Daily Current Affairs : 7th and 8th January

Daily Current Affairs for UPSC CSE

Topics Covered

1. IHS Markit India Services Business Activity Index
2. Prompt Corrective Action
3. Indian Data Relay Satellite System.
4. Article 30 of the Constitution
5. Lysosomal Storage Disorders (LSD)
6. Jus Cogens
7. Convention for the Protection of Cultural Property in the Event of Armed Conflict
8. EWS Reservation
9. GOCO Model
10. Infant Mortality
11. Nominal GDP
12. Facts for Prelims

1 . India Service Business Activity Index

Context : The IHS Markit India Services Business Activity Index improved from 52.7 in November to 53.3 in December, highlighting the second-strongest rate of increase in output in over a year, after July. Meanwhile, the Composite PMI Output Index that maps both the manufacturing and services sector, rose from 52.7 in November to 53.7, reflecting stronger rates of expansion in both the manufacturing and service sectors.

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.

2 . Prompt Corrective Action

Context : The Reserve Bank of India (RBI) has decided to impose restrictions on urban cooperative banks (UCBs) for deterioration of financial position, in line with the prompt corrective action (PCA) framework that is imposed on commercial banks.

About the News

• Under this revised Supervisory Action Framework (SAF), UCBs will face restrictions for worsening of three parameters: when net non-performing assets exceed 6% of net advances, when they incur losses for two consecutive financial years or have accumulated losses on their balance sheets, and if capital adequacy ratio falls below 9%.Action can be also taken if there are serious governance issues.
• For breach of such risk thresholds, UCBs will be asked to submit a board-approved action plan to correct the situation like reducing net NPAs below 6%, for restoring the profitability and wiping out the accumulated losses, and increasing capital adequacy ratio to 9% or above within 12 months.
• The board of the UCB will be asked to review the progress under the action plan on quarterly/monthly basis and submit the post-review progress report to the RBI.
• The RBI may also seek a board-approved proposal for merging the UCB with another bank or converting itself into a credit society if CAR falls below 9%.
• It can impose restrictions on declaration or payment of dividend or donation without prior approval if any one of the risk thresholds is breached.
• Some of the other curbs include restricting fresh loans and advances carrying risk-weights more than 100% on incurring capital expenditure beyond a specified limit and on expansion of the balance sheet.

What is Prompt Corrective Action

• To ensure that banks don’t go bust, RBI has put in place some trigger points to assess, monitor, control and take corrective actions on banks which are weak and troubled. The process or mechanism under which such actions are taken is known as Prompt Corrective Action, or PCA.

What does the RBI stipulate

• RBI has set trigger points on the basis of CRAR (a metric to measure balance sheet strength), NPA and ROA. Based on each trigger point, the banks have to follow a mandatory action plan. Apart from this, the RBI has discretionary action plans too.
• The rationale for classifying the rule-based action points into “mandatory“ and “discretionary“ is that some of the actions are essential to restore the financial health of banks while other actions will be taken at the discretion of RBI depending upon the profile of each bank. 
• Breaching net NPA ratio of 6% is one of the conditions that trigger restrictions.

What will a bank do if PCA is triggered

• Banks are not allowed to re new or access costly deposits or take steps to increase their fee-based income.
• Banks will also have to launch a special drive to reduce the stock of NPAs and contain generation of fresh NPAs.
• They will also not be allowed to enter into new lines of business. RBI will also impose restrictions on the bank on borrowings from interbank market. 

3 . Indian Data Relay Satellite System

Context : India plans to ring in its own era of space-to-space tracking and communication of its space assets this year by putting up a new satellite series called the Indian Data Relay Satellite System.

About Indian Data Relay Satellite System

• The IDRSS is planned to track and be constantly in touch with Indian satellites, in particular those in low-earth orbits which have limited coverage of earth.
• It will be vital to Indian Space Research Organisation (ISRO), whose roadmap is dotted with advanced LEO missions such as space docking, space station, as well as distant expeditions to moon, Mars and Venus. It will also be useful in monitoring launches
• IDRSS satellites of the 2,000 kg class would be launched on the GSLV launcher to geostationary orbits around 36,000 km away. In such apparently fixed orbits, they would be covering the same area on earth. A satellite in GEO covers a third of the earth below and three of them can provide total coverage.
• Work on the two IDRSS satellites planned initially has begun. The first of them will be sent towards the end of 2020. It will precede the pre-Gaganyaan experimental unmanned space flight which will have a humanoid dummy. A second one will follow in 2021. The two will offer near total tracking, sending and receiving of information from the crew 24/7.
• Older space majors such as the U.S. and Russia started their relay satellite systems in the late 1970s-80s and a few already have around 10 satellites each. They have used them to monitor their respective space stations Mir and the International Space Station, and trips that dock with them, as well as the Hubble Space Telescope.

Need and Benefits

• During the launch of the human mission and also when the crew craft orbits earth from a distance of 400 km, at least one ground station must see and track it. But with available ground stations, it wouldn’t be possible. Without data relay satellites, ISRO would have to create a large number ground stations everywhere or hire them globally and yet the crewed spacecraft would not be visible all the time.
• The first beneficiary would be the prospective crew members of the Gaganyaan mission of 2022 who can be fully and continuously in touch with mission control throughout their travel.

Other countries

• U.S. is putting up its third-generation advanced fleet of TDRS (Tracking & Data Relay Satellites)
• Russia has its Satellite Data Relay Network
• Europe is building its own European Data Relay System.
• China is into its second generation Tianlian II series.

4 . Article 30 of the Constitution

Context : The Supreme Court held that the state is well within its rights to introduce a regulatory regime in the “national interest” to provide minority educational institutions with well-qualified teachers in order for them to “achieve excellence in education.”

About the issue

• The judgment came on a challenge to the validity of the West Bengal Madrasah Service Commission Act of 2008.
• The State Act mandated that the process of appointment of teachers in aided madrasahs, recognised as minority institutions, would be done by a Commission, whose decision would be binding.

Detail of the Judgement

• The managements of minority institutions cannot ignore such a legal regime by saying that it is their fundamental right under Article 30 of the Constitution to establish and administer their educational institutions according to their choice.
• A Bench of Justices Arun Mishra and U.U. Lalit said the regulatory law should however balance the dual objectives of ensuring standard of excellence as well as preserving the right of the minorities to establish and administer their educational institutions. Regulations that embrace and reconcile the two objectives were reasonable
• Referring to the 11-judge Bench decision in the TMA Pai Foundation case, Justice Lalit, who authored the verdict, said Article 30(1) (right of minorities to establish and administer educational institutions of their choice) was neither absolute nor above the law.
• As per the judgement “When it comes to the right to appoint teachers, in terms of law laid down in the TMA Pai Foundation case, a regulation framed in the national interest must necessarily apply to all institutions regardless whether they are run by majority or minority as the essence of Article 30(1) is to ensure equal treatment between the majority and minority institutions. An objection can certainly be raised if an unfavourable treatment is meted out to an educational institution established and administered by minority. But if ensuring of excellence in educational institutions is the underlying principle behind a regulatory regime and the mechanism of selection of teachers is so designed to achieve excellence in institutions, the matter may stand on a completely different footing,” Justice Lalit wrote.
• The court explains how to strike a “balance” between the two objectives of excellence in education and the preservation of the minorities’ right to run their educational institutions.
• For this, the court broadly divides education into two categories – secular education and education “directly aimed at or dealing with preservation and protection of the heritage, culture, script and special characteristics of a religious or a linguistic minority.”
• When it comes to the latter, the court advocated “maximum latitude” to be given to the management to appoint teachers. The court reasons that only “teachers who believe in the religious ideology or in the special characteristics of the concerned minority would alone be able to imbibe in the students admitted in such educational institutions, what the minorities would like to preserve, profess and propagate.”
• However, minority institutions where the curriculum was “purely secular”, the intent must be to impart education availing the best possible teachers.
• The apex court upheld the validity of the 2008 Act, saying the Commission was composed of persons with profound knowledge in Islamic Culture and Islamic Theology. The court said the provisions of the Act were “specially designed” for madrasahs and the madrasah education system in West Bengal. The court concluded that the Act was “not violative of the rights of the minority educational institutions on any count

5 . Lysosomal Storage Disorders (LSD)

About LSD

• Lysosomal storage diseases  are a group of about 50 rare inherited metabolic disorders that result from defects in lysosomal function
• Lysosomes are sacs of enzymes within cells that digest large molecules and pass the fragments on to other parts of the cell for recycling. This process requires several critical enzymes.
• If one of these enzymes is defective, because of a mutation, the large molecules accumulate within the cell, eventually killing it
• Lysosomal storage disorders are caused by lysosomal dysfunction usually as a consequence of deficiency of a single enzyme required for the  metabolism  of lipids, glycoproteins (sugar-containing proteins), or so-called mucopolysaccharides. 

6 . Jus Cogens

What does Jus Cogens mean

• JUS COGENS or ius cogens, meaning “compelling law” in Latin, are rules in international law that are peremptory or authoritative, and from which states cannot deviate.
• These norms cannot be offset by a separate treaty between parties intending to do so, since they hold fundamental values.
• Today, most states and international organisations accept the principle of jus cogens, which dates back to Roman times.
• The jus cogens rules have been sanctioned by the Vienna Conventions on the Law of Treaties of 1969 and 1986. According to both Conventions, a treaty is void if it breaches jus cogens rules.
• Article 53 of the 1969 Convention (“Treaties conflicting with a peremptory norm of general international law (“jus cogens”)”) says: “A treaty is void if, at the time of its conclusion, it conflicts with a peremptory norm of general international law. For the purposes of the present Convention, a peremptory norm of general international law is a norm accepted and recognized by the international community of States as a whole as a norm from which no derogation is permitted and which can be modified only by a subsequent norm of general international law having the same character.”
• Article 64 of the 1986 Convention, “Emergence of a new peremptory norm of general international law (jus cogens)”, says: “If a new peremptory norm of general international law emerges, any existing treaty which is in conflict with that norm becomes void and terminates.”
• Besides treaties, unilateral declarations also have to abide by these norms. So far, an exhaustive list of jus cogens rules does not exist. However, the prohibition of slavery, genocide, racial discrimination, torture, and the right to self-determination are recognised norms. The prohibition against apartheid is also recognised as a jus cogens rule, from which no derogation is allowed, since apartheid is against the basic principles of the United Nations.

7 . Convention for the Protection of Cultural Property in the Event of Armed Conflict

Context : Following the assassination of Maj Gen Qassem Soleimani, President Donald Trump tweeted on Saturday that if “Iran strikes any Americans, or American assets” in retaliation, the US would target 52 sites in Iran, “some at a very high level & important to Iran & the Iranian culture”.

World Heritage Sites in Iran

• Twenty-four Iranian sites are on UNESCO’s World Heritage List, two of which are natural sites and the rest cultural sites.
• Among the main World Heritage Sites in Iran are the Meidan Emam and Masjed-e-Jame in Isfahan; the Golestan Palace in the historic heart of Tehran; Pasargadae and Persepolis, capitals of the Achaemenid Empire, founded by Cyrus II and Darius I in the 6th century BC; and the archaeological site of Takht-e Soleyman, which has the remains of an ancient Zoroastrian sanctuary.

What is the problem with targeting cultural heritage?

• Following the unparalleled destruction of cultural heritage in World War II, the nations of the world adopted at The Hague in 1954, The Convention for the Protection of Cultural Property in the Event of Armed Conflict, the first international treaty focussed exclusively on the protection of cultural heritage during war and armed conflict.

About the Convention

• The Convention defined cultural property as “movable or immovable property of great importance to the cultural heritage of every people, such as monuments of architecture, art or history, whether religious or secular; archaeological sites….”, etc.
• The signatories, referred to in the Convention as “the High Contracting Parties”, committed themselves to protecting, safeguarding, and having respect for cultural property.
• There are currently 133 signatories to Convention, including countries that have acceded to and ratified the treaty.
• Both the United States and Iran (as well as India) signed the Convention on May 14, 1954, and it entered into force on August 7, 1956.

Rome Statute

• The Rome Statute of 1998, the founding treaty of the International Criminal Court, describes as a “war crime” any intentional attack against a historical monument, or a building dedicated to religion, education, art, or science.
• The International Criminal Court started functioning in 2002 with jurisdiction over four main crimes: genocide, crimes against humanity, war crimes, and the crime of aggression.
• Article 8 of the Rome Statute deals with war crimes. Article 8(2)(b)(ii) says war crimes include “intentionally directing attacks against civilian objects, that is, objects which are not military objectives”, and 8(2)(b)(ix) mentions “intentionally directing attacks against buildings dedicated to religion, education, art, science or charitable purposes, historic monuments, hospitals and places where the sick and wounded are collected, provided they are not military objectives”.
• 122 countries are States Parties to the Rome Statute of the International Criminal Court.
• The United States is a signatory that has not ratified the Statute. India has neither signed nor ratified the Statute.

8 . EWS Reservation

Context : The Centre on Tuesday informed the Supreme Court that it would be the States’ prerogative to provide 10% economic reservation in government jobs and admission to education institutions.

About the issue

• The Centre was responding to a writ petition from Supreme Court advocate G.S. Mani complaining that the economic reservation law was not being implemented in Tamil Nadu and Karnataka.

What the Centre said

• As per the Centre “Whether or not to provide reservation to the economically weaker section in appointment to State government jobs and admission to State government educational institutions, as per provisions of the newly inserted Articles 15(6) and 16(6) of the Constitution, is to be decided by the State government concerned.
• Department of Social Justice and Empowerment “has no role in deciding the reservation policy of any State government”.

9 . GOCO Model

Context : The Army has initiated the process of identifying potential industry partners to implement the Government Owned Contractor Operated (GOCO) model for its base workshops and ordnance depots intended to improve operational efficiency.

About GOCO Model

• The GOCO model was one of the recommendations of the Lt. Gen. DB Shekatkar (Retd.) committee to “enhance combat capability and re-balancing defence expenditure.”
• In the ‘Government Owned Corporate Operated (GOCO)’ model the assets owned by Govt will be operated by the private industry for agreed upon terms.
• Maintenance of complete infrastructure will be the responsibility of the service provider

Benefits

• No further investment is required to be done by private companies for fixed assets
• Efficiency of the implementation of projects are increased as private sector are provided free hand in implementing the project.

10 . Infant Mortality

Context : India witnesses the death of an estimated 2,350 babies aged less than one year. Among them, an average 172 are from Rajasthan and 98 from Gujarat.  In 2014, of every 1,000 children born in the country, 39 did not see their first birthday. Today, that figure has come down to 33. That is 1,56,000 fewer deaths every year.

How high are the mortality numbers?

• India has an annual birth cohort of approximately 26 million. The infant mortality rate (IMR) in the country currently stands at 33 per 1,000 live births.
• This means babies numbering in the region of 8,50,000 die every year in India, or an average daily toll to 2,350.
• Gujarat has an annual birth cohort of 1.2 million. In 2017, the infant mortality rate in the state was 30 per 1,000 live births. This means the state sees about 36,000 deaths a year, or an average 98 a day.
• In Rajasthan, an estimated 1.65 million births take place every year. The infant mortality rate is 38 per 1000 live births which implies an estimated 62,843 deaths annually, or an average 172 every day.

Do Gujarat and Rajasthan have the highest infant mortality?

• No. Between 2014 and 2017, India’s IMR has declined by 15.4%.
• At a decline rate of 17.4%, Rajasthan has been ahead of the national average in reducing IMR while Gujarat has a decline rate of 14.3%.
• The IMR in Rajasthan dropped from 46 per 1,000 live births in 2014 to 38, and in Gujarat from 35 to 30.
• In 2017, states such as Arunachal Pradesh (42), Madhya Pradesh (47), Assam (44), Uttar Pradesh (41), Meghalaya (39), Odisha (41) and Chhattisgarh (38) had a higher IMR than Gujarat and Rajasthan. Arunachal, Tripura and Manipur have recorded a negative reduction rate between 2014 and 2017, which means child death rates there have gone up.
• In Arunachal it went up from 30 to 42, in Tripura from 21 to 29 and in Manipur from 11 to 12.

Why do so many infants die in India every year?

• On January 1, 2020, according to a UNICEF estimate, India, with an estimated 67,385 babies born that day, accounted for 17% of the estimated 392,078 births globally. This is higher than the 46,299 babies born in China that day, the 26,039 born in Nigeria and 16,787 born in Pakistan.
• Among the factors that have been proved detrimental to child survival are lack of education in the mother, malnutrition (more than half of Indian women are anaemic), age of the mother at the time of birth, spacing, and whether the child is born at home or in a facility.
• According to a UNICEF factsheet on child mortality in India, “… Children born to mothers with at least 8 years of schooling have 32% lesser chances of dying in neonatal period and 52% lesser chances in the post-neonatal period, as compared to the illiterate mothers.”
• It also notes that infant and under-five mortality rates are highest among mothers under age 20. The rates are lowest among children born to mothers between the ages of 20-24, remain low up to 25-34, and increase again after that age.
• According to the National Family Health Survey-4, only 78.9% births in India happen in a facility. This means 21.1% or about 54 lakh births in a year still happen outside of a facility where hygiene levels can be low, sometimes without the help of a trained health worker. Apart from the obvious infection risks in a non-institutional birth, vaccine compliance too is usually worse in these cases.
• According to the Health Ministry, the vaccination cover in India after several rounds of Intensified Mission Indradhanush (MI) and the original MI, now stands at 87%. This means over 33 lakh children continue to miss out on some or all vaccinations every year.

11 . Nominal GDP

Context : National Statistical Office (NSO) released the first advance estimates of the national income that projected growth in India’s GDP at market prices for 2019-20 at 4.98% in “real” terms, the lowest since the 3.89% in the global financial crisis year of 2008-09. But even more significant was the estimated growth of 7.53% in “nominal” terms, which is the lowest since the 7.35% for 1975-76.

What is nominal GDP and how is it different from real GDP?

• GDP is the total market value of all goods and services produced in the economy during a particular year, inclusive of all taxes and subsidies on products. The market value taken at current prices is the nominal GDP. The value taken at constant prices — that is prices for all products taken at an unchanged base year — is the real GDP.
• In simple terms, real GDP is nominal GDP stripped of inflation. Real GDP growth thus measures how much the production of goods and services in the economy has increased in actual physical terms during a year. Nominal GDP growth, on the other hand, is a measure of the increase in incomes resulting from rise in both production and prices.

Importance of Nominal Growth

• In the normal course, real growth is what one would ordinarily look at. But the current fiscal year seems extraordinary because the gap between nominal and real GDP growth is just 2.6 percentage points. This is marginally higher than the difference of 2.5 percentage points in 2015-16. But in that year, real GDP growth was 8%, which translated into a nominal growth of 10.5%.
• In 2019-20, not only is real GDP growth expected to be the lowest in 11 years, but also the implied inflation (also called GDP deflator, or the increase in prices of all the goods and services produced in the economy) is just 2.6%. Simply put, producers have not gained from either higher output or higher prices.
• Households and firms generally look at the “topline” — how much their income has grown relative to the previous year. When that growth falls to single digits in a country like India, which has been used to a minimum 5-6% GDP increase year after year and an equal rate for inflation, it is unusual. Low nominal GDP growth is associated more with developed western economies.

12 Facts for Prelims

• Nauradehi Sanctuary – Madhya Pradesh