17 Jun 2022: UPSC Exam Comprehensive News Analysis

CNA 17 June 2022:- Download PDF Here

TABLE OF CONTENTS

A. GS 1 Related
B. GS 2 Related
C. GS 3 Related
ECONOMY
1. The reasons behind the crashing crypto market
2. The move to link credit cards with UPI
D. GS 4 Related
E. Editorials
POLITY
1. Bulldozer injustice to ‘teach a lesson’
ECONOMY
1. Waiting for jobs
F. Prelims Facts
1. U.S. to fund 3 Indian research institutions
G. Tidbits
1. Unemployment rate dips in first quarter of 2022: survey
2. Warm, sleepless nights in a concrete jungle
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions

1. The reasons behind the crashing crypto market

Syllabus: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Mains: Reasons for drop in cryptocurrency values

Context:

In recent times, Bitcoin and many other cryptocurrencies have been crashing since they hit an all-time high.

Background:

• Bitcoin has lost more than two-thirds of its value since it hit a peak in 2021.
• Ethereum has lost almost 80% from its peak. 
• As a result, the overall market capitalisation of cryptocurrencies has dropped under $1 trillion for the first time since 2021. 
• The crash seems to have led to a drop in investor enthusiasm with trading volumes in Indian cryptocurrency exchanges dropping by 90% from their peak.

Reasons for drop in cryptocurrency values:

• The fall is in line with the fall in prices of stocks and other assets as central banks such as the U.S. Federal Reserve tighten monetary policy to fight price rise. 
• The crash could also mark the popping of the bubble that has driven the prices of cryptocurrencies to stratospheric levels.
• The use of cryptocurrencies for real-life transactions was low. 

Governments’ efforts with respect to cryptocurrencies:

• Many countries have taken several steps to discourage the widespread use of cryptocurrencies. 
• While countries such as China and Russia have opted to impose outright bans on cryptocurrencies, others such as India have tried to tax and regulate them heavily. 
• In India, while the government has not imposed an outright ban on cryptocurrencies, the Reserve Bank of India has been quite vocal about the need to ban them completely. 
• If cryptocurrencies became widely acceptable, it would affect the control that central banks possess over the economy’s money supply. 
• It would also affect the ability of governments to fund their spending by creating fresh money as citizens could then opt to switch to alternative currencies.

2. The move to link credit cards with UPI

Syllabus: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Prelims: UPI

Mains: Benefits of Linking UPI with Credit cards

Context:

The Reserve Bank of India has proposed to allow the linking of credit cards with the Unified Payments Interface platform.

Background:

• At present, the UPI facilitates transactions by linking savings/current accounts through users’ debit cards. It is now proposed to allow the linking of credit cards on the UPI platform. 
• This is intended to provide additional convenience to users and enhance the scope of digital payments.
• This facility would be available after the required system development is complete. The RBI will issue necessary instructions to NPCI separately to facilitate the change. 

Benefits of this provision:

• The arrangement is expected to provide an additional avenue for payment to customers and hence enhance convenience. 
• The linking of credit cards to UPI has been proposed to further deepen the reach and usage of credit cards.
• It is expected to bolster transactions and acceptance at more merchant sites. 
• People who generally prefer to pay by credit card so as to avail of a longer pay-back period or loans on credit-card outstanding, or who do not wish to touch their savings at the moment of purchase, can pay using credit cards via UPI.
• Many merchants will be able to accept credit payments via UPI without needing a PoS device.
• Linking credit cards with UPI is likely to increase the use of such cards in small-ticket-size payments, as it would provide users with more options to pay from. 
• The move will provide a significant boost to overall spending via credit cards — currently, spending through the use of credit cards is more than double the average spend via debit cards. 
• Besides accelerating digital transactions this measure is also expected to affect the average ticket size of financial transactions. 
• Many people use credit cards for rewards and benefits and UPI for its convenience & security. 
• The new provision of linking credit cards to UPI brings both these advantages together.

Will a merchant discount rate be applicable for these payments?

• There is no word yet on the merchant discount rate (MDR) applicable on transactions using credit card numbers via UPI, other than for RuPay, which attracts no such charge. 
• Today, since foreign card issuers such as Visa and MasterCard have the lion’s share of the credit card network business, part of the fees goes to them. 
• However, the Indian government has shown its intent to promote the indigenous RuPay card system. 
• It remains to be seen if it indeed does turn out more economical for merchants to accept payments from users with credit cards from foreign issuers.

Category: ECONOMY

1. Waiting for jobs

Syllabus: Indian Economy and issues relating to growth, development and employment.

Prelims: Periodic Labour Force Survey (PLFS) and Labour Force Participation Rate (LFPR) 

Mains: Concerns regarding unemployment in India

Context

The Central government’s move to recruit personnel on a “mission mode”.

Details

• Latest reports suggest that there were about 8.86 lakh vacant jobs among all central government civilian posts as of March 2020.
• The Prime Minister of India announced that the Government will be recruiting 10 lakh personnel within the next 18 months.
• These personnel are expected to fill the current vacancies in the Railways, the armed forces and GST departments among others.

Concerns regarding unemployment in India

• The leaked Periodic Labour Force Survey (PLFS) in 2018 showed that India’s unemployment rate was the highest (6.07%) in four decades. 
• According to the latest PLFS data the overall unemployment rate was reported to be 4.2% in 2020-21 compared to 4.8% in 2019-20 and the labour force participation rate (LFPR) increased to 41.6% in 2020-21 from 40.1% in 2019-20. 
  • The decrease in the unemployment rate is not to be cheered as the decrease has also coincided with the transfer of employment into lower productive and unpaid jobs away from salaried employment.
  • Also, the industrial jobs have reduced with more employment in agricultural and farm-related jobs. This trend has increased post the pandemic and the lockdowns and has not reversed since then. 
• Another cause of concern is the very marginal decrease in the unemployment rates among the educated, i.e. above secondary education being 9.1% and the unemployment rates among the youth (age between 15-29) being 12.9%.
• As per the more widely accepted statistic internationally, the current weekly status of unemployment is said to be 7.5% for all persons in 2020-21. 
• Further, the wage rates have continued to remain lower for those employed in salaried jobs and self-employed compared to the pre-pandemic period.

2. Warm, sleepless nights in a concrete jungle

• Data on ‘Accidental Deaths & Suicides in India’ released by the National Crime Records Bureau show that over the years, heatstrokes have become the second leading cause of death from a natural force in India.
• The combination of high day and night-time temperatures is dangerous as it seriously impacts the blood circulation and other bodily functions of people, especially the elderly.
• Taking insights from India’s first heat action plan that came up in Ahmedabad in 2013, the Centre is currently working with 23 heatwave-prone States and over 130 cities, including Delhi, to implement a similar action plan.
• The cause of growing urban heat islands is global warming and these heat islands are linked to micro-climatic changes, which occur when we start disrupting our landscapes.

H. UPSC Prelims Practice Questions

Q1. In which of the following international groupings, India is a member, but no ASEAN 
nation is a member?

1. Mekong Ganga Cooperation
2. Shanghai Cooperation Organization
3. SAARC
4. BIMSTEC

Choose the correct code.

1. Any 1 of the above
2. Any 2 of the above
3. Any 3 of the above
4. All of the above

CHECK ANSWERS:-

Answer: b

Explanation:

• The Mekong Ganga Cooperation (MGC) is an initiative by six countries – India and five ASEAN countries – Cambodia, Lao PDR, Myanmar, Thailand, and Vietnam.
• The Shanghai Cooperation Organisation (SCO) is an international alliance that consists of 8 member states and 4 observers from Eurasia. 
• The South Asian Association for Regional Cooperation (SAARC) is an economic and political organization of eight countries in South Asia. 
• BIMSTEC has a total of seven member countries – five from South Asia, including Bangladesh, Bhutan, India, Nepal, and Sri Lanka, and two from Southeast Asia, including Myanmar and Thailand.
• Hence b is the correct option.

Q2. Consider the following statements:

1. UNESCO has designated Champaner-Pavagadh Archeological Park as a World Heritage Site, calling it the “only complete and unchanged Islamic pre-Mughal city”.
2. Kalika Mata Temple lies within the Champaner-Pavagadh Archaeological Park.
3. The temple complex also houses a dargah.

Choose the correct code:

1. 1 & 2 only
2. 2 & 3 only
3. 1 & 3 only
4. All of the above

CHECK ANSWERS:-

Answer: d

Explanation:

• UNESCO has designated Champaner-Pavagadh as a World Heritage Site and called it the only ‘complete and unchanged Islamic pre-Mughal city’. 
• It also includes Kalika Mata Temple on the hill and Jama Masjid at the foothills. 
• According to a note kept by the trust, it is believed that in the 15th century, Sultan Mahmud Begada conquered Champaner, where he established his capital and ‘destroyed the spire of the temple’. Sadanshah Pir Dargah was built around that time.
• Hence all the statements are correct.

Q3. Which of the following nations is/are not members of the I2U2 group?

1. Indonesia
2. United Kingdom
3. Israel
4. UAE
5. India
6. Ukraine

Choose the correct code:

1. 1, 5 & 6 only
2. 1, 2 & 6 only
3. 3, 4 & 5 only
4. 2, 3 & 4 only

CHECK ANSWERS:-

Answer: b

Explanation:

• In 2022, India, Israel, the United Arab Emirates, and the United States will establish the I2U2 group. 
• The organization’s goal is to re-energize and revitalize American relationships across the world.
• Hence Indonesia, the United Kingdom and Ukraine are not members of the I2U2 group.
• Hence option b is correct.

Q4. The infamous ‘Black Death’ pandemic was caused by which of the following microorganisms?

1. Bacteria
2. Virus
3. Fungi
4. Protozoa

CHECK ANSWERS:-

Answer: a

Explanation:

• The Black Death was the first wave of a roughly 500-year-long pandemic known as the second plague pandemic, and it was one of the most devastating infectious disease disasters in human history.
• Plague is caused by the zoonotic bacterium Yersinia pestis, which is present in small animals and their fleas.
• Hence A is correct.

Q5. ‘R2 Code of Practices’ constitutes a tool available for promoting the adoption of 
[UPSC 2021]

1.  environmentally responsible practices in electronics recycling industry
2. ecological management of ‘Wetlands of International Importance’ under the Ramsar Convention
3. sustainable practices in the cultivation of agricultural crops in degraded lands
4. ‘Environmental Impact Assessment’ in the exploitation of natural resources

CHECK ANSWERS:-

Answer: a

Explanation:

R2 stands for Responsible Recycling and is a standard specifically created for the electronics recycling industry by Sustainable Electronics Recycling International (SERI). R2 certified companies to have a policy on managing used and end-of-life electronics equipment, components and materials based on strategies such as reuse, materials and energy recovery and/or disposal. This certification is intended for electronics recyclers. 

Hence option A is correct.

I. UPSC Mains Practice Questions

1. Demolition drives conducted in multiple States violate ‘due process’. Discuss. (15 Marks, 250 Words) [GS-2, Polity]
2. Write a note on Periodic Labour Force Survey (PLFS) and explain why the Indian economy is not generating enough jobs? (10 Marks, 150 Words) [GS-3, Economy]

Read the previous CNA here.

CNA 17 June 2022:- Download PDF Here