Syllabus:

• Prelims & Mains – ENVIRONMENT

Context: A recent audit report by the Comptroller and Auditor General of India (CAG) on the functioning of the Compensatory Afforestation Fund Management and Planning Authority (CAMPA) in the 2019-2022 period has flagged that the funds allocated for compensatory afforestation were diverted for other activities by Uttarakhand’s forest divisions.

Background: –

• As per CAMPA guidelines, after receiving funds, afforestation should be conducted within a year, or two growing seasons. However, the report flagged that in 37 cases, compensatory afforestation was executed after more than eight years of getting final clearance.

Key takeaways

• The simple principle that works in compensatory afforestation is that since forests are an important resource and render ecological services, they must not be destroyed. However, because of developmental requirements, forests are routinely cut, or, as it is said in official language, “diverted for non-forest purposes”.
• But since afforested land does not become a forest overnight, there is still a loss of the goods and services that the diverted forest would have provided in the interim period. These goods and services include timber, bamboo, fuelwood, carbon sequestration, soil conservation, water recharge, and seed dispersal. 
• Afforested land is expected to take no less than 50 years to start delivering comparable goods and services. To compensate for the loss in the interim, the law requires that the Net Present Value (NPV) of the diverted forest is calculated for a period of 50 years, and recovered from the “user agency” that is “diverting” the forests.
• “User agencies”, which are often private parties, are not expected to undertake afforestation work themselves. This work has to be done by the state government. But the entire expenditure to be incurred on creating this new ‘forest’, including purchase of land for the purpose, has to be borne by the user.
• Thus, if any user agency wants to divert forest land for non-forest purposes, it has to deposit money for compensatory afforestation as well as pay the NPV, besides a few other charges.
• CAMPA is set up to manage this money. The compensatory afforestation money and NPV are supposed to be collected from the user agency by the government of the state in which the project is located, and deposited with the central government. The money will eventually flow back to the state to be used for afforestation or related works.
• The Compensatory Afforestation Fund Act 2016 created a national CAMPA at the central government level, and a state CAMPA in each state and UT. Similarly, a National Compensatory Afforestation Fund (CAF), and one in each state and UT too are also constituted.
• The states deposit money collected from user agencies with the national CAF, to be eventually credited into state CAFs as per their entitlement. The states, however, receive only 90% of their share; the other 10%  are held back to cover administrative expenses.

Source: Indian Express

Syllabus:

• Prelims & Mains – POLITY

Context: Incarcerated Khadoor Sahib MP Amritpal Singh moved the Punjab and Haryana High Court to attend the ongoing Parliament session, lest he lose his seat because of his prolonged absence from the House.

Background: –

• Amritpal, who faces charges under National Security Act, has been detained in Dibrugarh since April 2023. He contested and won the 2024 Lok Sabha election from prison, but thus far has an attendance of only 2%.

Key takeaways

• “If for a period of sixty days a member of either House of Parliament is without permission of the House absent from all meetings thereof, the House may declare his seat vacant,” Article 101(4) says. 
• The 60 days, however, do not account for “any period during which the House is prorogued or is adjourned for more than four consecutive days”.
• Effectively, the period of absence is only calculated based on the actual sittings of Parliament. Amritpal, for instance, only attended one sitting of the Lok Sabha — the one in which he was sworn in last July. Since then, he has remained in detention in Assam.

MPs can seek leave

• The operative term in Article 101(4) is “without permission of the House”. For long absences, MPs write to the ‘Committee on Absence of Members from the Sittings of the House’, the parliamentary panel that deals with this issue.
• The committee makes recommendations on each leave application, which are then ratified by the House concerned. In practice, however, applications are seldom rejected.
• Past leave application reports list illness — their own or some relative’s — as the most common reason for MPs being granted leave. That said, members have requested and been granted leave on the count of being imprisoned as well.
• In 2023, then Ghosi MP Atul Rai of the Bahujan Samaj Party sought permission to remain absent on 23 consecutive sittings of Parliament as he was in jail. His application was granted.
• Even if an MP is absent for more than 60 days, the House has to “declare” the seat vacant, meaning the matter has to be put to vote.

Source: Indian Express

Syllabus:

• Prelims & Mains – ECONOMY

Context: Stubborn inflation and President Donald Trump’s hard-line trade policies have rekindled fears of stagflation, a worrying mix of sluggish growth and relentless inflation that haunted the U.S. in the 1970s.

Background:

• A critical component of the stagflation phenomenon—persistently high inflation—became more pronounced earlier this month when data revealed that consumer prices in January experienced their most rapid monthly increase since August 2023.
• Meanwhile, the trajectory of U.S. economic growth remains uncertain, with the potential inflationary impact of Mr. Trump’s tariffs posing a risk that could further exacerbate the situation.

Key takeaways

• Stagflation is a rare economic condition where high inflation coexists with stagnant economic growth and high unemployment. This phenomenon contradicts conventional economic theories, which suggest that inflation and economic growth generally move in the same direction.

Understanding Stagflation:

• The term “stagflation” is a combination of stagnation (slow or no economic growth) and inflation (rising prices).
• Typically, inflation is associated with economic expansion, but in stagflation, rising prices occur alongside weak demand and high unemployment.

Causes of Stagflation:

• Supply-Side Shocks: A sudden increase in the cost of essential goods (e.g., crude oil prices) can drive inflation while simultaneously slowing economic activity.
• Monetary Policy Failures: Excessive money supply without corresponding economic growth can lead to inflation without boosting employment or output.
• Structural Rigidities: Labor market inefficiencies, lack of productivity growth, and supply chain disruptions can contribute to stagnant growth and rising inflation.
• External Factors: Geopolitical tensions, trade restrictions, and commodity price volatility can create stagflationary conditions.
• Historical Example: The 1970s Oil Crisis is a classic example, where oil price shocks caused high inflation while economies faced recessionary pressures.

Impact of Stagflation:

• Economic Growth Decline: Businesses struggle due to high costs, reducing production and investments.
• Unemployment Increases: Job losses occur as firms cut back on hiring due to weak demand.
• Declining Purchasing Power: Rising prices erode consumer savings and wages, impacting living standards.
• Policy Dilemma: Central banks face difficulty in addressing stagflation since measures to curb inflation (e.g., high interest rates) can further slow growth, while stimulus measures (e.g., low interest rates) can worsen inflation.

Source: The Hindu

Syllabus:

• Prelims  – CURRENT EVENT

Context: Following opposition from local communities, environmentalists and civil society groups, the World Bank has said that it will not invest in four waste-to-energy (WTE) incineration plants in Gujarat.

Background: –

• According to a press release by civil society group Alliance for Incinerator Free Gujarat, the World Bank’s International Finance Corporation (IFC) – the private lending arm of the World Bank – confirmed to the NGO after it filed for an access to information request that it would not be investing in the WTE incineration plants in Gujarat.

Key takeaways

• The International Finance Corporation (IFC), a key institution of the World Bank Group, plays a crucial role in promoting private sector development in emerging economies by providing investment, advisory, and asset management services.
• Established: 1956
• Headquarters: Washington, D.C., USA
• Parent Organization: World Bank Group
• Membership: 186 countries

Objectives of IFC:

• To promote private sector development in developing countries.
• To provide financial assistance to businesses and entrepreneurs where traditional financial institutions are reluctant to invest.
• To reduce poverty by fostering economic growth through private sector investments.
• To support sustainable development by financing projects with environmental and social benefits.

Functions of IFC:

• Financing Private Sector Projects: Provides loans, equity investments, and guarantees to private enterprises.
• Mobilizing Capital: Helps attract private investors and financial institutions to invest in developing economies.
• Advisory Services: Offers expertise in corporate governance, financial structuring, and policy reforms.
• Promoting Sustainable Development: Invests in environmentally friendly and socially responsible projects.

IFC & India:

• India is one of the largest recipients of IFC funding.
• IFC has invested in renewable energy, infrastructure, banking, and microfinance sectors in India.
• Supports MSMEs (Micro, Small, and Medium Enterprises) and start-ups.
• Aims to facilitate green financing and sustainable urban development in India.

Source: The Wire

Syllabus:

• Prelims  – CURRENT EVENT

Context: The Prime Minister Internship Scheme (PMIS) is once again open for applications with the launch of round 2 of the pilot phase.

Background: –

• After more than six lakh applications in round 1, round 2 offers more than one lakh internship opportunities in top companies across more than 730 districts in India.

Key takeaways

• The Prime Minister Internship Scheme (PMIS) is a significant initiative by the Government of India, aiming to provide 12-month paid internships to the nation’s youth in the country’s top companies. 
• This program seeks to bridge the gap between academic learning and practical industry experience, thereby enhancing employability and skill development among young individuals.

Key Features of PMIS:

• Target Group: Individuals aged 21 to 24 who are not currently enrolled in any full-time academic program or employment. 
• Internship Duration: 12 months, combining relevant training with at least six months of professional experience. 
• Financial Assistance: Each intern receives a monthly stipend of ₹5,000, supplemented by a one-time financial assistance of ₹6,000. 
• Sectors Covered: Internships are available across various sectors, including Oil, Gas & Energy; Banking & Financial Services; Travel & Hospitality; Automotive; Metals & Mining; Manufacturing & Industrial; and Fast-Moving Consumer Goods (FMCG). 

Eligibility Criteria:

• Age: 21 to 24 years.
• Educational Background: Applicants should have completed their education and not be engaged in any full-time academic or employment activities.
• Minimum qualification of 10th, 12th grade, or an undergraduate degree, ITI, or other technical diploma
• Exclusions: Individuals enrolled in full-time studies or employment are not eligible. 

Implementation and Outreach:

• The scheme is spearheaded by the Ministry of Corporate Affairs.
• To maximize reach, more than 70 Information, Education, and Communication (IEC) events are being conducted across India, targeting districts with the highest number of internship opportunities.

Source: Economic Times

Q1.) Consider the following statements regarding Stagflation:

1. Stagflation is a situation where high inflation is accompanied by high economic growth.
2. It is primarily caused by supply-side shocks that lead to rising costs while economic output stagnates.
3. Stagflation was first widely recognized during the 1970s oil crisis.

Which of the above statements is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2, and 3

Q2.) Which of the following statements regarding the International Finance Corporation (IFC) is correct?

(a) IFC is a part of the International Monetary Fund (IMF) and primarily provides loans to governments of developing countries.
(b) IFC provides financial assistance only to large multinational corporations and excludes small and medium enterprises (SMEs).
(c) The headquarters of IFC is located in Geneva, Switzerland.
(d) It is a member of the World Bank Group and focuses on private sector investment in developing economies.

Q3.) With reference to the Prime Minister Internship Scheme (PMIS), consider the following statements:

1. The scheme provides a 12-month internship opportunity to young individuals in India’s top companies.
2. The eligible age group for this internship is 21 to 24 years.
3. Interns under this scheme receive both a monthly stipend and a one-time financial assistance.

Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2, and 3

Comment the answers to the above questions in the comment section below!!

ANSWERS FOR ’  Today’s – Daily Practice MCQs’ will be updated along with tomorrow’s Daily Current Affairs

Q.1) – a

Q.2) – a

Q.3) – b