IAS JUNIOR CURRENT AFFAIRS PRELIMS AUGUST 2019

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IAS JUNIOR CURRENT AFFAIRS PRELIMS AUGUST 2019
UPSC PRELIMS 2020 - CURRENT AFFAIRS AUGUST 2019

                                                  UPSC 2020
                     IAS JUNIOR CURRENT AFFAIRS PRELIMS
                                               AUGUST 2019
                            (Useful for all competitive exams)

 For any career related guidance call +9740931896 or mail to info@iasjunior.com

WWW.IASJUNIOR.COM                                                                                   Page 1
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Contents
Topic in Syllabus: Indian Society ...........................................................................................................................................4
   Topic : National Essential Diagnostics List (NEDL) ...............................................................................................................4
   Topic : Notifiable Diseases ................................................................................................................................................5
   Topic: Samagra Shiksha Abhiyan .......................................................................................................................................6
Topic in Syllabus: Indian Economy ...................................................................................................................................... 10
   Topic : RBI Surplus Transfer ............................................................................................................................................ 10
   Topic : FDI Review .......................................................................................................................................................... 12
   Topic: Handicrafts - Hastshilp Vikas Yojana...................................................................................................................... 14
   Topic: Companies (Amendment) Bill, 2019 ...................................................................................................................... 16
   Topic: Fintech Sandbox .................................................................................................................................................. 17
   Topic: Ban Crypto Currency? ........................................................................................................................................... 18
   Topic: RBI’s Monetary Policy ........................................................................................................................................... 21
   Topic : India’s Services Exports to exceed Merchandise Exports ....................................................................................... 23
   Topic : Direct Tax Code ................................................................................................................................................... 25
   Topic : Micro credit model .............................................................................................................................................. 27
Topic in Syllabus: International Affairs ................................................................................................................................ 29
   Topic: India ranks 52 on Global Innovation Index............................................................................................................. 29
   Topic:Cambodia - China secret agreement ....................................................................................................................... 31
   Topic : Indo-Pak tensions ................................................................................................................................................ 33
   Topic : WTO – Developing Country Status........................................................................................................................ 34
Topic in Syllabus: Ecology & Environment ........................................................................................................................... 36
   Topic : 18th CoP of CITES, Geneva ................................................................................................................................... 36
   Topic: Tiger census Report .............................................................................................................................................. 38
   Topic : Water Stress ........................................................................................................................................................ 41
   Topic : Kajin Sara lake - World’s Highest Lake .................................................................................................................. 44
   Topic : Wildfires in Arctic ................................................................................................................................................ 45
   Topic : First Monument of a Glacier - Okjokull Glacier...................................................................................................... 46
   Topic : India biggest emitter of sulphur dioxide ............................................................................................................... 47
Topic in Syllabus: Science & Technology .............................................................................................................................. 49
   Topic: Gravitational Lensing ............................................................................................................................................ 49
   Topic: Deep Ocean Mission ............................................................................................................................................. 50
   Topic : Perseid Meteor Shower ....................................................................................................................................... 52

WWW.IASJUNIOR.COM                                                                                                                                                        Page 2
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   Topic : Indian researchers develop bone substitutes from eggshells ................................................................................. 53
   Topic : Alien species........................................................................................................................................................ 54
Topic in Syllabus: Heritage & Culture .................................................................................................................................. 56
   Topic : Dindigul Lock & Kandangi Sarees .......................................................................................................................... 56
   Topic: Endangered Languages ......................................................................................................................................... 58
   Topic : Indus Script ......................................................................................................................................................... 60
Topic in Syllabus: Indian Polity ............................................................................................................................................ 62
   Topic : Article 371F ......................................................................................................................................................... 62
Topic in Syllabus: Indian Governance .................................................................................................................................. 63
   Topic : Naga Peace Framework Agreement...................................................................................................................... 63
   Topic : States Reserving Jobs for Locals ........................................................................................................................... 65
 Topic : Cancer Treatment covered under the Ayushman Bharat Yojana- Pradhan Mantri Jan Arogya Yojana
(PM-JAY) ........................................................................................................................................................................................ 66
Topic in Syllabus: Indian Geography .................................................................................................................................... 68
   Topic: Odisha gets GI tag forRasagola,demands for ChhenaPoda and Arisa ...................................................................... 68
   Topic: Census 2021 ......................................................................................................................................................... 69
   Topic : Nematodes.......................................................................................................................................................... 72
   Topic: Study on Floods .................................................................................................................................................... 73
   Topic : Amazon Rainforest .............................................................................................................................................. 75
Topic in Syllabus: World Geography .................................................................................................................................... 76
   Topic : World Population Prospects 2019 ........................................................................................................................ 76
   Topic : MRD discovered in Northern Ethiopia .................................................................................................................. 78
Topic in Syllabus: Schemes & Programmes .......................................................................................................................... 79
   Topic : SANKALP Scheme ................................................................................................................................................ 79
   Topic : PM Kisan Maan Dhan Yojana ............................................................................................................................... 81
Topic in Syllabus: Indian History ......................................................................................................................................... 82
   Topic : Indian Indentured Labourers ................................................................................................................................ 82
Infographic Summary ......................................................................................................................................................... 85

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  Topic in Syllabus: Indian Society
Topic : National Essential Diagnostics List (NEDL)

                                                Context:

                                                The Indian Council of Medical Research (ICMR) has finalised the
                                                country’s first National Essential Diagnostics List (NEDL).

                                                    • India has become the first country in the world to compile
                                                such a list that would provide guidance to the government for
                                                deciding the kind of diagnostic tests that different healthcare facilities
                                                in villages and remote areas require.

                                                 Background:

   •   In India, diagnostics are regulated under the regulatory provisions of the Medical Device Rules, 2017.
   •   Diagnostics (medical devices and in vitro diagnostics) follow a regulatory framework based on the drug
       regulations under the Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules 1945.

NEDL:

   •   Level of Healthcare: NEDL has been developed for all levels of health care – village level, primary, secondary
       and tertiary care.
   •   It builds upon the Free Diagnostics Service Initiative (FDI) and other diagnostics initiatives of the Health
       Ministry to provide an expanded basket of tests at different levels of the public health system.

Free Diagnostics Service Initiative (FDI):

FDI was launched in July 2015. Under this initiative, the National Health Mission (NHM) is supporting all states to
provide essential diagnostics – laboratory and radiology at their public health facilities, free of cost.

Key Points:

   •   It includes a group of general laboratory tests for routine patient care and for diagnosis of communicable and
       non- communicable diseases.
   •   Inclusion of the diagnostic test on specific diseases selected on the basis of disease burden: Vector borne
       diseases (Malaria, Dengue, Filariasis, Chikungunya, Japanese encephalitis); Leptospirosis, Brucellosis,
       Tuberculosis, Hepatitis A, B C and E, HIV, Syphilis.
   •   Certain tests have been put as desirable tests and should be included in regions or states with high disease
       burden of that disease.
   •   It also encompasses tests relevant for new programmes such as Health and Wellness Centres (HWCs) under
       the Pradhan Mantri Jan Arogya Yojana.
   •   In addition to tests, corresponding In Vitro Diagnostics (IVD) products have also been recommended. In vitro
       diagnostics are tests done on samples such as blood or tissue that have been taken from the human body

WWW.IASJUNIOR.COM                                                                                                  Page 4
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   •   A guidance document on “Regulatory framework for diagnostics: National and International” has been
       included.
   •   It also recommends list of human resources such as ASHA workers, lab technicians pathologists for different
       levels of health care as per the proposed list of diagnostics.

Significance:

   •   Diagnostics serve a key role in improving health and quality of life.
   •   While affordability of diagnostics is a prime concern in low, middle-income countries like India, low cost,
       inaccurate diagnostics have made their way into the Indian market which has no place in the quality health care
       system.
   •   The implementation of NEDL would enable improved health care services delivery through evidence-based
       care, improved patient outcomes and reduction in out -of pocket expenditure; effective utilisation of public
       health facilities.
   •   It would help in effective assessment of disease burden, disease trends, surveillance, and outbreak
       identification; and address antimicrobial resistance crisis too

Sample Question:

Which organisation launched the Malaria Elimination Research Alliance recently?

(A)Indian Council of Medical Research
(B)World Health Organisation
(C)Ministry of Women and Child Development
(D)NABARD

Solution: (A)

Indian Council of Medical Research (ICMR) recently launched the Malaria Elimination Research Alliance (MERA)-
India and organised the Stakeholders’ Meeting at ICMR headquarters, New Delhi to have vibrant discussions on the
roadmap of the Alliance.

Topic : Notifiable Diseases

Context

A month after Union Health Minister asked the Delhi government to
make malaria and dengue notifiable diseases, the South Delhi
Municipal Corporation (SDMC) has initiated the work to notify
malaria in Delhi.

Notifiable disease:

A notifiable disease is any disease that is required by law to be

WWW.IASJUNIOR.COM                                                                                              Page 5
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reported to government authorities.

The World Health Organization’s International Health Regulations, 1969 require disease reporting to the WHO in
order to help with its global surveillance and advisory role.

                                               Steps:

                                               Registered medical practitioners need to notify such diseases in a proper
                                               form within three days, or notify verbally via phone within 24
                                               hours depending on the urgency of the situation.

                                               The onus of notifying any disease and the implementation lies with the
                                               state government. Any failure to report a notifiable disease is a criminal
                                               offence and the state government can take necessary actions against
                                               defaulters.

                                               Which diseases are notifiable disease?

                                               The Centre has notified several diseases such as cholera, diphtheria,
                                               encephalitis, leprosy, meningitis, pertussis (whooping cough), plague,
                                               tuberculosis, AIDS, hepatitis, measles, yellow fever, malaria dengue,
                                               etc.

Significance:

    •   This reporting allows the authorities to monitor the disease, and provides early warning of possible outbreaks.
    •   The process helps the government keep track and formulate a plan for elimination and control. In less
        infectious conditions, it improves information about the burden and distribution of disease.

Sample Question:

Which of the following is the back bone in disease prevention?

a. Epidemeology

b. Demography

c. Vital Statistics

d. Health Statistics

Answer: a

 Topic: Samagra Shiksha Abhiyan

WWW.IASJUNIOR.COM                                                                                                  Page 6
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Context:

The Union Budget, 2018-19, has proposed to treat school
education holistically without segmentation from pre-nursery to
Class 12. Samagra Shiksha – an overarching programme for the
school education sector extending from pre-school to class 12 has
been, therefore, prepared with the broader goal of improving school
effectiveness measured in terms of equal opportunities for
schooling and equitable learning outcomes

Sustainable Development Goals

   •   The Goal SDG-4.1 states that “By 2030, ensure that all boys and girls complete free, equitable and quality
       primary and secondary education leading to relevant and effective learning outcomes.
   •   Further the SDG 4.5 states that “By 2030, eliminate gender disparities in education and ensure equal access
       to all levels of Education and vocational training for the vulnerable, including persons with disabilities,
       indigenous peoples and children in vulnerable situations”

Objectives:

   •   Provision of quality education and enhancing learning outcomes of students.
   •   Bridging Social and Gender Gaps in School Education.
   •   Ensuring equity and inclusion at all levels of school education.
   •   Ensuring minimum standards in schooling provisions.
   •   Promoting Vocationalisation of education.
   •   Support States in implementation of Right of Children to Free and Compulsory Education (RTE) Act, 2009;
       and
   •   Strengthening and up-gradation of State Council for Educational Research and Training (SCERTs)/State
       Institutes of Education and District Institute of Education and Training (DIET) as a nodal agencies for teacher
       training

Features:

Holistic approach to education

   •   Treat school education holistically as a continuum from Pre-school to Class 12
   •   Inclusion of senior secondary levels and pre-school levels in support for School education for the first time

Administrative reform

   •   Single and unified administrative structure leading to harmonized implementation
   •   Flexibility to States to prioritise their interventions under the Scheme
   •   An integrated administration looking at ‘school’ as a continuum

Focus on Quality of Education

   •   Enhanced focus on improving the quality of education by focusing on the two T’s – Teachers and
       Technology
   •   Enhanced Capacity Building of Teachers and School Heads

WWW.IASJUNIOR.COM                                                                                                 Page 7
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   •   Focus on strengthening Teacher Education Institutions like SCERTs and DIETs to improve the quality of
       prospective teachers in the system
   •   SCERT to be the nodal institution for in-service and pre-service teacher training – will make training dynamic
       and need-based
   •   Support for Rashtriya Avishkar Abhiyan to promote Science and Maths learning in schools
   •   Support Padhe Bharat Badhe Bharat Programme to develop foundational skills at primary level.
   •   Provision of library grants for every school ranging from Rs. 5000 to Rs. 20000

Focus on Digital Education

   •   Support ‘Operation Digital Board’in all secondary schools over a period of 5 years, which will revolutionize
       education- easy to understand, technology based learning classrooms will become flipped classrooms.
   •   Enhanced use of digital technology in education through smart classrooms, digital boards and DTH channels
   •   Digital initiatives like Unified District Information on School Education(UDISE+), Shagun,to be strengthened
   •   Strengthening of ICT infrastructure in schools from upper primary to higher secondary level

Strengthening of Schools

   •   Enhanced Transport facility to children across all classes from I to VIII for universal access to school
   •   Composite school grant increased from Rs. 14,500-50,000 to Rs. 25,000- 1 Lakh and to be allocated on the
       basis of school enrolment.
   •   Specific provision for Swachhta activities – support ‘Swachh Vidyalaya’
   •   Improve the Quality of Infrastructure in Government Schools

Focus on Girl Education

   •   Upgradation of Kasturba Gandhi Balika Vidyalayas (KGBVs) from Class 6-8 to Class 6-12.
   •   Self-defence training for girls from upper primary to senior secondary stage
   •   Enhanced Commitment to ‘BetiBachaoBetiPadhao’

Focus on Inclusion

   •   Allocation for uniforms under RTE Act enhanced from Rs. 400 to Rs. 600 per child per annum.
   •   Allocation for textbooks under the RTE Act, enhanced from Rs. 150/250 to Rs. 250/400 per child per annum.
       Energized textbooks to be introduced.
   •   Allocation for Children with Special Needs (CwSN) increased from Rs. 3000 to Rs. 3500 per child per annum.
       Stipend of Rs. 200 per month for Girls with Special Needs from Classes 1 to 12

Focus on Skill Development

   •   Exposure to Vocational Skills at Upper Primary Level would be extended.
   •   Vocational education for Class 9-12 as integrated with the curriculum and to be made more practical and
       industry oriented.
   •   Reinforce emphasis on ‘Kaushal Vikas’

Focus on Sports and Physical Education

   •   Sports Education to be an integral part of curriculum

WWW.IASJUNIOR.COM                                                                                              Page 8
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    •    Every school will receive sports equipment at the cost of Rs. 5000 for Primary Schools, Rs. 10,000 for upper
         primary schools and up to Rs. 25,000 for secondary and senior secondary schools to inculcate and emphasize
         the relevance of sports

Focus on Regional Balance

    •    Promote Balanced Educational Development
    •    Preference to Educationally Backward Blocks(EBBs), LWE affected districts, Special Focus Districts
         (SFDs), Border areas and the 117 aspirational districts identified by Niti Aayog

Implementation:

    •    The Scheme will be implemented as a Centrally Sponsored Scheme by the Department through a single
         State Implementation Society (SIS) at the State/UT level.
    •    At the National level, there would be a Governing Council headed by Minister of Human Resource
         Development and a Project Approval Board (PAB) headed by Secretary, Department of School Education
         and Literacy.
    •    The Governing Council will be empowered to modify financial and programmatic norms and approve the
         detailed guidelines for implementation within the overall Framework of the scheme. Such modifications will
         include innovations and interventions to improve the quality of school education
    •    The Department will be assisted by a Technical Support Group (TSG) at Educational Consultants of
         India Limited (EdCIL) to provide technical support in functional areas pertaining to access, equity and
         quality education by merging the TSGs of the Schemes of SSA, RMSA and TE. States would be expected to
         bring a single Plan for the entire school education sector

Sample Question:

Which among the following are the features of Samagra Shiksha scheme-

1 . It focuses on two T’s – Teachers and Technology.

2 . Strengthening of libraries through annual grant.

3 . Every school will get sports equipment.

4 . Kasturba Gandhi BalikaVidyalaya (KGBV) to be expanded from Class 6-8 to Class 6-12.

codes:

a .1 , 2 & 3

b .2 , 3 & 4

c .1 , 3 & 4

d .1 , 2 , 3 & 4

WWW.IASJUNIOR.COM                                                                                              Page 9
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Answer – d

  Topic in Syllabus: Indian Economy
Topic : RBI Surplus Transfer

                                                 Context:

                                                The Central Board of the Reserve Bank of India (RBI) on 26th
                                                August decided to transfer a sum of ₹1,76,051 crore to the
                                                Government comprising of ₹1,23,414 crore of surplus for the year
                                                2018-19 and ₹52,637 crore of excess provisions identified as per the
                                                revised Economic Capital Framework (ECF) adopted at the meeting
                                                of the Central Board.

                                                 Reason:

                                                    • Overcapitalised RBI: The narrative that the RBI is an
                                                overcapitalised institution has been in discussions for some time.
                                                    • The Economic Survey of 2016-17 found that the RBI is one of
                                                the most capitalised central banks in the world and noted, “There is
                                                no particular reason why this extra capital should be kept with the
       RBI”.
   •   Some central banks around the world (like the US and UK) keep 13% to 14% of their assets as a reserve
       compared to RBI’s 27% and some (like Russia) more than that.
   •   Economists in the past have argued for RBI releasing ‘extra’ capital that can be put to productive use by the
       government. The Malegam Committee estimated the excess (in 2013) at ₹1.49 lakh crore.

Surplus Distribution Policy:

The Surplus Distribution Policy of RBI that was finalized is in line with the recommendations of the Bimal Jalan
committeethat was formed by the RBI, in consultation with the Government, to review the extant Economic Capital
Framework of the RBI.

Bimal Jalan committee:

   •   The Committee’s recommendations were based on the consideration of the role of central banks’ financial
       resilience, cross-country practices, statutory provisions and the impact of the RBI’s public policy mandate and
       operating environment on its balance sheet and the risks involved.
   •   In view of the RBI’s function as a lender of last resort, it needs to maintain some Contingent Risk Buffer
       (CRB) to insure the economy against any tail risk of financial stability crisis.
   •   The Jalan Committee recommended that the CRB needs to be maintained at a range of 5.5% to 6.5% of the
       RBI’s balance sheet.
   •   The surplus transfer policy is now formula based and thus transparent, which is an important departure from
       the past.

WWW.IASJUNIOR.COM                                                                                              Page 10
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   •   The formula-based CRB will take care of the risk provisioning and the central board of RBI will decide on the
       level of risk provisioning.

RBI Surplus Transfer:

RBI’s Earning:

   •   Returns earned on its foreign currency assets, which could be in the form of bonds and treasury bills of other
       central banks or top-rated securities, and deposits with other central banks.
   •   Interest on its holdings of local rupee-denominated government bonds or securities, and while lending to banks
       for very short tenures, such as overnight.
   •   Management commission on handling the borrowings of state governments and the central government.

RBI’s Expenditure:

Printing of currency notes and on staff, besides the commission it gives to banks for undertaking transactions on
behalf of the government across the country, and to primary dealers, including banks, for underwriting some of these
borrowings.

Surplus Transfer:

   •   RBI transfers the surplus – that is, the excess of income over expenditure – to the government, in accordance
       with Section 47 (Allocation of Surplus Profits) of the Reserve Bank of India Act, 1934.
   •   A technical Committee of the RBI Board headed by Y H Malegam (2013), which reviewed the adequacy of
       reserves and surplus distribution policy, recommended a higher transfer to the government.
   •   By and large, with a few exceptions, the quantum of surplus transfer averages around 0.5% of the GDP.

Implications

   •   It would help the government to go for bank recapitalisation in a big way given the economic slowdown, when
       channels of credit disbursements are choked because of a lack of capital with the commercial banks.
   •   The transfer of the additional surplus from the RBI could enable the government to pursue efforts
       towards stimulating the economy while maintaining budget discipline.
   •   The government, in the case of revenue shortages, would be able to meet the fiscal deficit target without
       cutting expenditures on important sectors.
   •   It would give the Government necessary fiscal space to maneuver structural reforms to boost economic
       growth.
   •   The surplus transfer from the RBI has implications for the central bank’s balance sheet, government budget,
       financial market and, above all, monetary policy and debt management by the RBI.

Way Forward

   •   The decision of the RBI Board must be welcomed as it would help the government in combating the economic
       slowdown and to conform to the fiscal targets.
   •   It is hoped that the government will be prudent in using these funds.
   •   However, the RBI dividend transfer is not a panacea. India’s economy needs sustained structural reforms to
       boost potential growth.

WWW.IASJUNIOR.COM                                                                                             Page 11
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Sample Question:

Which out of the following has maximum weightage among core sectors?

a. Crude Oil

b. Steel

c. Electricity

d. Petroleum refinery products

Answer: d

Topic : FDI Review

                                                     Context:

                                                    Recently, the Union Cabinet has approved the proposal for the review
                                                    of Foreign Direct Investment in various sectors.

                                                     Background:

                                                        • This will result in making India a more attractive FDI
                                                    destination, leading to benefits of increased investments, employment
                                                    and growth.
                                                        • As of now (March 2019), Singapore remains India’s top FDI
                                                    source, twice that from Mauritius.

Steps Taken:

    •      100% FDI under automatic route is permitted for sale of coal, for coal mining activities including
           associated processing infrastructure.
    •      The government has allowed 100% FDI through the automatic route for contract manufacturing.It
           will augment the Make in India initiative and will attract global companies in India looking to establish
           alternative manufacturing hubs
    •      Easing norms for FDI in Single Brand Retail Trading (SBRT):Retail trading through online trade by
           SBRT, can also be undertaken prior to the opening of brick and mortar stores (it should be opened within 2
           years from the date of start of online retail).
    •      Online sales will lead to the creation of jobs in logistics, digital payments, customer care, training and product
           skilling.
    •      It has been decided to permit 26% FDI under government route for uploading/ streaming of News &
           Current Affairs through Digital Media, on the lines of print media.
    •      In India, FDI policy provisions have been progressively liberalized across various sectors in recent years to
           make India an attractive investment destination.

WWW.IASJUNIOR.COM                                                                                                     Page 12
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    •   Some of the sectors include Defence, Construction Development, Trading, Pharmaceuticals, Power Exchanges,
        Insurance, Pension, Other Financial Services, Asset reconstruction Companies, Broadcasting and Civil
        Aviation.

Way Forward:

    •   Due to these measures, a total FDI into India from 2014-15 to 2018-19 has been $ 286 billion.
    •   Despite the dim global picture (UNCTAD's World Investment Report 2019), India continues to remain a
        preferred and attractive destination for global FDI flows.
    •   India seeks to use this potential to attract far more foreign investment which can be achieved inter-alia by
        further liberalizing and simplifying the FDI policy regime.

Foreign direct investment (FDI)

    •   It is an investment from a party in one country into a business or corporation in another country with the
        intention of establishing a lasting interest.
    •   Lasting interest differentiates FDI from foreign portfolio investments, where investors passively hold securities
        from a foreign country.
    •   Foreign direct investment can be made by expanding one’s business into a foreign country or by becoming the
        owner of a company in another country.

Contract manufacturing

The business model in which a firm hires a contract manufacturer to produce components or final products based on
the hiring firm’s design. Companies outsource their production to other companies.

Contract manufacturing - Benefits:

    •   Cost Savings: Companies save on their capital costs and labour costs because they do not have to pay for a
        facility and the equipment needed for production.
    •   Some companies may look to contract manufacture in low-cost countries, such as India, to benefit from the
        low cost of labour.
    •   Advanced Skills: Companies can take advantage of skills that they may not possess, but the contract
        manufacturer does.
    •   Focus: Companies can focus on their core competencies better if they can hand off base production to an
        outside company.
    •   Economies of Scale: Contract Manufacturers have multiple customers that they produce, it may lead to
        reduced costs in acquiring raw materials by benefiting from economies of scale.

Sample Question:

Which of the following types of FDI includes creation of new assets and production facilities in the host country?

a. brownfield investment

b. strategic alliances

c. merger and acquisition
WWW.IASJUNIOR.COM                                                                                                 Page 13
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d. greenfield investment

Answer: d

Topic: Handicrafts - Hastshilp Vikas Yojana

                                                 Context:

                                                The Government launched the Ambedkar Hastshilp Vikas Yojana
                                                (AHVY) in the year 2001-2002 to empower and develop artesian
                                                into a well-organized market.

                                                 Ambedkar Hastshilp Vikas Yojana:

                                                     • It is one of the component of National Handicraft
                                                 Development Programme for development and promotion of
                                                 Handicrafts Sector.
                                                     • It is a cluster specific schemein which Government has
                                                 identified and adopted 90 clusters covering aspirational districts,
                                                 women clusters, weaker section and export potential clusters.
                                                     • These clusters will be transformed in a time period of 3 years
       by ensuring self-sustainment of the Self Help Groups/artisans of these clusters.

Features of the scheme:

   •   Design & Technology Upgradation
   •   Human Resource Development
   •   Direct Benefit to Artisans
   •   Infrastructure and Technology Support
   •   Research and Development
   •   Marketing Support & Services

Handlooms and Handicrafts:

   •   Handloom provides employment to more than 43 lakh Weaversand other associated people directly and
       indirectly.
   •   In Non-agricultural Season Handicrafts and Handlooms provide subsidiary employmentto their practitioners.
   •   They also help in getting social recognitionto the respective producer community and thereby in maintaining
       social stability and harmony in the rural society. They exhibit the glory of their native places.
   •   Preventing Migrationof artisans, weavers and small-marginal farmers from rural to urban areas is their
       contribution in the rural economy.

Challenges

   •   Consumers changing preferences
   •   Challenges from the international market
   •   Availability of low cost alternative
   •   Lack of interest in the younger generation process chain the traditional craftsmanship
WWW.IASJUNIOR.COM                                                                                             Page 14
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Measures/Initiatives

   •   National Handloom development programme– It is an umbrella scheme consisting of two major
       components – overall development of the Handloom sector and welfare of the Handloom Weavers.
   •   Weavers Mudra scheme– Concessional credit scheme for the Weavers was launched in the year 2015. Under
       the scheme loans are provided at concessional rate of 6% for a period of 3 years.
   •   Apart from production, marketing assistance is also provided directly to the Weavers or through Agencies
       like state Handloom Corporation with a view to link the buyers and sellers and does encourage direct
       marketing.
   •   In order to expand the Handloom market with the help of modern technology 21 leading e commerce
       companies have been engaged for online marketing of Handloom products.
   •   BunKar Mitra helpline was introduced in the year 2017 as a solution to Weavers professional queries.
   •   Sankul is the art cum trade centre and crafts museum dedicated to the public in September 2017 to provide
       standard marketing facilities to the Weavers and artisan.
   •   The Indian Handloom brand (IHB) initiative to create market for premium Handloom products. It includes
       measures like widespread awareness and brand building activities.
   •   Handloom Mark was launched to assure quality and genuineness of Handloom products to the consumers.
   •   Enterprise resource planning (ERP)system and e-Dhaga mobile app may also be named in the context of
       use of technology in this traditional domain.
   •   Sant Kabir award, national Award and national merit certificate are some of the motivational efforts to
       encourage the rivers and their younger generation to sustain their ancestral livelihoods.
   •   As a long term measure, professional courses in Handloom Technology have been introduced through six
       Central Indian Institutes of Handloom Technology.
   •   Mahatma Gandhi Bunker Bima Yojana and Health Insurance Scheme are significant among the Welfare
       measures for the Weavers.
   •   The National Handicrafts Development Programme strives for integrated development of handicraft sector.
   •   Comprehensive Handicrafts cluster Development Scheme has three fold objectives and infrastructure
       development, technology upgradation, human resource development and development and marketing support
       and services.
   •   Handicraft mark a Trademark certification to ensure authenticity of the product and to provide collective
       identity to the artefacts.
   •   Pehchan aims at facilitating artisans smooth access to their due benefits

Sample Question:

To address the challenges being faced by handloom and handicrafts industries, Govt. of India is implementing
which of the following schemes for Handloom Sector?
a. Yarn Supply Scheme (YSS)
b. Ambedkar Hastshilp Vikas Yojana
c. Research & Development Scheme
d. Mega Cluster Scheme

Answer: b

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Topic: Companies (Amendment) Bill, 2019

                                              Context:

                                              The Lok Sabha has passed the Companies (Amendment) Bill, 2019,
                                              recently. The legislation is aimed at tightening the Corporate
                                              Social Responsibility (CSR) compliance and reducing the load of
                                              cases before the National Company Law Tribunal (NCLT).

                                              Salient Features of the bill:

                                                • The bill aims to ensure greater accountability and a better
                                            enforcement of the corporate governance norms.
                                                • A key change in the Bill is related to CSR spending, where in
      companies would have to mandatorily keep unspent money into a special account.
         o The companies will have one year to firm up the CSR proposal and another three years to spend funds.
            In case money remains unspent for one plus three years, the money will have to be moved to an escrow
            account, could even be the Prime Minister's Relief Fund.

Corporate Social Responsibility:

  •   Corporate Social Responsibility is a management concept whereby companies integrate social and
      environmental concerns in their business operations and interactions with their stakeholders.
  •   CSR is generally understood as being the way through which a company achieves a balance of economic,
      environmental and social imperatives (Triple-Bottom-Line- Approach), while at the same time addressing the
      expectations of shareholders and stakeholders.
  •   India has become the first country to make CSR spending mandatory through a law, i.e. through Section 135 of
      the Companies Act, 2013.

The salient features of CSR provision are as follows:

  •   Companies earning profit of over Rs 5 crore, turnover of Rs 1000 crore or networth of more than Rs 500 crore
      are required to shell out at least two percent of their three-year annual average net profit towards CSR
      activities.
  •   Each such company is required to constitute a CSR committee of the Board
  •   The Board of each such company is required to have the company’s CSR policy formulated and monitor its
      implementation;
  •   Companies may implement their CSR Policy through trusts or societies or Section 8 companies etc.

Significance:

  •   The Bill seeks to empower the Registrar of Companies to initiate action for the removal of the name of a
      company from the Register of Companies if it is not carrying on any business or operation in accordance with
      the Company Law.
  •   The legislation envisages a re-categorisation of 16 minor offences as purely civil defaults.

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   •   It also provides for transferring of functions with regard to dealing with applications for change of financial
       year to Central government and shifting of powers for conversion from public to private companies from
       NCLT to the central government.
   •   The bill provided more clarity with respect to certain powers of the National Financial Reporting Authority
       (NFRA).

Sample Question:

All definitions of Corporate Social Responsibility recognize that:

a) companies have a responsibility for their impact on society and environment.

b) the natural environment should be the main focus of CSR activities.

c) business ethics is a complex issue.

d) companies must pay equal attention to business ethics and sustainability

Answer: a

Topic: Fintech Sandbox

Context:

                                                 Recently, the Insurance Regulatory and Development Authority of
                                                 India (IRDAI) has allowed the use of regulatory sandbox (RS) to
                                                 promote new, innovative products and processes in the Fintech
                                                 industry.

                                                  RS:

                                                     • RS is an infrastructure that helps Fintech players to live
                                                 test their products or solutions, before getting the necessary
                                                 regulatory approvals for a mass launch, saving start-ups time
       and cost.
   •   It allows the regulator, the innovators, the financial service providers and the customers to conduct field tests
       to collect evidence on the benefits and risks of new financial innovations.
   •   For instance, Data analytics(a part of Fintech) is an area which insurance industry can take benefit to serve
       their customers as India accounts for around only 6% of insurance premium in Asia and around 2% of
       the global premium volume.
   •   The Reserve Bank of India is also planning to provide similar infrastructure in the banking sector.

Fintech:

WWW.IASJUNIOR.COM                                                                                                 Page 17
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   •     Financial technology (Fintech) is used to describe new technology that seeks to improve and automate
         the delivery and use of financial services.

General Insurance :

   •     In 1972 with the passing of the General Insurance Business (Nationalisation) Act, general insurance business
         was nationalized with effect from January 1, 1973.
   •     107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd.,
         the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and United India Insurance
         Company Ltd.

   •     In 1993, the Government set up a committee under the chairmanship of RN Malhotra, former Governor
         of RBI, to propose recommendations for reforms in the insurance sector.

IRDAI:

   •     Following the recommendations of the Malhotra Committee report, in 1999, the Insurance Regulatory and
         Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance
         industry.
   •     The IRDA was incorporated as a statutory body in April 2000.
   •     Insurance Regulatory Development Authority of India (IRDAI) is a regulatory body created with the aim of
         protecting the interests of the insurance customers.
   •     It regulates and sees to the development of the insurance industry while monitoring insurance-related activities.
   •     The key objectives of the IRDA include the promotion of competition so as to enhance customer satisfaction
         through increased consumer choice and lower premiums while ensuring the financial security of the insurance
         market.

Sample Question:

Which of the following organization has decided to establish a regulatory sandbox for Fintech startups?

a) IRDAI

b) RBI

c) SEBI

d) None of these

Answer: a

Topic: Ban Crypto Currency?

Context

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                                                 An inter-ministerial committee (IMC) that was set up to assess the
                                                 viability of virtual currencies has recommended that India should ban
                                                 private crypto currencies such as Bitcoin.

                                                  Concerns:

                                                     •Finance Minister Arun Jaitley said the government doesn’t
                                               consider them legal tender.
   •   The Reserve Bank of India has repeatedly warned the public of the risks associated with dealing with
       cryptocurrencies.
   •   There have been cases of consumers being defrauded, including in India.

What are virtual currencies?

   •   A virtual currency is a digital representation of value that can be digitally traded and functions as
           o a medium of exchange, and/ or
           o a unit of account, and/or
           o a store of value,
   •   But, unlike fiat currency like the rupee, it is not legal tender and does not have the backing of a government.
   •   A cryptocurrency is a subset of virtual currencies, and is decentralised, and protected by cryptography.
   •   There are block chains which are online registers and through these online registers, people can actually buy
       these currencies and mine the currencies and use them as instrument of exchange. There are about 9-10 crypto
       currencies in the world right now.
   •   Bitcoins is the largest cryptocurrency in the world because they are computer generated currencies and the
       codes are completely secret, so nobody masters it.
   •   Bitcoin, Litecoin, Ripple, Ethereum, PPcoin, Dogecoin, Coinye, Namecoin etc. are some of the examples of
       cryptocurrencies.

Important terms related to cryptocurrency:

Distributed Ledger Technologies

   •   DLT refers to technologies that involve the use of independent computers (also referred to as nodes) to record,
       share, and synchronise transactions in their respective electronic ledgers. All virtual currencies use DLT.

Blockchain technology

   •   It is a specific kind of DLT that came to prominence after Bitcoin, a cryptocurrency that used it, became
       popular.
   •   Cryptocurrencies such as Bitcoin use codes to encrypt transactions and stack them up in blocks, creating
       Blockchains.
   •   It is the use of codes that differentiates cryptocurrencies from other virtual currencies

Transactions

   •   A transfer of funds between two digital wallets is called a transaction. That transaction gets submitted to a
       public ledger and awaits confirmation.

Mining

WWW.IASJUNIOR.COM                                                                                                Page 19
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   •   In simple terms, mining is the process of confirming transactions and adding them to a public ledger. In order
       to add a transaction to the ledger, the “miner” must solve an increasingly-complex computational problem (like
       a mathematical puzzle).

Benefits of cryptocurrencies

   •   Ownership: Cryptocurrencies hold the promise of making it easier to transfer funds directly between two
       parties in a transaction, without the need for a trusted third party such as a bank or credit card company
   •   Low transaction fee: Fund transfers are done with minimal processing fees, allowing users to avoid the steep
       fees charged by most banks and financial institutions for wire transfers.
   •   Identity Protection: Paying with credit/debit cards requires submitting sensitive banking information that
       could be stolen or compromised. Cryptocurrency can be sent directly to a recipient without any information
       other than total amount you want to send.
   •   Risk-free for sellers: Payments using Cryptocurrency can’t be reversed, which means merchants don’t have to
       worry about stopped payments. The blockchain makes it difficult for you to be defrauded.

Demerits of Cryptocurrency

   •   Accessibility: Since cryptocurrency mining and transactions can only happen on network, illiterate people will
       find it difficult to understand the working mechanism. Also rural areas that do not have access to internet will
       not be able to perform cryptocurrency transactions.
   •   Threat of hacking: using bitcoins, providing a data structure for this ledger that is exposed to a limited threat
       from hackers and can be copied across all computers running Bitcoin software
   •   Volatility: Cryptocurrency exchange rates can vary greatly, which means the amount you pay or receive one
       day could be wildly different next day.

IMC’s view on DLT and cryptocurrencies?

The first thing to understand is that the IMC recognises the potential of DLT and Blockchain.

   •   The IMC accepts that internationally, the application of DLT is being explored in the areas of trade finance,
       mortgage loan applications, digital identity management or KYC requirements, cross-border fund transfers and
       clearing and settlement systems.
   •   To that extent, it recommends the Department of Economic Affairs (within the Finance Ministry) to take
       necessary measures to facilitate the use of DLT in the entire financial field after identifying its uses.
   •   The IMC also recommends that regulators — RBI, SEBI, IRDA, PFRDA, and IBBI — explore evolving
       appropriate regulations for development of DLT in their respective areas.
   •   The IMC’s view is that it “would be advisable to have an open mind regarding the introduction of an official
       digital currency in India”.
   •   It noted that the RBI Act has the enabling provisions to permit the central government to approve a “Central
       Bank Digital Currency” (CBDC) as legal tender in India.

Second, scaling up such a currency system over a large population would require crippling levels of energy resources.
Currencies such as Bitcoin require humongous processing power.

   •   According to a report by the Bank of International Settlement, Bitcoin processing already uses as much energy
       as is used by Switzerland; it called this an environmental disaster.

Third, the IMC is worried that if private cryptocurrencies are allowed to function as legal tender, the RBI would lose
control over the monetary policy and financial stability, as it would not be able to keep a tab on the money supply in
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the economy

Fourth, the anonymity of private digital currencies make them vulnerable to money laundering and use in terrorist
financing activities while making law enforcement difficult.

Fifth, there is no grievance redressal mechanism in such a system, as all transactions are irreversible.

The inter-ministerial committee believes it is, going so far as to draft a law that mandates a fine and imprisonment of
up to 10 years for the offences of mining, generating, holding, selling, dealing in, transferring, disposing of, or issuing
cryptocurrencies.

Conclusion:

   •   An outright ban on cryptocurrency may not be a good idea. If new currency is popular, it would be wise to take
       note of it, accept the advent of technology, recognize the rise in popularity of cryptocurrency and then
       introduce safeguard, measures and regulatory structure by which people do not feel that they should have
       something to fall back on.
   •   The government will see opportunities for revenues as large number of people have made gains through
       cryptocurrency.

Sample Question:

Consider the following statements regarding cryptocurrencies.

   1. Crypto Currency is an encrypted centralized digital currency.
   2. These currencies are regulated by central monetary authority.

Which of the statement(s) given above is/are correct ?

a) 1 only

b) 2 only

c) 1 and 2 both

d) Neither 1 nor 2

Answer: d

                                                  Topic: RBI’s Monetary Policy

                                                   Context:

                                                  In its third bi-monthly policy statement of the current financial year (
                                                  FY- 2019-20), the Reserve Bank of India's Monetary Policy

WWW.IASJUNIOR.COM                                                                                                  Page 21
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Committee (MPC) has cut the repo rate for the fourth time in a row.

   •   The MPC slashed repo rate by 35 basis points to 5.40%, the lowest in over nine years.
   •   The MPC also revised downwards the GDP growth for FY20 from 7% in the June policy to 6.9% in August in
       the range of 5.8-6.6% for the first half of FY20 and 7.3-7.5% for the second half–with risks somewhat tilted to
       the downside.
   •   All this has been done to support the sluggish economic growth and to stimulate aggregate demand.

Policy Highlights:

   •   The RBI has decided to allow round-the-clock fund transfers through NEFT from December 2019 in order to
       promote digital transactions.
   •   Currently, the National Electronic Funds Transfer (NEFT) operated by the RBI as a retail payment system is
       available for customers from 8 a.m. to 7 p.m. on all working days with the exception of the second and fourth
       Saturdays of the month.
   •   The NEFT system is used for fund transfers up to ₹2 lakh.
   •   Earlier in its June Monetary Policy, the RBI had done away with charges on fund transfers through RTGS and
       NEFT routes to boost digital transactions and asked banks to pass on the benefits to customers.
   •   The Real Time Gross Settlement System (RTGS) is meant for large-value instantaneous fund transfers.
   •   The RBI also proposed creation of a central payment fraud registry that will track banking fraud. At present,
       there is a Central Fraud Monitoring Cell of the central bank.

National Payments Corporation of India (NPCI):

   •   It has allowed the National Payments Corporation of India (NPCI) operated Bharat Bill Payment Service
       (BBPS) hub to enable payments for all recurrent billers (except prepaid recharges). At present, it is available
       only for DTH services, electricity, gas, telecom and water bills. Allowing all billers to plug into BBPS would
       mean that all payment providers will be able to offer customers anytime, anywhere payment services for every
       biller from their own sites or locations.
   •   The Bharat bill payment system is a Reserve Bank of India (RBI) conceptualised system driven by National
       Payments Corporation of India (NPCI). It is a one-stop ecosystem for payment of all bills providing an
       interoperable and accessible “Anytime Anywhere” bill payment service to all customers across India with
       certainty, reliability and safety of transactions.
   •   It has multiple modes of payment and provides instant confirmation of payment via an SMS or receipt.

Significance:

   •   Currently, RBI has a mechanism in place for banks to report all banking frauds to the Central Fraud
       Monitoring Cell of the Reserve Bank. The proposed registry extend the platform to all payments operators.
   •   Payment system companies will be provided access to the registry for near-real time fraud monitoring and the
       aggregated fraud data will be published to educate customers on emerging risks. A detailed framework in this
       regard will be put in place by the end of October.
   •   Risk monitoring and management involving fraudulent activities in digital payments is imperative, considering
       the massive growth of the industry, including infrastructure, volume and value of transactions.
   •   For Non Banking Financial Companies (NBFCs): The central bank has decided to raise a bank’s exposure
       limit to a single NBFC to 20% of its Tier-I capital from 15% earlier. The hike will enable banks to increase the
       credit flow to big NBFCs.
   •   This measure is pertinent at a time when lending activity by many NBFCs have declined significantly,
       resulting in demand slowdown for a range of items including cars, tractors, white goods among others.

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Sample Question:

RBI, on behalf of government, issues MSS bonds to mop up extra liquidity from the market. This is same as Open
Market Operations(OMO), but has a significant difference. What is it?

a. Money raised from the market by MSS Bond is stored in government’s normal account.

b. Money raised from the market by MSS Bond is stored in a separate account, known as MSS Account, which cannot
be used for normal government expenditure.

c. Money is not raised by MSS bonds

d. None of the above

Ans: b)

Money raised from the market by MSS Bond is stored in a separate account, known as MSS Account, which cannot be
used for normal government expenditure.

Topic : India’s Services Exports to exceed Merchandise Exports

Context:

                                                  India may perhaps soon cross a unique turning point when its export of
                                                  services becomes bigger than its export of merchandise (other than oil
                                                  and gems & jewellery).

                                                   Background:

                                                  The export of gems & jewellery is classified as merchandise trade.

                                                  However, in reality what is being exported is the value created by the
                                                  work of those who cut and polish imported diamond roughs and work
                                                  on precious metals (also imported).

Leaving aside the official classification, this is export of services.

There is supreme irony in this services-manufacturing conclusion.

In this context, the US first proposed, in the 1980s, that a new round of global trade talks should be expanded to
include not just merchandise trade but also trade in services.

At that time, India was a strong critic of the idea of opening up markets for trade in services.

Current Scenario:

WWW.IASJUNIOR.COM                                                                                                Page 23
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