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DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 15th March 2021

Archives (PRELIMS + MAINS FOCUS) Genome Mapping in Indian Ocean  Part of: GS Prelims and GS – III – Environment; Sci & Tech In news Genome Mapping in Indian Ocean shall be taken up by Scientists from the National Institute of Oceanography (NIO), Panaji, Goa.  Key takeaways  Onboard research vessel Sindhu Sadhana, the team will traverse over 10,000 nautical miles in the Indian Ocean to reveal the internal working of the ocean at a cellular level. It is the first-of-its-kind research project in India.  Objective: Understanding the biochemistry and the response of the ocean to climate change, nutrient stress and increasing pollution. Duration: 3 years  Bamiyan Buddhas Part of: GS Prelims and GS-I - Culture  In news In March 2001, the Taliban began blowing up two monumental Buddha statues in Afghanistan’s Bamiyan Valley. Now, 20 years later, on the anniversary of the annihilation, the Bamiyan Buddhas have been brought back to life in the form of 3D projections in an event called “A Night With Buddha”. Important value additions  Bamiyan Buddhas The Bamiyan Buddhas were great examples of a confluence of Gupta, Sassanian and Hellenistic artistic styles. They are said to date back to the 5th century AD.  They were once the tallest standing Buddhas in the world. They were called by the locals Salsal and Shamama.   Salsal means “light shines through the universe”; Shamama is “Queen Mother”. UNESCO included the remains in its list of world heritage sites in 2003 Efforts have been made to restore and reconstruct the Buddhas in their niches with the pieces available. Bamiyan It is situated in the high mountains of the Hindu Kush in the central highlands of Afghanistan. The valley is set along the line of the Bamiyan River.  It was once integral to the early days of the Silk Roads, providing passage for merchants, culture, religion and language. India–Japan Space Ties Part of: GS Prelims and GS – II – International Relations  In news Bilateral meeting between the Indian Space Research Organisation (ISRO) and the Japan Aerospace Exploration Agency (JAXA) was held virtually. Key takeaways  Both space agencies reviewed cooperation in earth observation, lunar cooperation and satellite navigation.  They also agreed to explore opportunities for cooperation in space situational awareness and professional exchange programmes. Both agencies signed an Implementing Arrangement for collaborative activities on rice crop area and air quality monitoring using satellite data. BRICS Contact Group on Economic and Trade Issues (CGETI) Part of: GS Prelims and GS – II – International Relations In news The BRICS Contact Group on Economic and Trade Issues (CGETI) held their first meeting under India’s Chairship from 9-11 March 2021. Key takeaways  Theme: BRICS@15: Intra BRICS Cooperation for Continuity, Consolidation, and Consensus. The deliverables proposed are on: (1) BRICS Cooperation on Multilateral Trading system including cooperation for the TRIPS Waiver proposal at WTO; (2) Framework for Consumer Protection in E-Commerce; (3) Non-Tariff Measures (NTM) Resolution Mechanism; (4) Sanitary and Phyto-Sanitary (SPS) etc. BRICS is the acronym for five nations: Brazil, Russia, India, China, and South Africa. Mera Ration Mobile App  Part of: GS Prelims and GS – II – Policies and interventions; Welfare schemes  In news Mera Ration Mobile App was launched recently.  Ministry: Ministry of Consumer Affairs, Food and Public Distribution  Key takeaways  Target audience: For the benefit of those ration card holders who move to new places in search of livelihood. At present 32 States and Union Territories are covered under One Nation One Ration Card (ONORC).  At present, the system covers nearly 69 Crore National Food Security Act- NFSA beneficiaries in the country.  SC's  rule over State Election Commissioners  Part of: GS Prelims and GS – II – Judiciary  In news The Supreme Court has held that independent persons and not bureaucrats should be appointed as State Election Commissioners. Key takeaways  Giving government employees the additional charge of State Election Commissioners is a “mockery of the Constitution”. It directed that the States should appoint independent persons as Election Commissioners all across India.  Important value additions  Article 243K Article 243K deals with the Elections to the Panchayats.  It states that The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to the Panchayats shall be vested in a State Election Commission.  It shall consist of a State Election Commissioner to be appointed by the Governor.  The conditions of service and tenure of office of the State Election Commissioner shall be such as the Governor may by rule determine.   The State Election Commissioner shall not be removed from his office except in like manner and on the like ground as a Judge of a High Court.  The conditions of service of the State Election Commissioner shall not be varied to his disadvantage after his appointment.  Miscellaneous INS Karanj  Indian Navy’s third stealth Scorpene class Submarine INS Karanj has been commissioned at the Naval Dockyard Mumbai.  The Scorpene Submarines are one of the most advanced conventional submarines in the world. More deadly and stealthier than their predecessors, these submarines are equipped with potent weapons and sensors to neutralise any threat above or below the sea surface. Dustlik  The India – Uzbekistan joint military exercise “DUSTLIK II” commenced in Foreign Training Node Chaubatia, Ranikhet (Uttarakhand).  Both contingents will be sharing their expertise and skills in the field of counter terrorist operations in mountainous/rural/urban scenario under UN mandate. This is the Second Edition of annual bilateral joint exercise of both armies. (Mains Focus) INTERNATIONAL/ SECURITY Topic: GS-2: India and its neighborhood- relations.  GS-2: Effect of policies and politics of developed and developing countries on India’s interests Joe Biden’s Afghanistan peace plan Context: The Joe Biden administration has proposed a new peace plan to the Afghan government and the Taliban, seeking to bring violence to a halt and form an interim government.  What is the American proposal? Involving other Stakeholders: US has proposed a UN-led conference of representatives of Russia, China, Pakistan, Iran, India and the U.S. “to discuss a unified approach to support peace in Afghanistan”.  Written Proposal to enhance Trust: US will share written proposals with the Afghan leadership and the Taliban to accelerate talks.  Comprehensive Ceasefire and Inclusive government: US has urged both sides to reach a consensus on Afghanistan’s future constitutional and governing arrangements; find a road map to a new “inclusive government”; and agree on the terms of a “permanent and comprehensive ceasefire”.  Negotiations in third country: US has also proposed a senior level meeting of the Afghan government and the Taliban in Turkey to discuss power sharing, reduction of violence and other specific goals. Why the U.S. is making this peace push? Review of Strategy: The Biden administration is currently reviewing its Afghan strategy. While the review is not completed, there is a consensus within the administration that “accelerating the peace process” is the best way to advance the shared interests of the U.S. and the Afghan government.  Doha Agreement (US Withdrawal plan): According to the agreement the U.S. signed with the Taliban in February 2020, American troops - currently some 2,500 troops are in Afghanistan - are set to leave the country by May 1. The Taliban have warned that if the U.S. troops are not out by the deadline, they will step up fighting.  Slow pace of peace talks: The Taliban and the Afghan government started peace talks in Doha in September 2020 but reached no breakthrough. The Biden administration is concerned about the slow pace of the talks. Restraining Taliban and Regional Stability: The U.S. assessment is that if American troops are pulled out of Afghanistan, the Taliban would make quick gains and the security situation will worsen. It hopes that the best way to prevent a complete Taliban takeover is a regional peace process and an interim unity government. The Taliban are yet to respond to America’s proposal. What is the Afghan government’s stand? Critical of US’s direct talks with Taliban: The Ghani administration has consistently been critical of the U.S.’s direct outreach to the Taliban. The Trump administration held direct talks with the Taliban, excluding the government. Later, US put pressure on Kabul to release Taliban prisoners as part of Doha agreement.  Against making concession to Taliban: Even when the Doha talks between the Taliban and the Afghan government were under way, Mr. Ghani made it clear that he, as elected President, is the only legitimate representative of the Afghan people and he resisted making concessions to the Taliban.  Democratic Process and Internal Interference: President Ghani reiterated his opposition to any transfer of power except through elections. Afghanistan Vice President Amrullah Saleh, a hardline critic of the Taliban, said the U.S. “can make a decision on their troops, not on the people of Afghanistan”. What’s next? While the Afghan government’s opposition to sharing power with the Taliban is well known, it is not clear whether Mr. Ghani could continue to resist American pressure, especially if the U.S. brings regional powers, including India, on board.  If the US decides to stick to the Taliban deal and withdraw troops by May, Mr. Ghani would be in a tougher spot. He doesn’t have any good options. If he rejects the American offer, the war will continue forever.  The Taliban have already taken over much of the country’s hinterlands and are breathing down the neck of its cities.  If Afghanistan President Ghani accepts the proposal, he will have to share power with the Taliban and discuss amendments to the Constitution and the future governance framework.  Either way, the Taliban are set to make gains. Connecting the dots: India’s projects in Afghanistan – Salma Dam Moral impact of deal on anti-India terrorist groups ECONOMY/ GOVERNANCE Topic: GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation Cairn tax ruling Context: In December 2020, a three-member tribunal at the Permanent Court of Arbitration in the Netherlands ruled against India in its long-running tax dispute with the U.K.-based oil and gas company Cairn Energy Plc and a subsidiary, Cairn UK Holdings Ltd. The tribunal ordered India to pay about $1.4 billion to the company.  Action by Cairn: Cairn Energy has successfully moved courts in five countries- The Netherlands, France, Canada, USA and UK, to recognise its claim as per the arbitration award.  Such a recognition by courts opens the door for Cairn Energy to seize assets of the Indian government in these jurisdictions by way of enforcing its claim, in case the latter doesn’t pay its dues. What is the case about? The year in reference, 2006-07, was one in which big corporate changes and developments took place in Cairn Energy.  It was the year in which it not only undertook a corporate reorganisation, but also floated an Indian subsidiary, Cairn India, which in early 2007 got listed on the Indian bourses.  Through the corporate reorganisation process, Cairn Energy had transferred all of its India assets, which were until then held by nine subsidiaries in various countries, to the newly-formed Cairn India. But the tax authorities claimed that in the process of this reorganisation, Cairn Energy had made capital gains worth ₹24,500 crore. This, the department asserted, was the basis of the tax demand of 1.6 billions USD. In 2011, the U.K.-based Vedanta Resources bought a nearly 60% stake in Cairn India. In fact, four years after this, Cairn India received a tax notice for not withholding tax for the gains ascribed to its former parent company. What happened after the tax claims in the Cairn Energy dispute? After receiving a draft assessment order from the tax authorities, Cairn UK Holdings Ltd. appealed before the Income Tax Appellate Tribunal. The tribunal, while providing the company relief from back-dated interest demands, however, upheld the main tax demand. The company had initiated proceedings of arbitration under the U.K.-India bilateral investment treaty.  But during this time, “the government sold Cairn’s almost 5% holding in Vedanta Ltd” (the residual stake the firm owned after selling Cairn India), “seized dividends totalling ₹1,140 crore due to it from those shareholdings”, and “set off a ₹1,590-crore tax refund against the demand”. What was the main argument of Cairn Energy during the arbitration? The claimants, Cairn Energy and Cairn UK Holdings, argued that till the amendment was made to tax retrospectively in 2012, there was no tax on indirect transfers (transfer by a non-resident of shares in non-Indian companies which indirectly held assets in India).  They also said the government had approved the 2006 reorganisation.  The application of the 2012 amendments, they alleged, constituted manifest breaches of the U.K.-India bilateral investment treaty. What was India’s defence during the arbitration? India’s counter to the main charge of Cairn Energy was that its 2006 transactions were taxable irrespective of the 2012 amendments. It argued that “Indian law has long permitted taxation where a transaction has a strong economic nexus with India”.  It said even if it is retrospective, it is “valid and binding applying the longstanding constitutional, legislative and legal framework in which the claimants have invested”. What did the arbitration tribunal rule? The tribunal said the tax demand violated the U.K.-India bilateral investment treaty. The tribunal said India “failed to accord Cairn Energy’s investments fair and equitable treatment” under the bilateral protection pact it had with the United Kingdom. It also ordered India to compensate Cairn Energy and its subsidiary for “the total harm suffered” as a result of the breaches of the treaty. What next? It has been reported in the media that India will appeal against the tribunal’s decision. Connecting the dots: Vodafone Case (TEST YOUR KNOWLEDGE) Model questions: (You can now post your answers in comment section) Note: Correct answers of today’s questions will be provided in next day’s DNA section. Kindly refer to it and update your answers. Comments Up-voted by IASbaba are also the “correct answers”. Q.1 Bamiyan Valley is situated in which of the following country?  India Afghanistan  Canada Brazil Q.2 Consider the following statements regarding Bamiyan Buddhas: They are great examples of a confluence of Gupta, Sassanian and Hellenistic artistic styles. UNESCO included their remains in its list of world heritage sites in 2003 Which of the above is or are correct?  1 only  2 only  Both 1 and 2  Neither 1 nor 2  Q.3 Which of the following article deals with State Election Commission?  Article 243K  Article 240K Article 244K Article 217  ANSWERS FOR 13th March 2021 TEST YOUR KNOWLEDGE (TYK) 1 D 2 C 3 D 4 D 5 B Must Read On reservation debate: Indian Express On QUAD and India’s interests: The Hindu On cybercrime threats from China: The Hindu

IASbaba’s TLP (Phase 1 – ENGLISH & हिंदी): UPSC Mains Answer Writing – General Studies Paper 1 Questions [15th March,2021] – Day 55

For Previous TLP (ARCHIVES) - CLICK HERE Hello Friends, Welcome to IASbaba’s TLP (Phase 1- ENGLISH & हिंदी): UPSC Mains Answer Writing – General Studies 1 Questions [15th March 2020] – Day 55 We will make sure, in the next 100 days not a single day is wasted and your mains preparation is solidified. All your energies are channelized in the right direction. Trust us! This will make a huge difference in your results this time, provided that you follow this plan sincerely every day without fail. Gear up and Make the Best Use of this initiative. We are giving 5 Mains Questions on a daily basis so that every student can actively participate and keep your preparation focused. Do remember that, “the difference between Ordinary and EXTRA-Ordinary is PRACTICE!!” To Know More about the Initiative -> CLICK HERE SCHEDULE/DETAILED PLAN – > CLICK HERE Note: Click on Each Question (Link), it will open in a new tab and then Answer respective questions! 1. Can overpopulation be held as the primary reason for unemployment in India? Critically examine. क्या भारत में बेरोजगारी के प्राथमिक कारण के रूप में अत्याधिक जनसंख्या जिम्मेदार है? समालोचनात्मक जांच करें। 2. What is National Population Register (NPR)? What are its objectives. How is it different from National Register of Citizens (NRC)? Discuss. राष्ट्रीय जनसंख्या रजिस्टर (NPR) क्या है? इसके उद्देश्य क्या हैं। यह नागरिक रजिस्टर (NRC) से अलग कैसे है? चर्चा करें। 3. What are the key challenges in tapping India’s demographic dividend? Examine. What suggestions would you give to address those?  Discuss. भारत के जनसांख्यिकीय लाभांश के दोहन में प्रमुख चुनौतियाँ क्या हैं? जांच करें। आप उनको हल करने के लिए क्या सुझाव देंगे? चर्चा करें। 4. Does India really need a population control bill? Share your views. क्या भारत को वास्तव में जनसंख्या नियंत्रण बिल की आवश्यकता है? अपने विचार साझा करें 5. What are the factors responsible for regional variations in demographic attributes in India? Illustrate. भारत में जनसांख्यिकीय विशेषताओं में क्षेत्रीय विविधताओं के लिए कौन से कारक जिम्मेदार हैं? चित्रण करें। P.S: The review from IASbaba will happen from the time the question is posted till 10 pm everyday. We would also encourage peer reviews. So friends get actively involved and start reviewing each others answers. This will keep the entire community motivated. All the Best :)

Ace The Prelims (ATP)

Ace The Prelims (ATP) – 2021– PRELIMS – [15th March, 2021] – Day 61

ARCHIVES Hello Friends, Welcome to IASbaba’s Ace The Prelims (ATP) – 2021 – PRELIMS & MAINS – [15th March, 2021] – Day 61   UPSC Quiz - 2021 : IASbaba's Daily Current Affairs Quiz 15th March 2021 UPSC CSAT Quiz – 2021: IASbaba’s Daily CSAT Practice Test – 15th March 2021 UPSC Static Quiz – 2021: IASbaba’s Daily Static Quiz (PYQs) – Polity [Day 61]   The way ATP molecules provide energy to every single cell of our body and help us in achieving our day to day tasks, similarly, the ‘Ace the Prelims (ATP) 2021’ Programme will help in providing energy and direction to your prelims preparation and push you beyond the cutoff of Prelims 2021. Ace the Prelims (ATP) – 2021 will include Daily Static Quiz (PYQs) Daily CSAT Practice Test Daily Current Affair Quiz 60 Days Plan (starts from 2nd week of March) To Know More about Ace the Prelims (ATP) 2021 - CLICK HERE   Thank You IASbaba

Daily Prelims CA Quiz

UPSC Quiz - 2021 : IASbaba's Daily Current Affairs Quiz 15th March 2021

For Previous Daily Quiz (ARCHIVES) - CLICK HERE The Current Affairs questions are based on sources like ‘The Hindu’, ‘Indian Express’ and ‘PIB’, which are very important sources for UPSC Prelims Exam. The questions are focused on both the concepts and facts. The topics covered here are generally different from what is being covered under ‘Daily Current Affairs/Daily News Analysis (DNA) and Daily Static Quiz’ to avoid duplication. The questions would be published from Monday to Saturday before 2 PM. One should not spend more than 10 minutes on this initiative. We will make sure, in the next 4 months not a single day is wasted. All your energies are channelized in the right direction. Trust us! This will make a huge difference in your results this time, provided that you follow this plan sincerely every day without fail. Gear up and Make the Best Use of this initiative. Do remember that, “the difference between Ordinary and EXTRA-Ordinary is PRACTICE!!” To Know More about Ace the Prelims (ATP) 2021 - CLICK HERE Important Note: Don't forget to post your marks in the comment section. Also, let us know if you enjoyed today's test :) After completing the 5 questions, click on 'View Questions' to check your score, time taken and solutions. To take the Test - Click Here

Daily Static Quiz

UPSC Static Quiz – 2021: IASbaba’s Daily Static Quiz (PYQs) – Polity [Day 61]

ARCHIVES DAILY STATIC QUIZ (PYQs) It will cover PYQs all the topics of static subjects – Polity, History, Geography, Economics, Environment and Science and technology. Daily 5 questions (Monday to Saturday) will be posted from static topics (PYQs) The questions will be in the quiz format so you will be able to answer them directly on the portal. Schedule Week 1 – Polity Week 2 – Economics Week 3 – History and Art & Culture Week 4 – Geography Week 5 – Environment and Science & Technology Same cycle will be repeated from Week 6. Make the best use of the initiative. All the best! To Know More about Ace the Prelims (ATP) 2021 - CLICK HERE Important Note: Don't forget to post your marks in the comment section. Also, let us know if you enjoyed today's test :) After completing the 5 questions, click on 'View Questions' to check your score, time taken and solutions. To take the Test - Click Here

UPSC CSAT Quiz – 2021: IASbaba’s Daily CSAT Practice Test – 15th March 2021

ARCHIVES Daily CSAT Practice Test Everyday 5 Questions from Aptitude, Logical Reasoning, and Reading Comprehension will be covered from Monday to Saturday. Make the best use of the initiative. All the best! To Know More about Ace the Prelims (ATP) 2021 - CLICK HERE Important Note: Don't forget to post your marks in the comment section. Also, let us know if you enjoyed today's test :) After completing the 5 questions, click on 'View Questions' to check your score, time taken and solutions. To take the Test - Click Here

Motivational Articles

Creative Guidance – Accepting Failure – Inspirational Educative Articles

Accepting Failure: Success is as much about succeeding as it is about accepting failure. There is no real success without developing the necessary grace to accept failure. As philosophical as this may sound, life is a teacher that teaches not through success, but through failure. We learn more in moments of failure than in moments of success. This invaluable learning that comes from life will be entirely missed if we do not know how to accept failure. Let us try and define failure. There are two ways of looking at failure; one from your individual personal perspective, and the other from the perspective of the people around you. When you fail in the eyes of people, it is a failure you can eventually accept and move on. But, when you fail in your own eyes, when you accept yourself as a failure, then there cannot be a bigger tragedy than that. Knowing the difference between failure on the outside and failure on the inside is extremely important. On the outside, we fail all the time. In fact, on the outside, success is a rare fruit that grows only on the highest branches of life, available only to a select few. But on the inside, it is always there as long as you are willing to acknowledge it. Accepting failure is not only a sign of humility, but also a sign of intelligence. When we fully realize that life is more about failing than succeeding, it makes more sense to accept failure than to fight with it. Accepting failure is not about giving up, but about valuing common sense over emotions. It is very easy to get stuck in an emotional loop and keep trying even when the odds of success are slim to none. Knowing when to move on to the next step, knowing when to let go, knowing when to accept failure is probably more important than succeeding. “This article is a part of the creative endeavor of Meditation Farm and IASBABA.”

DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 13th March 2021

Archives (PRELIMS + MAINS FOCUS) India attends first QUAD Summit Part of: GS Prelims and GS – II – International Relations In news PM Modi recently attended the first Quad Summit.  Key takeaways  Other countries that attended:  U.S.A's President, Australian PM and Japanese PM  Access to COVID-19 vaccines, cooperation on technology, and climate change were discussed.  Quad vaccine initiative was announced in which India will manufacture American vaccines with Japanese funding and Australian logistical support for countries in the Indo-Pacific region. Three working groups were also launched — Quad vaccine experts group, Quad Critical and Emerging Technology Working Group, and Quad Climate Working Group. Increase in arrests under UAPA Act Part of: GS Prelims and GS – III – Terrorism In news According to the Ministry of Home Affairs (MHA), number of persons arrested under the UAPA (Unlawful Activities [Prevention] Act) in 2019 has increased by over 72% as compared to year 2015.  Key takeaways  In 2019, the highest number of arrests were made in Uttar Pradesh (498), Manipur (386), Tamil Nadu (308), J & K (227) and Jharkhand (202). Only 2.2 % of cases registered under the UAPA between 2016-2019 ended in convictions by court. Cases under the UAPA are investigated by the State police and the National Investigation Agency (NIA). Under the UAPA, getting bail is rare and the investigating agency has up to 180 days to file a charge sheet ICAR receives King Bhumibol World Soil Day - 2020 Award  Part of: GS Prelims and GS – III – Environment  In news Indian Council of Agricultural Research (ICAR) has received King Bhumibol World Soil Day - 2020 Award of FAO. ICAR received the award for its excellent contributions in “Soil Health Awareness” on the theme “Stop soil erosion, save our future” during 2020. Important value additions  King Bhumibol World Soil Day Award Launched in: 2018  It acknowledges individuals or institutions that raise public awareness of soils  Sponsored by: Kingdom of Thailand It is named after King Bhumibol Adulyadej of Thailand  Shramik Kalyan Portal  Part of: GS Prelims and GS-II - Policies and interventions & GS – III – Employment  In news Indian Railways ensures 100% compliance of payment of minimum wages to contract workers through e-application Shramik Kalyan Portal. Important value additions  Indian Railway Shramik Kalyan  Developed and launched: 1st October, 2018. It ensures the compliance of provisions of Minimum Wages Act.  The contractors are required to regularly upload wage payment data into e-application. It ensures that contractual workers of Indian Railways get their rightful dues Licensing conditions for telecom companies amended Part of: GS Prelims and GS – III – Infrastructure; Telecommunications  In news The Department of Telecommunications (DoT) has amended the licensing conditions for telecom companies.  Now, these will include defence and national security as parameters when purchasing ‘trusted telecom products’ and sourcing equipment from ‘trusted telecom equipment sources’. Key takeaways  This means that the designated authority can cite these two aspects (Defence and national security) and ask telecom companies not to use products which it has deemed unsafe at any time. The new norms will come in force from June 15, 2021.  After Enforcement, telecom companies will not be able to use any products that do not appear on the trusted telecom equipment source list or the trusted telecom product list. If a telecom company wishes to expand its network by using any equipment that does not come from a trusted source, it will have to take prior permission from the National Cyber Security Coordinator. Do you know?  In December 2020, India’s Cabinet Committee on Security approved the setting up of" National Security Directive on telecommunication sector. Objective: To classify telecom products and their sources under the ‘trusted’ and ‘non-trusted’ categories. The list of products telecom companies will be allowed to use in their network would be approved by the National Cyber Security Coordinator (NCSC).  NCSC will make its decision based on the approval of a committee headed by the deputy National Security Advisor (NSA). (Mains Focus) SOCIETY/ GOVERNANCE Topic: GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. AT1 bonds: SEBI New Norms Context: The decision of the Securities and Exchange Board of India (Sebi) to slap restrictions on mutual fund (MF) investments in additional tier-1 (AT1) bonds has raised a storm in the MF and banking sectors. The Finance Ministry has asked the regulator to withdraw the changes as it could lead to disruption in the investments of mutual funds and the fund-raising plans of banks. What are AT1 bonds? What’s total outstanding in these bonds? AT1 Bonds stand for additional tier-1 bonds.  These are unsecured bonds which have perpetual tenure. In other words, the bonds have no maturity date.  They have call option, which can be used by the banks to buy these bonds back from investors.  These bonds are typically used by banks to bolster their core or tier-1 capital.  AT1 bonds are subordinate to all other debt and only senior to common equity.  Mutual funds (MFs) are among the largest investors in perpetual debt instruments, and hold over Rs 35,000 crore of the outstanding additional tier-I bond issuances of Rs 90,000 crore. What action has been taken by the Sebi recently and why? 100-year Instrument: In a recent circular, the Sebi told mutual funds to value these perpetual bonds as a 100-year instrument. This essentially means MFs have to make the assumption that these bonds would be redeemed in 100 years.  Limit Ownership: The regulator also asked MFs to limit the ownership of the bonds at 10 per cent of the assets of a scheme.  Linkage with Yes Bank Crisis: According to the SEBI, these instruments could be riskier than other debt instruments. The SEBI has probably made this decision after the RBI allowed a write-off of Rs 8,400 crore on AT1 bonds issued by Yes Bank Ltd after it was rescued by SBI What is the impact of this decision? Increased Risk: Typically, MFs have treated the date of the call option on AT1 bonds as maturity date. Now, if these bonds are treated as 100-year bonds, it raises the risk in these bonds as they become ultra long-term.  Increases Volatility in Bond Prices: This could also lead to volatility in the prices of these bonds as the risk increases the yields on these bonds rises. Bond yields and bond prices move in opposite directions and therefore, higher yield will drive down the price of bond, which in turn will lead to a decrease in the net asset value of MF schemes holding these bonds. Push MF to engage in Panic Selling: Moreover, these bonds are not liquid and it will be difficult for MFs to sell these to meet redemption pressure. Potential redemptions on account of this new rule would lead to mutual fund houses engaging in panic selling of the bonds in the secondary market leading to widening of yields Impacts Fund Raising Capability of Banks: AT1 bonds have emerged as the capital instrument of choice for state banks as they strive to shore up capital ratios. If there are restrictions on investments by mutual funds in such bonds, banks will find it tough to raise capital at a time when they need funds in the wake of the soaring bad assets. Why has the Finance Ministry asked SEBI to review the decision? The Finance Ministry has sought withdrawal of valuation norms for AT1 bonds prescribed by the SEBI for mutual fund houses as it might lead to mutual funds making losses and exiting from these bonds, affecting capital raising plans of PSU banks. The government doesn’t want a disruption in the fund mobilisation exercise of banks at a time when two PSU banks are on the privatisation block.  Banks are yet to receive the proposed capital injection in FY21 although they will need more capital to face the asset-quality challenges in the foreseeable future.  Connecting the dots: Laxmi Vilas Bank Crisis (TEST YOUR KNOWLEDGE) Model questions: (You can now post your answers in comment section) Note: Correct answers of today’s questions will be provided in next day’s DNA section. Kindly refer to it and update your answers. Comments Up-voted by IASbaba are also the “correct answers”. Q.1 Consider the following statements regarding recently amended licensing conditions for telecom companies: Defence and national security are new parameters for purchasing trusted telecom products The list of products telecom companies are allowed to use are approved by the National Cyber Security Coordinator (NCSC).  Which of the above is or are correct?  1 only 2 only Both 1 and 2 Neither 1 nor 2  Q.2 Which of the following is not a member of QUAD  Japan USA  India Both 1 and 2  China  ANSWERS FOR 12th March 2021 TEST YOUR KNOWLEDGE (TYK) 1 D 2 C 3 D 4 D 5 B Must Read On wages for house work: Indian Express On vaccine divide: The Hindu On U.S. push for Afghan unity government with Taliban: Indian Express

Motivational Articles

[MI-STORIES]MOTIVATIONAL AND INSPIRATIONAL STORIES - A Glass of Water!

For Previous Story -> CLICK HERE Inspirational Stories: Here is the story for this week from the new series of Inspirational and Motivational stories. One of the oldest known forms of communication is story telling. There is something primordial within us that loves stories and their tremendous impact. In this series, we aim to bring you the best of real-life stories that can inspire and motivate you. Stories always try to teach us something useful. It is one of the best ways of learning from other's mistakes and avoiding our own. Although each story has its own moral, in the comments section you can share your opinion on the moral of the story. If you are able to see something that others might have missed, you can share it for the benefit of all. Apart from just reading these awesome stories, you can also share some of the stories that have inspired you. If we find the story appropriate and useful, we will share it with all. More importantly, read these stories every week without a miss, and stay inspired.   So Here is the story for this week - A Glass of Water!   “Once upon a time a psychology professor walked around on a stage while teaching stress management principles to an auditorium filled with students. As she raised a glass of water, everyone expected they’d be asked the typical ‘glass half empty or glass half full’ question. Instead, with a smile on her face, the professor asked, ‘How heavy is this glass of water I’m holding?’ Students shouted out answers ranging from eight ounces to a couple pounds. She replied, ‘From my perspective, the absolute weight of this glass doesn’t matter.  It all depends on how long I hold it. If I hold it for a minute or two, it’s fairly light. If I hold it for an hour straight, its weight might make my arm ache a little. If I hold it for a day straight, my arm will likely cramp up and feel completely numb and paralyzed, forcing me to drop the glass to the floor. In each case, the weight of the glass doesn’t change, but the longer I hold it, the heavier it feels to me.’ As the class shook their heads in agreement, she continued, ‘Your stresses and worries in life are very much like this glass of water. Think about them for a while and nothing happens. Think about them a bit longer and you begin to ache a little. Think about them all day long, and you will feel completely numb and paralyzed – incapable of doing anything else until you drop them.'” What do you think is the moral of the story?

IASbaba’s TLP (Phase 1 – ENGLISH & हिंदी): UPSC Mains Answer Writing – ESSAY [13th MARCH,2021] – Day 54

For Previous TLP (ARCHIVES) - CLICK HERE Hello Friends, Welcome to IASbaba’s TLP (Phase 1 – ENGLISH & हिंदी): UPSC Mains Answer Writing – ESSAY [14th MARCH,2021] – Day 54 We will make sure, in the next 100 days not a single day is wasted and your mains preparation is solidified. All your energies are channelized in the right direction. Trust us! This will make a huge difference in your results this time, provided that you follow this plan sincerely every day without fail. Gear up and Make the Best Use of this initiative. Do remember that, “the difference between Ordinary and EXTRA-Ordinary is PRACTICE!!” To Know More about the Initiative -> CLICK HERE SCHEDULE/DETAILED PLAN – > CLICK HERE 1. India’s cyber ecosystem: Threats, challenges and preparedness.  भारत का साइबर पारिस्थितिकी तंत्र: खतरे, चुनौतियां और तैयारियाँ। 2. India’s internal security: Challenges and priorities.  भारत की आंतरिक सुरक्षा: चुनौतियाँ और प्राथमिकताएँ। 3. The only real security that a man can have in this world is a reserve of knowledge, experience and ability. एकमात्र वास्तविक सुरक्षा जो इस दुनिया में एक आदमी के पास हो सकती है वह ज्ञान, अनुभव और क्षमता का भंडार है। 4. Nationalism can be a destructive force when it promotes intolerance and division. राष्ट्रवाद एक विनाशकारी शक्ति हो सकता है जब यह असहिष्णुता और विभाजन को बढ़ावा देता है।