Daily Current Affairs for UPSC CSE1.
Topics Covered
- Combined Maritime force
- Election of President
- Cardless withdrawal Technology
- Sri Lanka Debt Default
- National Monetisation Pipeline
- El Nino
1 . Combined Maritime Force
Context : India and the U.S. discussed a broad range of issues — from the COVID-19 response, supply chains and climate action to global and regional issues — on Monday, but Russia’s war on Ukraine and its ramifications for the world appeared to have been the major theme for the day. On the defence side, the countries announced several measures at enhancing cooperation, including India joining the Bahrain-based multilateral partnership Combined Maritime Force (CMF) as an associate partner.
About CMF
- Established in 2001, CMF is multinational maritime partnership united by the desire to maintain maritime security. CMF operates to counter non-state actors using the maritime environment to conduct illegal acts such as piracy and narcotics, charcoal and weapons smuggling.
- Encouraging regional cooperation and engaging with regional and international partners to strengthen relevant capabilities, CMF aims to promote security, stability and prosperity across approximately 3.2 million square miles of international waters.
Importance
- Protect trade: The Area of Operations in which CMF operates are amongst the busiest around the globe, containing three of the world’s seven strategic choke points. Reassuring those who rely on the free flow of commerce by denying illicit non-state actors the use of the high seas is crucial to protecting global trade.
- Counter-terrorism: The movement of narcotics, weapons and other illicit cargoes, mass migration and people smuggling all increase the threat to the rule of law, regional stability and global security, and often leads to the funding of terrorist organizations.
- Counter-piracy: Whilst piracy has effectively been suppressed, the conditions enabling the conduct of piracy remain which could lead to a resurgence, and CMF remains vigilant to respond to these diverse threats.
Members and partnerships
- CMF currently has 33 members, including: Australia, Bahrain, Belgium, Brazil, Canada, Denmark, France, Germany, Greece, Iraq, Italy, Japan, Jordan, Republic of Korea, Kuwait, Malaysia, the Netherlands, New Zealand, Norway, Pakistan, the Philippines, Portugal, Qatar, Saudi Arabia, Seychelles, Singapore, Spain, Thailand, Turkey, UAE, United Kingdom, United States and Yemen.
- CMF also works with a number of regional and international partners including the UN Office of Drugs and Crime (UNODC), EU Naval Forces (EU NAVFOR) as well as partners within the commercial maritime industry.
How does CMF work?
- CMF is a coalition of the willing and does not proscribe a specific level of participation from any member nation. The contribution from each country, therefore, varies depending on its ability to contribute assets and the availability of those assets at any given time.
- CMF is a flexible organization and contributions can vary from the provision of a liaison officer at CMF HQ in Bahrain, to the deployment of warships or maritime reconnaissance aircraft. We can also call on warships not explicitly assigned to CMF to give Associated Support. This allows a warship to offer assistance to CMF whilst concurrently undertaking national tasking
2 . Election of President
Context : The tenure of the current President of India Ram Nath Kovind is set to end in July this year, which is also when the 16th Indian Presidential election will be held to elect his successor. The Assembly elections held in five States this year, and the changes in the National Democratic Alliance (NDA), are expected to alter the dynamic of votes in the upcoming presidential race.
How is the President elected?
- The Indian President is elected through an electoral college system, wherein the votes are cast by national and State-level lawmakers. The elections are conducted and overseen by the Election Commission (EC) of India.
- The electoral college is made up of all the elected members of the Upper and Lower Houses of Parliament (Rajya Sabha and Lok Sabha MPs), and the elected members of the Legislative Assemblies of States and Union Territories (MLAs). This means, in the upcoming polls, the number of electors will be 4,896 — 543 Lok Sabha MPs, 233 MPs of the Rajya Sabha, and 4,120 MLAs of all States, including the National Capital Territory (NCT) of Delhi and Union Territory of Puducherry.
- Before the voting, comes the nomination stage, where the candidate intending to stand in the election, files the nomination along with a signed list of 50 proposers and 50 seconders. These proposers and seconders can be anyone from the total of 4,896 members of the electoral college from the State and national level. The rule for securing 50 proposers and seconders was implemented when the EC noticed, in 1974, that several candidates, many without even a bleak chance of winning, would file their nominations to contest the polls. An elector cannot propose or second the nomination of more than one candidate.
What is the value of each vote and how is it calculated?
- A vote cast by each MP or MLA is not calculated as one vote. There is a larger vote value attached to it.
- The fixed value of each vote by an MP of the Rajya Sabha and the Lok Sabha is 708. Meanwhile, the vote value of each MLA differs from State to State based on a calculation that factors in its population vis-a-vis the number of members in its legislative Assembly. As per the Constitution (Eighty-fourth Amendment) Act 2001, currently, the population of States is taken from the figures of the 1971 Census. This will change when the figures of the Census taken after the year 2026 are published.
- The value of each MLA’s vote is determined by dividing the population of the State by the number of MLAs in its legislative Assembly, and the quotient achieved is further divided by 1000. Uttar Pradesh for instance, has the highest vote value for each of its MLAs, at 208. The value of one MLA’s vote in Maharashtra is 175, while that in Arunachal Pradesh is just 8. The total votes of each Legislative Assembly are calculated by multiplying the vote value of each MLA by the number of MLAs.
- Finally, based on these values, the total number of votes of all Rajya Sabha and Lok Sabha MPs would be 5,59,408 (776 MPs X 708), and the total votes of all MLAs from State Legislative Assemblies would come up to 5,49,495. Thus, the grand total vote value of the whole electoral college comes up to 10,98,903.
What is required to secure a victory?
- A nominated candidate does not secure victory based on a simple majority but through a system of bagging a specific quota of votes. While counting, the EC totals up all the valid votes cast by the electoral college through paper ballots and to win, the candidate must secure 50% of the total votes cast + 1.
- Unlike general elections, where electors vote for a single party’s candidate, the voters of the electoral college write the names of candidates on the ballot paper in the order of preference.
3 . Cardless Cash Withdrawal Technology
Context : Last week, India’s Central bank announced cardless cash withdrawals at ATMs across the country. The feature will let consumers use Unified Payment Interface (UPI) on their smartphones to withdraw cash from ATMs. All ATMs across the country must enable this feature in their cash-dispensing machines, the Reserve Bank of India (RBI) said.
How will this system work?
- Cardless cash withdrawals are to be authenticated via UPI.
- ATMs are expected to show an option for withdrawing cash using UPI.
- Once a user selects this option, they can input the amount to be withdrawn and a QR code will be generated on the ATM screen.
- Users will then need to scan that code via their UPI app, and enter the password to withdraw cash from the ATM.
- Until now, only fund transfers between accounts were enabled via UPI. With this option, consumers can also take cash out from ATMs without a card.
What issues does this technology solve?
- According to the RBI Governor, Shaktikanta Das, cardless cash withdrawals will enhance security of cash withdrawal transactions. Besides, it would help prevent frauds like card skimming and card cloning.
- Currently, only existing customers of a few banks are allowed to withdraw cash without cards, and from specific bank’s ATM networks. However, the RBI’s move to allow interoperability in cardless withdrawals will enable users to take cash from any and all ATMs. The RBI’s move will invite more players into the payment ecosystem in India to innovate and solve further problems of customers
What is card skimming?
- Criminals steal data from credit/ debit cards by tracking a card swiped at ATMs. They pick this information from using a skimming device that reads the card’s magnetic strip. These devices are surreptitiously installed on ATMs.
- Once the device picks up the data, it can be used to gain unauthorised access to the user’s banking records. The stolen information can be coded onto a new card, a process called cloning, and be used to make payments and transact with other bank accounts. Problematic ATMs that function intermittently, and the ones located in isolated areas are often used to install such skimming devices.
- Fraudsters also install scanning devices on point-of-sale machines. These devices stealthily scan a card before it is swiped at the payment counter at a departmental store. These are especially tough to spot if the billing counter is not in the line of sight of the card owner. These devices are difficult to identify as they appear to be a legitimate part of an existing ATM, or like a regular in-store card reader. It is skilfully fitted into the payment machines.
What are the limitations and challenges of the cardless cash withdrawal feature?
- Currently, ICICI Bank, Kotak Mahindra Bank, HDFC Bank and SBI allow cardless cash withdrawals for their users. But, accessing the feature is cumbersome as it has certain withdrawal limits, and the transaction is charged. The cardless feature at these banks work with each specific bank’s app.
- HDFC Bank customers are allowed to withdraw up to ₹10,000 per day and ₹25,000 per month using the cardless cash method. These withdrawals also have a service fee of ₹25 per transaction. At the moment, it is not clear whether UPI-based cash withdrawals will have the same restrictions and service fee inclusions.
- Scalability of this feature might be a challenge as it has to be seen how many banks quickly roll it out to their customers
- In cardless withdrawal, the security vulnerability of a card is minimised, but the risk will soon transfer to a mobile-enabled feature. The mobile can now become the epicentre of transactions, making it the next target for fraudsters
4 . Sri Lanka Debt Default
Context : The Sri Lankan government on Tuesday decided to default on all its foreign debt worth $51 billion as it awaits financial assistance from the International Monetary Fund (IMF). The government stated that it took the decision to preserve its dwindling foreign reserves to pay for the import of essential items. Ratings agencies such as Fitch, and Standard & Poor’s have downgraded Sri Lanka’s sovereign debt.
What is sovereign debt?
- Sovereign debt refers to the debt issued or accumulated by any government. Governments borrow money to finance the various expenses that they cannot meet through their regular tax revenues. They usually need to pay interest on such debt along with the principal amount over time although many governments simply choose to borrow fresh debt to repay existing debt.
- Historically, governments have tended to borrow more money than they could actually repay in order to fund populist spending.
- It should also be noted that governments can borrow either in their local currency or in foreign currency like the U.S. dollar. Governments usually find it easier to borrow and repay in their local currency. This is because governments with the help of their central banks can easily create fresh local currency to repay debt denominated in the local currency. This is known as debt monetisation and it can lead to increased money supply which in turn causes prices to rise.
- Making good on their foreign debt which is denominated in a foreign currency, however, can be a tricky affair for governments. This is because governments depend on the inflow of foreign currency to gather the necessary foreign exchange to pay their foreign debt.
- The Sri Lankan government or the central bank, for example, cannot create U.S. dollars out of thin air to pay their foreign debt denominated in U.S. dollars. Instead, they depend on U.S. dollars flowing into Sri Lanka in the form of foreign investment and payments received in exchange for the export of various goods and services to build up their foreign reserves.
Why is Sri Lanka unable to make good on its foreign debt commitments?
- Sri Lanka depends heavily on its tourism sector to bring in the foreign exchange necessary to import essential items such as food and fuel. The tourism sector contributes to about 10% of Sri Lanka’s gross domestic product. Since the coronavirus pandemic and the ensuing lockdowns, Sri Lanka’s tourism sector has been hit hard. This, in turn, has affected the inflow of U.S. dollars into the Sri Lankan economy. Sri Lanka’s forex reserves have dropped to $2.3 billion in February this year from over $7.5 billion in 2019. Thus, the Sri Lankan government has been finding it hard to obtain the U.S. dollars necessary to make good on its foreign debt obligations. It has thus sought help from the IMF as well as countries such as India and China. India this week agreed to offer additional financial assistance of $2 billion to Sri Lanka by rolling over debt that the island nation owes India.
- Sri Lanka’s efforts to fix the exchange rate of the Sri Lankan rupee against the U.S. dollar in order to prop up the price of the rupee may have also played a role in the foreign debt crisis. As foreign exchange inflows dried up during the pandemic and the Sri Lankan rupee came under increasing pressure, the country’s central bank at a certain point banned the payment of more than 200 Sri Lankan rupees for one U.S. dollar. This rate was way below the actual market price of the dollar, which caused trades to be pushed into the black market and also caused a drop in the supply of U.S. dollars in the forex market.
What is the cost of defaulting on foreign debt?
- International lenders may be reluctant to lend any more money to the Sri Lankan government unless such lending is part of a restructuring agreement. This fact will also be reflected in the ratings that international ratings agencies give to debt issued by the Sri Lankan government. Going forward, the cost of fresh borrowing is likely to be high for the Sri Lankan government as lenders will be incurring greater risk while lending to a government that has been unable to make good on its previous commitments.v
- A bailout by the IMF could be on the cards, but the Sri Lankan government will have to agree to implement structural reforms as a pre-condition for such aid.
- The IMF may require the Sri Lankan government to end its aggressive push towards 100% organic farming that has caused food supplies to be affected and food prices to rise. It may also recommend getting rid of price controls on food and other essential goods. It should be noted that price controls on any commodity affect the incentive that producers have to bring fresh supplies into the market. Controls imposed on the exchange rate of the rupee may also need to go in order to re-attract U.S. dollars. An end to price controls and the ban on non-organic farming can help the domestic economy return to normalcy. This, in turn, can help in the return of tourists. At the moment, mass protests due to rapidly rising prices may be causing many tourists to avoid visiting Sri Lanka, thus worsening the country’s foreign debt crisis.
5 . National Monetization Pipeline
Context : The government has completed transactions worth ₹96,000 crore under the National Monetisation Pipeline (NMP) in 2021-22, surpassing the year’s target of ₹88,000 crore, according to a top government official.
About National Monetization Pipeline
- The government unveiled a four-year National Monetisation Pipeline (NMP) worth an estimated Rs 6 lakh crore.
- It aims to unlock value in brownfield projects by engaging the private sector, transferring to them revenue rights and not ownership in the projects, and using the funds so generated for infrastructure creation across the country.
- The NMP has been announced to provide a clear framework for monetisation and give potential investors a ready list of assets to generate investment interest. The government has stressed that these are brownfield assets, which have been “de-risked” from execution risks, and therefore should encourage private investment. Structuring the monetisation transactions, providing a balance risk profile of assets, and effective execution of the NMP will be key challenges.
What is monetisation?
- In a monetisation transaction, the government is basically transferring revenue rights to private parties for a specified transaction period in return for upfront money, a revenue share, and commitment of investments in the assets.
- Real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), for instance, are the key structures used to monetise assets in the roads and power sectors.
- These are also listed on stock exchanges, providing investors liquidity through secondary markets as well. While these are a structured financing vehicle, other monetisation models on PPP (Public Private Partnership) basis include: Operate Maintain Transfer (OMT), Toll Operate Transfer (TOT), and Operations, Maintenance & Development (OMD). OMT and TOT have been used in highways sector while OMD is being deployed in case of airports.
- Finance Minister Nirmala Sitharaman said: “There is no land here, this entire (NMP) is talking about brownfield projects where investments have already been made, where there is a completed asset which is either languishing or it is not fully monetised or is under-utilised. So by bringing in private participation in this you will be able to monetise it better and ensure further investment in infrastructure building.
6 . El Nino
Context : The southwest monsoon is likely to be “normal” in 2022, though rainfall in August, the second rainiest month, will likely be subdued according to a private weather company Skymet .
Background and History
- El Nino was observed as far back as in the late 1800s when South American fishermen noticed the warming up of coastal waters around Christmas. They referred to it as “El Nino” (Spanish for the boy child), since it appeared around Christmas.
- Sir Gilbert Walker, a British mathematician, discovered the Southern Oscillation (SO), or large-scale changes in sea level pressure across Indonesia and the tropical Pacific. However, he did not recognise that it was linked to changes in the Pacific Ocean or El Nino.
- It wasn’t until the late 1960s that Norwegian-American meteorologist Jacob Bjerknes and others realised that the changes in the ocean and the atmosphere were connected. This was how the coinage ‘ENSO’ came into existence.
- As already mentioned, El Nino has been found to impact almost half the world triggering droughts in Australia, India, southern Africa and floods in Peru, Ecuador, the United States, the Gulf of Mexico, and the Colorado River basin.
About Elnino
- El Nino is a phenomenon in the equatorial Pacific, in which sea-surface temperatures rise over a threshold of +0.5 degree Celsius (and when it cools by the same margin it is La Nina).
- These are averaged over five, three-month sessions on a trot across a stretch of water designated as the Nino 3.4 region to arrive at the Oceanic Nino Index (ONI).
Terms related to Elnino
- Southern Oscillation Index, or SOI – gives an indication of the development and intensity of El Nino or La Nina. The SOI is calculated on the basis of the atmospheric pressure differences between Tahiti (South Pacific Ocean) and Darwin (Australia), separated by 8,569 km. Sustained positive SOI values are indicative of La Nina conditions while negative values suggest El Nino conditions.
- ENSO (El Nino Southern Oscillation) – refers to the oscillation between the El Nino and the La Nina. ENSO shifts irregularly back and forth between El Nino and La Niña every two to seven years. Each phase triggers predictable disruptions of temperature, precipitation, and winds disrupting large-scale air movements in the tropics, triggering a cascade of global side effects.
- Under ‘normal’ conditions, though, the west tropical Pacific is warmer than its eastern basin. The warmer area of the ocean is also a source for convection and is associated with cloudiness and rainfall. During El Nino years, the warmth shifts to Central and East Tropical Pacific (Nino 3.4 region), and along with it, cloudiness and rainfall.
Effects of Elnino
- El Nino has been generally known to suppress monsoon rainfall in India while La Nina increases it.
- El Niño years tend to be drier than average, but one of the strongest El Nino of the century (1997-98) produced a monsoon season with above-average rainfall for India (see table).
- Researchers also believe that even the location of the warming in the Pacific may possibly have an influence on the monsoon.
- Anomalous warming in the Central and East Pacific (Nino 3.4 region) could have a more profound adverse impact on the monsoon than when the warming shifts to the adjoining far east Pacific (Nino 3. region).
- Current conditions (March, 2019) suggest that the warming is pronounced (+0.98 degree Celsius) in the Nino 3.4 region than the far east Pacific (+0.74 degree Celsius), which could suggest a weaker monsoon this year.
- Scientists claim there may be other factors that combine with the prevailing Pacific conditions to decide the fate of the monsoon.
- Progressive heating of the land during April-May-June is one.
- The extent of the Himalayan/Eurasian snow cover is another. Less snow cover means a warmer subcontinent, which can help to intensify the monsoon circulation and bring more rain.
- The Indian summer monsoon rainfall is influenced by a system of oscillating sea surface temperatures known as the Indian Ocean Dipole (IOD) in which the western Indian Ocean becomes alternately warmer and then colder than the eastern part of the ocean. A positive IOD occurs when the sea surface temperatures are greater than normal in the Arabian Sea and less than normal in the tropical eastern Indian Ocean. When the reverse is the case, a negative IOD is said to have developed. A positive IOD leads to greater monsoon rainfall and more active (above normal rainfall) monsoon days while negative IOD leads to less rainfall and more monsoon break days (no rainfall)