Current Affairs Compilations for UPSC IAS Prelims 2022

Mains Oriented Articles

GS Paper 2

GS Paper 3

Prelims Oriented Articles (Factly)

Mains Oriented Articles

GS Paper 2

About Hiroshima G7 Summit: In Hiroshima, En Route To A North-South Bridge

News: Indian Prime Minister is travelling to Hiroshima, Japan to participate in the 49th G7 summit. For India, this will be the tenth participation.

What is G7?

G7 countries have around 45% of global GDP. It has moved on to become an economy-plus forum encompassing in its deliberation major global challenges, including peace and security, counter-terrorism, development, education, health, environment and climate change.

About the Hiroshima G7 summit

A Hiroshima action statement on food security is being worked upon. It aims to respond to the ongoing global food security crisis and to build more resilient, sustainable, and inclusive agriculture and food systems.

What is the importance of the G7 grouping for India?

Provides opportunity: India’s participation in the G7 summits will provide India with an opportunity to meet with some of the most important leaders of the global community. The interactions with G7 countries provide useful input into understanding the dynamics of these major countries.

Help in expanding the rules-based order: India has been recognised as a partner of G7 for a long and is seen as a strong voice of the democratic global south. India has also been shaping the narrative on development, environment, peace and stability. This can get significant attention from like-minded countries.

Aid the success of India’s G20 presidency: Hiroshima G7 summit allows for a certain G20-G7 north-south bridging which India is best placed to undertake among major stakeholders in the world. Further, the presence of both Indonesia and Brazil (Present G20 troika countries) in the upcoming G7 summit further strengthens India’s G20 presidency.

India has become the largest country in population terms and is on its way to becoming the third-largest economy in another decade. This has increased India’s G7 membership fortune in future.

What are the concerns raised against the G7 grouping?

G7 articulate Western unity: G7 has a practice of “outreach” by interacting with a select number of invited countries decided by the host. For example, the recent host Japan does not invite China and Russia to be part of the summit.

Not the gathering of largest economies: G7 started in the early 1970s as a getting together of what were the largest economies in the world. But now, with the rise of BRICS, this is no longer the case and G20 has assumed the mantle of the premier economic forum of the world.

Poverty in India is yet again being overstated

News: As the 2024 elections approach, the Great Indian Poverty Debate has again started. As the government has not released the 2017-18 Consumer Expenditure Survey (CES), many theories on poverty estimates are emerging.

What are the necessary factors in poverty measurement?

Head count: There has to be a consumption (or income) level below which individuals are deemed poor i.e. the “head count”. But population sizes differ, so the headcount becomes the percentage who are poor.

Accounting inflation: Large countries like India and China have differential spatial (urban, rural, and state) rates of inflation. So, there is a need for state-specific poverty lines.

Raise the poverty line accordingly: There is a need to change the level of poverty line with development i.e. as a country becomes richer (less poor), the poverty line should be raised.

About India’s poverty measurement criteria

According to newspaper reports, the government is undertaking two back-to-back consumer surveys. But the questionnaire remains pretty much the same as in 2011-12.

The only major change is, to get more accurate reporting, each household will be visited thrice instead of once. First, for questions pertaining to seven-day consumption (fruits and vegetables). Second, for measuring 30-day consumption (most items). Third, for more durable items (recall period of 365 days).

World Bank and other experts, including Nobel laureate Angus Deaton, recommended having food questions on a weekly basis recall (rather than monthly) since the late 1990s. Post 2011-12, the government accepted a Modified Mixed Recall Period (MMRP) method has become the official, and only, method of data collection by NSS.

What are the various theories on India’s poverty estimation?

Why experts are suggesting India’s poverty has reduced significantly in recent times?

Firstly, over the last decade (2011-12 to 2021-22), per capita GDP in India has increased by a cumulative 52%. Further, the real per capita consumption (national accounts data) grew at a healthy 3.13% CAGR, for an aggregate increase of 37%.

Secondly, average consumption increases by 37%. For example, the World Bank estimates a 67%  “reasonable” pass-through of private final consumption expenditure (PFCE) growth to household consumption growth.

Thirdly, few experts said that India’s poverty remains constant around 20-25%. But the constancy of the poverty rate is not correct. Because a) According to the MMRP method, poverty in India in 2011-12 was 10 percentage points lower at 12.4%, b) The 2017-18 survey did not collect data for any method other than MMRP. So, the poverty lines should not be constant.

Fourthly, the World Bank has recently updated its poverty estimates for India and other countries. It said that the pace of poverty reduction is considerably higher during the post-2013 period.

According to World Bank estimates, the pace of poverty reduction in 2015-2019 was almost twice the rate of reduction between 2004-05 and 2011-12.

At present, three organizations (NSSO, NCAER and CMIE) have ongoing surveys on consumption and therefore estimates of poverty.

A long-drawn test for India’s diplomatic skills

News: India is going to attend various multilateral organizations meetings in the coming months.

What are the upcoming multilateral meetings which India will be part of?

1. a) Indian PM and other Quad leaders are expected to meet G7 countries in May, b) PM will visit the US in June, c) India will host the Shanghai Cooperation Organisation (SCO) Summit in July, d) PM will then attend the BRICS summit in South Africa in August and e) India will host the G20 summit in September.

Therefore, there are many multilateral meetings on the list of India to attend, which shows that India is keen to get involved with the different global groupings.

It will also be a chance for India to showcase its diplomatic skills in maintaining the balance in its relations with various countries.

How is India trying to maintain balance?

India has maintained a sweet spot without following the Indonesian President to visit Ukraine nor has it invited Ukraine’s Foreign Minister in the G20 meeting.

Further, India hosting SCO and G20 shows India’s content to strike balance between the global order in the wake of war and changing geopolitical scenario.

India is also setting examples for many countries in South East Asia and the Global South by maintaining this balance.

For example, Saudi Arabia, the United Arab Emirates, Turkey and Israel are managing their ties with the West without joining its stand on Ukraine or sanctions.

Further, the France President has reiterated on the Strategic Autonomy after his visit to China this year. This strategic autonomy has benefited India to maintain its relations with the countries of its interests.

What are the challenges for India in maintaining this balance?

1. a) Unexpected victory of Ukraine over Russia may force India to reexamine its relations with Russia, b) attacks by China across any part of the Line of Actual Control would make India to rethink on its strategies, c) India would also be forced to rethink if Russia escalates its stand on payment issues or withhold supplies of defence hardware to India under pressure from China, d) threats remain over imposition of unilateral sanctions by the West for buying Russian oil or sanctions under Countering America’s Adversaries Through Sanctions Act-Related Sanctions (CAATSA) for acquisition of the Russian S-400 missile systems.

What can be the way ahead for India?

An important task with India ahead is to ensure China and Russia come to a consensus on a joint declaration at the G-20 summit in September.

This is because the G7 countries have always been in favour of excluding these two countries from the group.

Therefore, for India to get success in maintaining the balance with the nations, it has to show its diplomatic skills in making a consensus between the two nations.

PLI footprint in India-China trade

News: India’s imports from China are reducing compared to imports from other countries.

India’s imports from China increased at a slower growth rate in comparison to global imports.

In FY23, India’s import of electronics products from China decreased from $30.3 billion to $27.6 billion.

The decrease is most noticeable in sectors where the PLI (production-linked incentive) scheme is in operation.

For instance, there was a 70.9% decrease in imports of solar cells and parts, 23.1% in laptops and PCs, and 4.1% in mobile phones between FY22 and FY23.

China’s share in India’s merchandise imports has also decreased from 16.4% in FY18 to 13.8% in FY23.

What are the other areas of concern?

China is India’s fourth-largest export destination, with exports during FY23 being $15.3 billion.

India had a trade surplus with China until 2005. However, due to China’s technical advancement and India’s product profile, this surplus turned into a more than $83.2-billion deficit in FY23.

The major problem is not high imports but low exports. The figures of Chinese exports to Japan, Korea, and the US are 25.8 per cent, 21.4 per cent, and 21.4 per cent, respectively.

China still is India’s number one supplier of import items.

Therefore, to become self-reliant India must invest in deep manufacturing. For electric-vehicle batteries, India must produce lithium-ion cells; for laptops, printed circuit boards should be made; for mobile phones, components should be manufactured and not merely the outer shell of the final product.

GS Paper 3

More innovation, a skilled workforce: The promise in India’s National Quantum Mission

News: The Union Cabinet has recently approved the ₹6,003 crore National Quantum Mission (NQM).

What is Quantum computing technology?

What is India’s National Quantum Mission(NQM)?

What is the significance of India’s National Quantum Mission?

Investments in quantum materials and devices promise far more dividends. Such as,

Generate a cadre of the highly skilled workforce: As India gears to become the world’s third-largest economy by 2027, a strongly networked material infrastructure in the country will be crucial. This will cater to not just quantum technologies but also other major scientific megaprojects.

The concept of “quantum devices”: New paradigms of ultrafast transistors and optoelectronic components, as well as non-volatile memory and sensing devices, are becoming enabling vehicles for quantum applications.

Research on new architectures to incorporate quantum materials into functional units has led to the concept of quantum devices.

Develop new or upgrading current methods: Increasing investments in innovation, quantum materials, and manpower generation will lead to precise synthesis, scalable yield, and stable performance of quantum technologies.

Streamline the material and device requirements for the core quantum technology: By a) building infrastructure for new materials and devices with in-house R&D, b) synergising the diverse and geographically distributed material workforce in India to achieve mission deliverables, and c) ensuring efficient resource utilisation as well as minimising redundancy and duplication will streamline the material and device requirements.

What are the challenges faced by the NQM?

Fewer firms in tech manufacturing: Currently nearly 12% of start-ups are deep tech-related — this represents a nearly 35 times increase between 2016 and 2019. However, less than 3% of these involve manufacturing and/or materials.

India does not have enough infrastructure: India does not have enough infrastructure that can support the entire chain of operation from working out the proof-of-principle to developing working prototypes.

Fewer and more scattered R&D community: In 2018, India had 253 full-time equivalent researchers per million of its population. This is about 11% of the researcher density of Italy. Further, this workforce is also distributed across the country.

Material/device challenge: The material/device challenge in quantum technologies is unique because it often demands manipulation of the quantum state of an electron or atom with much more control, like three-dimensional systems, that contain billions of atoms.

What should be done to enhance India’s National Quantum Mission?

The research will be required to develop low-loss materials for superconducting quantum electronics this will preserve quantum information over a long period and much more.

Leverage the evolving scientific infrastructure: Capacity building in the past two decades under national initiatives, such as the Nano Mission and National Supercomputing Mission, has enabled a five-fold increase in research publications in this area between 2011 and 2019.

Strategic recruitment: India needs to devolve strategies to integrate the initiatives of the demographically scattered human resources. Further, the NQM’s goal-oriented multi-institutional consortia will demand strategic recruitment of new talent, synergistic multi-institutional collaboration and political will to ease bureaucratic norms and prevent delays in infrastructure building.

India needs to create a well-balanced R&D ecosystem where material research for near-term goals and applications needs to coexist and collaborate with more fundamental and futuristic objectives.

Through timely investment and efficient management, India can emerge a global leader in the Quantum technology.

Measuring success: Increasing PLI allocation will not be enough

News: The Union Cabinet has recently approved an updated Production Linked Incentive (PLI) scheme for IT hardware manufacturing with more fund allocation.

About the updated Production Linked Incentive (PLI) scheme for IT hardware manufacturing

What are the key changes in the PLI Scheme 2.0 for IT Hardware?

-The updated scheme now has a budgetary outlay of Rs. 17,000 crore, compared to the previous allocation of Rs. 7,325 crore.

-The tenure of the scheme has also been increased to six years from four years.

-The average incentive has been enhanced to 5% compared to 2% offered in the previous version.

-Companies using local components will now get additional incentives.

What are the expected benefits of PLI Scheme 2.0 for IT Hardware?

With the modified scheme, the government expects an investment of Rs. 2,430 crore in the sector during the given period.

India needs to create a large number of manufacturing jobs for its ever-rising workforce. Hence, with the updated scheme, the Centre expects to create 75,000 direct jobs and boost production by Rs. 3.35 trillion.

About the potential of Electronics manufacturing in India

Electronics manufacturing has been witnessing consistent expansion with a 17% compound annual growth rate (CAGR) over the past eight years. The annual production value is estimated to have crossed $105 billion, or about Rs. 9 trillion.

India has emerged as a trusted supply-chain partner for global players and large companies are willing to invest in India.

Why increasing allocation for PLI Scheme 2.0 for IT Hardware is not enough?

The earlier version did not yield results despite investment: Various reports have shown that the target for electronics manufacturing would be missed by a significant margin by 2025-26. Exports would be around only 53-55% of the stated target.

In the case of IT hardware, in particular, against the target of $25 billion, production is estimated to touch only about $6 billion.

The extension of financial support is not the correct way to attract investment: The financial support might cause a) the subdued performance of firms in different sectors, b) In the long run, they might develop heavy dependence on PLI, c) deviate focus from create enabling conditions for a large and diverse manufacturing base in the country and d) fiscal incentive can be only one of the many variables determining actual investment decisions.

What should be done?

The government should re-evaluate the scheme to help drive long-term investment and balance India’s aversion to large trade agreements.

Logistics makes the world go around

News: India has jumped six ranks to 38th position among 139 countries on the World Bank’s Logistics Performance Index for 2023.

About WB’s Logistics Performance Index, 2023

Click Here to Read

The Logistics Index is built on six components – 1) the efficiency of customs, 2) the quality of trade and transport infrastructure, 3) the ease of arranging competitively priced shipments, 4) the quality and competence of logistics services, 5) the ability to track consignments, and 6) timeliness.

India has beaten key ASEAN (Association of Southeast Asian Nations) competitors like Indonesia, Vietnam, and the Philippines, in the index.

What are the benefits for India in the improvement of its the ranks in the Logistics Performance Index, 2023?

1. a) it helps lower the cost of doing business in India, and b) it will help India’s exports and make the country a more attractive destination for investment, especially in the manufacturing sector.

How is the World Bank Logistics Performance Index better than World Bank’s Ease of Doing Business Index?

The World Bank’s Ease of Doing Business Index was flawed because the index was based on judgements of experts and not on surveys of real businesses.

The Index was based on the idea that less regulation is always better, which was a wrong narrative. For instance, the recent failure of Silicon Valley Bank has been due to the weakening regulation of mid-size banks since 2019.

The flaws that existed with the World Bank’s Ease of Doing Business are not present in the World Bank’s Logistics Performance Index. Hence, the rank in this index holds a significant importance.

Read More: Lessons from the death of the ease of doing business index

What measures can be taken by India to improve its ranking further in the Logistics Performance Index?

India should focus on improving its score further because its competitors are trying to improve.

For instance, Thailand is slightly ahead of India because of better scores on two components — customs and trade and transport infrastructure.

Therefore, India must also focus on the efficiency of its customs system because India’s custom score has fallen since 2016.

India can take some technical assistance from Singapore, which has the best customs efficiency in the world. An improvement in the score for customs efficiency will have huge benefits for India.

What are other areas that India also needs to focus on?

In addition to the custom, India should also focus on –

Cost of fuel: Before the depreciation of the rupee, diesel prices in India were much higher than in many East Asian countries. However, even after the depreciation of the rupee, diesel prices remain 10 percent higher than in China.

Electricity: Electricity prices are cheaper for consumers than for producers. Due to which, discoms are often at loss.

Freight: India’s rail freight rates for goods needs to be reviewed. This is because even with the recent rupee depreciation of 10 percent, Indian rail freight rates are among the highest in the world.

Warming warning – on WMO’s report on increasing heat

News: The article discusses the recent findings by the World Meteorological Organization (WMO) about projected temperature trends for the next decade

According to the WMO, the annual mean global near-surface temperature for each year between 2023 and 2027 is likely to be 1.1°-1.8°C higher than the average from 1850-1900.

There is a 66% chance that the global near-surface temperature will exceed 1.5°C above pre-industrial levels in at least one year before 2027.

The Intergovernmental Panel on Climate Change (IPCC) has repeatedly said that the 1.5°C threshold should not be breached. However, with current climate policies, the globe is likely to heat beyond 2°C by the end of the century.

The heat due to El Niño-Southern Oscillation (ENSO) combined with human-induced climate change will push global temperatures into uncharted territory.

How can it impact India?

The rise in ocean temperatures is also likely to lead to stronger cyclones. For example, Cyclone Mocha, which crossed through Myanmar, claimed at least 60 lives and caused severe damage. It ended up being stronger than what was initially estimated.

The India Meteorological Department has already indicated that monsoon rainfall will be on the lower side of ‘normal’ due to the El Niño.

Therefore, Increased investments in disaster-related infrastructure are crucial to handle the changing climate conditions.

Globalization will work better for Planet Earth than its alternative

News: McKinsey Global Institute has discarded the view that the path to sustainability will involve moving away from globalization.

The McKinsey research suggests that the resources, innovations, and capital required to reach net-zero emissions are unevenly distributed globally, necessitating international cooperation and exchange.

WTO also supports that trade is crucial for countries to reduce emissions and build climate resilience.

What are some of the examples that prove that globalization is necessary for decarbonization?

First, all major world regions rely on imports for at least one input necessary for the net-zero transition. For instance, over 75% of the global supply of lithium, essential for electric vehicle batteries, comes from Australia and Chile.

Second, Decarbonizing sectors that produce most GHGs will require the development of low-emission technologies and infrastructure. Building and operating these assets requires: new mineral resources, new fuels, and complex manufacturing at scale. Therefore, International supply chains are integral to produce these assets.

Third, Minerals like copper, lithium, and rare earth metals, vital for electric vehicles and renewable power are not available in every country.

Fourth, the distribution of manufactured goods like solar panels and electric vehicles relies on global supply chains.

Fifth, developing countries will need more investment for the net-zero transition. Hence, access to cross-border financial flows will be necessary for these economies.

Sixth, if economies attempt to localize or diversify supply chains, the need for capital and intangibles will increase.

Prelims Oriented Articles (Factly)

What are RBI regulations on green deposits?

Source: The post is based on the article “What are RBI regulations on green deposits?” published in The Hindu on 19th May 2023

What is the News?

The Reserve Bank of India(RBI) has come up with a regulatory framework for banks to accept green deposits from customers. 

What are Green Deposits?

Green deposits are not very different from the regular deposits that banks accept from their customers.

The only major difference is that banks promise to earmark the money that they receive as green deposits towards environment­-friendly projects.

For example, a bank may promise that green deposits will be used towards financing renewable energy projects that fight climate change.

What is the purpose of RBI’s regulatory framework on green deposits? 

The regulatory framework is aimed at preventing greenwashing, which refers to making misleading claims about the positive environmental impact of an activity.

For example, a bank may advertise that their green deposits will have a huge positive impact on the environment, while the actual impact may be minimal.

What does RBI’s regulatory framework on green deposits provide for?

It lays down certain conditions that banks must fulfil to accept green deposits from customers:

Firstly, banks will have to come up with a set of rules or policies approved by their respective Boards that need to be followed while investing in green deposits from customers. These rules need to be made public on the banks’ websites.

Secondly, the banks will also have to disclose regular information about 1) The amount of green deposits received, 2) Deposits allocated towards various green projects and 3) The impact of such investments on the environment.

Thirdly, a third ­party will have to verify the claims made by banks regarding the projects in which the banks invest their green deposits.

Lastly, RBI has also come up with a list of sectors that can be classified as sustainable and thus eligible to receive green deposits. These include renewable energy, waste management, clean transportation, energy efficiency, and afforestation.

Will Green Deposits help Depositors/Investors and the Environment?

Depositors who care about the environment may get some satisfaction from investing their money in environmentally sustainable investment products. But there are challenges since the bank is only able to invest in a certain number of projects with green funds.

When it comes to protecting the environment, green investing enthusiasts believe that putting money into green projects may be one of the best ways to help the environment.

However, critics argue that green investment products are often just a way to make investors feel good about themselves and that these investments don’t really do much good to the environment.

Supreme Court upholds Tamil Nadu law passed to overturn court’s jallikattu ban

Source: The post is based on the article “Supreme Court upholds Tamil Nadu law passed to overturn court’s jallikattu ban” published in TOI on 19th May 2023

What is the News?

The Supreme Court has upheld amendments made by Tamil Nadu, Karnataka and Maharashtra to the Prevention of Cruelty to Animals Act, 1960, to allow the traditional bull-taming sports of Jallikattu and Kambala, and bullock-cart racing.

What is Jallikattu?

Click Here to read

What is Kambala?

Click Here to read

What was the issue before the Supreme Court?

Click Here to read

What did the SC rule on the amendments made by state governments to allow bull-taming sports?

Amendments not a piece of colourable legislation: The Supreme Court held that the amendments passed by the State Governments to allow the traditional bull-taming sports of Jallikattu and Kambala are not a piece of colourable legislation.

Note: Doctrine of Colourable Legislation means when a legislature does not have the power to make laws on a particular subject directly, it cannot make laws on it indirectly.

Amendments minimize cruelty: The amendments minimize cruelty to animals in the concerned sports. Once it is implemented and read with the rules, the sports will not come under the definition of cruelty defined in the 1960 Act.

– Moreover, since the amendment has received Presidential assent; hence, there is no flaw in the state action.

Jallikattu has historical context: The court said that when the legislature has declared that Jallikattu is part of the cultural heritage of Tamil Nadu, the judiciary will not go against the view. 

Amendments do not violate fundamental rights and duties: The amendment does not violate Articles 51-A (g) and 51-A (h) which impose duties on Indian citizens to protect the environment and develop a scientific temper, humanism, spirit of inquiry, and reform, respectively. 

– Further, it also held that the amendment didn’t violate Articles 14 (Right to Equality) and 21 (Right to Life) of the Constitution.

Elections and the airwaves

Source: The post is based on the article “Elections and the airwaves” published in The Hindu on 19th May 2023

What is the News?

The six recognised national parties and one recognised State party were provided free airtime on public broadcasters during the recently concluded Karnataka Assembly elections.

The parties were allocated a base time of 45 minutes and additional slots based on performance in previous polls.

What is the rationale behind giving free airtime on public broadcasters to National and State parties?

Legal Basis: The facility to provide free airtime for political parties during elections was given a statutory basis through the 2003 amendment to the Representation of People Act, 1951.

Supreme Court judgment: The Supreme Court, in its The Secretary, Ministry of Information and Broadcasting vs Cricket Association of Bengal and ANR, 1995 judgment held that airwaves are public property and their use should serve the greater public good. 

– Elections being the lifeblood of a democracy, the misuse or abuse of airwaves to gain an unfair electoral advantage is a key regulatory apprehension of governments around the world.

What is the process of allocating free airtime to public broadcasters?

Time vouchers are distributed by a lottery system by the Election Commission in a transparent process to obviate any preferential treatment in getting primetime slots.

The transcripts of political parties are vetted to ensure that they adhere to relevant codes. These codes proscribe any content which is inter alia critical of other countries, attack religions or other communities or incites violence and personal attacks. 

In case of any disagreements over the content of the script as vetted by the public broadcaster, it is referred to an Apex Committee comprising members from Akashvani and DD whose decision is final.

What is the practice followed in other countries on this?

In the U.S, the Federal Communications Commission which regulates the electronic media in the country, devised the fairness doctrine to keep electioneering on the airwaves equitable.

– The now-defunct fairness doctrine placed a positive obligation on broadcasters who carry political content of one candidate on its programme to extend the same to another candidate in the electoral fray.

In the U.K, political parties are allocated designated slots by Parliament, called party political broadcasts (PPBs) to convey important political information to the people.

– The British Communication watchdog, Ofcom, is responsible for ensuring that PPBs are included in every licensed public service television channel and commercial radio services. Similar requirements are adopted in Singapore, Brazil and Japan.

What are the operational challenges in this?

Firstly, the scheme is available to national and recognised State parties Hence, many analysts argue that it is not truly equitable.

– There are calls for extending the provision to cover private broadcasters akin to the fairness doctrine of the USA designated slot may be mandated for private channels to air content equitably and provide a platform for smaller parties and candidates. 

– However, the ECI is constrained by the considerations of practicality and the fact that airwaves are not an infinite resource.

Secondly, the Apex Committee comprises officials from Akashvani and DD. They are expected to sit in review of their own decision in case of conflict with the political party on the content of the transcript which leaves scope for conflict of interest.

International credit card spends outside India will attract 20% TCS: How cardholders may be impacted

Source: The post is based on the article “International credit card spends outside India will attract 20% TCS: How cardholders may be impacted” published in Indian Express on 19th May 2023

What is the News?

The Central Government has amended rules under the Foreign Exchange Management Act (FEMA) to bring international credit card spending outside India under the Liberalised Remittance Scheme (LRS).

What is the change brought by the government related to the usage of credit cards?

Credit card spending outside India has been brought under the ambit of the Liberalised Remittance Scheme (LRS).

Under the LRS, Indian residents are allowed to remit up to $250,000 per year without any prior approval from the RBI.

This means any remittance beyond USD 2.5 lakh or its equivalent in foreign currency would require approval from the RBI.

Moreover, bringing credit card transactions under LRS enables the levy of a tax collection at source(TCS).

Note: The Union Budget 2023-24 hiked TCS rates to 20% from 5% currently, on overseas tour packages and funds remitted under LRS (other than for education and medical purposes).  The new tax rates will come into effect from July 1, 2023.

What has been the response of experts to these changes in the usage of credit cards abroad?

Firstly, the changes in credit card spending will likely add to the compliance burden of banks and financial institutions. If the aim was to track overseas transactions, the TCS rate of 20% is probably too high and could have been instead at 1-2%.

Secondly, TCS being a direct tax levy collected by the seller of specified goods from the buyer and deposited to the government could add to the burden of a traveller at the time of purchase of a tour package. 

– While taxpayers can claim refunds on the TCS levy at the time of filing their returns, this could result in their funds being locked until the refund is initiated by the tax department.

Thirdly, this move will impact hundreds of thousands of private and business travellers who will have to set aside an additional 20 per cent that will eat into cash flows, bloat budgets, and could end up militating against the seamless movement of people in a globalized world.

Centre pushes vaccination as lumpy skin disease ravages cattle again

Source: The post is based on the article “Centre pushes vaccination as lumpy skin disease ravages cattle again” published in The Hindu on 18th May 2023

What is the News?

Around 10,000 active cases of Lumpy Skin Disease have been detected across four states and a Union territory in the country. Of these, around 2,200 are in Uttarakhand.

What is Lumpy Skin Disease?

Click Here to read

Note: It is not a zoonotic virus, meaning the disease cannot spread to humans. 

Mortality rate: The morbidity of the disease varies between two to 45% and mortality or rate of death is less than 10%.

Cases of Lumpy Skin Disease in India: Currently, the maximum number of cases are from states like Maharashtra, Uttarakhand, Karnataka and Sikkim.

But the gravity of the infection was lower than last year as cattle have now developed herd immunity. 

Note: Herd immunity is when a large number of people are vaccinated against a disease, lowering the chances of others being infected by it.

What are the economic implications of Lumpy Skin Disease?

The spread of the disease can lead to “substantial” and “severe” economic losses.

The disease leads to reduced milk production as the animal becomes weak and also loses appetite due to mouth ulceration. 

The income losses can also be due to poor growth, reduced draught power capacity and reproductive problems associated with abortions, infertility and lack of semen for artificial insemination. 

Movement and trade bans after infection also put an economic strain on the whole value chain.

What is Lumpi-ProVacInd Vaccine?

Click Here to read

RBI to join GFIN’s Greenwashing TechSprint to tackle ESG risks

Source: The post is based on the article “RBI to join GFIN’s Greenwashing TechSprint to tackle ESG risks” published in The Hindu on 17th May 2023

What is the News?

The Reserve Bank of India has opened the application window for all India-based firms and innovators to participate in Global Financial Innovation Network (GFIN)’s first-ever Greenwashing TechSprint. 

What is Greenwashing?

Click Here to read

What is Global Financial Innovation Network(GFIN)?

Global Financial Innovation Network (GFIN) was formally launched in January 2019 by an international group of financial regulators and related organizations.

It is a network of over 70 organizations committed to supporting financial innovation in the interests of consumers. 

It seeks to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas. 

This includes the ability to apply to join a pilot for firms wishing to test innovative products, services or business models across more than one jurisdiction.

What is GFIN Greenwashing TechSprint?

RBI will be among the 13 international regulators taking part in GFIN’s Greenwashing TechSprint.

The objective of the Techsprint is to develop a tool that could help regulators or the market more effectively tackle or mitigate the risks of greenwashing in financial services.