27 Apr 2021: UPSC Exam Comprehensive News Analysis

CNA 27th April 2021:- Download PDF Here

TABLE OF CONTENTS

A. GS 1 Related
GEOGRAPHY
1. IMD predicts rain in several parts till month-end
B. GS 2 Related
C. GS 3 Related
DISASTER MANAGEMENT
1. Assam Rifles, IAF contain forest fires in Mizoram
ECONOMY
1. ‘Hasten vaccination, boost health infra’
SCIENCE AND TECHNOLOGY
1. DRDO develops crystal blades for aero engines
D. GS 4 Related
E. Editorials
GOVERNANCE
1. Protecting the police
SOCIAL JUSTICE
1. Another wave spells more nutrition loss
ECONOMY
1. An idea on taxation that is worth a try
HEALTH
1. Undermining ‘vaccination for all’
F. Prelims Facts
1. PGInvIT
2. Modi, Biden discuss COVID-19, U.S. aid
G. Tidbits
1. RIL-BP starts gas output at KG-D6 field
2. India ranked 49th in CGGI
3. ‘India expected to invest $1 billion in AI by 2023’
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions

Category: ECONOMY

1. ‘Hasten vaccination, boost health infra’

Context:

• Article on the state of the economy in RBI bulletin.

Background:

• India is battling a spurt in new infections and mortalities in the second wave of the COVID-19 pandemic.

Challenges to the Indian economy:

• Observing that healthcare infrastructure and vaccine supplies are strained, financial markets have been reeling and earnings forecasts are facing downgrades.
• The resurgence in COVID-19, if not contained in time, risks protracted restrictions and disruptions in supply chains with consequent inflationary pressures.

Signs of resilience:

• The article argues that economic activity in India is holding up against COVID-19’s renewed onslaught. It notes that apart from contact-intensive sectors, activity indicators largely remained resilient in March and grew beyond pre-pandemic levels.
  • The early results of corporate performance in January-March indicate strong growth in revenue and net profit, driven by a pick up in demand and order inflows.
    • The IT companies have been putting up a stellar performance owing to rising digitalisation.
  • The electricity consumption, a real-time indicator of economic activity has risen sharply in April on top of steady growth in seven preceding months.
  • Merchandise exports have posted robust growth in the first week of April.

Recommendations:

• The administration should focus on speedier vaccination, ramping up of health infrastructure and observance of pandemic protocols.
• The government must remain resolutely focussed on a post-pandemic future of strong and sustainable growth with macroeconomic and financial stability.

Category: SCIENCE AND TECHNOLOGY

1. DRDO develops crystal blades for aero engines

Context:

• The Defence Research and Development Organisation (DRDO) has developed single crystal blade technology.

Background:

Grain boundary:

• During the normal casting of metal components, the metal while solidifying forms grains. Each grain has a different orientation of its crystal lattice from its neighbours.
• A grain boundary is the interface between two grains, or crystallites, in a polycrystalline material.
• The grain boundaries are characterized by increased chemical activity, slippage under stress loading, and the formation of voids. These conditions can lead to creep, the tendency of blade material to deform at a temperature-dependent rate under stresses well below the yield strength of the material.
• Corrosion and cracks also start at grain boundaries. Thus, grain boundaries greatly shorten turbine vane and blade life, and require lowered turbine temperatures with a concurrent decrease in engine performance.

Single crystal technology:

• To offset the limitations imposed by grain boundaries in polycrystalline materials, metallurgists have sought to eliminate grain boundaries from turbine airfoils altogether, by inventing techniques to cast single-crystal turbine blades and vanes, and design alloys to be used exclusively in single-crystal form.
• By eliminating grain boundaries, single-crystal airfoils have longer thermal and fatigue life, are more corrosion resistant and can also be cast with thinner walls.

Details:

• The single-crystal high-pressure turbine (HPT) blades were manufactured using a nickel-based superalloy.
• The work was part of a programme taken up by the Defence Metallurgical Research Laboratory (DMRL), a laboratory of the DRDO.

Significance:

Technological breakthrough for India:

• This development marks a major technological breakthrough. Very few countries such as the U.S., the U.K., France and Russia have the capability to design and manufacture such single crystal components.

Impetus to indigenous defence production:

• Single-crystal technology is a critical component in aero engines.
• Helicopters need compact and powerful aero-engines for operating at extreme conditions and to achieve this, state-of-the-art single-crystal blades having complex shape and geometry, manufactured out of nickel-based superalloys capable of withstanding high temperatures of operation are used.
• DRDO has supplied 60 such single-crystal blades to the Hindustan Aeronautics Limited (HAL) as part of their indigenous helicopter development programme for helicopter engine application.

Category: SOCIAL JUSTICE

1. Another wave spells more nutrition loss

Context

• Growing levels of acute food insecurity.

Key facts

• The second wave of Covid-19 infections will likely pose a greater risk to the poor.
• Rural areas may face severe devastation as they have poor healthcare and hence will require closer examination and urgent policy attention.
• India has consistently ranked poorly in all international rankings on hunger (ranking 102 among 117 countries in the Global Hunger Index 2019).
• Surveys show among the poor and the marginalized, the quantity of food they consumed either ‘decreased’ or ‘decreased a lot’ compared to before the Covid.
  • Households reported cutting down on nutritious food such as milk, vegetables, pulses and oil.
  • The poorer, socially marginalised Dalits, and those with lesser access to food security schemes (such as migrants) faced more severe food insecurity.

Reduced income

• A large number of households reported no or lower levels of income.
• Households were also seeking loans for food, an indicator of the debilitating food and financial insecurities that poor households continue to face.

Migrants on the margins

• Migrants who have travelled to cities only months ago are again travelling back to their villages.
• There was limited support for migrants even in existing social protection schemes such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

Impact

• These reductions will undoubtedly further accelerate the impending effects on children’s nutrition, as highlighted in the National Family Health Survey or NFHS-V (2019-20) and the Global Food Policy Report, 2021.
• The loss in nutrition may have come as a consequence of people losing their jobs and/or being pushed into lower income brackets over time.
• This indicates that households have not had a chance to rebuild, and with many completely exhausting their savings and facing massive debt, they are bound to be more severely hit than the first wave.

In the face of such a threat, including high unemployment that is steadily rising again, the state must ensure immediate, sustained action.

Way forward

• The government will provide 5 kilogram of free food grains to millions of poor who are covered under the National Food Security Act, 2013, “due to economic disruptions caused by the Covid-19 outbreak in the country” for the months of May and June under the Pradhan Mantri Garib Kalyan Anna Yojana.
  • Prime Minister stressed that it is important that the poor of the country have nutritional support when the country is facing the second wave of coronavirus pandemic.
  • Experts suggest the programme should be further extended to six months because job recoveries will take time.
• The government needs to expand the current offering to include nutritious foods like pulses; address issues faced in existing schemes such as MGNREGA (like delays in wages and rationing); and new schemes such as a potential urban employment scheme should be explored.
• Social protection mechanisms for the poorest and most vulnerable people during and in the aftermath of the COVID-19 crisis need to be employed that incorporate provisions on the Right to Food, both in terms of quantity and nutritional quality.
• For migrants stuck in cities without work, community kitchens (such as Amma canteens) are required.

Category: ECONOMY

1. An idea on taxation that is worth a try

Context

• Treasury Secretary Janet Yellen has thrown the weight of the U.S. government behind a push for a global corporate minimum tax rate.

Why a global minimum tax?

• Major economies are aiming to discourage multinational companies from shifting profits – and tax revenues – to low-tax countries regardless of where their sales are made.
• Increasingly, income from intangible sources such as drug patents, software and royalties on intellectual property has migrated to these jurisdictions, allowing companies to avoid paying higher taxes in their traditional home countries.
• With a broadly agreed global minimum tax, the Biden administration hopes to reduce such tax base erosion without putting American firms at a financial disadvantage, allowing them to compete on innovation, infrastructure and other attributes.

The targets

• The proposal for a minimum corporate tax is tailored to address the low effective rates of tax shelled out by some of the world’s biggest corporations, including digital giants such as Apple, Alphabet and Facebook, as well as major corporations such as Nike and Starbucks.
• These companies typically rely on complex webs of subsidiaries to hoover profits out of major markets into low-tax countries such as Ireland or the Caribbean nations such as the British Virgin Islands or the Bahamas, or to central American nations such as Panama.

Global minimum corporate tax rate

• It is setting a minimum rate for corporations all over the world to pay regardless of which jurisdiction they are registered in.
• A global minimum rate would ensure that companies would have to pay wherever they were registered, with revenues being apportioned according to the extent of their activity in the respective countries.
• This is a move designed to tackle a worldwide phenomenon known as Base Erosion and Profit Shifting (BEPS), wherein large corporations register in low-tax jurisdictions to avoid paying higher rates of corporate tax prevalent in the countries they actually operate in.

BEPS:

Base Erosion and Profit Sharing

Where are international tax talks?

The Paris-based Organization for Economic Cooperation and Development has been coordinating tax negotiations among 140 countries for years on two major efforts:

• Setting rules for taxing cross-border digital services and
• Curbing tax base erosion, with a global corporate minimum tax part of the latter.

How would a global minimum tax work?

• The global minimum tax rate would apply to companies’ overseas profits.
• Therefore, if countries agree on a global minimum, governments could still set whatever local corporate tax rate they want.
• But if companies pay lower rates in a particular country, their home governments could “top-up” their taxes to the agreed minimum rate, eliminating the advantage of shifting profits to a tax haven.

The problems

• Apart from the challenges of getting all major nations on the same page, especially since this impinges on the right of the sovereign to decide a nation’s tax policy, the proposal has other pitfalls.
• A global minimum rate would essentially take away a tool that countries use to push policies that suit them.
• Nations have used their freedom to set corporation tax rates as a way to attract such businesses. Smaller countries such as Ireland, the Netherlands and Singapore have attracted footloose businesses by offering low corporate tax rates.
  • The global minimum tax rate will finish off every opportunity for such countries whose only weapon to attract these companies is lower taxes.
  • A lower tax rate is a tool they can use to alternatively push economic activity.
• In a world where there are income inequalities across geographies, a minimum global corporation tax rate could crowd out investment opportunities.

Impact on India

• India has already been proactively engaging with foreign governments in double taxation avoidance agreements, tax information exchange agreements, and multilateral conventions to plug loopholes. This proposal of a common tax rate, thereby, adds no further benefits to India.
• To address “the challenges posed by the enterprises who conduct their business through digital means and carry out activities in the country remotely”, the government had introduced the ‘Equalisation Levy’ in 2016.
• A lower tax rate is a tool for India to alternatively push economic activity.

Category: HEALTH

1. Undermining ‘vaccination for all’

Background:

• CNA dated April 22, 2021: A recipe for vaccine inequity.

Demand-supply mismatch

• This is because the vaccine has been expanded to cover a larger population in India. The largest supplier, SII, gave two explanations for its inability to meet its commitments.

Second, the company complained that it lacked the financial capacity to expand its production, requesting a grant of ₹30 billion from the government.

• It is seeking the money to ramp up monthly production to more than 100 million doses by the end of May.

2. Modi, Biden discuss COVID-19, U.S. aid

TRIPS initiative:

• The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international legal agreement between all the member nations of the World Trade Organization (WTO). It establishes minimum standards for the regulation by national governments of different forms of intellectual property (IP) as applied to nationals of other WTO member nations.
• TRIPS is administered by the WTO.

Calls for temporary waiver:

• In 2020, South Africa and India proposed that WTO grant a temporary waiver from TRIPS provisions to enable faster production of COVID-19 vaccines and easier accessibility of diagnostics and treatments.
• The waivers would be in addition to the existing flexibilities in TRIPS allowing countries to impose compulsory licenses. Though over 100 developing nations supported the waiver, it was blocked by the G7 members.
  • Compulsory licensing is when a government allows someone else to produce a patented product or process without the consent of the patent owner or plans to use the patent-protected invention itself.

2. India ranked 49th in CGGI

• India has been ranked 49th in the Chandler Good Government Index (CGGI).
• The CGGI classifies 104 countries in terms of government capabilities and outcomes. The index focuses on seven pillars: leadership and foresight; robust laws and policies; strong institutions; financial stewardship; attractive marketplace; global influence and reputation; and helping people rise.
• The report notes civil service innovation and capacity building as being key focus areas for the Indian government.

3. ‘India expected to invest $1 billion in AI by 2023’

• Global enterprises are expected to invest $98 billion in artificial intelligence (AI) by 2023 and India’s share in it will be about $1 billion.
• However, worryingly, 55% of this proposed global investment may go waste due to a lack of familiarity or understanding of newer practices, technologies and tools and the inability to optimise data. The corresponding wastage in India will be around $484 million. Further, poor management practices may also lead to further losses.

Q.1 ‘Bambi Bucket’, often seen in news, is used for/as

Q.2 Which of the following statement/s is/are correct?

Q.3 Which of the following statement/s is/are incorrect?

Q.4 Japan is funding which of the following projects in India?

Q.5 Project DANTAK of Bhutan, involving Indian support, deals with?

Q.6 In India, which of the following can be considered as public investment in agriculture?

Read the previous CNA here.

CNA 27th April 2021:- Download PDF Here