UPSC Daily Current Affairs- January 4, 2022 | Current Affairs: Daily, Weekly & Monthly - CLAT PDF Download

GS-I

Context

• The Prime Minister has paid tributes to Rani Velu Nachiyar on her birth anniversary.

About Velu Nachiyar (1730-1796)

• Rani Velu Nachiyar was a queen of Sivaganga estate from c. 1780–1790. 
• She was the first Indian queen to wage war with the East India Company in India. 
• She is widely known as Veeramangai (“brave woman”).

Her legend

• Early life 
  • Velu Nachiyar was the princess of Ramanathapuram and the only child of King Chellamuthu Vijayaragunatha Sethupathy and Queen Sakandhimuthathal of the Ramnad kingdom. 
  • Nachiyar was trained in many methods of combat, including war match weapons usage, martial arts like Valari, Silambam, horse riding, and archery. 
  • She was a scholar in many languages and was proficient in languages like French, English and Urdu.
• Battles fought 
  • During this period, she formed an army and sought an alliance with Hyder Ali with the aim of launching a campaign against the East India Company in 1780. 
  • When her husband, Muthu Vaduganatha Periyavudaya Thevar was killed in a battle with EIC soldiers, she was drawn into the conflict. 
  • When Velu Nachiyar found the place where the EIC stored some of their ammunition, she arranged a suicide attack on the location, blowing it up.

GS-II

Context

• Recently, the Institute of Mathematical Sciences (IMSc) has completed 60 years of its formation.

About IMSc

• The Institute of Mathematical Sciences (IMSc), founded by Alladi Ramakrishnan on 3rd January 1962. 
• It is located in South Chennai, in the Adyar-Taramani area. 
• It is an autonomous national institution for fundamental research in the areas of Theoretical Physics, Mathematics, Theoretical Computer Science and Computational Biology.
• It is governed by a Board and an Academic Council.
• Research at IMSc is supported by the Department of Atomic Energy of the Government of India and by the Government of Tamil Nadu.
• Programmes
  • It has a vibrant academic program, including an active PhD program to which a select group of students are admitted every year.
  • It supports a large number of scientists at the post-doctoral level and hosts a  visiting scientist programme. The Institute organizes several national and international scientific meetings annually.
  • It is also involved in a range of outreach activities for schools, colleges and the general public.

Context

• Pakistan Foreign Minister Shah has said that his country was ready to host the 19th SAARC Summit and invited India to join it virtually if it is not willing to visit Islamabad.

About SAARC

• The South Asian Association for Regional Cooperation (SAARC) is the regional intergovernmental organization and geopolitical union of states in South Asia. 
• Members: Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. 
• It was established in Dhaka on 8 December 1985. Its secretariat is based in Kathmandu, Nepal.
• The organization promotes the development of economic and regional integration.
• It maintains permanent diplomatic relations at the United Nations as an observer and has developed links with multilateral entities, including the European Union.

Formation of SAARC

• After the USSR invaded Afghanistan in 1979, the security situation in South Asia rapidly deteriorated. 
• In response, the foreign ministers of the initial seven members met in Colombo in 1981. 
• At the meeting, Bangladesh proposed forming a regional association that would meet to discuss matters such as security and trade. 
• While most of the countries present were in favour of the proposal, India and Pakistan were sceptical. 
• Eventually, both countries relented and in 1983 in Dhaka, joined the other five nations in signing the Declaration.

Economic significance of SAARC

• The SAARC comprises 3% of the world’s area, 21% of the world’s population and 4.21% (US$3.67 trillion) of the global economy, as of 2019.
• It launched the South Asian Free Trade Area in 2006.

Major accomplishments

• Forum for discussions: It has provided a platform for representatives from member countries to meet and discuss important issues, something that may have been challenging through bilateral discussions. 
• Diplomatic tool: India and Pakistan for example would struggle to publicly justify a meeting when tensions between the two are particularly high, but both countries often come together under the banner of SAARC. 
• Crisis management: The bloc has also made some headway in signing agreements related to climate change, food security and combating the Covid-19 crisis. 
• Technology: It has been another avenue of cooperation marked by the launch of South Asia Satellite by India.

Limitations to SAARC

• Small scale: Despite its lofty ambitions, SAARC has not become a regional association in the mould of the European Union or the African Union. 
• Internal divisions: Its member states are plagued by internal divisions, most notably the conflict between India and Pakistan. 
• Trade disputes: This in turn has hampered its ability to form comprehensive trade agreements or to meaningfully collaborate on areas such as security, energy and infrastructure. 
• Terrorism: The last SAARC summit to be held in Pakistan has been cancelled several times due to many nations pulling out of the summit citing fears of regional insecurity.

Why must India rethink SAARC?

• Extended diplomacy: India continued to attend Shanghai Cooperation Organisation (SCO) meetings along with their Pakistani counterparts. 
• Pandemic mitigation: Reviving SAARC is crucial to countering the common challenges brought about by the pandemic. 
• Economic cooperation: Apart from the overall GDP slowdown, global job cuts has led to fall in revenue for migrant labour and expatriates from South Asian countries. 
• Countering China: While dealing with China, a unified South Asian platform is a crucial countermeasure for India.

Context

• Recently, the Union Education Minister launched National Educational Alliance for Technology (NEAT) 3.0.

More in News

• Currently, more than 12 lakh socially and economically disadvantaged students have received the benefits of free ed-tech course coupons worth over ₹253 crores under NEAT 3.0.

National Educational Alliance for Technology (NEAT)

• About
  • The Ministry of Education had announced NEAT as a Public-Private partnership model between the Government (through its implementing agency AICTE) and the Education Technology companies across India. 
  • It is an initiative to provide the use of best-developed technological solutions in the education sector to enhance the employability of the youth on a single platform for learners' convenience.
    • These solutions use artificial intelligence for a personalised and customised learning experience for better learning outcomes and skill development in niche areas. 
• Aim
  • To bring the best technological products in education pedagogy on a single platform for the convenience of learners.

Significance

• It will be a game-changer in bridging the digital divide, especially among the economically disadvantaged students and also in fulfilling the knowledge-based requirement of India and the world.
• It bridges the gap between ed-tech companies, academic institutions and students with its B2B (Business to Business) and B2C (Business to Consumer) model.

Context

• China is building a new bridge on Pangong Tso which will provide an additional axis to deploy troops faster between the north and south banks of the lake, and closer to the LAC.

About the Bridge

• The bridge: is being constructed more than 20 km east of Finger 8 on the lake’s north bank. 
  • India says Finger 8 denotes the LAC. 
• North bank and South bank: On the North Bank there is a PLA garrison at Kurnak fort and on the South Bank at Moldo and the distance between the two is around 200 kms. 
• Pangong Tso: An endorheic lake is 135 km long, of which more than two-thirds is under Chinese control. 
  • Khurnak Fort, close to where China is building the new bridge, is near the halfway mark of the boomerang-shaped lake.
• Khurnak Fort: The bridge site is just east of Khurnak Fort in Rutog County where the PLA has frontier bases.
  • Historically a part of India, Khurnak Fort has been under Chinese control since 1958. 
  • From Khurnak Fort, the LAC is considerably west, with India claiming it at Finger 8 and China claiming it at Finger 4.
• Friction points: The north and south banks of the lake were among the several friction points that surfaced after the start of the standoff. 
  • Before India and China pulled back troops from the north and south banks in 2021, the area had seen massive mobilization and the two sides even deployed tanks, barely a few hundred meters apart in some locations. 
  • Indian troops positioned themselves on the peaks there, including Magar Hill, Gurung Hill, Rezang La, Rechin La, and this allowed them to dominate the strategic Spanggur Gap. 
    • It can be used for launching an offensive, as China had done in 1962 and also gave them a view of the PLA garrison at Moldo.
  • Apart from PP15, China is blocking Indian troops from accessing its traditional patrolling limits PP10, PP11, PP11A, PP12 and PP13 in Depsang Plains.

Significance for China

• Mobilize its troops faster: The new bridge built by China will allow it to mobilize its troops faster in this area, hoping to prevent a repeat of what happened in 2020.
• Infrastructural development: The widening of roads, building of new roads and bridges, new bases, airstrips, advance landing bases, etc are not restricted to the eastern Ladakh region, but are happening across the three sectors of the India-China boundary. 
• Upper hand: The Bridge is in Chinese territory, and the Indian Army will have to now factor this in its operational plans. 
• New border law: China has implemented its new border law that calls for strengthening its border defence, development of villages and infrastructure near the borders and also lays down conditions under which emergency measures can be imposed in the border areas. 
  • China renamed 15 places in Arunachal Pradesh on its map. Although the law is not specially meant for India, it has significant implications as the border dispute with China has flared up.

Significance for India

• Improving its infrastructure: India has been improving its infrastructure in the border areas. 
• The Border Roads Organization: completed more than 100 projects in border areas, the majority of which were close to the border with China. 
• Improving its surveillance: India is also improving its surveillance along the entire 3488-km boundary, and has been building new airstrips and landing areas. 
• Occupied key heights on the Kailash range: Towards the end of 2020, India outmanoeuvred China to capture the previously unoccupied heights of the Kailash Range on the south bank of the lake. 
• Nimu-Padam-Darcha axis: India is speeding up work on the Nimu-Padam-Darcha axis which is going to help troops move to Ladakh from other parts of the country.

GS-III

Context

• Economists are predicting a potential virtuous capital investments (capex) cycle to kick in globally as we emerge from the pandemic.

Why capex wave is difficult in India?

• Fall in capital formation: India’s fixed capital formation rate has steadily fallen from 36 per cent of GDP in 2008 to 26 per cent in 2020. 
• For a set of 718 listed companies for which data is consistently available from 2005, the capex growth rate has decreased from 7 per cent in 2008 to around 2 per cent in 2020. 
• Low return on invested capital: The return on invested capital in FY21 is still low at 2-3 per cent compared with 16-18 per cent returns in 2005-08. 
• Structural issues: Land acquisition is still tough, changes to labour laws have been slow, and reform uncertainty has resurfaced with the rollback of the agriculture reform laws. 
• Discouraging current data: As per CMIE data, the quarter ending in June 2021 saw Rs 2.72 lakh crore worth of new projects announced. This fell to Rs 2.22 lakh crore for the September 2021 quarter. 
• This is much below the average of Rs 4 lakh crore a quarter of new project announcements during 2018 and 2019. 
• Further, new projects are concentrated in fewer industries (power, and technology) with the top three accounting for 44 per cent of the total of new projects announced. 
• Low capacity utilisation: At the same time, capacity utilisation for corporate India is at an all-time low. 
• From a peak of 83 per cent in 2010, when capex was running hot, utilisation levels declined to 70 per cent just before the pandemic, and further to 60 per cent in June 2021 as per the RBI’s latest OBICUS data. 
• Capex is funded either from fresh debt or equity issues or from accumulated cash. Large firms are repaying debt.

Why do analysts think that capital investment cycle is about to start?

• Less leveraged: Corporates are less leveraged today compared to 2008.
• Indian corporates repaid debts of more than Rs 1.5 trillion. 
• Fiscal and monetary support: Companies are also more confident of durable fiscal and monetary support. 
• Increased savings: Households have large excess savings built during Covid — $1.7 trillion in the US and roughly $300 billion in India as per a UBS report. 
• Cash: Lastly, corporates are sitting on a large cash pile – S&P 500 firms’ cash has soared from $1 trillion pre-pandemic to $1.5 trillion now.

Conclusion

• It is too early in the cycle to predict anything with confidence, but we need more evidence to predict a CAPEX cycle.

Context

• The open-source software repository service GitHub is in the news after it was used to create and share an offensively named app that sexually harassed Muslim women in India.

About GitHub

• It is the world’s largest open-source developer community platform where users upload their projects and code for others to view, edit, and tweak. 
• Under this platform, any developer can upload whatever software code or app code or software idea they have on the platform and have others collaborate with them to help improve it, find errors, and fix problems. 
  • Any public project can be viewed by others on the platform. Most of the features of the platform are free for users. 
  • Organisations can use paid accounts to upload their software and projects for collaboration.
• The platform uses the software Git, which was created in 2005 by Linus Trovalds, the developer of the open-source operating system Linux, to track changes in a set of files and for coordination in software development. 
• GitHub has longstanding policies against content and conduct involving harassment, discrimination, and inciting violence.

What is not allowed on GitHub?

• Posting gratuitously violent content, misinformation or fake news, active malware or exploits on the platform is prohibited. 
• It does not allow doxxing — revealing personal information with malicious intent — and the invasion of privacy. 
• It claims sexually obscene and pornographic content is not allowed on the platform, even though this does not mean “all nudity or all code and content related to sexuality is prohibited”. 
• If a user is reported as violating the rules of the platform, GitHub can remove or block their content, and suspend or terminate the account. But it is not clear how long a suspension can last.

Context

• There are three major reasons why the GDP data, and hence any narrative of economic recovery based on it, are questionable.

Three issues with the GDP data, and  narrative of economic recovery based on it

• Double deflation problem
  • The new series entailed a shift from a volume-based measurement system to one based on nominal values, thereby making the deflator problem more critical. 
  • Simply put, the NSO calculates real GDP by gathering nominal GDP data in rupees and then deflating this data using various price indices. 
  • The nominal data needs to be deflated twice: Once for outputs and once for inputs. 
  • But the NSO — almost uniquely amongst G20 countries — deflates the nominal data only once.
  • It does not deflate the value of inputs.
  • To see why this is a problem, consider what happens when the price of imported oil goes down. 
  • In that case, input costs will fall and the profits recorded by Indian firms will rise. 
  • This increase in profits is merely the result of a fall in input prices, so it needs to be deflated away. 
  • But the NSO doesn’t deflate away the increase in profits. 
  • Since the cost of inputs is measured by the WPI (wholesale price index), a crude measure of the overestimation caused by the absence of “double deflation” is given by the gap between the WPI and the CPI (consumer price index). 
  • In the 2014-2017 period, oil prices plunged, causing the WPI to fall sharply relative to the CPI.
  • This meant that real growth was probably overstated. 
  • In the last few months, the exact opposite has been happening. WPI inflation is soaring. 
  • The rapid increase in the WPI relative to the CPI is imparting an upward bias to the deflator.
• Sectoral weight not updated
  • When it calculates GDP, it takes a sample of activity in each sector, then aggregates the figures by using sectoral weights. 
  • To make sure that the weights are reasonably accurate, the NSO normally updates them once a decade. 
  • It has now been more than 10 years since the weights were changed, and there are no signs of a base year revision. 
  • As a result, the sectoral weights are still based on the structure of the economy in 2010-11, when in particular the information technology sector was much smaller.
• Measurement of unorganised sector
  • Measurement of the unorganised sector has always been difficult in India. 
  • Once in a while, the NSO undertakes a survey to measure the size of the sector.
  • In the meantime, it simply assumes that the sector has been growing at the same rate as the organised sector. 
  • However, starting in 2016 the unorganised sector has been disproportionately impacted by a series of shocks.
  • In 2018, the NBFC sector reported serious problems, which in turn impacted unorganised sector firms since they were heavily dependent on NBFCs for funds. 
  • From 2020 onwards, the pandemic has impacted the unorganised sector more than the organised sector enterprises. 
  • Despite these shocks, the NSO does not seem to have made any adjustments to its methodology for estimating the growth of the unorganised sector.

Conclusion

• There are serious problems with India’s GDP data. Any analysis of recovery or growth forecast based on this data must be taken with a handful of salt.