CNA 08 Feb 2022:- Download PDF Here
TABLE OF CONTENTS
A. GS 1 Related B. GS 2 Related C. GS 3 Related ECONOMY 1. RBI’s digital currency plans DEFENCE AND INTERNAL SECURITY 1. The BrahMos deal and India’s defence exports D. GS 4 Related E. Editorials INTERNATIONAL RELATIONS 1. Notes for India as the digital trade juggernaut rolls on ECONOMY 1. A self-reliant pharma industry HEALTH 1. A dose of science in the vaccination strategy F. Prelims Facts 1. Universalise maternity benefit scheme, say activists G. Tidbits 1. Coast under pressure H. UPSC Prelims Practice Questions I. UPSC Mains Practice Questions
A. GS 1 Related
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B. GS 2 Related
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C. GS 3 Related
1. RBI’s digital currency plans
Syllabus: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
Prelims: Features of CBDCs; Blockchain technology application; Global adoption of CBDCs
Mains: Significance and concern associated with the adoption of CBDCs.
Context:
- In the 2022-23 Budget, the Finance Minister has announced the introduction of India’s Central Bank Digital Currency (CBDC).
Central Bank Digital Currency:
- Central bank digital currency (CBDC) refers to the virtual form of a fiat currency. A CBDC is an electronic record or digital token of a country’s official currency. Hence CBDC is no different from physical cash, except that it would exist in a digital form.
- CBDC would be issued and regulated by the nation’s central bank – the Reserve Bank of India.
- The CBDC will be held in a digital wallet.
- The digital rupee will not directly replace demand deposits held in banks. Physical cash will continue to be used by banks, and people who wish to withdraw cash from banks can still do so. But they can also opt to convert their bank deposits into the new digital rupee.
- Technologies such as blockchain would be used to issue the digital currency.
Significance of CBDCs:
- Meet the increasing demand for digital currencies: The digital rupee could help meet the increasing demand for digital currencies as is evident from the rise of private digital currencies such as bitcoin and the increasing use of digital payments.
- More reliable compared to private digital currencies: Notably, central bank digital currencies could be a reliable, sovereign-backed alternative to private currencies which are mostly volatile and unregulated.
- Low/negligible cost of issuing digital currency: Digital rupee almost eliminates the cost of printing and distributing physical cash as the creation and the distribution of the digital rupee will happen electronically.
- Increased control over monetary and fiscal policy: Given that unlike physical cash, which is hard to trace, a digital currency that is monitored by the RBI can be more easily tracked and controlled by the central bank, CBDCs can simplify the implementation of monetary and fiscal policy.
- Promote financial inclusion: The CBDCs can also help promote financial inclusion in the economy by bringing the unbanked into the financial system.
- Boost to Digital Economy: The digital rupee would give a ‘big boost’ to the digital economy in India and help India reap the benefits of such a system.
Concerns/challenges associated with CBDCs:
- Impact on credit creation: Some economists have pointed out some risks in the transition to a new monetary system based on CBDCs. People may begin withdrawing money from their bank accounts with the increasing popularity of digital currencies. The large flight of capital from bank accounts to digital currencies can affect the number of loans created by the banks.
- This may not be an immediate concern for banks in India that offer interest on deposits to account holders.
- Privacy concerns: The centralized form and traceability of digital currencies have led to serious concerns regarding the privacy of the digital currency holder and this could slow down the adoption.
- Inability to replace private digital currencies: The demand for private currencies comes primarily from people who have lost faith in fiat currencies issued by central banks. The mere digital version of a national currency like the rupee is unlikely to affect the demand for private currencies. The need for privacy is one of the primary reasons for the popularity of private digital currencies. The lack of privacy could impact the popularity of central bank-issued digital currencies.
Recommendations:
- The following measures could be taken to address the possible negative impacts of the introduction of central bank-issued digital currencies.
- The central banks could cap the amount of money that an individual can hold in the form of CBDCs. This would help prevent the mass withdrawal of deposits from banks.
- Central banks may also have to inject fresh money into banks to ensure that the ability of banks to create loans is not affected by depositors’ rush to digital currencies.
Global developments with respect to CBDC:
- CBDCs are in various stages of development around the world.
- In 2020, the Bahamas launched the world’s first CBDC.
- Several countries, including the United States, those in the European Union and China, have been working towards issuing their own Central Bank Digital Currency (CBDC) in recent years.
- Notably, a few countries, including Finland and Denmark have cancelled efforts to introduce a digital currency owing to doubts over the efficacy of central bank digital currency.
Category: DEFENCE AND INTERNAL SECURITY
1. The BrahMos deal and India’s defence exports
Syllabus: Defence production
Prelims: BrahMos and Akash missile systems
Mains: Growth of defence exports from India; Significance of domestic defence manufacturing and defence exports; Measures being taken to boost defence exports
Context:
- Recently, the Philippines signed a deal with BrahMos Aerospace Pvt. Ltd. for the supply of the BrahMos supersonic cruise missile. This is the biggest defence export contract of India.
- BrahMos is a joint venture between India’s DRDO and Russia’s NPO Mashinostroyeniya.
BrahMos missile:
- BrahMos is a medium-range ramjet supersonic cruise missile. It is notably one of the fastest supersonic cruise missiles in the world.
- Initially built as an anti-ship missile, several variants have since been developed and currently, BrahMos can be launched from land, sea, sub-sea and air against the surface and sea-based targets and has constantly been improved and upgraded.
- The range of the BrahMos was originally limited to 290 km as per obligations of the Missile Technology Control Regime (MTCR). Following India’s entry into MTCR in June 2016, plans have been announced to extend the range of the missile first to 450 km and subsequently to 600 km.
- Know more about BrahMos in the linked article.
Defence exports from India:
Philippines:
- The Philippines Army is looking to procure BrahMos missiles.
- The Philippines is also looking at several other military procurements from India. Hindustan Aeronautics Limited (HAL) has received interest from the Philippines Coast Guard for the procurement of seven Dhruv Advanced Light Helicopters and eight Dornier Do-228 aircraft.
- Indian based companies have supplied Bullet Proof Jackets (BPJ) to the Philippines in the past and are now in the race for bigger contracts for BPJs and helmets. Maritime domain and shipbuilding is another potential area for Indian defence companies in the Philippines.
South-East Asian nations:
- The South-East Asia region has emerged as a major focus area for India’s defence exports. Negotiations for the BrahMos missile with Indonesia and Thailand are in advanced stages.
- In December 2020, the Cabinet Committee on Security (CCS) approved the export of indigenous Akash Surface to Air (SAM) missile systems with several countries in South East Asia.
West Asian nations:
- Several West Asian nations have envisaged interest in Akash and BrahMos missile systems.
Growth of the domestic defence manufacturing industry and exports:
- From 2016-17 to 2018-19, India’s defence exports have registered a staggering 700% growth.
- The value of exports of defence items including major items in Financial Year 2020-21 was stood at ₹8,434.84 crore. The export target for the financial year 2021-22 was ₹10,000 crore.
- India has set itself an ambitious target to achieve a manufacturing turnover of $25 billion or ₹1,75,000 crore including exports of ₹35,000 crores in aerospace and defence goods and services by 2025.
Measures being taken by the Government to promote defence exports:
- There have been a series of measures announced to promote domestic defence manufacturing as well as efforts to boost exports.
- Simplified defence industrial licensing
- Relaxation of export controls and grant of No Objection Certificates (NOC)
- A committee comprising the Defence Minister, External Affairs Minister and National Security Advisor has been set up to provide faster approvals for the export of major defence platforms
- Extending Line of Credit (LoC) to foreign countries to import defence products
- Empowering Defence Attaches in Indian missions abroad to promote defence exports
D. GS 4 Related
Nothing here for today!!!
E. Editorials
Category: INTERNATIONAL RELATIONS
1. Notes for India as the digital trade juggernaut rolls on
Syllabus: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
Prelims: Joint Statement Initiative (JSI)
Mains: Significance of Joint Statement Initiative (JSI) and India and South Africa resistance against JSI.
Context:
This article evaluates the significance of the Joint Statement Initiative (JSI) and the resistance of India and South Africa against JSI.
What is the Joint Statement Initiative (JSI)?
- Joint Statement Initiative (JSI) can be broadly defined as a plurilateral negotiating tool initiated by a group of WTO Members who start negotiations on certain issues without adhering to the rule of consensus decision-making.
- These negotiations are primarily driven by like-minded developed country Members, although there is also some participation from developing countries.
- JSI Members seek to tap into opportunities in sectors with limited WTO jurisprudence (i.e., e-commerce, investment).
Background of Joint Statement Initiative (JSI)
- At the 11th Ministerial Conference in December 2017, like-minded groups of members issued joint statements on advancing discussions on e-commerce, multilateral framework on investment facilitation, MSMEs, etc.
- In 2020, new initiatives were launched on trade and environmental sustainability and on plastics pollution and environmentally sustainable plastics trade.
- In 2021, members of the Joint Initiative on Services Domestic Regulation concluded negotiations.
Joint Statement Initiative on e-commerce:
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Why are India and South Africa against the Joint Statement Initiative (JSI)?
- India and South Africa fear being arm-twisted into accepting global rules that could escalate domestic policymaking and economic growth.
- India and South Africa argue that the moratorium imposes significant costs on developing countries as they are unable to benefit from the revenue customs duties would bring.
- India and South Africa have rightly pointed out that the JSI contravenes the WTO’s consensus-based framework, where every member has a voice and vote regardless of economic standing.
- India and South Africa’s positioning strikes questions on how to balance the sovereign right of states to shape domestic policy with international obligations that would enable them to reap the benefits of a global trading system.
What are the Concerns with the Free Flow of Data across Borders?
- Several countries, both within and outside the JSI, have imposed data localisation mandates that compel corporations to store and process data within territorial borders.
- The Joint Parliamentary Committee (JPC) on data protection has recommended stringent localisation measures for sensitive personal data and critical personal data in India’s data protection legislation.
- However, for nations and industries in the developed world looking to access new digital markets, these restrictions impose unnecessary compliance costs. Developed countries believe that JSI hampers innovation, whereas developing countries believe it is essential for algorithmic transparency and fairness.
Recommendations for India:
- Data sovereignty is championed as a means of resisting ‘data colonialism’, the exploitative economic practices and intensive lobbying of Silicon Valley companies.
- Policymaking for India’s digital economy is at a critical juncture.
- Surveillance reform, personal data protection, algorithmic governance, and non-personal data regulation must be galvanized through evidenced insights, and work for individuals, communities, and aspiring local businesses.
- India can consider the example of the Digital Economy Partnership Agreement (DEPA) between Singapore, Chile, and New Zealand.
- India can push for a framework where countries can pick and choose modules with which they wish to comply.
- These combinations can be amassed incrementally as emerging economies such as India work through domestic regulations.
Conclusion:
Despite its failings, the WTO plays a critical role in global governance and is vital to India’s strategic interests. India should consider compromising on their multilateralization goal in order to form JSIs and safeguard the trust of developing countries in the system. Negotiating without surrendering domestic policy-making holds the key to India’s digital future.
1. A self-reliant pharma industry
Syllabus: Issues relating to mobilization of resources.
Mains: Significance of the PLI Scheme for Pharmaceuticals and ways to make the pharma industry in India self-reliant.
Context:
This article examines the significance of the PLI Scheme for Pharmaceuticals and ways to make the pharma industry in India self-reliant.
Pharmaceutical Industry in India
- The pharmaceutical industry in India is the 3rd largest in the world in terms of volume and 14th largest in terms of value.
- India is the largest provider of generic drugs globally.
- Indian medicines are preferred worldwide, thereby rightly making the country the “Pharmacy of the World”.
PLI Scheme for Pharmaceuticals:
- The Production Linked Incentive (PLI) Scheme will promote pharmaceutical manufacturing in India.
- Objectives:
- To reduce import dependence on active pharmaceutical ingredients (APIs), drug intermediates (DIs) and key starting materials (KSMs).
- To enhance India’s manufacturing capabilities by increasing investment and production in the pharmaceutical sector.
Ways to make Pharma Industry Self-reliant:
- Creating Confidence among Investors:
- Firms will invest in production in India if they see a prospect of producing at prices cheaper than the cost of imports.
- Any strategy aimed at achieving self-reliance should focus on achieving price competency in production which in turn will create confidence among investors.
- Reducing Import Dependence:
- India needs a strategy to realize the objective of reducing import dependence.
- Technology plays a very crucial role in reducing import dependence as Indian producers have constraints in overcoming some of the advantages of Chinese producers such as the scale of operations.
- Utilizing Existing Manufacturing Facilities:
- Many firms used to produce these products and have wound up production as cheaper imports began to flow from China.
- Permission to utilize existing but inoperational or underutilized facilities for production would have elicited a better response.
- Need of Industrial Policy:
- The history of the development of the indigenous pharmaceutical industry in India shows the significance of an industrial policy that is in tandem with trade and science and technology policies.
- Focus on Smaller Firms:
- The production of APIs by large firms is largely for captive consumption. The focus of the PLI Phase-I scheme, however, is on large firms.
- It is equally important to include smaller firms that are into the KSMs/DIs/APIs business in a major way.
- Involving Public Sector Enterprises:
- Public sector enterprises (PSEs) should be tasked with the production of APIs and their KSMs and DIs.
- The lead role that PSEs had played in the development of the indigenous pharmaceutical industry in India can never be forgotten.
Conclusion:
The Government of India has recognised the importance of industries such as pharmaceuticals and medical devices to be self-reliant. And this is reflected in the production-linked incentive (PLI) schemes that have been launched under the umbrella of the Aatmanirbhar Bharat Abhiyaan.
1. A dose of science in the vaccination strategy
Syllabus: Issues relating to Health
Mains: Recent developments and impacts on India’s vaccination strategy
Context:
This article underlines the need for a vaccination strategy for India and the factors to be considered while preparing the Vaccination Strategy.
Recent Developments with respect to ‘precaution shots’ or the ‘third dose’ of COVID-19
- First, two COVID-19 vaccines have received ‘conditional market authorization’.
- Second, phase three clinical trials which include the booster dose of a nasal COVID-19 candidate vaccine have been approved.
- Third, the Omicron wave has largely swept through the country.
- Fourth, ₹5,000 crore has been allocated for COVID-19 vaccines in the Union Budget 2022-23.
What do these new developments mean for the COVID-19 vaccination and booster dose strategy in India?
- Market Authorisation:
- The Covishield and Covaxin COVID-19 vaccines have received ‘conditional’ market authorisation.
- As both COVID vaccines meet the standard of safety by showing potential benefits of the vaccine, they have now been upgraded to ‘conditional market authorisation’.
- Know more about the Conditional Market Authorization for COVID 19 Vaccines in PIB dated Jan 27, 2022.
- Nasal vaccine
- In the nasal approach, the vaccine dose is given via the nose, rather than orally or through the arm.
- As the target is to deliver a dose that goes right into the respiratory pathways, the vaccine is either injected through a specific nasal spray or through aerosol delivery.
- Benefits of nasal vaccine
- Ease of administration without a needle and syringe.
- Role in reducing transmission.
- Useful for children.
- Availability of vaccines to ensure wider availability and address vaccine inequity.
- Sandwich immunity:
- As an Omicron wave is sweeping through India, the country is at a stage that can be termed ‘sandwich immunity’.
- ‘Sandwich immunity’ is a hybrid immunity supplemented by another layer of natural infection.
- Know more about the Need and Science behind the Booster Shots in Jan 2, 2022.
Factors to be considered for Efficient Vaccination Strategy:
- First, the local situation matters a lot: The context of India is very different from that in other countries. Therefore, the data used by the other countries in deciding on vaccine effectiveness and boosters cannot, and should not, be used for India.
- Second, the success of any vaccination programme depends on citizen participation: The unscientific and misinformed public discourse has been an ongoing challenge in India’s COVID-19 pandemic response. Therefore, governments at all levels need to step up transparent and timely science communication around vaccines and through trustworthy sources.
- Third, identify vaccine and vaccination-specific policy questions: Analyse the COVID-19 disease and vaccine data and link them with clinical outcomes to assess the effectiveness against SARS-CoV-2 variants. This needs to be supplemented by conducting primary research for the policy questions.
Conclusion:
The COVID-19 vaccination and booster doses strategy should be determined by keeping context in the backdrop and being solely informed by emerging scientific and epidemiological evidence. Alongside, rather than being solely focused on COVID-19 vaccines and boosters we, as a society, need to come to a consensus and prepare a road map to ‘live with SARS-CoV-2’.
F. Prelims Facts
1. Universalise maternity benefit scheme, say activists
Syllabus: Welfare Schemes for Vulnerable Sections of the population by the Centre and States and the Performance of these Schemes.
Pradhan Mantri Matru Vandana Yojana:
- The Pradhan Mantri Matru Vandana Yojana (PMMVY), launched in 2017, provides ₹5,000 for the birth of the first child to partially compensate a woman for the loss of wages.
- The amount is given in three instalments upon meeting certain conditions.
- It is combined with another scheme, Janani Suraksha Yojana, under which nearly ₹1,000 is given for an institutional birth. So in total, a woman gets ₹6,000.
Context:
- The Union government announced that the maternity benefit provided under the Pradhan Mantri Matru Vandana Yojana (PMMVY) would be extended to cover the second child only if it is a girl.
- The activists have demanded that the provision of support be universalised for the second child irrespective of the gender.
- Activists claim this move also goes against the National Food Security Act, 2013 which states that every pregnant woman and lactating mother are entitled to state support.
G. Tidbits
- According to a study led by researchers at the University of Queensland (UQ), Australia, around 15 percent of coastal areas around the world remain vulnerable to pressures caused by human activity.
- Coastal regions containing seagrasses, savannah, and coral reefs had the highest levels of human pressure compared to other coastal ecosystems.
H. UPSC Prelims Practice Questions
Q1. Consider the following statements with regards to Ordinance making powers of the Governor:
- The Governor can promulgate an ordinance when the Legislative Assembly is not in session in case of the unicameral legislature or when both Legislative assembly and council are not in session in case of a bicameral legislature.
- His power to promulgate ordinances is one of the discretionary powers given to the Governor.
- President’s instructions on the state ordinance are required if a bill containing the same provisions would have required the previous sanction of the President for its introduction into the state legislature.
Choose the correct code:
- 1 & 2 only
- 2 & 3 only
- 1 & 3 only
- All of the above
CHECK ANSWERS:-
Answer: c
Explanation:
- Article 213 of the Indian Constitution envisages the power of the Governor to promulgate Ordinances during recess of Legislature.
- The power to promulgate ordinances is not a discretionary power of the Governor. Governor can promulgate ordinances only on the advice of the Chief Minister and the Council of Ministers.
Q2. Consider the following statements with regards to Anticipatory Bail:
- It is a direction issued to release a person on Bail even before the person is arrested.
- It is issued only by the High Court and Supreme Court.
- An application for anticipatory Bail can be filed in cases of both bailable and non-bailable offences.
Choose the correct code:
- 1 only
- 2 only
- 1 & 3 only
- 2 & 3 only
CHECK ANSWERS:-
Answer: a
Explanation:
- Anticipatory bail is a direction to release a person on bail, issued even before the person is arrested. It is only issued by the Sessions Court and High Court.
- An application for anticipatory bail can be filed in cases of non-bailable offences.
Q3. Consider the following statements with regards to Pradhan Mantri Matru Vandana Yojana:
- PMMVY is a maternity benefit programme being implemented in all districts of the country with effect from 1st January 2017.
- Cash benefits are provided to pregnant women in their bank account directly to meet enhanced nutritional needs and partially compensate for wage loss.
- It is a centrally sponsored scheme being executed by the Ministry of Women and Child Development.
Choose the correct code:
- 1 & 2 only
- 2 & 3 only
- 1 & 3 only
- All of the above
CHECK ANSWERS:-
Answer: d
Explanation:
- Pradhan Mantri Matru Vandana Yojana (PMMVY) is a Maternity Benefit Programme that is implemented in all the districts of the country in accordance with the provision of the National Food Security Act, 2013.
- The Pradhan Mantri Matru Vandana Yojana launched in 2017, provides ₹5,000 for the birth of the first child to partially compensate a woman for the loss of wages. It is combined with another scheme, Janani Suraksha Yojana, under which nearly ₹1,000 is given for an institutional birth. So in total, a woman gets ₹6,000.
- The amount is given in three instalments upon meeting certain conditions. Cash benefits are provided to pregnant women in their bank account directly.
- It is a centrally sponsored scheme being executed by the Ministry of Women and Child Development.
Q4. The Supreme Court recently stated, “The grant of ____________ is to break the monotony of imprisonment and to enable the convict to maintain continuity with family life and integration with society. Although _________ can be claimed without a reason, the prisoner does not have an absolute legal right to claim __________. The grant of __________ must be balanced against the public interest and can be refused to certain categories of prisoners.”
What was the Supreme Court referring to?
- Parole
- Furlough
- Bail
- Anticipatory Bail
CHECK ANSWERS:-
Answer: b
Explanation:
- A prison furlough is when a prisoner is allowed to leave prison and then return. Furloughs are, in effect, temporary releases from the physical custody of the state prison system. At the end of the furlough, the person must return to prison.
- The grant of furlough is to break the monotony of imprisonment and to enable the convict to maintain continuity with family life and integration with society. Notably, while a furlough can be claimed without a reason, the prisoner does not have an absolute legal right.
Q5. Along with the Budget, the Finance Minister also places other documents before the Parliament which include ‘The Macro Economic Framework Statement’. The aforesaid document is presented because this is mandated by
- Long standing parliamentary convention
- Article 112 and Article 110(1) of the Constitution of India
- Article 113 of the Constitution of India
- Provisions of the Fiscal Responsibility and Budget Management Act, 2003
CHECK ANSWERS:-
Answer: d
Explanation:
- Fiscal Responsibility and Budget Management (FRBM) became an Act in 2003. The objective of the Act is to ensure inter-generational equity in fiscal management, long-run macroeconomic stability, better coordination between fiscal and monetary policy, and transparency in the fiscal operation of the Government.
- FRBM Act provides a legal institutional framework for fiscal consolidation. The Act also requires the government to lay before the parliament three policy statements in each financial year namely:
- Medium Term Fiscal Policy Statement;
- Fiscal Policy Strategy Statement and
- Macroeconomic Framework Policy Statement.
I. UPSC Mains Practice Questions
- A few WTO members are pushing ahead with the Joint Statement Initiative (JSI) on e-commerce. But India has thus far resisted pressures from the developed world to jump onto the JSI bandwagon. Analyse. (250 words; 15 marks) (GS Paper 3/Economy)
- Why is the Government introducing a Central Bank Digital Currency (CBDC)? What will be the risks in the transition to a new monetary system? (250 words; 15 marks)(GS Paper 3/Economy)
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CNA 08 Feb 2022:- Download PDF Here
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