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The Indian Express’ UPSC weekly news express covers some of the important and burning topics of current affairs news from this week to help you prepare for UPSC-CSE. Try out the MCQs and check your answers provided towards the end of the article.
Why in news?
— The Union Finance Ministry’s move to bring in virtual digital assets under the money laundering law is aimed at widening the taxation and regulatory net and giving teeth to agencies. But there are concerns over the lack of a central regulator.
KEY TAKEAWAYS
Aanchal Magazine and Soumyarendra Barik Explain:
What exactly did the ministry do?
— On March 7, the government issued a notification bringing transactions involving crypto assets under the Prevention of Money Laundering Act. It laid out the nature of transactions to be covered under PMLA. These are as follows: Exchange between virtual digital assets and fiat currencies; exchange between one or more forms of virtual digital assets; transfer of virtual digital assets; safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets; participation in and provision of financial services related to an issuer’s offer and sale of a virtual digital asset.
Why the move?
— The measure is expected to aid investigative agencies in carrying out action against crypto firms. The Enforcement Directorate and Income Tax Department have either probed or are probing several cases against companies running cryptocurrency exchanges and transactions. ED, for instance, froze the bank balances of the popular WazirX exchange last year.
What is the legal status of crypto in India?
— In the Union Budget last year, even though the government brought in a tax for cryptocurrencies, it did not proceed with framing regulations. Earlier, the Reserve Bank of India had proposed a ban that was set aside by a court order. In July last year, flagging the RBI’s concerns, Finance Minister Nirmala Sitharaman told Parliament that “international collaboration” would be needed for any effective regulation or ban on cryptocurrency.
— From April 2022, India introduced a 30 per cent income tax on gains made from cryptocurrencies. In July 2022, rules regarding 1 per cent tax deducted at source on cryptocurrency came into effect.
How is the notification being viewed by the industry?
— Publicly, the cryptocurrency industry has largely welcomed the move. Internally, however, there are concerns that the notification does not offer entities time to adhere to the fresh norms. The industry is also concerned that in the absence of a central regulator, crypto entities could end up dealing directly with enforcement agencies like the ED.
“Slowly but surely, we are moving towards a regulated crypto ecosystem,” Sumit Gupta, co-founder and CEO of cryptocurrency exchange CoinDCX. “Entities such as CoinDCX are now required by law to conduct due diligence and enhanced due diligence under the PMLA… We have been looking for a way to share data with the FIU-IND for sometime now, and are now delighted that this channel has been opened. My team and I are still looking at the fine print, such as the inclusion of the transfer of VDAs.”
(Source: Finance Ministry brings crypto assets under Prevention of Money Laundering Act: What are the implications? by Aanchal Magazine , Soumyarendra Barik)
Point to ponder: Cryptocurrencies are neither a currency nor an investment. They need to be scrutinised. Discuss.
1. MCQ:
With reference to Non-Fungible Tokens (NFTs), consider the following statements: (2022)
1. They enable the digital representation of physical assets.
2. They are unique cryptographic tokens that exist on a blockchain.
3. They can be traded or exchanged at equivalency and therefore can be used as a medium transactions. of commercial
Which of the statements given above are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Why in news?
— After a visit to the cricket stadium in Ahmedabad with Prime Minister Narendra Modi on Thursday, Australian Prime Minister Anthony Albanese tweeted about the fierce but friendly sporting rivalry between the two nations.
“At the heart of this contest is genuine respect, reflecting the affection and friendship between our peoples…On the field, Australia and India are competing to be the best in the world. Off the field, we are co-operating to build a better world,” Albanese, the first leader of his country to make a bilateral visit to India since Malcolm Turnbull in 2017, posted.
The first in-person India-Australia Annual Summit was held on Friday.
KEY TAKEAWAYS
Shubhajit Roy Explains:
Historical perspective
— The India-Australia bilateral relationship has been underpinned by the shared values of pluralistic, Westminster-style democracies, Commonwealth traditions, expanding economic engagement, and increasing high-level interaction.
— Several common traits, including strong, vibrant, secular, and multicultural democracies, a free press, an independent judicial system, and English language, serve as the foundation for closer co-operation and multifaceted interaction between the two countries.
— The end of the Cold War and beginning of India’s economic reforms in 1991 provided the impetus for the development of closer ties between the two nations. The ever-increasing numbers of Indian students travelling to Australia for higher education, and the growing tourism and sporting links, have played a significant role in strengthening bilateral relations.
— With the passage of time, ties evolved in the direction of a strategic relationship, alongside the existing economic engagement. In recent years, the relationship has charted a new trajectory of transformational growth. With greater convergence of views on issues such as international terrorism, and a shared commitment to a rules-based order in the Indo-Pacific region, the two democracies have taken their cooperation to plurilateral formats, including the Quad (with the United States and Japan).
Strategic ties
— In September 2014, Australia’s Prime Minister Tony Abbott visited India, and in November that year, Modi became the first Indian Prime Minister to make an official visit to Australia after Rajiv Gandhi in 1986. He also became the first Indian PM to address a joint sitting of the Parliament of Australia.
— At the India-Australia Leaders’ Virtual Summit in June 2020, Modi and Prime Minister Scott Morrison elevated the bilateral relationship from the Strategic Partnership concluded in 2009 to a Comprehensive Strategic Partnership (CSP).
— Modi and Morrison spoke by phone on three occasions in 2021, and met in person in Washington DC and at the COP26 climate summit in Glasgow. At the 2nd India-Australia Virtual Summit in March 2022, several key announcements were made, including on a Letter of Intent on Migration and Mobility Partnership Arrangement to foster the exchange of skills, and a Letter of Arrangement for Educational Qualifications Recognition to facilitate the mobility of students and professionals.
— Prime Ministers Modi and Albanese met thrice last year. There has been a series of high-level engagements and exchange of ministerial visits in 2022 and in 2023. The External Affairs Minister travelled to Australia on February 18, and his Australian counterpart Penny Wong visited from February 28 to March 3. Australia’s Education Minister Jason Clare also visited.
China factor
— Ties between Australia and China were strained after Canberra in 2018 banned Chinese telecom firm Huawei from the 5G network. Later, it called for an inquiry into the origins of Covid-19, and slammed China’s human rights record in Xinjiang and Hong Kong. China responded by imposing trade barriers on Australian exports, and by cutting off all ministerial contact.
— India has been facing an aggressive Chinese military along the border. New Delhi and Canberra have been assessing the Chinese challenge since 2013.
— In a speech at the Centre for Policy Research last year, former Australian envoy Peter Varghese said: “China’s abandonment of hide and bide, its ambition to become the predominant power in the Indo-Pacific if not beyond, its use of economic coercion and its desire to recreate the Middle Kingdom where harmony was hierarchy with China at the top: all of this is leading other countries to balance and constrain China. And India is seen as an important element in these strategies.”
— He said “both Australia and India support a rules-based international order”, and that they are partners “in seeking to forge regional institutions in the Indo-Pacific which are inclusive, promote further economic integration, and can help…to manage the tensions…as economic growth across the…region shifts strategic weight and relativities”. The countries’ participation in Quad is an example of their convergence of interests, based on shared concerns.
Wide cooperation
*Economic cooperation: The Economic Cooperation Trade Agreement (ECTA) — the first free trade agreement signed by India with a developed country in a decade — entered into force in December 2022, and has resulted in an immediate reduction of duty to zero on 96% of Indian exports to Australia in value (that is 98% of the tariff lines) and zero duty on 85% of Australia’s exports (in value) to India.
Bilateral trade was US$ 27.5 billion in 2021; with ECTA, there is potential for it to reach around US$ 50 billion in five years.
*People-to-people ties: India is one of the top sources of skilled immigrants to Australia. As per the 2021 Census, around 9.76 lakh people in Australia reported their ancestry as Indian origin, making them the second largest group of overseas-born residents in Australia. To celebrate India@75, the Australian government illuminated more than 40 buildings across the country, and Prime Minister Albanese issued a personal video message.
*Education: The Mechanism for Mutual Recognition of Educational Qualifications (MREQ) was signed on March 2 this year. This will facilitate mobility of students between India and Australia. Deakin University and University of Wollongong are planning to open campuses in India. More than 1 lakh Indian students are pursuing higher education degrees in Australian universities, making Indian students the second largest cohort of foreign students in Australia.
*Defence cooperation: The 2+2 Ministerial Dialogue was held in September 2021, and the Deputy Prime Minister and Defence Minister of Australia visited in June 2022. The Mutual Logistics Support Agreement (MLSA) was concluded during the Virtual Summit in June 2020, and the two militaries held several joint exercises in 2022. Australia will host military operations with India, Japan, and the US in the “Malabar” exercises off the coast of Perth in August, and has invited India to join the Talisman Sabre exercises later this year.
Albanese visited INS Vikrant on Thursday, and declared “there has never been a point in both of our country’s histories where we’ve had such a strong strategic alignment”.
*Clean energy: The countries signed a Letter of Intent on New and Renewable Energy in February 2022 which provides for cooperation towards bringing down the cost of renewable energy technologies, especially ultra low-cost solar and clean hydrogen. During the Virtual Summit in March 2022, India announced matching funds of AUD 10 million for Pacific Island Countries under Infrastructure for Resilient Island States (IRIS) and of AUD 10 million for Pacific Island Countries under International Solar Alliance (ISA).
(Source: The India-Australia relationship: Strategic and trade ties; the China factor by Shubhajit Roy)
Point to ponder: India-Australia ECTA is a landmark in bilateral relations, will deepen ties. How?
2. MCQ:
Supply Chain Resilience Initiative (SCRI) is seen in relation with:
(a) Pakistan, Russia and China
(b) Australia, India and Russia
(c) Japan,US and Australia
(d) Australia, Japan and India
Why in news?
— Each year, March 8 is observed as International Women’s Day to celebrate the social, economic, cultural, and political achievements of women from all around the world. The day also focuses on a call to action for accelerating gender parity and setting agendas and goals in achieving these targets. Events, talks, and awareness campaigns are organised to achieve this goal.
KEY TAKEAWAYS
History of International Women’s Day
— The concept of International Women’s Day first emerged in the early 1900s. Women’s Day first came into existence in 1909 and it was known as National Women’s Day. The day was initially celebrated on 28 February 1909, when 15,000 women marched through New York City demanding shorter hours, better pay, and voting rights.
— Around the same time in Europe, in 1910 to be precise, the second International Conference of Working Women was held in Denmark’s Copenhagen, where Clara Zetkin, who led the Women’s Office for the Social Democratic Party in Germany tabled the idea of an International Women’s Day and on March 9, 1911, International Women’s Day was honoured for the first time in Austria, Denmark, Germany and Switzerland.
— The United Nations (UN) started celebrating International Women’s Day in 197 and in 1977, it was officially agreed that the day will be widely observed on March 8 every year.
Significance of International Women’s Day
— Gender inequality and discrimination are rampant in our societies, and most of the time, women are victims of them. To fight these gender biases and to bring attention to issues such as gender equality, reproductive rights, and violence and abuse against women, International Women’s Day is celebrated. It has become a forum to raise awareness and galvanize change in society.
International Women’s Day Theme – 2023
— The theme for this year’s Women’s Day, according to the United Nations is “DigitALL: Innovation and technology for gender equality” and it aims to emphasise the importance of technology in bringing gender issues to light. Director General of UNESCO Audrey Azoulay, in her message for this year’s International Women’s Day, said, “”This year, on International Women’s Day, I would like to applaud this new generation of young women – for their courage in speaking out, inspiring others and mobilizing their peers, for a more sustainable tomorrow.”
(Source: International Women’s Day 2023: Date, history, importance and why we celebrate Women’s Day on March 8? )
Point to ponder: Women’s Day is a reminder of aspirations of women, realities they are saddled with, and urgent need to close that gap. Discuss.
3. MCQ:
Recently, Ministry of Women & Child Development launched Stree Manoraksha Project in collaboration with:
(a) UN WOMEN
(b) NIMHANS
(c) NITI AAYOG
(d) None of the above
Why in news?
— Since the dawn of the Space Age, the answer has been: It depends. For decades, lunar missions have operated on the time of the country that launched them. But with several lunar explorations heading for the launchpad, the European Space Agency has deemed the current system unsustainable.
— The solution, the agency said last week, is a lunar time zone.
“ESA is not taking the lead on this discussion; we’re just putting a finger on a problem we need to tackle,” said Brice Dellandrea, an engineer with the ESA. “But this is the kind of topic that needs international coordination and consensus.”
KEY TAKEAWAYS
According to New York Times:
Why do we need a time zone for the moon?
— The main objective of establishing a universal timekeeping system for the moon, the ESA said, is to streamline contact among the various countries and entities, public and private, that are coordinating trips to and around the moon.
Which countries are planning lunar missions?
— The discussion about how to do that is happening as things are starting to get busy on and above the lunar surface.
— The M1 lunar lander built by the Japanese company Ispace is set to arrive on the moon in April, when it will try to deploy a rover built by the United Arab Emirates; a robot built by Japan’s space agency, JAXA; and other payloads.
— A six-legged cylindrical robot called the Nova-C lander, built by the Houston-based company Intuitive Machines, is expected to launch on SpaceX’s Falcon 9 and land on the South Pole of the moon in June. Additional uncrewed missions will land by the end of the year, according to Jack Burns, director of the Network for Exploration and Space Science at the University of Colorado, Boulder.
— Those missions, among other possible lunar landings, are happening as NASA prepares to send four astronauts into orbit around the moon next year. That mission will pave the way for the first crewed moon landing since Apollo 17 in December 1972, currently planned for 2025.
— The European Space Agency, meanwhile, is contributing to NASA’s effort to build the Gateway lunar station, which will serve as a way station for future crews on their way to the lunar surface. Last year, China completed construction of its own space station and previously hinted that Chinese astronauts would be on the moon by 2030. South Korea launched its own lunar spacecraft, Danuri, on a SpaceX Falcon rocket from Florida in August. It joined India’s Chandrayaan-2 mission, as well as spacecraft from NASA and China, in its orbit of the moon.
— With increased exploration comes the potential for miscommunication.
“These missions will not only be on or around the moon at the same time, but they will often be interacting as well — potentially relaying communications for one another, performing joint observations or carrying out rendezvous operations,” the ESA said in a statement.
— For all those interactions to happen smoothly, the missions will need to operate on a standardized time, the agency said.
“This idea of timekeeping on the moon is important because it shows the international development of the moon,” Burns said. “Precision timekeeping was key to navigation on the Earth, and it’s key to navigation between the Earth and the moon.”
What could be the methods for establishing a ‘moon time zone’?
— The ESA said that a universal timekeeping system for the moon is needed, but that many details remain to be worked out. One of the questions that has yet to be settled, the agency said, was whether lunar time should be set on the moon or synchronized with Earth.
— Time on Earth is precisely tracked by atomic clocks, but synchronizing time on the moon is tricky because clocks run faster there, gaining around 56 microseconds, or millionths of a second, per day.
— Once a new lunar time zone is established, the methods used to create it will be useful for future space exploration, Burns said. Astronauts could go to Mars in the next two to three decades, he said, and will face similar logistical hurdles that a Martian time zone could address.
“We’re going to be an exploration civilization in which we’re going to be exploring beyond Earth’s orbit,” Burns said. “We’re going to be going to the moon and then, after that, to Mars.”
(Source: The moon may get its own time zone: Here is why Written by Claire Fahy)
Point to ponder: What is the geopolitics around the moon?
4. MCQ:
Tides occur in the oceans and seas due to which among the following?
1. Gravitational force of the Sun
2. Gravitational force of the Moon
3. Centrifugal force of the Earth
Select the correct answer using the code given below.
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Why in news?
— Two recent sets of data released by the National Sample Survey Office (NSSO) and the National Statistical Office (NSO) offer insights into the process of structural transformation in the Indian economy, especially in relation to the agriculture and manufacturing sectors.
— Economists refer to structural transformation as basically a compositional shift that entails the transfer of surplus labour from agriculture to sectors where productivity (output per worker) and average incomes are higher — particularly manufacturing and modern services.
KEY TAKEAWAYS
Harish Damodaran Explains:
— The NSSO’s latest annual Periodic Labour Force Survey (PLFS) report for 2021-22 (July-June) shows the farm sector’s share in the country’s employed labour force at 45.5%. That’s down from 46.5% in 2020-21, but still higher than the 2018-19 low of 42.5%. Clearly, the effects of the pandemic-induced economic disruptions, which had forced a reverse migration to the farms, haven’t fully subsided.
Stalled transformation
— Chart 1 shows the share of agriculture in the total workforce over a longer time period, based on previous years’ PLFS reports (also called ‘Employment and Unemployment’ surveys until 2011-12). That share fell from 64.6% in 1993-94 to 42.5% in 2018-19.
Chart showing the share of agriculture in the total workforce compared to manufacturing (from 1993 to 2021).The biggest decline, from 58.5% to 48.9%, happened between 2004-05 and 2011-12. During this seven-year period, the workforce engaged in farming registered, for the first time in India’s history, a fall even in absolute terms — from 268.6 million to 231.9 million. The share of the labour force employed in manufacturing too, peaked at 12.6% in 2011-12.
— Since 2011-12, this structural transformation has slowed, with the share of agriculture in employment not falling fast enough and, in fact, rising after 2018-19. The share of manufacturing has dropped behind even that of construction and trade, hotels & restaurants.
In 2017-18, the latter two sectors accounted for 11.7% and 12% of the total workforce respectively, as against manufacturing’s 12.1%. But in 2021-22, manufacturing’s share, at 11.6%, was below that of construction (12.4%) as well as trade, hotels & restaurants (12.1%).
— In other words, structural transformation hasn’t just slowed — it has stalled, if not reversed. There is not much labour transfer taking place from farms to factories. The jobs that are getting generated outside agriculture are mostly in construction and low-paid services, whose share has overtaken that of manufacturing. The construction sector has now become the second-largest employer after agriculture. Five years ago, it was at No. 4, after agriculture, manufacturing and trade, hotels & restaurants. Today, manufacturing has been relegated to the fourth spot.
Output vs. Value added
— This links up with the second set of data, which are from the NSO’s first revised estimates of national income for 2021-22, released on February 28. It also contains estimates of ‘output’ and ‘value-added’ by different sectors of the economy.
— Output is simply the gross value of production by an industry or sector. For the economy, it would mean the total value of all goods and services produced during a financial year. However, production involves the use of inputs. Further, the inputs for one industry are the outputs of other industries supplying to it. To avoid double-counting, one has to, then, deduct the value of inputs or intermediate consumption from the value of output. Since the producer merely adds value to the inputs that he uses, economists consider gross value added (GVA), and not gross value of output (GVO), as a measure of aggregate production.
One way to assess how much value an industry or sector actually creates in the process of production is by looking at the ratio of GVA to GVO. GVA, to repeat, is GVO at current prices minus the value of intermediate consumption. Chart 2 shows these ratios for various sectors in 2021-22, based on the NSO’s latest revised estimates of national income.
— Chart showing that value addition is the highest in agriculture for 2021-2022 and the lowest in manufacturing.It can be seen that value addition is the highest in agriculture. For every Rs 100 worth of produce coming from Indian farms, Rs 80 is the value generated by those owning and working the lands. In 2021-22, the GVO from agriculture, forestry & fishing was estimated at Rs 50.71 lakh crore. After deducting the value of intermediate consumption (Rs 10.05 lakh crore), the GVA for the sector worked out to Rs 40.66 lakh crore.
— On the other hand, value addition is the lowest, at just over a fifth, for manufacturing. Although the GVO from manufacturing (Rs 156.90 lakh crore) was more than three times from agriculture, the value of intermediate consumption, too, was over 12 times (Rs 122.93 crore) higher. As a result, the GVA by manufacturing, at Rs 33.97 lakh crore in 2021-22, was way below agriculture’s.
“Purchased inputs are very little in agriculture, unlike manufacturing. The value produced comes mostly from the land rather than the seeds, fertilisers, pesticides, diesel and electricity that farmers consume,” explains Pronab Sen, former Chief Statistician of India.
Link with employment
— High value-addition is a key reason why agriculture is able to employ so many people. The sector’s share in GVO — the total value of all goods and services produced by the country — was only 11.4% in 2021-22. When measured in terms of value-added or GVA though, the share rose to 19%. It was the other way round for manufacturing: its share in overall GVO was as high as 35.4%, while being just 15.8% relative to GVA.
However, even taking into account high value-addition, a sector generating 19% of income — accruing to the primary factors of production, namely the owners of land (farmers), labour (agricultural workers) and capital (lenders) — cannot support 45% of the country’s population.
— Moreover, the GVA-GVO ratio is not a measure of productivity. An agriculturalist may be adding more value to every unit of input he consumes than a manufacturer. But productivity is a function of output per worker or per unit of land — which is low in agriculture compared to modern manufacturing and services. It explains why the average farmer earns less than his urban counterpart. To earn more, the farmer’s productivity has to go up — which means producing more on the same land with fewer hands.
— At the end of the day, there’s no escaping the fact that India has too many people in agriculture. They need to be enabled to find employment in other sectors, which will, in turn, raise agriculture’s productivity.
(Source: What India’s labour force and national income data tell us about jobs shifting from agriculture by Harish Damodaran )
Point to ponder: Agriculture sector has done well, needs ‘re-orientation’. Do you agree?
5. MCQ:
Disguised unemployment generally means (2013)
(a) large number of people remain unemployed
(b) alternative employment is not available
(c) marginal productivity of labour is zero
(d) productivity of workers is low
Share your views, answers and suggestions in the comment box or at manas.srivastava@indianexpress.com
