17 May 2018: UPSC Exam Comprehensive News Analysis

TABLE OF CONTENTS

A. GS1 Related
B. GS2 Related
POLITY
1. BJP invited to form govt., Cong. moves SC
GOVERNANCE
1. Swachh rankings are out, Indore gets cleanest city tag
C. GS3 Related
ENVIRONMENT AND ECOLOGY
1. Cabinet approves new policy for biofuels
ECONOMY
1. New concerns over Britain’s visa cap
2. Govt. may soon adopt ‘shell’ firm definition
3. India could be the next shoe to drop
D. GS4 Related
E. Editorials
ECONOMY
1. Slide of the currency and a widening trade deficit present the RBI with a huge dilemma
INTERNATIONAL RELATIONS
1. A pilgrimage to Nepal
2. Death in Gaza
ECOLOGY AND ENVIRONMENT
1. Anything but green
F. Prelims Fact
G. UPSC Prelims Practice Questions
H. UPSC Mains Practice Questions 

A. GS1 Related

Nothing here for today!!!

B. GS2 Related

Category: POLITY

1. BJP invited to form govt., Cong. moves SC

  • Karnataka Governor Vajubhai Vala invited former Chief Minister B.S. Yeddyurappa to form the government on the basis of his election as Leader of the BJP Legislature Party.
  • Yeddyurappa will take oath — for the third time — as the 29th Chief Minister of Karnataka on Thursday morning. He has been asked to prove he enjoys the confidence of the Assembly within 15 days of assuming office.
  • The Governor’s decision came after both the BJP and the Janata Dal (Secular), with the support of the Congress, staked claim to form the government. Although the signatures of 117 elected members were submitted by the leaders of the JD(S) and the Congress, the Governor invited Mr. Yeddyurappa, the leader of the single largest party in the Assembly.
  • The Governor’s decision to invite the BJP, which emerged as the single largest party with 104 seats (eight short of majority in the 222-member House, with two constituencies yet to go to the polls), is expected to intensify the political slugfest after the people’s mandate threw up a hung Assembly.
  • By inviting the BJP to form the government, Karnataka Governor Vajubhai Vala chose the single largest party over the post-poll alliance of Congress-JD(S).

Governor’s Role

  • Legal experts are divided over the question whether the Governor violated the law by choosing the BJP over the numerically stronger post-election alliance of Congress and JD (S).
  • After all, it was only in April 2017 that the Supreme Court ordered a floor test despite the Congress being the single largest party in Goa. Governor Mridula Sinha brazenly did not invite the Congress first to form the government in Goa but chose the BJP alliance.
  • Governor Vala did the reverse in Karnataka. He ignored the post-poll alliance to give first preference to the single largest party, BJP. Former Supreme Court judge, Justice K.T. Thomas, said it is political ethics for the Governor to first invite the single largest party to form a stable government.
  • Justice Thomas refers to the Bommai judgment of 1994 to support his argument. The Bommai judgment endorses the Sarkaria Commission report of 1988. The Commission recommends that in case of no pre-poll alliance among parties, the Governor should give first preference to the single largest party.
  • However, senior advocate K.V. Vishwanathan refers to a paragraph in the same 24-year-old Bommai judgment by a seven-judge Constitution Bench to argue the very opposite. He notes that the judgment also mentions that the Governor can either invite the “single largest party/group.”
  • The Rameshwar Prasad judgment in 2006 by a five-judge apex court Bench endorses the Sarkaria Commission and Bommai judgment.
  • This 2006 judgment even quoted how post-poll alliances were a source of instability in government. It further cited the observation made by the National Commission to Review the Working of the Constitution that changing alignment of the members of political parties so openly really makes a mockery of our democracy.

Category: GOVERNANCE

1. Swachh rankings are out, Indore gets cleanest city tag

  • Jharkhand has emerged as the best-performing State in terms of cleanliness, while Indore in Madhya Pradesh was adjudged the cleanest city in the country, according to the government swachhta survey released on Wednesday.
  • Maharashtra stood second behind Jharkhand, while Chhattisgarh was at the third position in the category of ‘best-performing States’ in the ‘Swachh Survekshan 2018’ released by Housing and Urban Affairs Minister Hardeep Singh Puri here.
  • As far as cities are concerned, table-topper Indore is followed by Madhya Pradesh capital Bhopal, while Union Territory of Chandigarh stands at the third place in the national-level category.
  • Indore and Bhopal have retained their respective positions from the last year survey. But this year, the survey has covered 4,203 cities while in 2017 only 434 cities were surveyed.
  • State ranking was introduced in this year’s survey, which was conducted between January 4 and March 10. In 2016, the survey was conducted in 73 cities having a population of 10 lakh or more and also the capital cities.
  • The New Delhi Municipal Council (NDMC) got the tag of India’s ‘cleanest small city’ (urban local body) with population between 1 lakh and 3 lakh in the 2018 survey.
  • In the ‘cantonment’ category, the Delhi Cantonment has emerged as the cleanest, followed by Almora, Ranikhet and Nainital (all three in Uttarakhand).
  • Uttar Pradesh’s Ghaziabad was adjudged the “fastest mover big city” in this survey.
  • Mysuru has been ranked the cleanest medium-sized city in the country. Mysuru has been ranked the cleanest among cities with a population of between 3 lakh and one million. Mangaluru has been ranked the best city in solid waste management.

C. GS3 Related

Category: ENVIRONMENT AND ECOLOGY

1. Cabinet approves new policy for biofuels

  • The Union Cabinet approved a national policy on biofuels that seeks to not only help farmers dispose of their surplus stock in an economic manner but also reduce India’s oil-import dependence.
  • The policy expands the scope of raw material for ethanol production by allowing use of sugarcane juice, sugar-containing materials like sugar beet, sweet sorghum, starch-containing materials like corn, cassava, damaged food grains like wheat, broken rice, rotten potatoes [that are] unfit for human consumption for ethanol production.
  • Farmers are at a risk of not getting appropriate price for their produce during the surplus production phase.
  • Taking this into account, the policy allows use of surplus food grains for production of ethanol for blending with petrol with the approval of National Biofuel Coordination Committee.
  • The policy also provides for a viability gap funding scheme of Rupees 5,000 crore in six years for second generation (more advanced) ethanol bio-refineries in addition to tax incentives and a higher purchase price as compared to first generation biofuels.
  • One crore litres of E10 [petrol with 9-10% ethanol blended in it] save 28 crore rupees of forex at current rates. The ethanol supply year 2017-18 is likely to see a supply of around 150 crore litres of ethanol which will result in savings of over Rupees 4,000 crore of forex.
  • The release added that one crore litres of E10 reduce carbon dioxide emissions by about 20,000 tonnes.
  • For the ethanol supply year 2017-18, there will be lesser emissions of CO2 to the tune of 30 lakh tonnes. By reducing crop burning and conversion of agricultural residues/wastes to biofuels there will be further reduction in greenhouse gas emissions.

Category: ECONOMY

1. New concerns over Britain’s visa cap

  • Representatives from British IT, engineering, medical and other bodies, and politicians have come together to call for changes to Britain’s immigration rules after it emerged that more than 6,000 skilled professionals were refused the necessary visa because of a monthly cap for that visa category.
  • A freedom of information request by the Campaign for Science and Engineering (CaSE) revealed that 6,080 Tier 2 (general) visas — including for professionals from India — were refused due to the annual cap between December 2017 and March 2018, putting the British economy and public services at risk.
  • While the figures don’t break down the refusals by nationality, they do by sector, revealing that 1,814 refusals for roles in professional services were made, alongside 1,226 for IT roles, 1,518 for doctors and 392 for engineers.
  • Last month, it emerged that hundreds of Indian doctors on Tier 2 as well as a separate Tier 5 visa categories had been refused visas despite having been offered roles in NHS Trusts up and down the U.K.
  • These figures show the scale of the problem and the urgency to find a solution. Across the country, businesses and public services are being blocked at the last hurdle from recruiting the people they need, including in health, engineering and tech, due to the visa cap.
  • CaSE is calling for roles on the “shortage occupation list” as well as PhD level roles to be exempt from the cap.
  • Under the current system, there is an annual limit of 20,700 Tier 2 (general) visas for non-EU professionals allocated by Britain, broken down into monthly limits which vary between 1,000 and 2,200 a month.
  • Once the monthly cap is reached, further certificates of sponsorship are allocated based on a points-based system, dependent on whether work for an occupation on the official shortage list is being applied for, whether the work is Ph-D level, and also on the basis of salary.

2. Govt. may soon adopt ‘shell’ firm definition

  • A government committee has drafted the definition of ‘shell-company’ to plug a loophole in existing laws that empower enforcement agencies to initiate legal proceedings against such entities.
  • The issue had come up after a large number of entities, against which action had been taken, contested their classification as shell companies.
  • The committee also examined the definition provided by the Organisation for Economic Co-operation and Development (OECD), which has defined a ‘shell company’ as “a company that is formally registered, incorporated, or otherwise legally organised in an economy but which does not conduct any operations in that economy other than in a pass-through capacity.”
  • The authorities encountered some issues with the OECD definition, and hence explored other definitions.
  • They have arrived at one such definition, which is being tested on the basis of the data on such entities that is available with the Ministry of Corporate Affairs.
  • After determining that the definition is wide enough to cover all aspects of such entities, the Centre may soon adopt it for inclusion and implementation for legal purposes.

3. India could be the next shoe to drop

D. GS4 Related

Nothing here for today!!!

E. Editorials

Category: ECONOMY

1. Slide of the currency and a widening trade deficit present the RBI with a huge dilemma

Context in view of trade deficit:

  • India’s macroeconomic threats lie exposed as it grapples with the rupee’s slide. The currency sunk to a closing low of 68.07 against the U.S. dollar on Tuesday, its lowest level in 16 months, before recovering slightly the next day.
  • The rupee, already one of the worst performing Asian currencies, has now weakened 6.2% in 2018. The rise in crude oil prices through this year, amidst rising geopolitical tensions in West Asia and dwindling global supply, have obviously hurt the rupee and the trade balance.
  • Meanwhile, despite a depreciating currency, India’s merchandise exports are stumbling instead of gaining from the opportunity.
  • There is a sharp decline in exports from employment-intensive sectors such as readymade garments and gems and jewellery, according to official data.
  •  The trade deficit has consequently widened to $13.7 billion in April, compared to $13.25 billion in the same month in 2017.
  • The value of oil and petroleum product imports increased by 41.5% from last year to hit $10.4 billion. U.S. sanctions following Washington’s withdrawal from the Iran nuclear deal and a June 22 meeting of OPEC should drive oil price trends hereon.
  • Oil prices apart, the tightening of U.S. monetary policy has almost always spelled trouble for emerging market economies hooked to Western capital inflows. This time it is no different; capital outflows are scuppering the currencies of many emerging market economies.

Why is the rupee in a free fall?

  • As the U.S. Federal Reserve has come to adopt a more hawkish stance, investors in search of higher risk-adjusted yields have started to pull money out of emerging markets.
  • Yields on emerging market bonds have risen as investors sold them off aggressively. The yield on the 10-year bond issued by the Indian government has risen to more than 7.8%, from 7.1% in early April.
  • Foreign portfolio investors (FPIs) pulled out Rs.15,500 crore from India’s capital markets in April, which is the highest monthly outflow since December 2016.
  • Not surprisingly, about two-thirds of the outflow was attributed to the bond market.
  • The current headwinds from the reversal of capital flows were only to be expected. India is better placed than countries such as Argentina or Turkey.
  • But that’s no reason to be complacent as external account risks can get out of hand very quickly.
  •  A hike in the RBI’s benchmark interest rates could stem the capital exodus, but with core inflation picking up and the government keen on a rate cut as a growth catalyst, the RBI has an unenviable dilemma on its hands.
  • Policymakers, blessed with relatively benign external economic conditions after the taper tantrum of 2013, will have to find means to spur exports — whether by facilitating swifter GST refunds or taking on tariff and non-tariff barriers from the developed world. Efforts to diversify India’s energy basket also need greater stress.

Category: INTERNATIONAL RELATIONS

1. A pilgrimage to Nepal

Background:

  • Prime Minister Narendra Modi’s visit was high on symbolism but India must do more to deliver on the bilateral agenda
  • Narendra Modi visited Nepal, his third since he became Prime Minister in 2014. Each of the visits has been markedly different, in terms of both atmospherics and outcomes.
  • This is due to the political backdrop against which it took place, reflecting the evolving Nepali domestic political transition from a centralised monarchy to a federal republic and the complex nature of India-Nepal relations.
  • Nepali Prime Minister K.P. Sharma Oli was in Delhi from April 6-8. Mr. Modi’s return visit coming within a month was not just good neighbourliness but more a realisation that the relationship had deteriorated in recent years and there was an urgent need to arrest the slide.

Nepal’s importance

  • After coming to power, Nepal was among Mr. Modi’s first destinations abroad, in keeping with his neighbourhood first policy.
  • A bilateral visit to Nepal was long overdue, the last one being in 1997. Part of the reason was Nepal’s ongoing political transition, a Maoist insurgency in Nepal which lasted from the mid-1990s till 2005, a delicate peace process which was mid-wifed by India and a new constitution-drafting exercise that began in 2008.
  • Meanwhile, every Nepali Prime Minister had visited India, some more than once, leading Nepali commentators to conclude that Nepal did not rank high in Delhi’s foreign policy priorities.
  • Modi’s visit was a successful exercise in correcting this perception.
  • He spoke about respecting Nepali sovereignty, reiterated readiness to revise the 1950 Friendship Treaty in line with Nepali wishes, offered encouragement for the constitution-drafting process while wisely refraining from any suggestions, offered generous terms for power purchase and announced a billion-dollar line of credit on generous terms.
  • A long joint statement was issued, highlighting (HIT – Highways, Information ways and Transmission ways) connectivity projects with clear timelines.
  • Political parties and civil society were unanimous in concluding that a new chapter in India-Nepal relations was being opened.
  • Modi was back in Nepal, this time for the South Asian Association for Regional Cooperation (SAARC) summit.
  • During his visit when he spoke about the need for the spirit of consensus to guide the constitution-drafting so that it could become an instrument to fulfil the aspirations of all Nepali citizens.
  • The problem lies in the fractured politics of Nepal. Traditionally, hill elites Bahuns and Chettris, who constitute 29% of the population have ruled Nepal.
  • This is as true today as during the monarchy for the leadership of the three main political parties — Nepali Congress (NC), United Marxist-Leninist (UML) and the Maoists is drawn from the same elites.
  • The Madhesis constitute 35% but have traditionally been marginalised, live in the Terai areas bordering India and share close ties ‘roti-beti ka rishta’ with their kin across the border.

Nationalism, anti-Indianism

  • Relations with India often become an issue in Nepal’s domestic politics as politicians seek to don the mantle of Nepali nationalism which invariably carries within it a grain of anti-Indianism.
  • During the monarchy, the King would emerge as a staunch nationalist when he wanted to crack down on pro-democratic forces and the NC would be painted in pro-Indian colours.
  • The monarchy has given way to a republic but old habits die hard. India’s desire to play favourites also contributes to it, particularly when different elements in India convey different messages.

Nepal’s crisis

  • Following the 2013 election, an NC-UML coalition emerged with NC leader Sushil Koirala becoming Prime Minister on the understanding that he would hand over the reins to Mr. Oli, the UML leader, after the constitution was adopted. Mr. Oli was understandably impatient and finally the constitution was promulgated in September 2015 even as the Terai was erupting in protests.
  • Having belatedly realised the implications, India cautioned against haste but this was seen in Kathmandu as blatant encouragement for the growing Madhesi agitation.
  • Life in the Terai came to a standstill.
  • Oli blamed India for imposing an economic blockade which was causing acute shortages of essentials such as petrol, diesel, liquefied petroleum gas and medical supplies.
  • India blamed the deteriorating security environment which made the transporters reluctant to cross over and advised Mr. Oli to address Madhesi concerns.
  • Eventually, a constitutional amendment was adopted and the movement of goods across the border returned to normal. But trust had been breached. In addition, the blockade had unleashed a wave of resentment against India.

A new beginning

  • In 2017, the first elections under the new constitution were held for the national parliament, the seven newly created provincial assemblies and the local bodies (town municipalities and village council). Riding the nationalist wave and projecting himself as the only leader who had stood up to India, Mr. Oli again emerged as Prime Minister, but stronger than before as UML also scored impressive victories in the provincial and local body elections.
  • Modi realised that the political landscape was shifting.
  • China was now keen to expand its presence in the region with ambitious projects. Mr. Oli made India his first foreign destination and Mr. Modi has reciprocated with a quick return visit.
  • A bus service between Janakpur and Ayodhya was inaugurated.

 INDIA AND NEPAL ECONOMIC COOPERATIONS:

  • The joint statement is short.
  • The 900 MW Arun III hydel project, has progressed and both Prime Ministers jointly laid its foundation stone.
  • Of the four planned Integrated Check Posts, one is now functional after over a decade.
  • The 2018 statement prioritises cooperation in agriculture, inland water-ways, a survey for a railway line from Raxaul to Kathmandu and increasing air connectivity.
  • The 2014 announcements included a railway services agreement, additional air links connecting Lucknow, Pokhara and Nepalgunj in six months, setting up of the Pancheshwar Development Authority to complete the detailed project report in a year, concluding an MoU for the Nepal Police Academy, pledge of $1 billion (increased by another $1 billion after the 2015 earthquake) and creating a Buddhist circuit connecting Lumbini with Sarnath and Bodh Gaya.
  • Most of these have remained announcements. With China stepping up its game in Nepal, this is no longer a tenable situation.

Conclusion:

  • The visit was high on symbolism, less so on substance.
  • The focus was on religious and cultural commonalities
  •  A pilgrimage is part expiation and part a new beginning.
  • The first may have been achieved but a new beginning based on the principles of “equality, mutual trust, respect and mutual benefit”.
  • A sustained effort by India will require time in ensuring implementation of long-pending economic cooperation projects.

2. Death in Gaza

 Israel-Palestine issue

  • The Israeli-Palestinian conflict is over who gets what land and how it’s controlled.
  • The 1967 war is particularly important for today’s conflict, as it left Israel in control of the West Bank and Gaza Strip, two territories home to large Palestinian populations.
  • Today, the West Bank is nominally controlled by the Palestinian Authority and is under Israeli occupation.
  • This comes in the form of Israeli troops, who enforce Israeli security restrictions on Palestinian movement and activities, and Israeli “settlers,” Jews who build ever-expanding communities in the West Bank that effectively deny the land to Palestinians.
  • Gaza is controlled by Hamas, an Islamist fundamentalist party, and is under Israeli blockade but not ground troop occupation.

Issues regarding Gaza, opening of American Embassy:

  • The deaths at the Gaza-Israel border show the continuing toll of occupation
  • The violence in Gaza that preceded the opening of the American embassy in Jerusalem on Monday has once again reminded the world of the dangerous consequences of President Donald Trump’s decision to move the U.S. diplomatic mission from Tel Aviv to the disputed city.
  • When Mr. Trump first announced the shift, making good a campaign promise, many had warned it would trigger violence in the Palestinian Territories besides complicating any peace processes.
  • On Monday morning, across Gaza, a tiny Mediterranean strip that has been suffocatingly blockaded by Israel and Egypt for years, loudspeakers urged Palestinians to rush to the border with Israel and protest.
  • On the border, Israeli soldiers fired into the crowd, killing at least 60 people; it was the worst day of violence since Israel attacked Gaza in 2014.
  • The embassy shift and the disproportionate response at the Gaza border, crucially, came on the eve of the 70th anniversary of Nakba, the day to mark the forced eviction of hundreds of thousands of Palestinians from their homes in 1948.
  • Gaza has been burning for the past few weeks. Dozens of protesters had already been killed before Monday’s incidents.
  • Shortly after the Gaza violence, at the embassy opening ceremony, Israeli Prime Minister Benjamin Netanyahu didn’t show any remorse over the death of Palestinians. Instead he called it a glorious day.
  • The real problem is that there is no meaningful effort to restart the peace process, which is the only way forward to end violence and address the political and humanitarian concerns of the occupied territories.
  • Trump had promised to make his own peace plan, but his decision to move the embassy to Jerusalem, which most countries do not recognise as Israel’s capital, has only worsened the crisis.
  • Jerusalem is seen as part of a final settlement between the Israelis and the Palestinians.
  • Though the whole city is now under Israeli control, the Palestinians lay claim to East Jerusalem, including the Old City, as their capital. They are now trapped in this cycle of violence.

 The international community concern:

  • Despite repeated promises from the outside world, they are caught in the status quo — the Israeli occupation of the West Bank and East Jerusalem and the blockade of Gaza.
  • The callous way in which Israel dealt with the protests shows the utter disregard Tel Aviv and the international community have for Palestinian lives
  • With Mr. Trump recognising Jerusalem as Israel’s capital, Palestinians fear that facts on the ground are being manipulated further to their disadvantage.
  • The international community must not remain silent; for starters, there must be an inquiry into the carnage at the Gaza border.

Category: ECOLOGY AND ENVIRONMENT

1. Anything but green

The draft National Forest Policy is an attempt to get around the Supreme Court’s judgment on forest conservation

The Draft National Forest Policy 2018, has generated a fair amount of public discourse. Despite all that has been written, what is it that has changed in the last 30 years that necessitates a new policy

 Flavour of existing policy

  • The answer lies in the judgment of the Supreme Court on forest conservation. In 2006, the court held that the existing National Forest Policy (NFP), 1988 has a “statutory flavour”.
  • This was reiterated by the Supreme Court in 2011, in Lafarge Umiam Mining (P) Ltd. versus Union of India. which said “The time has come for this Court to declare and we hereby declare that the NFP, 1988 which lays down far-reaching principles must necessarily govern the grant of permissions under Section 2 of the Forest (Conservation) Act, 1980.”
  • Thus, for the first time, the government was obligated to consider the provisions of NFP, 1988 while considering proposals for clearing forest land for activities such as mining, laying roads and building dams.
  • One of the strongest provisions in the existing NFP is with respect to restrictions on diversion of forest land for non-forest purposes.
  • According to the policy, Diversion of forest land for any-non-forest purpose should be subject to the most careful examinations by specialists from the standpoint of social and environmental costs and benefits. The need for “most careful examination by specialists” and “costs and benefit” are prerequisites before grant of clearances.
  • In addition, the policy also says that tropical rain/moist forests, particularly in areas like Arunachal Pradesh, Kerala, Andaman & Nicobar Islands, should be totally safeguarded.
  • In the last few years, forest clearances granted by the Ministry of Environment, Forest and Climate Change have been challenged before the National Green Tribunal by affected and concerned persons.
  • The Ministry has been having a tough time in the Tribunal justifying how tropical moist evergreen forests in the Western Ghats, the Northeast and other regions which have to be totally safeguarded, in terms of the forest policy, have been allowed to be diverted in ecologically-sensitive locations. Concerned groups have also raised questions about the manner in which cost-benefit analyses have been done and how detailed examination by specialists was undertaken.
  • It is these specific provisions with regard to forest diversion that have become the Achilles’ heel of the government, which has been finding it difficult to justify forest diversion in light of the restrictions under NFP, 1988.

Facilitating diversion

  • Therefore, a matter of serious concern is that the draft policy published this year has completely deleted the section on safeguards to be followed for diversion of forest land. In fact, it does not regard diversion as a threat at all so far as forest land is concerned.
  • Under the draft policy one has: before diversion of forest land, no requirement of cost-benefit analysis; no examinations by specialists; no requirement of alternatives; and no mention of the fact that tropical moist evergreen forests as well as forests in hilly States such as Arunachal Pradesh should be “totally safeguarded”. Instead of specialists, Central and State Boards for Forestry are envisaged, which are to be headed by the respective Forest Ministers with a specific mandate for ensuring “simplification of procedures”.
  • Contrary to general belief, the real motive for a new Forest Policy is not to encourage commercial plantations, undermine the rights of communities (which are protected under the law) or mitigate climate change and encourage the use of timber.
  • The main objective, in plain and simple terms, is to facilitate speedy diversion of forest land for various non-forest purposes such as mining, laying roads and building dams without any detailed scientific and legal scrutiny.
  • The draft policy is nothing but an attempt to circumvent the Supreme Court’s judgment in Lafarge. There are reasons to believe that if the public at large demands that provisions with respect to forest diversion — as contained in the NFP,1988 — should be an integral part of the new Forest Policy, the government would never come out with a new policy.

F. Prelims Fact

Nothing here for today!!!

G. Practice Questions for UPSC Prelims Exam

Question 1. Consider the following statements about Equity Markets:
  1. An equity market is different from a share market.
  2. Equity market is the aggregation of buyers and sellers of stocks.

Select the correct answer using the codes given:

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. None of the above

See

Answer


(b
)

Type: Economy
Level: Moderate
Explanation:

Equity Market

An equity market, often know as stock market or share market, is a market where shares of companies or entities are issued and traded, either through exchanges or through listed dealers or brokers. Stock exchanges list shares of common equity as well as other security types, e.g. corporate bonds and convertible bonds.

Equity market is the aggregation of buyers and sellers of stocks. The equity sale gives a company access to capital and investors a slice of ownership in a company with the potential to realize gains based on the future performance of the company.

Question 2. Consider the following statements about Shell Companies:
  1. They can be set up by business people for legitimate purposes only.
  2. Shell companies are companies without active business operations or significant assets.

Select the incorrect answer using the codes given:

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. None of the above

See

Answer


(a
)

Type: Economy
Level: Moderate
Explanation:

Shell companies are companies without active business operations or significant assets. They can be set up by business people for both legitimate and illegitimate purposes.

Illegitimate purposes for registering a shell company include hiding particulars of ownership from the law enforcement, laundering unaccounted money and avoiding tax.

With the shell company as a front, all transactions are shown on paper as legitimate business transactions, thereby turning black money into white. In this process, the business person also avoids paying tax on the laundered money.

India, however, does not have a concrete definition of shell companies. Shell companies are not defined in any law or act. However, US has defined the shell companies under their Securities Act. They have taken up the basic definition, hence making it the commonly used one.

Question 3. Consider the following statements about Biofuels:
  1. Biofuels are combustible fuels created from biomass from recently living plant matter.
  2. Biodiesel can be combusted in diesel engines.

Select the correct answer using the codes given:

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. None of the above

See

Answer


(c
)

Type: Environment
Level: Moderate
Explanation:

Biofuels are combustible fuels created from biomass in other words, fuels created from recently living plant matter as opposed to ancient plant matter in hydrocarbons.

The term biofuel is usually used to reference liquid fuels, such as ethanol and biodiesel that are used as replacements for transportation fuels like petroleum, diesel and jet fuel. Biofuels can also include solid fuels like wood pellets and biogas or syngas – however, in this summary, we will focus on liquid fuels.

There are two main types of biofuels – ethanol and biodiesel.  The simplest way to distinguish between the two is to remember ethanol is an alcohol and biodiesel is an oil.

Ethanol is an alcohol formed by fermentation and can be used as a replacement for, or additive to, gasoline whereas biodiesel is produced by extracting naturally occurring oils from plants and seeds in a process called transesterification. Biodiesel can be combusted in diesel engines.

Question 4. Consider the following statements about Categories of Biofuels:
  1. First generation biofuels are produced from food crops.
  2. Second generation biofuels are produced from cellulosic material such as wood, grasses, and inedible parts of plants.

Select the correct answer using the codes given:

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. None of the above

See

Answer


(c
)

Type: Environment
Level: Moderate
Explanation:

  • Biofuels are grouped by categories – first generation, second generation, and third generation – based on the type of feedstock the input material used to produce them.
  • First generation biofuels are produced from food crops. For ethanol, feedstocks include sugar cane, corn, maize, etc.  For biodiesel, feedstocks are naturally occurring vegetable oils such as soybean and canola.
  • Second generation biofuels are produced from cellulosic material such as wood, grasses, and inedible parts of plants. This material is more difficult to break down through fermentation and therefore requires pre-treatment before it can be processed.
  • Third generation biofuels are produced using the lipid production from algae. In addition, the term “Advanced Biofuels” is used to describe the relatively new technological field of biofuel production that uses waste such as garbage, animal fats, and spent cooking oil to produce liquid fuels.
Question 5. Consider the following statements:
  1. Swachh Survekshan is a ranking exercise taken up by the Government of India to assess rural and urban areas for their levels of cleanliness.
  2. The Quality Council of India (QCI) has been commissioned the responsibility of carrying out the assessment.

Select the correct answer using the codes given:

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. None of the above

See

Answer


(c
)

Type: Governance
Level: Moderate
Explanation:

Swachh Survekshan is a ranking exercise taken up by the Government of India to assess rural and urban areas for their levels of cleanliness and active implementation of Swachhata mission initiatives in a timely and innovative manner.

The objective of the survey is to encourage large-scale citizen participation and create awareness amongst all sections of society about the importance of working together towards making towns and cities a better place to live in. Additionally, the survey also intends to foster a spirit of healthy competition among towns and cities to improve their service delivery to citizens, towards creating cleaner cities and towns.

The Ministry of Urban Development, Government of India takes up the Swachh Survekshan in urban areas and the Ministry of Drinking Water and Sanitation in rural areas. The Quality Council of India (QCI) has been commissioned with the responsibility of carrying out the assessment.

H. UPSC Mains Practice Questions

 General Studies II
  1. What is the SCO? What is India’s role in the SCO?

General Studies III

  1. Explain in detail about National Policy on Bio-fuels. Also, comment on advantages of biofuels.

 

Also, check previous Daily News Analysis

“Proper Current Affairs preparation is the key to success in the UPSC- Civil Services Examination. We have now launched a comprehensive ‘Current Affairs Webinar’. Limited seats available. Click here to Know More.”

Enroll for India’s Largest All-India Test Series

Comments

Leave a Comment

Your Mobile number and Email id will not be published.

*

*