Current Affairs 22nd August 2022

1.    INDIA – U.K. FREE TRADE AGREEMENT

  • News: India and the UK recently concluded the fifth round of talks for a free trade agreement (FTA), designed to encourage trade and investment relations. Expectations are that an FTA will be signed by October 2022.
  • About Free Trade Agreement:
    • It is an agreement between two or more countries to minimize barriers to imports and exports of products and services among them.
    • It includes reducing tariffs, quotas, subsidies or prohibitions which could limit exchange of goods and services across borders.
    • The FTA might allow free trade among the two nations with a few exceptions.
    • This involves a formal and mutual agreement signed between two or more countries.
    • The agreement could be comprehensive and include goods, services, investment, intellectual property, competition, government procurement and other areas.
    • As of April 2022, India had 13 FTAs, including the South Asian Free Trade Area, and with Nepal, Bhutan, Thailand, Singapore, Japan and Malaysia. The 13 also include the agreements with Mauritius, UAE and Australia signed during the last five years. Additionally, India has also signed six limited Preferential Trade Agreements.
  • About India – U.K. Free Trade Agreement:
    • India and the United Kingdom have a multi-dimensional strategic partnership, and are actively engaged in bilateral trade.
    • The two countries agreed to begin formal negotiations for an FTA in January 2022, aiming to advance trade and investment relations between them.
    • The fifth round of FTA talks concluded on 29 July, and the expectation is that negotiations would be completed and the stage set for the FTA by October.
    • The FTA is important for both countries as it would provide a boost and create a robust framework of overall trade and investment between the two countries.
    • Bilateral trade stands at $50 billion (ie approx. $35 billion in services and $15 billion merchandise). India is UK’s 12th largest trading partner and accounts for 1.9% of UK’s total trade in four quarters to the end of 2022. UK is the seventh largest export destination for India.
    • The trade balance maintained by India with UK has largely been a surplus.
    • Top three services exported from India to UK are technical, trade-related and other business services, professional and management consulting services and travel.
    • Apart from reducing tariffs, the FTA also looks at lowering non-tariff barriers, particularly technical barriers to trade around rules of origin, investor protection and IPR.
    • MoUs on joint recognition of certain educational qualifications and an outline pact on healthcare workforce have  already been signed.
    • Also, both UK and India have set up panels for a totalization deal being advocated by India and permitting Indian legal services for the UK.
  • About Totalization Agreements:
    • Totalization agreements are international social security agreements that eliminate dual social security taxation, both in the home country and the country where an employee works
    • When employee from one country works in another and ends up paying taxes in both the countries.
    • Totalization helps by eliminating such dual Social Security taxation.
    • It also helps in filling the gaps in benefit of the protection for the workers who divided their career between two countries by totalisation of the period of contribution in the host country for determining the eligibility for benefits.

2.    CLEAN HYDROGEN

  • News: India can become a net exporter of clean hydrogen and provide global leadership in the space.
  • What is Decarbonisation?
    • Decarbonisation’ tends to refer to the process of reducing ‘carbon intensity’, lowering the amount of greenhouse gas emissions produced by the burning of fossil fuels.
    • Generally, this involves decreasing CO2 output per unit of electricity generated.
  • Types of Hydrogen with source:

3.    CENTRE FOR CORPORATE EXITS

  • News: The government is set to create a national centre for quick, faceless decision-making on requests from companies for winding up operations as part of efforts to improve the overall regulatory framework.
  • Details:
    • The ministry of corporate affairs is setting up the national centre for accelerated corporate exit, which will be backed by an IT infrastructure for decision-making at the national level without discretion by individual field officers, said a person familiar with the discussions in the government.
    • Once set up, businesses downing shutters need not go to the Registrars of Companies (RoCs) —but only file an online request showing they have no liabilities or have enough assets to match or exceed liabilities.
    • The government believes that ease of exit for businesses that have either failed to take off or want to close operations for various economic reasons will be a key consideration that investors will take into account while making investment decisions.
    • Ease of doing business entails not only ease of entry and of doing business but also of ease of exit.
    • “The effort is to reduce voluntary closure time from about one to two years to less than six months. That is the time needed to follow some statutory timelines for getting response to communications and to analyse replies.
    • Voluntary closure of companies is a routine procedure, where if all requirements are met, it should not take a long time. A system for transparent and expeditious processing of applications will be helpful.
    • The proposed national centre will assign requests from businesses across the country randomly to various officers. It will no longer be the RoC in a particular region where the company is incorporated that will handle such requests. This is expected to reduce human discretion and could also help in preventing any irregularity in winding up of companies.
    • The new system of voluntary closure will streamline the process, ensure predictability of action and reduce the cost of issuing advertisements regarding such closure of business as it will be done at the national level.
    • Voluntary closure of companies is different from winding up of companies by the government for default on filing annual reports for two consecutive years. In such cases of removal of the name of a company from records too, businesses having liabilities are excluded. The idea is that before a legal entity is extinguished, all its liabilities should be met.

4.    CHANDELA DYNASTY

  • News: On the large hilltop of Bangira lies a fort that served as a stronghold of the Chandela Kings in Balwant Nagar between the 11th and 17th centuries. To many of us, it is better known to us as the Jhansi Fort, synonymous with Rani Lakshmi Bai, the queen who single handedly fought off British troops during the freedom struggle
  • About Chandela Dynasty:
    • The land of Bundelkhand has always been the bone of contention between various kings and dynasties that ruled over here. Earlier this area was under the Gupta empire till 5th century AD, then it was ruled by the Gurjara-Pratihara dynasty; later this area was acquired by the Chandelas.
    • Chandelas were originally one of the 36 clans of the Rajput rulers who had ruled over central India starting from the ninth century AD to the thirteen centuries.
    • The land of the channels was called Jejakabhukti. Though the boundaries of the state always varied by Jejakabhuktiom from time to time the state had always included Mahoba, Khajuraho, Kalinjar, and Ajay Garh.
    • The extent of the empire comprised the region from the south of Ganga and Jamuna, and Betwa river on the west to the Narmada river on the south. the area which is known as Bundelkhand today has its outer boundaries touching the Vindhya region.

5.    DROUGHTS WORLDWIDE ARE HURTING GLOBAL TRADE

  • News: Severe droughts across the Northern Hemisphere—stretching from the farms of California to waterways in Europe and China—are further snarling supply chains and driving up the prices of food and energy, adding pressure to a global trade system already under stress.
  • How droughts in history are recorded?
    • Researchers compare droughts by measuring the growth of annual tree rings that reflect rainfall and temperature from year to year in specific areas.
  • Details:
    • Parts of China are experiencing their longest sustained heat wave since record-keeping began in 1961, according to China’s National Climate Center, leading to manufacturing shutdowns owing to lack of hydropower.
    • The drought affecting Spain, Portugal, France and Italy is on track to be the worst in 500 years.
    • In the American West, a drought that began two decades ago now appears to be the worst in 1,200 years.
    • The United Nations says the number of droughts worldwide has risen 29% since 2000 due to land degradation and climate change.
    • For some of the world’s biggest economies, this summer’s droughts are hurting industries including electricity generation, agriculture, manufacturing and tourism. That is compounding existing strains such as supply-chain disruptions stemming from the Covid-19 pandemic and pressure on energy and food prices from the war in Ukraine.
    • In the U.S., agricultural forecasters expect farmers to lose more than 40% of the cotton crop, while in Europe the Spanish olive-oil harvest is expected to fall by as much as a third amid hot and dry conditions.
    • In Europe, rivers such as the Rhine and Italy’s Po that serve as arteries for trade are running at historic lows, forcing manufacturers to cut shipments. Falling river levels also have reduced hydropower generation across the continent, affecting a key alternative source to natural gas, which is in shorter supply as Russia squeezes flows.
    • Heat has forced France to lower production at several nuclear reactors because the river water that cools them is too warm. And Germany, Europe’s biggest consumer of Russian gas, plans to burn more coal instead of gas to generate electricity, but low levels on the Rhine are holding back shipments.
    • Meager snowfall at the river’s source in the Swiss Alps and reduced rainfall downstream have lowered water flow in the Rhine Delta in the Netherlands. That has allowed seawater into the nation’s system of locks and dams, slowing river traffic and seeping into reservoirs used for drinking and agriculture. Drought is also drying out and weakening earthen dikes that protect low-lying areas of the Netherlands from the North Sea.

6.    PROMPT CORRECTIVE ACTION

  • News: Central Bank of India, the only public sector lender under the RBI’s prompt corrective action (PCA) framework, may see an exit from restrictions soon following an improvement in its financial health.
  • About Prompt Corrective Action:
    • PCA is a framework under which banks with weak financial metrics are put under watch by the RBI.
    • The RBI introduced the PCA framework in 2002 as a structured early-intervention mechanism for banks that become undercapitalised due to poor asset quality, or vulnerable due to loss of profitability.
    • It aims to check the problem of Non-Performing Assets (NPAs) in the Indian banking sector.
    • The framework was reviewed in 2017 based on the recommendations of the working group of the Financial Stability and Development Council on Resolution Regimes for Financial Institutions in India and the Financial Sector Legislative Reforms Commission.
    • PCA is intended to help alert the regulator as well as investors and depositors if a bank is heading for trouble.
    • The idea is to head off problems before they attain crisis proportions.
    • Essentially PCA helps RBI monitor key performance indicators of banks, and taking corrective measures, to restore the financial health of a bank.
    • The PCA framework deems banks as risky if they slip some trigger points – capital to risk weighted assets ratio (CRAR), net NPA, Return on Assets (RoA) and Tier 1 Leverage ratio.
    • Certain structured and discretionary actions are initiated in respect of banks hitting such trigger points.
    • The PCA framework is applicable only to commercial banks and not to co-operative banks and non-banking financial companies (NBFCs).
    • PCA Measures
      • RBI can place restrictions on dividend distribution, branch expansion, and management compensation.
      • Only in an extreme situation, would a bank be a likely candidate for resolution through amalgamation, reconstruction or winding up.
      • RBI may place restrictions on credit by PCA banks to unrated borrowers or those with high risks, but it doesn’t invoke a complete ban on their lending.
      • RBI may also impose restrictions on the bank on borrowings from interbank market.
      • Banks may also not be allowed to enter into new lines of business.

7.    FACIAL RECOGNITION TECHNOLOGY

  • News: RTI responses received by the Internet Freedom Foundation reveal that the Delhi Police treats matches of above 80% similarity generated by its facial recognition technology system as positive results.
  • About Facial Recognition Technology:
    • Facial recognition is an algorithm-based technology which creates a digital map of the face by identifying and mapping an individual’s facial features, which it then matches against the database to which it has access.
    • It can be used for two purposes: firstly, 1:1 verification of identity wherein the facial map is obtained for the purpose of matching it against the person’s photograph on a database to authenticate their identity. For example, 1:1 verification is used to unlock phones.
    • However, increasingly it is being used to provide access to any benefits or government schemes.
    • Secondly, there is the 1:n identification of identity wherein the facial map is obtained from a photograph or video and then matched against the entire database to identify the person in the photograph or video. Law enforcement agencies such as the Delhi Police usually procure FRT for 1:n identification.
    • For 1:n identification, FRT generates a probability or a match score between the suspect who is to be identified and the available database of identified criminals.
    • A list of possible matches are generated on the basis of their likelihood to be the correct match with corresponding match scores.
    • However, ultimately it is a human analyst who selects the final probable match from the list of matches generated by FRT.

8.    POLIO INFECTION IN US, UK AND ISRAEL

  • News: Polio, a deadly disease that used to paralyze tens of thousands of children every year, is spreading in London, New York and Jerusalem for the first time in decades, spurring catch-up vaccination campaigns.
  • Details:
    • Polio terrified parents around the world for the first half of the 20th century. Affecting mainly children under five, it is often asymptomatic but can also cause symptoms including fever and vomiting. Around one in 200 infections leads to irreversible paralysis, and among those patients, up to 10% die.
    • There is no cure, but since a vaccine was found in the 1950s, polio is entirely preventable. Globally, the wild form of the disease has almost disappeared.
    • Afghanistan and Pakistan are now the only countries where the highly infectious disease, spread mainly through contact with faecal matter, remains endemic. But this year, imported cases were also found in Malawi and Mozambique, the first in those countries since the 1990s.
    • There are two main forms of poliovirus. Alongside the wild-type outlined above, there are also rare cases of what is known as vaccine-derived polio.
    • It is this second form detected in wastewater in the British capital, London, and in New York in the United States, with one case of paralysis reported in New York state. Genetically similar virus has also been found in Jerusalem, Israel, and scientists are working to understand the link.
    • It stems from the use of an oral polio vaccine containing weakened live virus. After children are vaccinated, they shed virus in their faeces for a few weeks. In under-vaccinated communities, this can then spread and mutate back to a harmful version of the virus.
    • While countries including the Britain and the United States no longer use this live vaccine, others do – particularly to stop outbreaks – which allows for global spread, particularly as people began to travel again after COVID-19.
  • About Global Polio Eradication Initiative:
    • The Global Polio Eradication Initiative is an initiative created in 1988, just after the World Health Assembly resolved to eradicate the disease poliomyelitis.
    • Led by the World Health Organization, it is the largest international public health initiative in history.
    • The strategy for the eradication of polio rests on immunising every at-risk child until there is no one left for the disease to transmit to, and the disease eventually dies out.
    • The initiative is spearheaded by the following organisations in the form of multistakeholder governance:
      • WHO (World Health Organization), who are responsible for planning, technical direction, surveillance and eradication certification
      • Rotary International, whose responsibilities include fundraising, advocacy, and volunteer recruitment
      • The CDC, who are in charge of deploying scientists and public health experts to WHO and UNICEF
      • UNICEF is in charge of the distribution of the vaccine and helping countries develop communication and awareness strategies.
      • The Gates Foundation provided a large portion of the funding.

9.    FACTS

  • JUSTICE UDAY UMESH LALIT will be 49th Chief Justice of India. He will be the second person after Justice S.M. Sikri to be appointed as Chief Justice of India from the Bar.
  • JUSTICE KAMAL NARAIN SINGH had served the shortest tenue as Chief Justice of India. His term was of 17 days only (25th November 1991 to 12th December 1991).
  • 15TH ASIA CUP is taking place in UAE. The tournament, which was first played in 1983, will see six countries participating in the upcoming edition. These include five direct qualifiers: India, Pakistan, Sri Lanka, Afghanistan, and Bangladesh. Hong Kong, Kuwait, Singapore, and the UAE are battling against each other in the qualifiers and the winning team will earn the sixth spot in the main tournament.

 

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