20 Jul 2024: UPSC Exam Comprehensive News Analysis

20 July 2024 CNA
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TABLE OF CONTENTS

A. GS 1 Related
B. GS 2 Related
C. GS 3 Related
SECURITY
1. Microsoft update flaw triggers worldwide chaos
D. GS 4 Related
E. Editorials
ECONOMY
1. Living in denial about unemployment
SOCIAL JUSTICE
1. The promise of parametric insurance
F. Prelims Facts
1. ‘EPFO’s IT systems are dysfunctional and crash-prone’
2. Elevating India’s capital goods for a global electronics revolution
G. UPSC Prelims Practice Questions
H. UPSC Mains Practice Questions
FIP Magazine

Syllabus: GS-3, Unemployment

Mains: Challenges in accurately assessing employment in India.

Context:​ Unemployment remains a contentious issue in India, with conflicting reports from various institutions. Prime Minister Narendra Modi recently cited a Reserve Bank of India (RBI) report claiming significant job creation, while the opposition and several financial institutions argue otherwise. This discrepancy highlights the complexities and challenges in accurately assessing employment in India.

Conflicting Reports:

  • RBI Report: The India KLEMS Database, released on July 7, 2024, claims 8 crore jobs were created in the last 3-4 years.
  • State Bank of India (SBI) Report: States that 8.9 crore jobs were created in manufacturing and services from FY14-FY23.
  • Centre for Monitoring Indian Economy (CMIE) Report: Reports an unemployment rate rise to 9.2% in June 2024, contrary to the government’s narrative.

Ground Realities:

  • High Demand for Limited Jobs: 47 lakh applicants for 60,000 constable positions in Uttar Pradesh.
  • Massive Aspirations: 1.25 crore aspirants for the Railway Recruitment Board’s Non-Technical Popular Categories exam.
  • Protests and Frustration: Protests in states like Bihar and Uttar Pradesh against schemes like Agnipath highlight youth dissatisfaction.

Data Sources and Their Limitations:

  • KLEMS Data: Uses official data from the Employment and Unemployment Surveys (EUS) and the Periodic Labour Force Survey (PLFS). It does not independently estimate employment.
  • PLFS vs. CMIE: PLFS includes those working without income, leading to higher employment figures, while CMIE only counts those earning an income, showing higher unemployment.

Challenges in Data Collection:

  • Organized vs. Unorganized Sectors: The organized sector has reliable data, but the unorganized sector, which employs 94% of the labor force, lacks comprehensive data.
  • Impact of Economic Shocks: Events like demonetization, GST implementation, the NBFC crisis, and the COVID-19 pandemic have disrupted traditional data collection methods.

Issues

  • Inconsistent Data: Varying definitions and methodologies among data sources lead to conflicting employment statistics.
  • Outdated Surveys: Reliance on old Census data and infrequent surveys results in inaccurate employment estimates.
  • Economic Shocks: Recent economic disruptions have exacerbated data collection challenges and impacted employment figures.

Significance

  • Policy Making: Accurate employment data is crucial for effective policy making and addressing unemployment.
  • Youth Unrest: Growing unemployment and underemployment can lead to increased youth frustration and social unrest.
  • Economic Growth: Sustainable job creation is essential for economic growth and leveraging India’s demographic dividend.

Solutions

  • Improved Data Collection: Conduct more frequent and comprehensive surveys, particularly in the unorganized sector.
  • Unified Definitions: Standardize definitions and methodologies across data sources to ensure consistency.
  • Economic Reforms: Implement policies that promote job creation, particularly in sectors like manufacturing and services.
  • Skill Development: Invest in skill development programs to enhance employability and match market demands.

Nut Graf: The conflicting narratives about unemployment in India highlight the urgent need for reliable and consistent data. Acknowledging and addressing the limitations in current data collection methods is essential for formulating effective policies. By improving data accuracy and focusing on sustainable job creation, India can better address the unemployment crisis and harness its demographic potential.

Category: SOCIAL JUSTICE

1. The promise of parametric insurance

Syllabus: GS-2, Insurance

Mains: Challenges in the insurance industry of India

Context:​ The year 2023 was recorded as the warmest year, with natural disasters causing losses amounting to $280 billion globally. However, only $100 billion of these losses were insured, highlighting a significant gap in insurance coverage, especially between developed and developing economies. As extreme weather events become more frequent, the insurance industry must explore alternative coverage methods to enhance disaster resilience.

Current Insurance Methods:

  • Indemnity-Based Insurance: The widely used method involves physical assessment of damage for payouts. This method becomes problematic during large-scale disasters affecting economically disadvantaged communities with little asset documentation.

Need for Parametric Insurance:

  • Real-Time Measurements: Payments are triggered by specific weather parameters (e.g., rain levels, wind speed) without the need for physical loss verification.
  • Examples: Disaster-prone island countries have adopted parametric insurance, leading to better trust between states and insurers, reasonable pricing, and efficient trigger-payout combinations.

Global and Indian Context:

  • Global Use: Standardised parametric products for low-frequency, high-impact disasters (e.g., earthquakes, cyclones) are common. For instance, Morocco received $275 million in parametric insurance coverage after a 6.8 magnitude earthquake in 2023.
  • India’s Adoption: The Pradhan Mantri Fasal Bima Yojana for crop insurance and the Restructured Weather Based Crop Insurance Scheme are notable examples. States like Nagaland and organizations like the Co-operative Milk Marketing Federation in Kerala have also implemented parametric insurance.

Issues

  • Premium Payment Burden: Determining who should bear the premium costs—governments, corporations, or individuals—remains a challenge.
  • Data Accuracy: Precise thresholds and reliable data are crucial for effective parametric insurance.
  • Awareness and Trust: Building awareness and trust among stakeholders is essential for the widespread adoption of parametric insurance.

Significance

  • Disaster Resilience: Enhances the ability to recover quickly from natural disasters.
  • Economic Stability: Reduces financial burden on governments and individuals post-disaster.
  • Climate Adaptation: Facilitates climate adaptation strategies by providing financial protection against extreme weather events.

Solutions

  • Government Initiatives: States can tender parametric insurance products with clear terms to ensure competitive pricing and maximum payouts.
  • Data Utilization: Leveraging credible data from institutions like the India Meteorological Department for accurate monitoring and thresholds.
  • Collaboration: Encouraging collaboration between governments, private insurers, and multilateral institutions for risk pooling and better bargaining power.
  • Awareness Campaigns: Conducting awareness campaigns to educate stakeholders about the benefits and functioning of parametric insurance.

Nut Graf: Parametric insurance offers a promising solution to the increasing frequency and severity of natural disasters. By providing quick and reliable payouts based on predefined triggers, it addresses the limitations of traditional indemnity-based insurance. For effective implementation, precise data, collaborative efforts, and innovative policy frameworks are essential.

F. Prelims Facts

1. ‘EPFO’s IT systems are dysfunctional and crash-prone’

Context: The Employees’ Provident Fund Organisation (EPFO) in India, responsible for managing the provident fund and pension claims of millions of workers, is facing severe IT system challenges. Despite repeated warnings and requests for intervention over the past two and a half years, the issues remain unaddressed, leading to significant operational inefficiencies and frustrations among EPFO staff.

Current Issues:

  • System Crashes and Instability: EPFO’s IT systems have been experiencing frequent crashes, system slowdowns, involuntary user logouts, and complete system failures.
  • Operational Challenges: The deficiencies in the IT infrastructure make it difficult for staff to process claims efficiently, often taking longer than the stipulated 20 days, despite performance indicators suggesting a 10-day turnaround.

Efforts to Address Issues:

  • Repeated Warnings Ignored: The EPF Officers’ Association has consistently flagged these issues to the Central PF Commissioner and other top officials, but their concerns have not been acknowledged.
  • Extraordinary Measures: Field offices have resorted to working on weekends and holidays to manage claim settlements during periods of lower system load.

Call for Comprehensive Overhaul:

  • Expert Evaluation Needed: The officers’ association has proposed a comprehensive evaluation of EPFO’s application software by leading industry experts.
  • Technological Upgrades: An urgent overhaul of the IT systems is necessary to align with the technological advancements seen in other departments, such as the Income Tax department.

Significance

Impact on Employees and Beneficiaries:

  • Delayed Claims Processing: The inefficiencies in the IT systems directly affect millions of workers who depend on timely processing of their provident fund and pension claims.
  • Increased Frustration: Both staff and beneficiaries experience escalating frustration due to the prolonged inefficiencies and lack of resolution.

Operational Efficiency:

  • Resource Utilization: The current situation demands additional resources and extraordinary measures to manage claim settlements, which could be optimized with a fully functional IT system.
  • Performance Metrics: The discrepancy between actual performance and the performance indicators suggests a systemic failure in addressing the core issues.

Systemic Implications:

  • Organizational Trust: The continued denial and delay in addressing these issues can erode trust in the EPFO’s ability to manage its responsibilities effectively.
  • Benchmarking Against Other Departments: The successful technological upgrades in other government departments highlight the lag in EPFO’s systems, underscoring the need for urgent action.

2. Elevating India’s capital goods for a global electronics revolution

Context: India stands at a critical juncture with its capital goods industry, particularly in electronics manufacturing. Similar to the transformative power of the steam engine during the Industrial Revolution, the development of advanced capital goods can propel India to the forefront of the global electronics market. 

  • The nation’s electronics production has seen remarkable growth, reaching $115 billion in FY24, and is poised for further expansion. To capitalize on this potential, India must focus on innovation, research and development (R&D), and robust manufacturing infrastructure.

Current State of Electronics Manufacturing:

  • Impressive Growth: India’s electronics production has quadrupled over the past decade, with projections to increase fivefold in the next five years.
  • Global Market Potential: The global electronics market, valued at $4.5 trillion, is expected to reach $6.1 trillion by 2030, presenting a significant opportunity for India.

Role of Capital Goods:

  • Definition: Capital goods include machinery, tools, and equipment essential for production.
  • Importance: Advanced capital goods are crucial for producing high-quality electronics efficiently and at scale.

Demand-Supply Gap:

  • Domestic Demand: There is an urgent need to bridge the gap between the demand and supply of capital goods within India.
  • Dependency on Imports: Enhancing domestic manufacturing infrastructure will reduce reliance on imports and ensure a steady supply of high-quality equipment.

Innovation and R&D:

  • Investment in R&D: Significant investment in R&D is necessary to develop cutting-edge manufacturing technologies.
  • Intellectual Property Rights (IPR): Strong IPR protection can foster a secure environment for innovation.

Strategic Initiatives:

  • Dedicated Innovation Centre: Establishing a centre with a corpus of at least ₹1,000 crore at the Central Manufacturing Technology Institute (CMTI) to drive innovation in capital goods.
  • Industry-Academia Collaboration: Partnering with industry leaders and academic institutions to streamline production processes and enhance competitiveness.

Significance

Economic Growth:

  • Job Creation: Enhanced manufacturing capabilities can create numerous job opportunities.
  • Export Potential: Developing a robust capital goods sector can position India as a major player in the global electronics market.

Technological Advancements:

  • Global Standards: Indigenous technologies that meet and set international standards in quality and efficiency.
  • Sustainable Practices: Adopting eco-friendly technologies to position India as a responsible manufacturing hub.

Global Competitiveness:

  • Strategic Positioning: Indian firms can become formidable contenders on the global stage, potentially rivaling companies like ASML.
  • Reputation for Excellence: Building a reputation for high-quality and efficient manufacturing processes.

H. UPSC Prelims Practice Questions

Q1. With respect to Duchenne Muscular Dystrophy (DMD), which of the following 
statements is/are correct? (Level-Difficult)
  1. It is a genetic disorder characterised by progressive muscle degeneration and weakness
  2. Duchenne is caused by a change in the dystrophin gene.
  3. It primarily affects females.

Options:

  1. 1 and 2 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3
CHECK ANSWERS:-

Answer: a

Explanation:

  • Statement 01 is correct, Duchenne muscular dystrophy (DMD) is a genetic disorder characterised by progressive muscle degeneration and weakness. 
  • Statement 02 is correct, It is caused by the alterations of a protein called dystrophin that helps keep muscle cells intact.
  • Statement 03 is incorrect, DMD symptom onset is in early childhood, usually between ages 2 and 3. The disease primarily affects boys, but in rare cases it can affect girls.
Q2. An underwater device that detects and records ocean sounds from all directions is
(Level-Easy)
  1. Anemometer
  2. Hydrometer
  3. Hydrophone
  4. Hygrometer
CHECK ANSWERS:-

Answer: c

Explanation: 

  • A hydrophone is an underwater device that detects and records ocean sounds from all directions. 
  • Just as a microphone collects sound in the air, a hydrophone detects acoustic signals under the water. 
  • Most hydrophones are based on a special property of certain ceramics that produces a small electrical current when subjected to changes in underwater pressure. When submerged in the ocean, a ceramic hydrophone produces small-voltage signals over a wide range of frequencies as it is exposed to underwater sounds emanating from any direction.
  • By amplifying and recording these electrical signals, hydrophones measure ocean sounds with great precision. 
Q3. Which of the following statements is/are correct with respect to Rhododendrons? 
(Level-Medium)
  1. Rhododendrons are indicator species as far as climate change is concerned
  2. It is the State Tree of Uttarakhand
  3. Rhododendrons are evergreen but some are deciduous.

Options:

  1. 1 and 2 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3
CHECK ANSWERS:-

Answer: d

Explanation:

  • Statement 01 is correct, Rhododendrons are prominent indicators of climate change- as their blooms correspond to the changing of the seasons.
  • Statement 02 is correct, The species has been designated as the State tree of Uttarakhand and its blooming in the Garhwal Himalayas is celebrated as ‘Phool Sankranti’, a festival of flowers.
  • Statement 03 is correct, Rhododendrons range in habit from evergreen to deciduous and from low-growing ground covers to tall trees.
Q4. Consider the following statements with respect to Aubrite meteorites: 
(Level-Difficult)
  1. They are coarse-grained igneous rocks formed under extremely reducing conditions or by little or no free oxygen
  2. They contain a variety of exotic minerals not found on Earth

Which of the following statements is/are correct?

  1. 1 only
  2. 2 only
  3. Both
  4. None
CHECK ANSWERS:-

Answer: c

Explanation:

  • Statement 01 is correct, Aubrites are rare meteorites originating from an extremely reduced differentiated parent body in the solar system. They are rare meteorites originating from an extremely reduced differentiated parent body in the solar system.
  • Statement 02 is correct, They contain a variety of exotic minerals not found on Earth.
Q5. Consider the following statements: (PYQ-CSE-2007) (Level-Medium)
  1. North Atlantic Cooperation Council (NACC) is the name of the new organisation which has replaced the North Atlantic Treaty Organization (NATO).
  2. The United States of America and the United Kingdom became the members of NATO when it was formed in 1949.

Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2
CHECK ANSWERS:-

Answer: b

Explanation:

  • Statement 01 is incorrect, The North Atlantic Cooperation Council (NACC) was established by the Allies in December 1991 as a forum for dialogue and cooperation with NATO’s former Warsaw Pact adversaries. The NACC was succeeded by the Euro-Atlantic Partnership Council in 1997.
  • Statement 02 is correct, The United States of America and the United Kingdom were two of the founding members of NATO. 
    • Other founding members include Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, and Portugal.

Read the previous CNA here.

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