Daily Current Affairs : 3rd & 4th July 2020

Daily Current Affairs for UPSC CSE

1. Defence Acquisition Council
2. Shivalik Forest
3. East Container Terminal Project
4. India – China Trade deficit
5. CPWD ends ban on use of timber in its buildings
6. Private Trains
7. Containment Zone
8. Italian mariners case in UNCLOS
9. National Pharmaceutical Pricing Authority (NPPA)
10. Purchasing Manager’s Index
11. Facts for Prelims

1 . Defence Acquisition Council

Context: Defence Acquisition Council, chaired by Defence Minister Rajnath Sing has approved deals worth ₹38,900 crore.

Approved deals:

• Procurement of 21 MiG-29 fighter jets for the Indian Air Force (IAF), upgrade of 59 MiG-29s and acquirement of 12 Su-30 MKI aircraft.
• The 21 MiG-29s had been partially manufactured by Russia for an unfulfilled order and would now be upgraded and delivered to India.
• Other procurement includes Pinaka ammunition, armoured vehicle BMP armament upgrades and Software Defined Radio for the Army, Long Range Land Attack Missile Systems of over 1,000 km range and Astra Beyond Visual Range air-to-air missiles for the Navy and the IAF.

Benefits

• New aircraft procurements and upgradaton would add to the three of their squadrons in service that were undergoing an upgrade. The IAF currently has 30 fighter squadrons against a sanctioned strength of 42.
• Acquisition of the Pinaka missile systems would help to raise additional regiments over and above those inducted by the Army.
• Addition of LRLAMS to the existing arsenal would bolster the attack capabilities of the Navy and the IAF.

About Defence Acquisition Council

• Defence Acquisition Council (DAC) under the Defence Minister was constituted for overall guidance of the defence procurement planning process.
• It was constituted based on the Group of Ministers recommendations on “Reforming the National Security System,” 

Compostion

• Defence Minister: Chairman
• Minister of State for Defence: Member
• Chief of Army Staff: Member
• Chief of Naval Staff: Member
• Chief of Air Staff: Member
• Defence Secretary: Member
• Secretary Defence Research & Development: Member
• Secretary Defence Production: Member
• Chief of Integrated Staff Committees HQ IDS: Member
• Director General (Acquisition): Member
• Dy. Chief of Integrated Defence: Staff Member Secretary

Objective

• The objective of the Defence Acquisition Council is to ensure expeditious procurement of the approved requirements of the Armed Forces in terms of capabilities sought and time frame prescribed by optimally utilizing the allocated budgetary resources.

Functions

• The functions of the DACIn principle approval of 15 Years Long Terms Integrated Perspective Plan for Defence Forces
• Accord of Acceptance of Necessity to acquisition proposals;
• Categorization of the acquisition proposals relating to ‘Buy’, ‘Buy & Make’ and ‘Make’;
• Issues relating to Single vendor clearance;
• Decision regarding ‘offset’ provisions in respect of acquisition proposals above Rs. 300 crores;
• Decisions regarding Transfer of Technology under ‘Buy & Make’ category of acquisition proposals
• Field Trial evaluation.          

2 . Shivalik forest

Context: A proposal has been sent to the Uttar Pradesh government to declare the Shivalik forest in the Saharanpur circle a tiger reserve. If accepted, it would be the fourth tiger reserve in Uttar Pradesh after Amangarh in Bijnor, Pilibhit and Dudhwa in Lakhimpur-Kheri.

About Shivalik forest:

• The forest constitutes the northern tip of the State and the 33,220-hectare-long corridor, located at the foothills of the Shivalik range, connects four States — Himachal Pradesh, Uttarakhand, Haryana and Uttar Pradesh.
• Shivalik forests in Saharanpur have a similar topography of the forests to that of Rajaji National Park where the Uttarakhand government is proposing to relocate tigers from Corbett.
• No tiger has been sighted in the region for the last 10 years but at least 50 leopards have been in the forests.

Need

• With the rising tiger population, there is an increase in the number of clashes between tigers to protect their territory, he said. “The weaker ones often move into sugarcane fields where they can easily hide. The fields prove to be excellent hideouts.
• But it increases the chances of human-animal conflict. In such a scenario, it is necessary to increase the area for movement of tigers.

Benefits

• This would increase the area for movement of tigers and thus reduce the increasing man-animal conflict
• It will help nurture the rich biodiversity of the region.

Project Tiger

• Project Tiger was launched by the Government of India in the year 1973 to save the endangered species of tiger in the country. 
• Starting from nine (9) reserves in 1973-2016 the number is grown up to fifty (50).  A total area of 71027.10 km² is covered by these project tiger areas.
• The tiger reserves are constituted on a core/buffer strategy. The core areas have the legal status of a national park or a sanctuary, whereas the buffer or peripheral areas are a mix of forest and non-forest land, managed as a multiple use area. The Project Tiger aims to foster an exclusive tiger agenda in the core areas of tiger reserves, with an inclusive people oriented agenda in the buffer.
• Project Tiger is an ongoing Centrally Sponsored Scheme of the Ministry of Environment, Forests and Climate Change providing central assistance to the tiger States for tiger conservation in designated tiger reserves.
• The National Tiger Conservation Authority (NTCA) is a statutory body of the Ministry, with an overarching supervisory / coordination role, performing functions as provided in the Wildlife (Protection) Act, 1972.
• Approval for new Tiger Reserve has to be provided by National Tiger Conservation Authority

Fossil of Stegodon

• During camera-trap survey to count the leopard and deer population a team of the World Wide Fund for Nature came across a piece of fossil of Stegodon in a sandstone rock.
• In the past, stegodonts were believed to be the ancestors of the true  elephants  and mammoths, but currently they are believed to have no modern descendants. Stegodon may be derived from Stegolophodon, an extinct genus known from the Miocene of Asia. Stegodon is considered to be a sister group of elephants and mammoths.
• Despite possibly looking a lot like the elephants of today, Stegodon had a very remarkable feature: its tusks could grow to be 10 feet long, about a third of a bus’ length and almost as long as its entire body. Unlike its more famous long-tusked cousins, the mammoths, Stegodon’s tusks sometimes grew so close together that there wasn’t enough space for its trunk to lie in between
• The Fossil found  in the sandstone rock is the molar of the lower jaw. It is the first of its kind found in the region. Pieces of fossil of Stegodon have been found in Himachal Pradesh and Chandigarh. It is around 5-6 million years old.

3 . East Container Terminal Project

Context : Sri Lankan government had signed an agreement with India and Japan to jointly develop the East Container Terminal (ECT) in Colombo but there is no final agreement on the project.

About East Container Terminal

• Sri Lanka, Japan and India entered a memorandum of cooperation in May 2019, agreeing to jointly develop the terminal at an estimated cost of $700 million.
• As per the agreement the Sri Lanka Ports Authority (SLPA) retains 100% ownership of the East Container Terminal (ECT), while the Terminal Operations Company is jointly owned, the SLPA
• Sri Lanka will hold a 51% stake in the project and the joint venture partners will retain 49%.
• Japan is likely to provide a 40-year soft loan with a 0.1% interest rate, details of India’s contribution to the initiative are awaited,

Importance of the Project for India

• Over 70% of the trans-shipment business at the strategically located ECT is linked to India
• The involvement of India and Japan is the project is being seen as a big development aimed at neutralising the growing influence of China, which has poured money into the South Asian island nation under its mammoth Belt and Road Initiative (BRI) infrastructure plan 

Point of contention

• The nationalist groups in Sri Lanks are objecting to any “foreign involvement” in running “national assets”. Though it is an India- Japan- Sri Lanka agreement but the contention has been focussed merely on the ‘Sri Lanka-India’ dimension

4 . India- China trade deficit

Context: According to government data India’s trade deficit with China fell to $48.66 billion in 2019-20 on account of the decline in imports from the neighbouring country.

About the News

• Exports to China in the last financial year stood at $16.6 billion, while imports aggregated at $65.26 billion. The trade deficit stood at $53.56 billion in 2018-19 and $63 billion in 2017-18.
• The main imports from China include clocks and watches, musical instruments, toys, sports goods, furniture, mattresses, plastics, electrical machinery, electronic equipment, chemicals, iron and steel items, fertilisers, mineral fuel and metals.
• Foreign Direct Investment (FDI) from China in India dipped to $163.78 million in 2019-20 from $229 million in the previous fiscal. India had received $350.22 million in FDI from the neighbouring country in 2017-18 and $277.25 million in 2016-17.

Reasons for reduction in Trade Deficit & FDI

• It has also imposed anti-dumping duties on several goods, which are being dumped in the domestic market at below the average prices from China with a view to guarding domestic players from cheap imports.
• The government is framing technical regulations and quality norms for several products to reduce dependence on Chinese imports. As many as 371 products have been identified for technical regulations. Of these, technical regulations have been formulated for 150 products worth $47 billion of imports.
• Over 50 quality control orders (QCOs) and other technical regulations have been notified in the past one year, including those on electronic goods, toys, air conditioners, bicycle parts, chemicals, safety glass, pressure cooker and steel and electrical items. China accounts for about 14% of India’s imports and is a major supplier for sectors like mobile phones, telecom, power, plastic toys, and critical pharma ingredients.
• In April, the government tightened FDI norms coming from the countries which share land border with India. As per the amended FDI policy, a company or an individual from a country that shares land border with India can invest in any sector only after getting government approval.

Benefits for India

• This can be a step towards Atmanirbhar Bharat and Make in India wherein imported goods from China would be substituted by locally manufactured products.
• It will have a positive cascading effect on the economy as equivalent quantum of revenues would not only be added to the turnover of domestic enterprises including MSMEs
• It will also translate to benefits through forward and backward linkages, better economies of scale along with cost competitiveness
• It might also enhance the scope of employment generation.

5 . CPWD ends ban on use of timber in its buildings

Context: The Central Public Works Department has ended a ban in place since 1993 on the use of timber in its construction projects

About the News

• The use of timber had been banned in CPWD works from the year 1993.
• After a gap of over 25 years, Central Public Works Department has removed the ban on use of timber in construction of buildings and habitat projects. 

Reasons

• The MoEFCC has asked to remove the ban on use of wood in construction, since it will create demand for wood-based industries that would spur the local economy, particularly in rural areas, create large scale employment and encourage farmers and others to bring degraded areas under tree cover that, in turn, will augment production of a multitude ecosystem services for the benefit of the country
• Wood is a versatile renewable construction material and the life cycle economic cost of timber is also often much lower.
• As India has committed to an UNFCCC-NDC target (the United Nations Framework Convention on Climate Change – Nationally Determined Contributions) of creating additional sink of 2.5-3 billion MT of CO2 equivalent through additional forest and tree cover by 2030, raising the demand for forest products including wood so as to create a favourable investment ecosystem for planting more trees is an imperative

About CPWD

• The CPWD is the government’s largest construction agency and it executes major projects of the Centre as well as the state governments.
• It also looks after maintenance of central government buildings and erecting fences on the country’s international borders, among others.The agency also carries out projects in foreign countries under friendship programmes with India.
•  CPWD, which comes under the Union Housing and Urban Affairs Ministry, 

6 . Private trains

Context: Private trains are expected to begin operations by April 2023 and according to the Indian Railways this move would benefit travellers by way of confirmed tickets and faster trains.

Details about operation of Private Trains

• The private operators will be allowed to run train services using the common infrastructure of the railways—from tracks and signalling systems to depots and washing lines.
• Private firms will have the freedom to decide fares and stoppages, and also the basket of services on offer in these trains. They will be allowed to run these trains for a 35-year period in return for a share in the revenues they earn, apart from payments in the form of haulage charges for using public infrastructure.
• The time taken by a private train to complete a journey will be comparable to the fastest train on that route and will not exceed 160 km per hour.
• On the same origin-destination route when private trains leave, no other train run by Indian Railways will leave within 15 minutes of scheduled departure of a private train.
• Each private train will have a maximum of 16 coaches.
• Maintenance of rolling stock (coaches and locomotives) will be the responsibility of private firms, the safety audit will be done by the railways.
• Penalties will be imposed for failure to meet performance standards for private firms, and for any lapse on the part of the railways.

Significance

• This would be a “paradigm shift in passenger train operations” to deliver “world-class service” to commuters.
• This will allow (for the) introduction of next-generation technology
• It will reduce transit time, introduce modern coaches and take care of the mad rush for reserved tickets.

Challenges

• In the project information documents released by the government there is no mention of a regulator.
• The details of the plan to modernize the railways are still fairly sketchy. For example it is still unclear how the railways can expect a shift from air and roadways modes of transport as it is losing passengers due to lower fares and greater convenience and by raising passenger fares in exchange for better services on the new private trains.
• There is no clarity on how the new private trains will be accommodated since the existing rail network is already choked. The capacity constraints on existing routes operating at full capacity has led to trains steadily losing passenger traffic to other modes of transport. According to a data the Railways ferried 8.4 billion (840 crore) passengers in 2019-20 and about five crore passengers could not be accommodated. A further analysis shows that during the busy seasons/summer season nearly 13.3% passengers were not able to get confirmed reservation.
• When private firms and railways run trains on the same tracks, the question of “priority”  will arise and this will eventually introduce corruption as private operators may try to bribe their way out of the problem.
• The biggest and most unique challenge, however, will be “the railways will be a competitor and a (de facto) regulator of private trains,

7 . Containment Zone

What are containment zones?

• The lockdown, implemented in five phases, worked at the national level, while the classification of red, orange and green districts operated at the state and inter-district levels. Demarcation of containment zones is done within a town, village, or municipal or panchayat area.
• Neighbourhoods, colonies, or housing societies where infected people live are sealed, and access is restricted.
• Containment zones are where the restrictions on movement and interaction are the most severe. In many cities, the entire demarcated area is barricaded and the entry and exit points closed. Only the very basic supplies and services are allowed inside.

Who defines the containment zones?

• It is the district, town or panchayat authorities that decide which areas have to be marked as containment zones, how large they would be, and what kind of restrictions would apply. The rules for the national lockdown, for example, were set by the central government, while the state governments decided what restrictions to impose on districts.
• The district administration, municipal corporation or panchayat bodies exercise a great deal of discretion in demarcation of containment zones. The definition and time period vary, and are continuously reviewed and updated.

How are they demarcated?

• The parameters used are similar, but the exact criteria applied varies, and usually depends on local conditions. These have also evolved with time, and are under constant review.
• In general, containment zones are getting smaller with time as the number of cases are increasing — from entire localities, to colonies or neighbourhood, to streets and lanes, to particular buildings, and now just particular floors.
• As of now, in Delhi, a containment zone is declared if three or more infections are detected. In Gurgaon, if five positive cases emerge within a 1-km radius, that area is desginated a containment zone. In Noida, an area within a radius of 250 m, or one floor of a building, is declared a containment zone, even if one person is found positive.
• While some cities denotify areas after 28 days if no fresh case emerges from the containment zone, this period is seven or 14 days in some other cities. The perimeter of the containment zone is also different in different cities.

8 . Italian mariners case in UNCLOS

Context : The Government of India is studying an international tribunal’s ruling that the Italian marines accused of killing two fishermen in the waters off the Kerala coast on February 15, 2012, held “immunity” and would face a trial in Italy, not India.

Background of the Case

• 2 Italian mariners on board an oil tanker, “Enrica Lexie” shot two fishermen in the waters off the Kerala coast on February 15, 2012.They were detained by the Indian police.
• In early 2013 the two marines were allowed to return to Italy in early 2013 on a temporary leave.  But once they landed in Italy, Italian authorities notified India they would not return the marines unless there was a guarantee they would not face the death penalty.
• After tense diplomatic discussions, the two marines were returned, without any of the guarantees requested by Italy.
• In 2013, the Indian National Investigation Agency (NIA) filed a first information report against the two Italian marines in relation to charges including murder, attempted murder, mischief, conspiracy.
• In 2014 the National Investigation Agency invoked the Suppression of Unlawful Acts against Safety of Maritime Navigation and Fixed Platforms on Continental Shelf Act, 2002. This caused a diplomatic furore as it provides for the death penalty.
• Later the European Parliament issued an official resolution, according to which human rights of the two Italian marines were violated. The EU threatened to impose trade sanctions.
• Then Italy moved the International Tribunal for Law of the Sea (ITLOS)  seeking for two italian marines to stay in their own country during the trial process.
• In 2015, Italy instituted proceedings against India before an arbitral tribunal to be constituted under Annex VII of UNCLOS.
• According to UNCLOS, disputes can be resolved through four process, one of which was for ad-hoc arbitration as outlined in Annex VII of the convention. Accordingly, a specially-designated tribunal was constituted with five members on November 6, 2015.
• ITLOS directed both countries to suspend all court proceedings in the matter, and asked them not to start new proceedings that might aggravate the dispute or jeopardise proceedings of the arbitral tribunal.
• The Supreme Court stayed all proceedings against the two Italian marines.

What is the core legal dispute?

• It stems from India exercising criminal jurisdiction over the two Italians by filing a murder case and arresting them.
• Italy claims the marines had been hired to protect the tanker from pirates, and they were only doing their job.
• Italy argues the marines enjoyed sovereign functional immunity in India, and Italy alone had jurisdiction to deal with them.
• According to Italy, it was an “incident of navigation concerning a ship on the high seas”, outside the territorial waters of India. It has cited Article 97 of the United Nations Convention on the Law of the Sea (UNCLOS): “In the event of a collision or any other incident of navigation concerning a ship on the high seas”, only the flag state of that ship can launch penal proceedings.

India’s stand

• India exercised criminal jurisdiction over the two Italians by filing a murder case and arresting them.
• India claim that the marines on board “Enrica Lexie” had violated the freedom of navigation rights under the United Nations Convention on the Law of the Sea (UNCLOS)
• The tribunal has held India’s claim of compensation for the families of the captain and the crew members who have suffered. India has struck down Italy’s claim of compensation for the marines.

Recent Verdict

• The tribunal observed that India and Italy had concurrent jurisdiction over the incident and a valid legal basis to institute criminal proceedings against the marines. However, it found that the immunities enjoyed by the marines as State officials operate as an exception to the jurisdiction of the Indian courts and, hence, preclude them to judge the marines.
• While the tribunal held in Italy’s favour the main submission, of jurisdiction, it found merit in India’s counter-claim that the marines on board “Enrica Lexie” had violated the freedom of navigation rights under the United Nations Convention on the Law of the Sea (UNCLOS) by shooting at fishing boat “St. Antony” and should pay compensation to the victims’ families, the boat owner and crew members.

In India’s favour

• PCA rejected a key argument by Italy that India, by leading the Italian vessel into its territory and arresting the marines, violated its obligation to cooperate with measures to suppress piracy under Article 100 of UNCLOS. This may mean that the arbitration court did not view the incident as one related to piracy at all.
• The tribunal also found merit in India’s counter-claim that the marines on board Ship “Enrica Lexie” had violated the freedom of navigation rights under the United Nations Convention on the Law of the Sea (UNCLOS) by shooting at fishing boat “St. Antony” and should pay compensation to the victims’ families, the boat owner and crew members.

In taly’s favour

• An international arbitration court has ruled that India does not have jurisdiction to try the marines, who, it held, were entitled to immunity as they were acting on behalf of a state
• The tribunal ruled that the Italian marines enjoyed diplomatic immunity as Italian state officials under the United Nations Convention on the Law of Sea.

UNCLOS

• The United Nations Convention on the Law of the Sea (UNCLOS) is an international treaty which was adopted and signed in 1982 in Montego Bay (Jamaica)
• The Convention came into effect in November, 1994. It now has 162 Parties including the European Union for its share of jurisdictions.
•  Convention has become the legal framework for marine and maritime activities
• The Convention has created three new institutions on the international scene : – the International Tribunal for the Law of the Sea, headquartered in Hamburg (Germany), – the International Seabed Authority, headquartered in Kingston (Jamaica), – the Commission on the Limits of the Continental Shelf, based in the United Nations Headquarters in New York.
• It lays down a comprehensive regime of law and order in the world’s oceans and seas establishing rules governing all uses of the oceans and their resources.
• It embodies in one instrument traditional rules for the uses of the oceans and at the same time introduces new legal concepts and regimes and addresses new concerns.
• The Convention also provides the framework for further development of specific areas of the law of the sea.
• The convention has resolved several important issues related to ocean usage and sovereignty, such as:
  • Established freedom-of-navigation rights
  • Set territorial sea boundaries 12 miles offshore
  • Set exclusive economic zones up to 200 miles offshore
  • Set rules for extending continental shelf rights up to 350 miles offshore
  • Created the International Seabed Authority
  • Created other conflict-resolution mechanisms (e.g., the UN Commission on the Limits of the Continental Shelf)
• Pursuant to Article 287(1) of UNCLOS, when signing, ratifying, or acceding to UNCLOS, a State may make a declaration choosing one or more of the following means for settling such disputes:
  • the International Tribunal for the Law of the Sea (ITLOS) in Hamburg, Germany;
  • the International Court of Justice in The Hague, The Netherlands;
  • ad hoc arbitration (in accordance with Annex VII of UNCLOS); or
  • a “special arbitral tribunal” constituted for certain categories of disputes (established under Annex VIII of UNCLOS).

International Tribunal for Law of Sea

• The International Tribunal for the Law of the Sea is an independent judicial body established by the United Nations Convention on the Law of the Sea to adjudicate disputes arising out of the interpretation and application of the Convention.
• The Tribunal is composed of 21 independent members, elected from among persons enjoying the highest reputation for fairness and integrity and of recognized competence in the field of the law of the sea.
• The Tribunal has jurisdiction over any dispute concerning the interpretation or application of the Convention, and over all matters specifically provided for in any other agreement which confers jurisdiction on the Tribunal (Statute, article 21).

Permanent Court of arbitration

• The Permanent Court of Arbitration (PCA) is an intergovernmental organization located in The Hague, Netherlands.
• It is not a court in the traditional sense, but provides services of arbitral tribunal to resolve disputes that arise out of international agreements between member states, international organizations or private parties.
• The cases span a range of legal issues involving territorial and maritime boundaries, sovereignty, human rights, international investment, and international and regional trade.
• The PCA is constituted through two separate multilateral conventions with a combined membership of 122 states.
• The organization is not a United Nations agency, but the PCA is an official United Nations Observer.

9 . National Pharmaceutical Pricing Authority (NPPA)

Context: Union Health Ministry has identified a list of critical medical equipment and had requested the National Pharmaceutical Pricing Authority (NPPA) to ensure its availability at affordable prices this is to ensure sufficient availability and keep a check on the price rise of critical medical equipment for clinical management of COVID-19 in the country

About the news

• NPPA, in exercise of powers conferred under DPCO, 2013, has called for price-related data from manufacturers/importers of Pulse Oximeter and Oxygen Concentrator to ensure that prices existing as on 1st April, 2020 should not be increased more than 10% in a year.
• All the medical devices have been notified as drugs and have come under the regulatory regime of the Drugs and Cosmetics Act, 1940 and Drugs (Prices Control) Order, 2013, with effect from April 1.
• According to the NPPA all the Medical Devices have come under price regulation accordingly, price increase of medical devices would be monitored

About NPPA

• National Pharmaceutical Pricing Authority (NPPA) was constituted on 29th August, 1997 as an attached office of the Department of Pharmaceuticals (DoP), Ministry of Chemicals & Fertilizers as an independent Regulator for pricing of drugs and to ensure availability and accessibility of medicines at affordable prices.

Function of National Pharmaceutical Pricing Authority

• To implement and enforce the provisions of the Drugs (Prices Control) Order in accordance with the powers delegated to it.
• To deal with all legal matters arising out of the decisions of the Authority.
• To monitor the availability of drugs, identify shortages, if any, and to take remedial steps.
• To collect/ maintain data on production, exports and imports, market share of individual companies, profitability of companies etc., for bulk drugs and formulations.
• To undertake and/ or sponsor relevant studies in respect of pricing of drugs/ pharmaceuticals.
• To recruit/ appoint the officers and other staff members of the Authority, as per rules and procedures laid down by the Government.
• To render advice to the Central Government on changes/ revisions in the drug policy.
• To render assistance to the Central Government in the parliamentary matters relating to the drug pricing

Drug Prices Control Order (DPCO)

• The Drugs Prices Control Order, 1995 is an order issued by the Government of India under Sec. 3 of Essential Commodities Act, 1955 to regulate the prices of drugs. The Order interalia provides the list of price controlled drugs, procedures for fixation of prices of drugs, method of implementation of prices fixed by Govt., penalties for contravention of provisions etc. For the purpose of implementing provisions of DPCO, powers of Govt. have been vested in NPPA. Later, the Drugs (Prices Control) Order (DPCO) 2013 was notified.

National list of essential medicines

• The National list of essential medicines is one of the key instruments in balanced healthcare delivery system of a country which inter alia includes accessible, affordable quality medicine at all the primary, secondary, tertiary levels of healthcare. Realizing this GOI, MOHFW decided to have its own essential medicines list. The first National List of Essential Medicines of India was prepared and released in 1996. This list was subsequently revised in 2003.
• Till June 2018, 851 medicines (including 4 medical devices i.e. Cardiac stents, drug eluting stents, condoms and intra uterine devices) are regulated under Revised Schedule – I based on National List of Essential Medicines, 2015 (NLEM, 2015).

Purpose of the National List of Essential Medicines

The NLEM may have multiple uses. It can:

• Guide safe and effective treatment of priority disease conditions of a population
• Promote the rational use of medicines
• Optimize the available health resources of a country It can also be a guiding document for:
  • State governments to prepare their list of essential medicines
  • Procurement and supply of medicines in the public sector
  • Reimbursement of cost of medicines by organizations to its employees
  • Reimbursement by insurance companies
  • Identifying the ‘MUST KNOW’ domain for the teaching and training of health care professionals

How are prices regulated?

• The DPCO controls the prices of all essential medicines by fixing ceiling prices, limiting the highest prices companies can charge.
• The National List of Essential Medicines (NLEM) is drawn up to include essential medicines that satisfy the priority health needs of the population.
• The list is made with considerations of safety, efficacy, disease prevalence and the comparative cost-effectiveness of medicines, and is updated periodically by an expert panel set up for this purpose under the aegis of the Ministry of Health and Family Welfare. This list forms the basis of price controls under the DPCO.

What is the mechanism for price capping?

• The NLEM 2015 contains 376 medicines on the basis of which the National Pharmaceutical Pricing Authority (NPPA) has fixed prices of over 800 formulations using the provisions of the DPCO. However, these formulations cover less than 10% of the total pharmaceutical market.
• The DPCO follows a market-based pricing mechanism. The ceiling price is worked out on the basis of the simple average price of all brands having at least 1% market share of the total market turnover of that medicine.

10 . Purchasing Manager’s Index

Context : India’s services sector activity remained in a deep downturn in June as the COVID-19 pandemic curtailed intake of new work orders and disrupted business operations, a monthly survey showed. The IHS Markit India Services Business Activity Index was at 33.7 in June, up from 12.6 recorded in May

What does the PMI index mean?

• Purchasing Managers’ Index (PMI) is a survey-based economic indicator designed to provide a timely insight into business conditions.
• The PMI is widely used to anticipate changing economic trends in official data such as GDP, or sometimes as an alternative gauge of economic performance and business conditions to official data, as the latter sometimes suffer from delays in publication, poor availability or data quality issues.
• The PMI is produced globally by IHS Markit although a small number of trade associations also produce local PMIs in certain markets, such as the ISM in the United States.

What does the Purchasing Managers’ Index measure?

• The Purchasing Managers’ Index (PMI) is a survey-based indicator of business conditions, which includes individual measures (‘sub-indices’) of business output, new orders, employment, costs, selling prices, exports, purchasing activity, supplier performance, backlogs of orders and inventories of both inputs and finished goods, where applicable.
• The surveys ask respondents to report the change in each variable compared to the prior month, noting whether each has risen/improved, fallen/deteriorated or remained unchanged.
• These objective questions are accompanied by one subjective ‘sentiment’ question asking companies whether they forecast their output to be higher, the same or lower in a year’s time.
• Originally compiled for manufacturing, IHS Markit pioneered the extension of coverage to other sectors in the 1990s, including services, construction and retail.
• The PMI and its sub-indices are widely used to anticipate changing economic trends in official data such as GDP, or sometimes as an alternative gauge of economic performance and business conditions to official data, as the latter sometimes suffer from delays in publication, poor availability or data quality issues.

What is a services PMI?

• The services PMI was introduced in 1996 by IHS Markit’s economists (known as NTC Research at the time) to accompany the existing manufacturing PMI.
• With the service sector accounting for a larger proportion of GDP than manufacturing for most developed economies, the services PMI was born out of a need for analysts (and in particular central bank policymakers) to better understand changing business conditions in the wider economy.
• The services PMI has fewer questions than the manufacturing PMI due to some questions, such as inventories, not being relevant to many service providers.
• Coverage includes financial services, consumer services and all other business services.

Composite Purchasing Managers Index

• The composite Purchasing Managers’ Index (PMI) is an indicator of economic health for manufacturing and service sectors.
• The purpose of the PMI is to provide information about current business conditions to company decision makers, analysts and purchasing managers.
• Each country PMI survey for the manufacturing or service sector is based on questionnaire responses from panels of senior purchasing executives (or similar) at over 400 companies.
• The composite PMI is a number from 0 to 100. A PMI above 50 represents an expansion when compared with the previous month.
• A PMI reading under 50 represents a contraction, and a reading at 50 indicates no change

11 . Facts for Prelims

Heparin

• Heparin is a blood thinner that has long been used in patients vulnerable to blood clots in their legs, lungs, heart or other body parts.
• It is used to reduce their risk of heart attacks, strokes and pulmonary embolism.
• Several patients with critical illnesses, including those requiring kidney dialysis, are given the drug. During the Covid-19 pandemic, the Ministry of Health and Family Welfare included the drug in its clinical management guidelines for the treatment of Covid-19 patients in the ICU.