CNA 1 Oct 2022:- Download PDF Here
TABLE OF CONTENTS
A. GS 1 Related B. GS 2 Related INTERNATIONAL RELATIONS 1. U.S. sanctions on Indian petrochemical company 2. Putin annexes four regions of Ukraine C. GS 3 Related ECONOMICS 1. Policy Repo Rates D. GS 4 Related E. Editorials SOCIAL ISSUES 1. As India ages, keeping an eye on the elderly GOVERNANCE 1. Letting go of a chance to democratise telecom services F. Prelims Facts 1. Foreigners’ Tribunals 2. SEBI norms for IPOs G. Tidbits 1. Dada Saheb Phalke award H. UPSC Prelims Practice Questions I. UPSC Mains Practice Questions
A. GS 1 Related
Nothing here for today!!!
B. GS 2 Related
Category: INTERNATIONAL RELATIONS
1. U.S. sanctions on Indian petrochemical company
Syllabus: Effect of Policies & Politics of Developed & Developing Countries on India’s Interests
Mains: Impact of U.S. sanctions on India
Context: The U.S. imposed sanctions on an Indian petrochemical company for Iran oil purchases.
Introduction:
- The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) recently imposed sanctions against a Mumbai-based petrochemical company among several entities accused of selling Iranian petroleum products.
- As per OFAC’s statement, it had sanctioned the “international network of companies” that were involved in the sale of “hundreds of millions of dollars” worth of Iranian petrochemical products to South Asia and East Asia.
- The treasury department accused Iranian brokers and several front companies in the UAE, Hong Kong, and India that have facilitated financial transfers and shipping of Iranian petroleum and petrochemical products by “concealing the origin” of the shipments.
- It imposed sanctions on Mumbai based Tibalaji Petrochem Private Limited for purchasing Hongkong based-‘Triliance’ brokered petrochemical products, including methanol and base oil, for onward shipment to China.
- This is the first Indian entity to face the U.S. designation under unilateral sanctions passed in 2018-19, after the U.S’s decision to walk out of the Joint Comprehensive Plan of Action (JCPOA) with Iran.
What do these sanctions mean?
- The penalties freeze the companies’ assets in the US and make it illegal for American citizens to do business with them.
- Under the sanctions, those involved cannot have access to the US financial system or deal with US companies.
Sanctions on Iran:
- In May 2018, the US pulled out of Iran Nuclear Deal – JCPOA and imposed sanctions on Iran and on nations doing a significant amount of trade with Iran.
- However, no other signatory of the deal (the UK, China, Russia, Germany and France) has supported the US stand on the deal and even the UN has expressed grave misgivings about the decision as the International Atomic Energy Agency’s report concluded that Iran’s stockpile of uranium and heavy water, as well as its implementation of additional protocols, were “in compliance” with the agreement.
- After the exit of the United States, the other signatories in an attempt to keep the deal alive, launched a barter system known as INSTEX to facilitate transactions with Iran outside the US banking system.
Impact on India:
- The United States granted exemptions to eight countries including India allowing them to temporarily continue buying Iranian oil for 06 months which ended in May 2019.
- India officially refused to endorse the “unilateral sanctions” of the U.S, the union government agreed to end all oil imports from Iran in 2019, which made up about 11% of India’s intake.
- Iran is the third largest supplier of oil for India after Iraq and Saudi Arabia. Higher crude oil prices due to sanctions will widen the trade deficit and current account deficit of India.
- India also has strategic interests in Iran which will be impacted by sanctions. India has made economic investments in Chabahar port and in the International North-South Transport Corridor.
Nut Graf: The U.S imposed a new round of sanctions against Iran, vowing to impose financial penalties on a “regular basis” in an effort to “severely restrict” Iranian oil and petrochemical exports. The timing of these sanctions can be a “matter of concern” due to the ongoing Russia-Ukraine conflict which is responsible for rising fuel prices by disrupting crude oil supply chains.
2. Putin annexes four regions of Ukraine
Syllabus: Effect of Policies & Politics of Developed & Developing Countries on India’s Interests
Mains: Process of Annexation by Referendum
Context: Russian President Vladimir Putin annexed four territories in Ukraine controlled by the Russian Army.
Introduction:
- Vladimir Putin has signed “accession treaties” formalising Russia’s annexation of four occupied regions in Ukraine namely Donetsk, Luhansk, Kherson, and Zaporizhzhia.
- Together with Crimea which Russia annexed in 2014, Russia now claims 20% of Ukrainian territory.
- The signing ceremony came on the heels of the completion of Russia-orchestrated “referendums” in the four regions, which are largely or partly occupied by Russian or Russian-backed forces.
- Western countries and Ukraine have dismissed the referendums as breaching international law, and charged they were coercive and wholly unrepresentative.
- Russia also vetoed a UN resolution tabled by the U.S and Albania that would have declared its referendums as having “no validity”.
Image Source: The Guardian
What does this annexation mean?
- The action represents a sharp escalation in the ongoing conflict with Ukraine.
- The four territories create a crucial land corridor between Russia and the Crimean peninsula, annexed by Moscow in 2014.
- Russia has already taken a series of steps in the annexed regions:
- It has handed out thousands of Russian passports to residents since 2019 and
- Russia has completely replaced Ukraine’s hryvnia currency with the Russian rouble.
- In the occupied areas of all four regions, access to Ukrainian TV and mobile phone networks has been cut and only Russian channels and telecoms providers are available.
- Schools previously teaching the Ukrainian curriculum are being forced to adopt a new Russian one.
Read more on the Russia-Ukraine Conflict.
Nut Graf: Recent annexation of four Ukrainian regions will have a significant impact on the ongoing conflict between both countries. The U.S. and European allies, in addition to other countries, have opposed the annexation. Ukraine’s recent counteroffensive successes in the east and the south have pushed back Russian forces which made Russia change its strategy resorting to territorial gains via referendums.
C. GS 3 Related
Syllabus: Fiscal & Monetary Policy
Mains: Significance of inflation targeting to economic growth
Context: Reserve Bank raises policy repo rates by 50 bps and brings down growth outlook to 7%.
Introduction:
- The Reserve Bank of India’s Monetary Policy Committee (MPC) raised the policy repo rate by 50 basis points (bps) to 5.9%.
- This is the fourth rate hike since May 2022.
- The RBI also lowered the growth forecast to 7% for the current financial year from 7.2 per cent in August 2022 on concerns over a ‘bleak’ global economic outlook.
- However, RBI retained its retail inflation forecast at 6.7 percent.
- The MPC has effected a 190-bps increase in the last five months since May 2022.
- The MPC also voted by a 5:1 majority to “remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward”.
Image Source: The Hindu
Reason behind the steady rise in policy rate:
- The sustained high inflation could destabilise inflation expectations and harm growth in the medium term.
- Withdrawal of monetary accommodation is warranted to keep inflation expectations anchored and contain the second-round effects.
- Inflationary pressures are broad-based and core inflation remains at elevated levels.
- The volatility in global financial markets is impinging upon domestic financial markets, including the currency market, thereby leading to imported inflation.
- The MPC’s actions are in line with the current global inflation scenario and have leaned in favour of anchoring inflationary expectations to work out solutions to free the growth potential of the economy.
How will it impact borrowers and depositors?
- An increase in the policy rate will result in a hike in lending rates which will impact existing home loan customers and prospective borrowers.
- Conservative investors who like to park their funds in bank fixed deposits will benefit as banks are expected to raise their deposit rates following the rate hike.
- The immediate impact will be for borrowers with loans linked to the external benchmark linked lending rate (EBLR). For customers in the marginal cost of funds-based lending rate (MCLR) regime, the resetting of rates will happen with a lag.
- Banks and housing finance companies (HFC) have already raised their lending rates between 70 to 90 basis points following the 90 basis point hike in repo rate by RBI in May 2022 and June. Now banks and HFCs are expected to raise the rates again.
- The lending rates are increased by 190 basis points which will have a significant impact on EMIs.
View on Growth:
- The MPC also lowered the real gross domestic product (GDP) for fiscal 2022-23 to 7%, from a projection of 7.2% announced in August 2022.
- Extended geopolitical tensions, tightening global financial conditions and a possible decline in the external component of aggregate demand can pose a downside risk to growth.
Will there be more rate hikes?
- RBI has projected inflation of 6.7 per cent for the year 2022-23 and has said that the inflation will come down to 5 per cent in Q1FY23.
- It has, however, said that its future actions would depend upon the evolving situation. Given its enhanced concerns around inflation, market participants feel that the central bank may go for additional rate hikes of 50-60 basis points over the remaining part of the year.
- In its statement, the RBI said, “The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.”
Nut Graf: The MPC’s decision to increase policy repo rates are based on the twin objective, with primacy given to price stability driven by the necessity to keep growth in mind. The underlying fundamentals of India are resilient and the buffers built over the years have helped in dealing with any external shock.
D. GS 4 Related
Nothing here for today!!!
E. Editorials
1. As India ages, keeping an eye on the elderly
Syllabus: Population and associated issues
Prelims: International Day for Older Persons and World Population Prospects 2022
Mains: Issues associated with the increasing elderly population in India and the way forward
Context: On the occasion of International Day for Older Persons (1st of October), this article talks about the challenges associated with the elderly population of India.
Background
- The World Population Prospects 2022 report of the UN Department of Economic and Social Affairs (UNDESA) projects that India will house the largest population in the world which would include a large elderly sub-population.
- Even other United Nations reports have also estimated that the proportion of India’s elderly population will increase by nearly two times to reach about 20% of the total population by 2050.
- The changes projected in the demographic structure of the country will increase the burden on public health systems that are not equipped to deliver universal health services efficiently.
- Further, the social security measures of the country such as old-age and disability pensions are also not adequately equipped to address the issues.
Read more about – World Population Prospects 2022 in CNA dated Aug 13, 2022
Issues related to elderly
- The Hyderabad Ocular Morbidity in the Elderly Study (HOMES) by the L.V. Prasad Eye Institute has been undertaking a series of studies and reports on aspects such as health, quality of life, mental health, morbidity, and disability among the elderly living in old age homes in Hyderabad.
- Various studies have been using eye care as an entry point to measure various aspects of health and social metrics over a large range of socio-economic circumstances.
- In India, there is an increase in the prevalence of non-communicable diseases like diabetes, hypertension, heart diseases, vision disabilities, hearing defects and problems with mobility among the elderly.
- Close to 50% of the participants had a minimum of one disability and about 33% of them had multiple morbidities.
- Further, nearly 70% of the participants used at least one assistive device with spectacles being the most common assistive device used.
Know more about – Institutions for the elderly in India in CNA dated Mar 10, 2022.
The challenges of eye care
- According to a study, more than 30% of the elderly who participated in the study had distance vision loss and more than 50% of the participants had near vision impairment.
- The reports have also shown the interconnection between vision impairment and mental health and the confidence of the elderly.
- Individuals with vision impairment or defects are seen to have greater fear and are at risk of falling which is said to be one of the key causes of disability and hospitalisation among the elderly population.
- Also, vision impairment reduced the movement and independence of elderly individuals which often led to depression.
- Other chronic health conditions like diabetes and hypertension cause irreversible vision loss which has also become a major challenge.
Way forward
- There is a need to introduce a series of interventions that covers various aspects such as assistive devices for defects in vision hearing and mobility to psychiatric support for depression and other mental health issues.
- Setting up a comprehensive national eye care model as a holistic eye care model will help in recalibrating the overall elderly care services as per the requirements.
- Introduction of cross-subsidy models in eye health in India to help address the financial issues of the elderly.
- Incentivising centres which can carry out eye examinations because such examinations and tests help in identifying and recognising various systemic issues among the elderly.
- Adoption of modern and advanced imaging technologies, tele-health facilities, portable devices and apps that help to increase access to eye care facilities.
- Creating referral platforms that help connect eye care with other health specialities.
Nut graf: The reports on the changes in the demographic structure of the country indicate that the country’s elderly population would increase significantly in the coming years. This requires the policymakers to come up with a long-term strategy that is comprehensive, universal, integrated and accessible to elderly individuals.
2. Letting go of a chance to democratise telecom services
Syllabus: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Prelims: About draft Indian Telecommunication Bill, 2022
Mains: Critical evaluation of Indian Telecommunication Bill, 2022
Context: The notification of the draft Indian Telecommunication Bill, 2022 by the Ministry of Communications.
Draft Indian Telecommunication Bill, 2022
- The draft Indian Telecommunication Bill, 2022 has been notified for public consultation on September 21, 2022 by the Ministry.
- The Bill aims to create a legal framework in line with the requirements of the 21st century and to ensure India’s socio-economic development.
To learn more about the draft Indian Telecommunication Bill, 2022, refer to the following article:
UPSC Exam Comprehensive News Analysis dated 30 Sep 2022
Criticism of the Telecom Bill
- Critics opine that the latest Telecom Bill has failed to democratise the telecommunication services sector of the country as it has proposed to move towards stricter regulations and centralisation of power with respect to the new licensing regime.
- Critics feel that the Bill also failed to inculcate various recommendations and suggestions provided by courts (in Anuradha Bhasin v/s Union Of India), committees such as B.N. Srikrishna Committee Report on data protection and other institutions.
- They also say that the new Bill is just a repackaging of the provisions of the outdated laws and legislation as new laws.
- Further, the definition of telecommunication services has been expanded to include over-the-top (OTT) communication services as demanded by the Telecom Service Providers (TSPs).
- Critics argue that this categorisation is flawed as OTT services and TSPs have inherently performed different functionalities as TSPs act as the gatekeepers to the broadband infrastructure, whereas the OTT services can only be accessed through telco-controlled infrastructure.
- The introduction of OTT services under the ambit of telecommunication services may lead to uncertainty, promote ad hocism, and possess the threat of overbearing compliance and legal costs on service providers which might be detrimental to innovation.
- Also, this expansion of the definition might be an impediment to end-to-end encryption (E2EE) in India.
- The Bill tries to bypass the privacy protection practice of E2EE and requires OTT services such as Whatsapp and Signal to intercept or disclose messages to the authorised officer.
- This provides excessive discretion to the Government, and adversely impacts the privacy of individuals.
- The critics also say that the Department of Telecommunication has failed to acknowledge the key recommendations made by the Telecom Regulatory Authority of India (TRAI) and also has diluted the responsibilities and powers of TRAI.
- Through Clause 24(2)(b) of the draft Bill, a specific provision facilitating the government to order a suspension of internet power has been introduced for the first time in the Indian legal framework.
- This provision has attracted criticism regarding the impact of Internet shutdowns on the fundamental right to free speech of citizens and the high economic costs of such shutdowns.
- By not introducing principles that ensure net neutrality in the draft Bill, experts say that an opportunity has been missed by the government to set regulations in line with the global standards.
Nut graf: As the Ministry of Communications published its draft Indian Telecommunication Bill, 2022 which is made available for public comments, critics and other experts feel that the Bill fails to undertake adequate steps to achieve its objectives of boosting socio-economic growth.
F. Prelims Facts
Syllabus: GS02-Statutory, Regulatory and various Quasi-judicial Bodies.
Prelims: National Register of Citizens
Context: The Assam government has decided not to extend the term of members who were appointed for Foreigners’ Tribunals (FT).
Introduction:
- Assam has had 100 regular FTs since 2009 to try the cases of suspected foreigners referred by the Border wing of police.
- 200 additional FTs were set up primarily to handle cases related to the National Register of Citizens (NRC). The annual term of the 200 members expired on September 22, 2022.
- Retired civil servants not below the rank of secretary and additional secretary with judicial experience, or a practising advocate not below the age of 35 years and with at least seven years of practice were appointed as members for the additional FTs under the Foreigners Tribunal Act, 1941, and Foreigners Tribunal Order, 1984, soon after the complete draft NRC was published in August 2019.
- A member can be a retired judicial officer of the Assam Judicial Service, or a retired civil servant. A member is also required to have a fair knowledge of the official languages of Assam (Assamese, Bengali, Bodo and English) as well as be conversant with the historical background to the foreigners’ issue.
- Recently, the State government counsel told the Gauhati High Court about its decision not to extend the tenure of the members for the additional FTs.
Foreigners’ Tribunal:
- A Foreigners’ Tribunal or FT is a quasi-judicial body and a member is a designation similar to a judge.
- The main objective of an FT is to determine if a person staying illegally is a “foreigner” or not.
- Every individual, whose name does not figure in the final NRC, can represent his/her case in front of the appellate authority i.e. FT.
- Under the provisions of the Foreigners Act 1946 and Foreigners (Tribunals) Order 1964, only Foreigners Tribunals are empowered to declare a person as a foreigner.
Syllabus: GS03-Economics
Prelims: SEBI
Context: Recently, Securities and Exchange Board of India (SEBI) approved several changes to various regulations.
Key Details:
- SEBI decided to relax the pricing rules for open offers with respect to the disinvestment of public sector undertakings.
- Companies contemplating IPOs will soon have the option to make confidential pre-filing of offer documents.
- The pre-filing mechanism allows issuers to carry out limited interactions without having to make any sensitive information public.
- The issuer companies, in addition to the audited financial numbers, also have to disclose their key numbers on various key performance indicators in different sections of the draft red herring prospectus (DRHP) which are not covered in the financial statements in the offer documents.
- Tightening Initial Public Offering (IPO) norms, SEBI cleared the proposal mandating the issuers to disclose the offer price based on past transactions and fund-raising activities.
- The regulator has also given its nod to the proposed changes in the existing framework for Offer for Sale (OFS).
- SEBI has removed the 10 per cent minimum shareholding requirement for non-promoter shareholders to sell shares via the offer-for-sale mechanism.
- Earlier, non-promoters having a 10 percent stake in the firm and willing to offer shares of at least ₹25 crores as eligible to offer their shares through OFS.
- OFS mechanism has been made available to unit holders/sellers of listed REITs/InvITs to offer their holdings.
G. Tidbits
- President Droupadi Murmu gave away the National Film Awards for the year 2020 under various categories at the 68th edition of the ceremony recently.
- The Dadasaheb Phalke Award was conferred on veteran actor Asha Parekh, an accomplished Indian classical dancer who has also been a director and producer.
- In 1992, she was honoured with the Padma Shri by the Government of India for her contribution to the field of cinema.
H. UPSC Prelims Practice Questions
Q1. Consider the following statements: (Level-Difficult)
- A municipality reconstituted after premature dissolution does not enjoy the full period of five years but remains in office only for the remainder of the period.
- The Constitution prescribes reservation of seats for SC, ST, OBC and Women in the Municipality
Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both
- None
CHECK ANSWERS:-
Answer: a
Explanation:
- Statement 01 is correct, The 74th Constitutional Amendment act, 1992 provides for a five-year term of office for every municipality. However, it can be dissolved before the completion of its term.
- In case of premature dissolution, a fresh election has to be conducted within 6 months from the date of dissolution. A municipality reconstituted after premature dissolution does not enjoy the full period of five years but remains in office only for the remainder of the period.
- Statement 02 is incorrect, 74th Constitutional Amendment Act of 1992 provides for the reservation of seats for the scheduled castes and the scheduled tribes in every municipality in the proportion of their population to the total population in the municipal area.
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- Further, it provides for the reservation of not less than one-third of the total number of seats for women (including the number of seats reserved for women belonging to the SCs and the STs).
- The state legislature may provide for the manner of reservation of offices of chairpersons in the municipalities for SCs, STs and women.
- It may also make any provision for the reservation of seats in any Municipality or offices of chairpersons in municipalities in favour of backward classes.
Q2. Consider the following pairs: (Level-Difficult)
Security Force Border
- Border Security Force (BSF) Pakistan and Bangladesh
- ITBP Nepal
- Sashastra Seema Bal (SSB) China
- Assam Rifles Indo-Myanmar
How many pairs given above are not correctly matched?
- Only one pair
- Only two pairs
- Only three pairs
- All four pairs
CHECK ANSWERS:-
Answer: b
Explanation:
- Pair 01 is correctly matched, BSF is deployed on the Indo-Pakistan International Border, Indo-Bangladesh International Border, and Line of Control (LoC) along with the Indian Army.
- Pair 02 is incorrectly matched, ITBP is deployed on border guarding duties from Karakoram Pass in Ladakh to Jachep La in Arunachal Pradesh covering 3488 km of the Indo-China Border.
- Pair 03 is incorrectly matched, SSB is deployed to guard the Indo-Nepal and Indo-Bhutan Borders.
- Pair 04 is correctly matched, Assam Rifles is a Central Paramilitary Force under the Central Armed Police Forces. They have been guarding the 1,643 km long Indo-Myanmar border since 2002.
Q3. With respect to Dadasaheb Phalke Award, which of the following statements is/are correct? (Level-Difficult)
- It is India’s highest award in the field of cinema
- It is presented annually at the National Film Awards ceremony by the Directorate of Film Festivals
- The first recipient of the award was actress Devika Rani
- As of 2022, only two recipients have received the award posthumously
Options:
- 1 and 2 only
- 2, 3 and 4 only
- 1 and 3 only
- 1, 2, 3 and 4
CHECK ANSWERS:-
Answer: d
Explanation:
- Statement 01 is correct, The Dadasaheb Phalke Award is part of the National Film Awards and is considered the highest honour in the field of Indian cinema.
- Statement 02 is correct, It is presented annually at the National Film Awards ceremony by the Directorate of Film Festivals, an organisation set up by the Union Ministry of Information and Broadcasting.
- Statement 03 is correct, The first recipient of the award was actress Devika Rani, who was honoured at the 17th National Film Awards in 1970.
- Statement 04 is correct, As of 2022, there have been 52 awardees including two actors who were awarded posthumously.
Q4. What is Preliminary Prospectus in an IPO process called as? (Level-Difficult)
- Articles of Association (AoA)
- Memorandum of Association (MoA)
- Red herring
- Underwriting
CHECK ANSWERS:-
Answer: c
Explanation:
- A preliminary prospectus is a document that issuers disseminate to prospective investors during the waiting period in the initial public offering process (IPO) to describe their business operations and their offering.
- A preliminary prospectus may also be referred to as a “red herring.”
Q5. In the northern hemisphere, the longest day of the year normally occurs in the: (Level-Easy)(CSE PYQ-2022)
- First half of the month of June
- Second half of the month of June
- First half of the month of July
- Second half of the month of July
CHECK ANSWERS:-
Answer: b
Explanation:
- In the northern hemisphere, the longest day of the year is called the summer solstice.
- The maximum amount of sunlight received by the Northern Hemisphere during this time is usually on June 21 or 22.
Read more on Solstice and Equinox.
I. UPSC Mains Practice Questions
- In the light of the draft telecom bill, assess the impact of bringing OTT platforms under the same norms as the telecom companies in India. (250 words; 15 marks) (GS-2; Governance)
- How prepared is India to handle the growing elderly population in the country? Give suitable examples. (250 words; 15 marks) (GS- 1; Social Issues)
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CNA 1 Oct 2022:- Download PDF Here
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