Daily Current Affairs : 2nd July

Daily Current Affairs for UPSC CSE

Topics Covered

  1. Demilitarized Zone
  2. Armed Forces Special Powers Act (AFSPA
  3. National Investment and Infrastructure Fund (NIIF)
  4. Facts for Prelims : Cut money

1 . Demilitarized Zone

Context : The DMZ has come into the spotlight with Donald Trump becoming the first serving American President to visit the area.

About DMZ

  • The Korean Demilitarized Zone (DMZ) is a region 4 km wide and 240 km long, dividing the Korean Peninsula into the Democratic People’s Republic of Korea on the north and Republic of Korea on the south.
  • The DMZ was created after the 1953 Korean War Armistice Agreement, which ended the Korean War.
  • The site where the Armistice was signed is called the Joint Security Area (JSA), located 53 km to the north of Seoul.
  • It continues to be the venue where successive peace discussions concerning the region are conducted, including the meeting between Trump and North Korean leader Kim Jong-Un on Sunday.
  • After it was first came into force in 1953, the DMZ has seen multiple skirmishes, but there has been a de-escalation in recent years. In 1968, a commando team from the North crossed over in a widely reported attempt to assassinate the then South Korean President. Relations between the two neighbours have thawed in recent years, with peace agreements signed in 1991 and in 2018. The September 2018 agreement is the most comprehensive so far, with plans to convert the DMZ into a peace park. The pact included an initiative to rid the DMZ of more than 20 lakh landmines that remain embedded there

2 . Armed Forces Special Powers Act

Context : The Centre has once again declared the entire state of Nagaland as a “disturbed area” and extended the imposition of Armed Forces Special Powers Act (AFSPA) in the region for six months. The order will remain effective till December.

What does the AFSPA mean?

  • AFSPA gives armed forces the power to maintain public order in “disturbed areas”.
  • They have the authority to prohibit a gathering of five or more persons in an area, can use force or even open fire after giving due warning if they feel a person is in contravention of the law.
  • If reasonable suspicion exists, the army can also arrest a person without a warrant; enter or search a premises without a warrant; and ban the possession of firearms.
  • Any person arrested or taken into custody may be handed over to the officer in charge of the nearest police station along with a report detailing the circumstances that led to the arrest.

What is a disturbed area and who has the power to declare it?

  • A disturbed area is one which is declared by notification under Section 3 of the AFSPA. An area can be disturbed due to differences or disputes between members of different religious, racial, language or regional groups or castes or communities.
  • The Central Government, or the Governor of the State or administrator of the Union Territory can declare the whole or part of the State or Union Territory as a disturbed area.
  • A suitable notification would have to be made in the Official Gazette. As per Section 3 , it can be invoked in places where “the use of armed forces in aid of the civil power is necessary”.
  • The Ministry of Home Affairs would usually enforce this Act where necessary, but there have been exceptions where the Centre decided to forego its power and leave the decision to the State governments.

What’s the origin of AFSPA?

  • The Act came into force in the context of increasing violence in the Northeastern States decades ago, which the State governments found difficult to control. The Armed Forces (Special Powers) Bill was passed by both the Houses of Parliament and it was approved by the President on September 11, 1958. It became known as the Armed Forces Special Powers Act, 1958.

Currently AFSPA is applicable in following states:

  • Jammu & Kashmir
  • Assam
  • Nagaland
  • Manipur (except Imphal Municipal Area)
  • Three districts of Arunachal Pradesh and its eight police station areas bordering Assam 

3. National Investment and Infrastructure Fund

Context : State Bank of India and the National Investment and Infrastructure Fund (NIIF) signed a memorandum of understanding (MoU) to boost availability of capital for infrastructure projects.

About NIIF

  • National Investment and Infrastructure Fund, is an Indian-government backed entity established to provide long-term capital to the country’s infrastructure sector.
  • The Indian government has 49 per cent stake in NIIF with the rest held by marquee foreign and domestic investors such as Abu Dhabi Investment Authority, Temasek and HDFC Group. With the Centre’s significant stake, NIIF is considered India’s quasi sovereign wealth fund.
  • Across its three funds — Master Fund, Fund of Funds, and Strategic Fund — NIIF manages $3 billion of capital.


  • There is a need for big money to finance infrastructure sector in the country.
  • Given the sector’s long-gestation periods, these projects need long-term patient money. NIIF can play a key role in this.
  • NIIF, with government backing, professional fund managers with wide experience in infrastructure financing, and renowned international investors, is in a good position to raise funds and bridge the financing gap.
  • It can also bankroll other financiers such as IRFC and NHB, thus helping capital outlays grow manifold.


  • The objective of NIIF would be to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects. It could also consider other nationally important projects, for example, in manufacturing, if commercially viable.

Functions of NIIF

  • Fund raising through suitable instruments including off-shore credit enhanced bonds, and attracting anchor investors to participate as partners in NIIF;
  • Servicing of the investors of NIIF.
  • Considering and approving candidate companies/institutions/ projects (including state entities) for investments and periodic monitoring of investments.
  • Investing in the corpus created by Asset Management Companies (AMCs) for investing in private equity.
  • Preparing a shelf of infrastructure projects and providing advisory services.


  • provides equity / quasi-equity support to those Non Banking Financial Companies (NBFCs)/Financial Institutions (FIs) that are engaged mainly in infrastructure financing. These institutions will be able to leverage this equity support and provide debt to the projects selected.
  • Invest in funds engaged mainly in infrastructure sectors and managed by Asset Management Companies (AMCs) for equity / quasi-equity funding of listed / unlisted companies.
  • provides Equity/ quasi-equity support / debt to projects, to commercially viable projects, both greenfield and brownfield, including stalled projects.

4 . Facts for Prelims

Cut Money

  • Cut money is the illegal commission which third party charges from people wishing to avail benefits from government schemes.

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