combined Maritime Forces, and Independent Forces in the Indian Ocean region, maritime crime is still prevalent in the region.
• The counter-piracy response off the coast of Somalia delivered unprecedented regional and international cooperation in the domain of maritime security. However, it resulted in multiple players, the duplication of actions, and regional dependence on international navies.
• The countries in the region still face issues in policing and patrolling their often enormous Exclusive Economic Zones (EEZs).

IOC efforts:

Regional Maritime security architecture:

• The IOC has demonstrated leadership in the maritime security domain and has made impressive progress in the design and implementation of a regional maritime security architecture in the Western Indian Ocean.
• In 2012, the IOC, in collaboration with other regional organisations, launched the MASE Programme to promote Maritime Security in Eastern and Southern Africa and Indian Ocean.
• Under MASE, the IOC has established a mechanism for surveillance and control of the Western Indian Ocean with two regional centres.
  • The Regional Maritime Information Fusion Centre (RMIFC), based in Madagascar, and the Regional Coordination Operations Centre (RCOC), based in Seychelles.
  • The system is designed to deepen maritime domain awareness by monitoring maritime activities and promoting information sharing and exchange. Based on the information available there would be joint or jointly coordinated interventions at sea.
• The multilateral maritime security architecture has produced a sub-regional view of maritime security problems and has resulted in local ownership of actions towards workable and sustainable solutions to improve maritime control and surveillance.

Promoting collaboration in the region:

• The IOC has wielded a disproportionate degree of convening power.
• In 2018 and 2019, serving as the Chair of the Contact Group on Piracy off the Coast of Somalia (CGPCS), the IOC held ministerial meetings on maritime security in the Western Indian Ocean, drawing state representations from the region plus major powers such as India, the EU, the U.S., the U.K., Australia, and Russia.
• These meetings resulted in formal declarations, facilitated convergence around common, sub-region-specific definitions of maritime security threats and the legal way of dealing with them.

Mutually beneficial association:

• Following a request from India, the IOC granted observer status to India at the Commission’s 34th Council of Ministers.
• The involvement of India in IOC can be a mutually beneficial relationship for the IOC member nations and India.

India’s interests:

Maritime security:

• As a major stakeholder in the Indian Ocean with maritime security high on the agenda, India has been pursuing its interests and tackling maritime security challenges in the region.
• Maritime security is a prominent feature of India’s relations with Indian Ocean littoral states.
• India could use the information available though the Regional Maritime Information Fusion centre to increase its maritime awareness in the region and can supplement the capacity of India’s own Information Fusion Centre.
• The maritime security architecture being propounded by the IOC presents workable and sustainable solutions to improve maritime control and surveillance. The regional coordination and local successes at curbing maritime threats will have broader security dividends for the Indian Ocean space.
• The regional maritime security architecture with support from naval powers like India can deliver an urgently needed deterrent against unabating maritime crime at sea.

Regional diplomacy:

• India has, till recently, limited itself to bilateral cooperation in the Indian Ocean region. The observer status in IOC offers an opportunity for India to engage constructively with the member nations of IOC.
• The membership would allow India to strengthen its relations and influence in the strategic Indian Ocean region.

IOC’s interests:

• The IOC requires support from regional actors like India. Nearly all littoral states in the Western Indian Ocean need assistance in developing their maritime domain awareness and in building capacity to patrol their EEZs.
• With its observer status, India could extend its expertise to the region, supplement the RMIFC through India’s extensive satellite system and establish links with its own Information Fusion Centre.

Way forward:

India’s approach:

• India has repeatedly stated its strategic vision for the Indian Ocean based on Security and Growth for All in the Region (SAGAR) approach.
• India’s SAGAR vision is intended to be more consultative, democratic and equitable in dealing with smaller but equally significant countries in the region.
• SAGAR seeks to differentiate India’s leadership from the modus operandi of other regionally active major powers focussing on creating spheres of influence in the region. This will help reassure littoral states as India’s maritime influence grows.

F. Prelims Facts

Nothing here for today!!!

H. UPSC Prelims Practice Questions

Q1. Consider the following statements with respect to Indian Ocean Commission (IOC):

1. It is an intergovernmental organisation headquartered in Seychelles.
2. India has recently been accepted as a member of IOC.
3. China and Pakistan are observers of IOC.

Which of the given statement/s is/are incorrect?

1. 2 only
2. 3 only
3. 1 and 2 only
4. 1, 2 and 3

See

Q2. Which of the following are Zoonotic diseases?

1. Ebola
2. Rabies
3. Toxoplasmosis
4. Malaria

Choose the correct option:

1. 2 and 4 only
2. 2, 3 and 4 only
3. 1, 2, 3 and 4
4. 1, 2 and 4 only

See

Q3. Consider the following statements with respect to South China Sea:

1. It is an arm of the Western Pacific Ocean in Southeast Asia.
2. It is to the west of the Philippines and east of Vietnam.
3. It is to the south of the island of Borneo.

Which of the above is/are correct?

1. 1 only
2. 1 and 2 only
3. 2 and 3 only
4. 1 and 3 only

See

Q4. Consider the following statements with respect to the Financial Action Task 
Force (FATF):

1. FATF is an international organization developed to combat terrorism and money laundering.
2. FATF also deals with issues related to low tax jurisdiction or tax competition.
3. It was established by a Group of Seven (G-7) Summit in Paris.

Which of the given statement/s is/are incorrect?

1. 1 only
2. 1 and 2 only
3. 2 only
4. 1, 2 and 3

See

 

I. UPSC Mains Practice Questions

1. The granting of the observer status to India in the Indian Ocean Commission (IOC) is a welcome move which offers ample opportunities for a mutually beneficial relationship between the IOC member nations and India. Comment. (10 marks, 150 words)
2. Discuss the major aspects and concerns of the migrant crisis in India brought to light during the COVID-19 pandemic. Suggest suitable policy measures to address these concerns. (15 marks, 250 words)

Read the previous CNA here.