UPSC Essentials: Weekly news express with MCQs— MSMEs to Cheetahs and more

—However, the rise in delayed payments as a percentage of sales has been much lower for “medium” segment units

Key takeaways

—Micro units are those with investments up to Rs 1 crore and turnover of less than Rs 5 crore. For small units, the investment limit is at Rs 10 crore and a turnover is pegged at less than 50 crore. A unit is termed medium if it has investments of up to Rs 50 crore with a turnover of less than Rs 250 crore.

—A Crisil report showed that more than a quarter of India’s MSMEs lost market share of over 3 percent due to the pandemic. And half of them suffered a contraction in their earning margins because of a sharp rise in commodity prices during 2021 fiscal, compared with 2020. This is exacerbated by delayed payments.

—The government, in 2020, had asked both PSUs and the top 500 companies to clear their dues to units in the sector. This was done as part of the government’s plan to ensure enough liquidity for MSME units along with a credit facility for the sector under the Emergency Credit Line Guarantee Scheme (ECLGS) scheme.

—Despite various diktats from the Centre, the value of delayed payments to the MSME sector has increased to Rs 10.7 lakh crore until the end of calendar year 2021.

—Nitin Gadkari, then minister for MSME, had flagged way back in mid-2020 that state and Central governments, their ministries and PSUs, and major industries combined owed an estimated Rs 5 lakh crore to MSMEs.

—According to information from the Ministry of Statistics and Programme Implementation, the share of MSME in India’s manufacturing output during FY’20 was 36.9 per cent and the share of export of specified MSME-related products to all-India exports during FY21 was 49.5 per cent, as per information from Directorate General of Commercial Intelligence and Statistics.

Point to ponder: What are the issues and challenges faced by MSMEs?

1. MCQ:

Which of the following statements are correct with reference to the new definition of MSME?

(1) a micro enterprise, where the investment in Plant and Machinery or Equipment does not
exceed one crore rupees and turnover does not exceed five crore rupees

(2) a small enterprise, where the investment in Plant and Machinery or Equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees;

(3) a medium enterprise, where the investment in Plant and Machinery or Equipment does not exceed fifty crore rupees and turnover does not exceed hundred and fifty crore rupees.

a) 1 and 2                             b) 1 only
c) 2 and 3                             d) none

Making use of forex reserves

Syllabus:

Mains Examination: General Studies III: Indian Economy and issues relating to planning, mobilisation, of resources, growth, development and employment.

—From a peak of $642.45 billion on September 3, India’s foreign exchange reserves have dipped to $572.71 billion as of July 15. That’s a fall of almost $70 billion in just over 10 months.

Key takeaways

—A country typically accumulates forex reserves when its earnings from export of goods and services exceed payments against imports.

—The current account surpluses result in a build-up of reserves, as the central bank mops up all the excess foreign currency flowing into the country.

—The most obvious parallel one can draw is with households or firms, whose excess of incomes over expenditures or retained profits get added to their savings or reserves.

—Just as these savings/reserves are available for use by other households, firms and the government, the current account surpluses of a country may be invested in other countries. In the process, it becomes a net exporter of ‘capital’, in addition to goods and services.

—A higher supply of foreign currency with respect to the domestic currency leads to appreciation of domestic currency.

—The top 12 countries holding the highest foreign exchange reserves at the end of 2021 have large and persistent current account surpluses except for India, USA and Brazil.

—India is an outlier (along with the US and Brazil) among the countries that have accumulated sizeable forex reserves. Only in one out of the 11 years – 2020 – has it run a surplus on the current account of its balance of payments.

—Its $638.5 billion reserves in 2021 were despite current account deficits aggregating over $400 billion during the 11 years. The reserves have been built through import of capital; in other words, from others’ and not its own current account surpluses.

—The combined merchandise trade deficit during the eight years from 2014-15 to 2021-22 was close to $1.2 trillion. This has been offset by surplus in “invisibles’-the deficit was partly offset by a net surplus of $968 billion on the “invisibles” account of the balance of payments.

—Invisibles mainly comprise receipts from export of software services, remittances by overseas Indians, and tourism.

—In India’s case, these receipts have always exceeded payments on account of interest on loans, dividends, royalties, licence fees, foreign travel and assorted business and financial services.

—The capital flows attracted by India have not only financed its excess of imports over exports, but also contributed to an accretion to the official reserves.

—The US and Brazil have had similar stories, albeit with current account deficits larger than India’s and even relative to their reserves. Moreover, forex reserves and current account balances hardly matter to the US, when it is the owner of the reserve currency used in most international transactions.

—Besides current account deficits and capital flows, there is another source of reserve accretion or depletion: valuation effect. Foreign exchange reserves are held in the form of dollars as well as non-dollar currencies and gold, whose value is, in turn, influenced by movements in exchange rates and gold prices.

—A depreciation of the US dollar or higher gold prices, then, causes valuation gains in the existing stock of reserves. A strong dollar or fall in gold prices, likewise, brings down the value of the non-dollar portion of the reserves.

Point to ponder: The forex reserves were accumulated as a buffer against currency volatility, external shocks and sudden stops in capital flows. Explain.

2. MCQ:

Which of the following statement is not correct?

a) A country typically accumulates forex reserves when its payments against  imports exceeds earnings from the export of goods and services .

b) A higher supply of foreign currency with respect to the domestic currency leads to appreciation of domestic currency.

c) Foreign exchange reserves are held in the form of dollars as well as non-dollar currencies and gold, whose values are influenced by movements in exchange rates and gold prices.

d) India is an outlier among the countries that have accumulated sizeable forex reserves.

Suspension of MPs

Syllabus:

Preliminary Examination: Indian Polity and Governance

Main Examination: Parliament and State legislatures—structure, functioning, conduct of business, powers & privileges and issues arising out of these

—Over this week, the two Houses of Parliament have suspended 27 MPs between them.

—The two Houses suspended these MPs because they disrupted proceedings, demanding a debate on rising prices and increasing GST rates on essential commodities. The suspended MPs have started a fifty-hour dharna on the Parliament complex, and Opposition parties are demanding the revocation of the suspensions.

Key takeaways

—The government and not Parliament decides the parliamentary calendar. Therefore, the decision about the time available with Parliament for discussions rests with the government. The parliamentary procedure also prioritises government business over other debates that take place in the legislature.

—In this regard, Parliament has not updated its rules over the last 70 years to give Opposition parties a say in deciding the agenda for discussion. In 2001, Lok Sabha amended its rules to give the Speaker more powers to discipline MPs who disrupt House proceedings.

—Rules for ensuring the smooth functioning of Parliament have been unchanged since 1952. First, the presiding officers can direct an MP to withdraw from the House for any disorderly conduct. If the MP continues disrupting the House, the presiding officer can “name” the legislator. After that, the House can move a motion to suspend the MP until the end of the session. These powers are common to the presiding officers of both Houses.

—In 2001, during Speaker G M C Balayogi’s term, Lok Sabha changed its rules to give the Speaker more powers to deal with grave and disorderly conduct. As per this new rule, the Speaker can “name” an MP, who shall then automatically stand suspended for five days or the remaining part of the session. This rule removes the need for the House to pass a motion for suspension. Rajya Sabha has not incorporated this provision in its procedures.

—Article 122 of the Constitution says parliamentary proceedings cannot be questioned before a court: “No officer or Member of Parliament in whom powers are vested by or under this Constitution for regulating procedure or the conduct of business, or for maintaining order, in Parliament shall be subject to the jurisdiction of any court in respect of the exercise by him of those powers”.

—In some cases, however, courts have intervened in the procedural functioning of legislatures. For example, the Maharashtra Legislative Assembly passed a resolution in its 2021 Monsoon Session suspending 12 BJP MLAs for a year. The matter came before the Supreme Court, which held that the resolution was ineffective in law beyond the remainder of the Monsoon Session.

Point to ponder: Is Parliament obstruction in ‘favor of democracy’?

3. MCQ:

Which of the following statements is/are correct?

1. The origin of the office of Speaker and Deputy Speaker can be traced under the provisions of the Government of India Act of 1919.

2. The nomenclatures from President and Deputy President to the Speaker and Deputy Speaker respectively were changed by The Government of India Act of 1935.

3. Article 122 of the Constitution says parliamentary proceedings cannot be questioned before a court.

a) 1 and 3                          b) 2 and 3
c) 3 only                            d) all are correct

Cheetahs in Kuno wildlife sanctuary

Syllabus:

Preliminary Examination: General issues on Environmental ecology, Bio-diversity and Climate Change

Main Examination: General Studies III: Conservation, environmental pollution and degradation, environmental impact assessment.

—70 years after the cheetah’s extinction, the Indian government is planning to introduce them in the Kuno wildlife sanctuary.

Key takeaways

—India and Namibia signed a Memorandum of Understanding (MoU) on Wednesday to reintroduce the African cheetah in India. The MoU signed by Union Minister for Environment, Forests and Climate Change Bhupender Yadav and the Deputy Prime Minister and Foreign Minister of Namibia Netumbo Nandi-Ndaitwah, in New Delhi, also focuses on cooperation on wildlife conservation and sustainable biodiversity utilisation.

—The Asiatic cheetah was declared extinct in India in 1952 and is a critically endangered species surviving only in Iran. In 1947, there were confirmed records of the cheetah’s presence in India, but the three surviving males were gunned down by Maharaja Ramanuj Pratap Singh Deo of Surguja state in what is now Guru Ghasidas National Park in Chhattisgarh.

—The Indian government has been attempting to reintroduce cheetahs in India since the 1960s and the 1970s, but over the past decade these plans have gained more momentum.

—Back then, the government attempted to bring Asiatic cheetahs from Iran because it was the only country to have a surviving population of the species, but Tehran had declined, in part because of the critically low population numbers of the species, all of which were in the wild.

—Then in September 2009, during Jairam Ramesh’s tenure as environment minister, these plans gained traction when the minister pushed the project as one involving the reintroduction of “the only large mammal to have gone extinct in India.” Around that time, there was indication that the cheetahs would be brought in from the Cheetah Conservation Fund (CCF) in Namibia or other captive facilities based in South Africa.

—While these developments were occurring, the government’s Asiatic Lion Reintroduction Project, an initiative involving the reintroduction of the last wild population of the Asiatic lion found in the Gir Forest National Park in Gujarat, was happening simultaneously.

—The project attempted to establish a new population of Asiatic lions at the Kuno Wildlife Sanctuary in Madhya Pradesh. But this proposed translocation was bitterly contested by the Gujarat state government, on several grounds, one of which was that the lions were icons of the state.

—The dispute reached the Supreme Court of India, which in April 2013 threw a spanner in the works. In its order, the apex court said: “At this stage, in our view, the decision taken by MoEF (Ministry of Environment, Forest and Climate Change) for introduction of African cheetahs first to Kuno and then Asiatic lions, is arbitrary and illegal and clear violation of the statutory requirements provided under the Wildlife Protection Act.

—The order of MoEF to introduce African Cheetahs into Kuno cannot stand in the eye of Law and the same is quashed.” One of the grounds for quashing included the apex court’s objections to flying in a foreign species while ignoring the needs of native species.

—But the Indian government was unwilling to drop its proposal. The government’s National Tiger Conservation Authority approached the court with a review petition in 2016, once again seeking permission to reintroduce cheetahs into Kuno.

—The government argued that the cheetahs would help in conservation of other species in the sanctuary, including that of the grasslands. The legal proceedings shed some light on the government’s plans, which included the possibility of introducing the African Cheetahs to other national parks and sanctuaries in the country.

Point to ponder: The biggest challenge facing conservation in India is how to maintain habitat connectivity that keeps meta-populations self-sufficient (genetically viable) to perform their ecological roles. Discuss

4. MCQ:

According to the Wildlife (Protection) Act, 1972, which of the following animals cannot be hunted by any person except under some provisions provided by law?

1. Gharial

2. Indian wild ass

3. Wild buffalo

Select the correct answer using the code given below:(UPSC 2017)
a)1 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2 and 3

Ramsar sites

Syllabus:

Preliminary Examination: General issues on Environmental ecology, Bio-diversity and Climate Change

Main Examination: General Studies III: Conservation, environmental pollution and degradation, environmental impact assessment.

—Union Environment Minister Bhupendra Yadav Tuesday tweeted that five more Indian wetlands have got Ramsar recognition as “wetlands of international importance”.

—With the addition of these five wetlands, the number of Ramsar Sites in India has gone up to 54, the highest for any country in South Asia.

Key takeaways

—The Ramsar Convention, which came into existence in 1971, is an intergovernmental treaty that provides the framework for national action and international cooperation for the conservation and wise use of wetlands and their resources.

—The Ramsar Convention on Wetlands defines wetlands as “areas of marsh, fen, peat land or water, whether natural or artificial, permanent or temporary, with water that is static or flowing, fresh, brackish or salt, including areas of marine water the depth of which at low tide does not exceed six meters”.

—The Convention defines wise use of wetlands as “the maintenance of their ecological character, achieved through the implementation of ecosystem approaches, within the context of sustainable development”.

—The Indian government’s definition of wetland excludes river channels, paddy fields and other areas where the commercial activity takes place.

—The Wetlands (Conservation and Management) Rules, 2017 notified by the Union Ministry of Environment, Forest and Climate Change define wetlands as :

“area of marsh, fen, peatland or water; whether natural or artificial, permanent or temporary, with water that is static or flowing, fresh, brackish or salt, including areas of marine water the depth of which at low tide does not exceed six meters, but does not include river channels, paddy fields, human-made water bodies/tanks specifically constructed for drinking water purposes and structures specifically constructed for aquaculture, salt production, recreation and irrigation purposes”.

—Globally, wetlands cover 6.4 per cent of the geographical area of the world. In India, according to the National Wetland Inventory and Assessment compiled by the Indian Space Research Organisation (ISRO), wetlands are spread over area which is 4.63 per cent of the total geographical area of the country.

—Of the 1,52,600 sq km, inland-natural wetlands account for 43.4% and coastal-natural wetlands 24.3%. India has 19 types of wetlands. In state-wise distribution of wetlands, Gujarat is at the top with 34,700 sq km (17.56% of total geographical area of the state), or 22.7% of total wetlands areas of the country thanks to a long coastline. It is followed by Andhra Pradesh (14,500 sq km), Uttar Pradesh (12,400 sq km) and West Bengal (11,100 sq km).

—The five new wetlands that have been added to the list are the Karikili Bird Sanctuary, Pallikaranai Marsh Reserve Forest and Pichavaram Mangrove in Tamil Nadu, the Sakhya Sagar in Madhya Pradesh and Pala Wetland in Mizoram.

—India’s tally of 54 designated wetlands is the largest network of Ramsar Sites in South Asia. Of the 54 sites, 10 are in UP, 6 in Punjab, 4 each in Gujarat, Tamil Nadu and Jammu and Kashmir.

—The countries with the most Ramsar Sites are the United Kingdom (175) and Mexico (142), as per the Ramsar List.

—Bolivia has the largest area with 148,000 sq km under the Convention protection.

Point to ponder: What are flyways?

5. MCQ:

Which of the following statements is/are correct?

1. All Ramsar Sites are notified as protected areas under the Wildlife (Protection) Act, 1972.
2. India’s tally of 54 designated wetlands is the largest network of Ramsar Sites in South Asia.
3. The maximum number of Ramsar sites is in the state of Maharashtra.

a) 1 and 3  b) 1 and 2

c) only 2    d) None

Answers to MCQs- 1 (a) , 2 (a) , 3 (d) , 4 (d) , 5 (c)

Answer to previous MCQ- UPSC Essentials: Case Study of the week- The impact of social media on young India’s mental health- (a)