UPSC CURRENT AFFAIRS – 10 June 2024

UPSC CURRENT AFFAIRS – 10 June 2024 covers important current affairs of the day, their backward linkages, their relevance for Prelims exam and MCQs on main articles

InstaLinks : Insta Links help you think beyond the current affairs issue and help you think multidimensionally to develop depth in your understanding of these issues. These linkages provided in this ‘hint’ format help you frame possible questions in your mind that might arise(or an examiner might imagine) from each current event. InstaLinks also connect every issue to their static or theoretical background.

Table of Contents

GS Paper : 2 (UPSC CURRENT AFFAIRS – 8 June 2024)

Federalism in India after the 2024 General Election

GS Paper 3:

RBI keeps REPO RATE unchanged Reports in NEWS UNESCO’s New Tools for Greening Education

Facts for Prelims (FFP)

Base erosion and profit shifting IBBI Placental mammals

UPSC CURRENT AFFAIRS – 10 June 2024

UPSC CURRENT AFFAIRS – 10 June 2024 GS Paper 2

Syllabus: Centre-State Relations

Source: TH

Context: The aftermath of the 2024 general election in India has brought to light a significant shift towards increased democratization , with regional parties gaining substantial representation in Parliament. This development is expected to bolster federalism in India.

What is Federalism ?

Federalism is a system of government that combines a central or “federal” government with regional governments within a single political framework, distributing powers between them. In India, the Constitution outlines the structure of governance, delineating the relationship between the federal government and state governments. Legislative, administrative, and executive powers are divided between the Union government and the states through the Union List, State List, and Concurrent List .

Features of Indian Federalism :

Multilevel Government : Federalism entails the existence of two or more tiers of government, typically a central or federal government and regional or state governments. Separate Jurisdiction: Each level of government possesses its own authority and autonomy in areas such as legislation, taxation, and administration, even though they govern the same populace. Constitutional Specification : The powers and functions of each tier of government are clearly delineated and safeguarded by the Constitution, ensuring a balance of authority. Dispute Resolution Mechanism : The Supreme Court is vested with the authority to adjudicate disputes arising between state governments, providing a mechanism for resolving conflicts within the federal structure.

Federalism in India

What does the 2024 Election result mean for Indian federalism?

Increase in regional party representation in Parliament. Diverse composition in ruling coalition and opposition. Potential for more inclusive governance . Voter preference for addressing local issues The challenge to traditional dominance of central parties . Concerns over central policies undermining state autonomy. Tensions over resource allocation and political rhetoric during the campaign.

Challenges to Centre-State Relations :

Challenges Examples State border disputes Assam-Meghalaya, Assam-Mizoram disputes Interference in state matters Government of NCT of Delhi (GNCTD) Act, Agriculture laws, 2020 Alleged use of autonomous agencies against Opposition-led states Enforcement Directorate raids Governors sitting over state bills Tamil Nadu, Telangana Governors pulled by Supreme Court Resource Allocation Complaints Kerala’s complaints on resource transfer, Karnataka’s drought relief concerns, West Bengal’s MGNREGS funds Legal Disputes Rise in legal disputes between states and Centre, as highlighted by Supreme Court Bias in Finance Commissions States argue for fair allocation, citing bias towards the Centre in Finance Commissions Disparities Richer states like Mumbai contribute significantly to national taxes but receive a smaller share, leading to development disparities. Poorer states require more resources for development , and while the Finance Commission aims for fair distribution, historical disparities remain.

The concept of cooperative federalism :

It i mplies a system of governance where central and state governments collaborate and work together to achieve common goals, respecting each other’s constitutional boundaries.

Constitutional Boundaries between Centre and States:

Division of Powers: The Constitution of India divides powers between the Union and state governments through three lists in the Seventh Schedule: Union, state and concurrent lists. The doctrine of Pith and Substance: This doctrine is used by courts to determine under which list a particular legislation falls. If the core subject matter of legislation falls within a list assigned to one level of government, the law is deemed valid even if it incidentally encroaches on a subject in another list.

Some examples to illustrate the spirit of cooperative federalism :

GST Council : The GST Council, which includes representatives from both the central and state governments, is tasked with making decisions on tax rates, exemptions, and the implementation of GST. This collaborative framework ensures that both levels of government have a say in the tax policy, balancing regional interests with national priorities. Disaster Management: In the event of natural disasters, such as floods, earthquakes, or pandemics, the central government often works closely with state governments. For instance, during the COVID-19 pandemic, the Centre issued guidelines and provided resources, but states had the flexibility to adapt these guidelines to their local contexts. This allowed for a more tailored response, accommodating the diverse conditions across states. National Education Policy (NEP) 2020 : While the policy outlines broad national objectives, it allows states to customise and implement reforms according to their specific needs and contexts. River Water Disputes : The Inter-State River Water Disputes Act allows the central government to set up tribunals to adjudicate disputes, but the implementation of tribunal awards requires cooperation from the states involved. For instance, the resolution of the Cauvery water dispute involved extensive consultations and compliance from both Karnataka and Tamil Nadu, overseen by the central government. Niti Aayog : NITI Aayog acts as the quintessential platform for the Government of India by bringing States together as ‘Team India’ to work towards the national development agenda.

Strengthening Federalism:

Strengthening of Inter-State Council: Over the years multiple committees have recommended strengthening of the Interstate Council where the concurrent list subjects can be debated and discussed, balancing Centre state powers. Democratic Decentralisation of administration and strengthening governments at all levels in true spirit. Power should be decentralised based on the principle of subsidiarity. Increase Resource Devolution : Raising the current 41% resource devolution from the Centre to the States can empower states, enabling more localized governance. Fair Finance Commission Practices : The Sixteenth Finance Commission should strive for equitable treatment of all states, reducing friction and promoting fairer resource distribution, especially benefiting poorer states to address inequality. Enhance State Autonomy : By diminishing the central government’s control in programs such as the Public Distribution System and MGNREGS, states can affirm their constitutional roles as equal partners in governance, preventing central dominance over state initiatives.

Conclusion:

For the central government to exercise its powers within constitutional boundaries in the spirit of cooperative federalism, it must engage in continuous dialogue, respect the autonomy of states, and ensure that policies and decisions are made collaboratively. This approach not only strengthens the federal structure but also promotes a more inclusive and responsive governance system.

Insta Links:

Mains Links:

Though the federal principle is dominant in our constitution and that principle is one of its basic features, but it is equally true that federalism under the Indian Constitution leans in favour of a strong Center, a feature that militates against the concept of strong federalism. Discuss. (UPSC 2014)

Prelims Links:

Which one of the following is not a feature of Indian federalism? (UPSC 2017) (a) There is an independent judiciary in India.

(b) Powers have been clearly divided between the Centre and the States.

(c) The federating units have been given unequal representation in the Rajya Sabha.

(d) It is the result of an agreement among the federating units. Ans: (d) Local self-government can be best explained as an exercise in (USPC 2017) (a) Federalism

(b) Democratic decentralization

(c) Administrative delegation

(d) Direct democracy Ans: (b)

UPSC CURRENT AFFAIRS – 10 June 2024 GS Paper 3:

Syllabus: Indian Economy

Source: IE

Context: The Reserve Bank of India (RBI) has refrained from cutting the repo rate despite stable inflation rates. The repo rate, which influences loan EMIs, has remained unchanged since February 2023.

What is the Repo Rate and who maintains it?

The repo rate is the interest rate at which the RBI lends money to commercial banks . It impacts economic activity: a lower rate stimulates borrowing and spending, while a higher rate discourages it. The RBI’s monetary policy aims to maintain price stability , target a 4% inflation rate, and promote economic growth by adjusting the repo rate accordingly . Lowering the rate stimulates borrowing post-pandemic , while raising it curbs excessive spending during inflationary periods like the Russia-Ukraine conflict.

RBI keeps REPO RATE

Other Tools for Controlling Interest rates

Open Market Operations (OMO ): The RBI buys or sells government securities to adjust money supply and interest rates. Cash Reserve Ratio (CRR): The percentage of deposits banks must hold with the RBI, influencing their lending capacity. Statutory Liquidity Ratio (SLR): The percentage of deposits banks must invest in government securities, also affecting liquidity and interest rates.

Reasons for Not Cutting Interest Rates:

Reasons Description 1) Sticky Inflation: Despite a gradual decline , inflation hasn’t reached the 4% target since January 2021, hovering around 5% in the first four months of 2024. 2) Commitment to Durable Inflation Targeting: The RBI aims for sustained inflation around 4%, not just occasional dips below this level. 3) Strong Economic Growth: India’s GDP growth rate has been robust, with forecasts revised upwards to 7.2% for the current financial year , suggesting no urgent need for rate cuts to stimulate activity. 4) Fiscal Deficit Concerns: The RBI’s decision may be influenced by the forthcoming Union Budget and government borrowing plans , which could impact inflation or interest rates.

Understanding the Impact of High Interest Rates:

Positives:

Taming Inflation : High rates discourage borrowing and spending, reducing the money supply and easing inflationary pressures. Financial Stability : Attract foreign investments, strengthening the rupee and foreign exchange reserves, boosting financial stability. E.g. India’s foreign exchange reserves surged past $600 billion in 2023 amidst high interest rates, providing a cushion against global uncertainties. Promoting Savings : Higher interest rates on deposits incentivize saving, increasing domestic capital availability for investment and growth. E.g. Fixed deposit rates above 7% in India have encouraged individuals to save more, leading to higher bank deposits. Curbing Asset Bubbles : Discourage excessive speculation in assets like real estate and stocks, promoting financial market stability. Example: High interest rates during 2010-11 helped cool down the overheating real estate market in India, preventing a potential bubble. Encouraging Financial Discipline : High rates promote prudent borrowing and lending practices among businesses and individuals, reducing risk-taking and defaults.

Negatives:

Slower Economic Growth: Expensive borrowing can dampen investment and consumer spending, potentially slowing economic growth. E.g. High interest rates during 2019-20 contributed to a slowdown in India’s GDP growth rate. Increased Debt Burden : Existing borrowers face higher interest payments, straining finances and potentially leading to defaults. Impact on Investment : High rates can discourage investments in key sectors like infrastructure and manufacturing, hindering long-term growth. Pressure on Businesses : High borrowing costs can squeeze profit margins and hamper business expansion plans, potentially impacting job creation. E.g. Small and medium enterprises (SMEs) often face challenges in accessing credit at high interest rates. Impact on Consumer Spending : High interest rates on credit cards and personal loans can reduce discretionary spending, impacting retail sales and overall consumption. E.g. High interest rates on auto loans have led to a slowdown in car sales in India. Currency Appreciation : High interest rates can attract foreign capital, leading to currency appreciation, which can hurt export competitiveness. E.g. The Indian rupee’s appreciation in 2023 due to high interest rates posed challenges for export-oriented sectors like textiles and IT.

Conclusion

The RBI’s decision to maintain high interest rates reflects its efforts to balance inflation control with growth considerations. It will continue to monitor economic data and adjust rates as needed to achieve a harmonious outcome for the Indian economy.

Other steps announced by RBI in this MPC Meeting:

Rationalization of Export and Import regulations under the Foreign Exchange Management Act (1999) to boost ease of doing business. Establishment of a Digital Payments Intelligence Platform (DPIP) using advanced technology to combat payment fraud. Formation of a committee chaired by A.P. Hota to explore setting up a digital public infrastructure for DPIP. Integration of UPI Lite into the e-mandate framework with an auto-replenishment feature for the UPI Lite wallet. Revision of bulk deposit definition to include Single Rupee term deposits of ₹3 crore and above for Scheduled Commercial Banks (excluding Regional Rural Banks(RRBs)) and Small Finance Banks. For Local Area Banks, the threshold is ₹1 crore and above as applicable for RRBs.

About MPC :

The Monetary Policy Committee (MPC) , established under the amended RBI Act of 1934, comprises six members: three from the RBI and three appointed by the government. It decides the policy repo rate aimed at meeting the inflation target. Each member holds one vote, with the Governor having a casting vote in case of a tie.

Insta Links:

Mains Link:

Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments. (UPSC 2019)

Prelims Link:

Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)? (UPSC 2017) It decides the RBI’s benchmark interest rates. It is a 12-member body including the Governor of RBI and is reconstituted every year. It functions under the chairmanship of the Union Finance Minister. Select the correct answer using the code given below: (a) 1 only

(b) 1 and 2 only

(c) 3 only

(d) 2 and 3 only Ans: (a) If the RBI decides to adopt an expansionist monetary policy, which of the following would it not do? (UPSC 2020) Cut and optimize the Statutory Liquidity Ratio Increase the Marginal Standing Facility Rate Cut the Bank Rate and Repo Rate Select the correct answer using the code given below: (a) 1 and 2 only

(b) 2 only

(c) 1 and 3 only

(d) 1, 2 and 3 Ans: (b)

Report Description Building Better: India’s Path to Superior Quality Infrastructure Report Released by GLOBAL TRADE RESEARCH INITIATIVE (GTRI) India’s quality infrastructure : It is led by the Bureau of Indian Standards (BIS), and includes standardization, Quality Control Orders (QCOs), and Compulsory Registration Orders (CROs), aimed at ensuring product quality, safety, and performance. Since the BIS Act 2016 , over 140 QCOs have been issued for more than 550 products. Benefits of QCOs: Higher QCOs have resulted in reduced imports of substandard products, fewer consumer complaints and product recalls, increased domestic electronics production, and facilitated international trade. What are QCOs ? Quality Control Orders (QCOs) are mandatory regulatory standards implemented by the Bureau of Indian Standards (BIS) to ensure products meet specific quality, safety, and performance criteria. The main aim of the QCO is to control the import of sub-quality and cheaper items and to ensure that customers get quality products. QCOs cannot be challenged at WTO if they are imposed on grounds of health, safety, environment deceptive trade practice, or national security. Household Consumption Expenditure Survey 2022-23 The Consumption Expenditure Survey 2022-23 reveals that Indian households, both rural and urban, spent the most on processed food. Key findings: 1. Consumption expenditure on non-food items has increased over the years, surpassing 50% of total expenditure. The share of expenditure on food in rural India was 46% and in urban India was 39%. 2. Rural and urban households spent most on beverages, refreshments, and processed food. 3. The average estimated Monthly Per Capita Consumption. Expenditure (MPCE) in 2022-23 is observed to be Rs. 3,773 in rural India and Rs. 6,459 in urban India 4. Fall in the Gini coefficient , for both rural and urban spending between 2011-12 and 2022-23 (showing inequality is decreasing between Rural and Urban areas) The National Sample Survey Office (NSSO) released the Household Consumption Expenditure Survey (HCES), which collects data on household consumption of goods and services. Since 1950, NSSO, headed by the Director General, has conducted large-scale nationwide surveys on socio-economic subjects and the Annual Survey of Industries (ASI). It operates under the Ministry of Statistics and Programme Implementation. World Wealth Report 2024 The Capgemini Research Institute’s recently published World Wealth Report 2024. Wealth bands include Ultra-HNWIs ($30 million or more), Mid-Tier Millionaires ($5-30 million), and Millionaires Next Door ($1-5 million) Key Findings : India saw a 12.2% increase in the HNWI population , reaching more than 3 million, with over 12% growth in financial wealth to $1,445 billion. World Wealth Report 2024 Economic indicators in India showed improvements , including a decrease in the unemployment rate to 3.1%, a 29% increase in market capitalization, and a rise in national savings to 33.4% of GDP.

Syllabus: Environmental Conservation/ Governance: Government Policies and Interventions

Source: UNESCO

Context: UNESCO has launched the Greening Curriculum Guidance (GCG) and Green School Quality Standards (GSQS) under the Greening Education Partnership .

More about the initiative:

Goal : Greening at least 50% of schools globally by 2030 through the Greening Education Partnership. Target Audience : Policy-makers, education ministries, educators, learners, and communities. Launched a New GCG : A practical manual outlining climate education, detailing learning outcomes, and guiding countries to integrate environmental topics into curricula. Launched a New GSQS: Sets minimum requirements for creating green schools through an action-oriented approach.

Pillars of Green Education:

Greening Schools : Ensure schools achieve green accreditation. Greening Curriculum : Integrate climate education into all levels of education. Greening Teacher Training : Build school capacities for climate education. Greening Communities : Enhance community resilience through learning centres.

What is the Greening Education Partnership?

The Greening Education Partnership is a global initiative comprising 80 member states , aiming to tackle the climate crisis through education . It focuses on equipping learners with the knowledge, skills, values, and attitudes necessary to address climate change and promote sustainable development. The partnership emphasizes greening schools, integrating climate education into curricula, enhancing teacher training, and strengthening community resilience .

Issues with the School Greening?

50% of countries surveyed by UNESCO lack climate change in their curricula . 70% of young people cannot explain climate disruption.

India has integrated climate change education into NCERT textbooks and aims to make it interdisciplinary through NCF 2023

Recommendations:

NEP 2020 : The NEP 2020 outlines climate change as a crucial component of environmental education . National Curriculum Framework 2023: It defines content approaches, learning standards and assessments across all stages of education, including a practical approach to environmental awareness. Educating girls can indirectly mitigate climate change through demographic impacts. Vocational-Based Climate Education : India’s green economy requires climate education at all levels. Stakeholder Partnerships : Collaborations enhance the integration of climate concepts in education. Teacher Training : Incorporate climate topics in pre-service and in-service training for better delivery. Subject Integration: Embed climate concepts across subjects to foster critical thinking and holistic understanding. Whole-School Approach : Integrate climate action in teaching, governance, operations, and community partnerships. Innovative Pedagogies : Use immersive learning, experiential projects, technology, and gamification to enhance climate education.

UNESCO

Insta Links:

UPSC CURRENT AFFAIRS – 10 June 2024 Facts for Prelims (FFP)

Source: OECD

Context: The 16th meeting of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) concluded

An inclusive framework on BEPS is finalizing negotiations on Pillar One, while the Global Minimum Tax under Pillar Two is being implemented in countries globally

What is an Inclusive Framework?

The OECD/G20 Inclusive Framework on BEPS, with 147 countries and jurisdictions including India, fights tax avoidance and promotes fair tax practices through a Two-pillar approach: Pillar One reallocates profits of large MNEs , while Pillar Two establishes a Global Minimum Corporate Tax of 15 %. This framework ensures fairness in tax systems, addresses tax avoidance, and adapts to evolving business models and digital economies.

What is BEPS?

It refers to corporate tax planning strategies used by multinationals to shift profits from higher-tax jurisdictions to lower or no-tax jurisdictions.

used by multinationals to shift profits from higher-tax jurisdictions to lower or no-tax jurisdictions. The OECD defines BEPS strategies as exploiting gaps and mismatches in tax rules . It erodes the tax base (costing countries USD 100-240 billion in lost revenue annually) of the higher-tax jurisdictions.

. It erodes the tax base (costing countries USD 100-240 billion in lost revenue annually) of the higher-tax jurisdictions. As developing countries have a higher reliance on corporate income tax, they suffer from BEPS disproportionately.

have a higher reliance on corporate income tax, they suffer from BEPS disproportionately. Working together within the OECD/G20 Inclusive Framework on BEPS , over 135 countries and jurisdictions are collaborating on – The implementation of measures to tackle tax avoidance, Improving the coherence of international tax rules and Ensuring a more transparent tax environment.

and jurisdictions are collaborating on –

The objective of the Outcome Statement: It delivered a package to further implement the Two‐Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy.

Two‐Pillar Solution/ Global Anti-Base Erosion (GloBE) rules: These rules were agreed upon in 2021 by 137 countries and jurisdictions under the OECD/G20 Inclusive Framework on BEPS.

Base erosion and profit shifting

Source: ET

Context: Insolvency and Bankruptcy Board of India (IBBI) issues new guidelines for appointing IPs as resolution professionals effective from July 1, 2024 . The guidelines aim to streamline the process by establishing a panel of IPs for appointments, ensuring eligibility criteria, and requiring prior experience in handling Insolvency and Bankruptcy Code assignments.

What is IBBI ?

IBBI is a statutory body under the Insolvency and Bankruptcy Code, 2016, headquartered in New Delhi under the Ministry of Corporate Affairs. It oversees service providers in the insolvency ecosystem, regulates insolvency and resolution processes for corporations and individuals, and operates under a Governing Board appointed by the Central Government

Insolvency and Bankruptcy Board of India (IBBI)

Source: BT

Context: Thermal Infrared Imaging Satellite for High-resolution Natural Resource Assessment (TRISHNA) mission, a collaboration between ISRO and CNES (French Space Agency) , aims to monitor surface temperature and water management globally.

It includes two primary payloads : Thermal Infra-Red (TIR) from CNES for infrared imaging and VNIR-SWIR from ISRO for surface reflectance mapping. Operating in a Sun-synchronous orbit , it will aid climate monitoring, urban planning, and disaster management .

Objectives : The mission aims to monitor the energy and water budgets of continental biospheres, alongside high-resolution observation of water quality and dynamics. It provides detailed monitoring of surface temperature, emissivity, and radiation variables, aiding regional to global surface energy budgeting. Additionally, it assists in assessing urban heat islands, detecting thermal anomalies, and monitoring snow-melt runoff, glacier dynamics, aerosol optical depth, atmospheric water vapour, and cloud cover.

Other Indo-French collaborations to monitor Earth : Megha-Tropiques. Saral

Other Related Initiatives : GEOGLAM is an initiative launched by the G20 to improve food security and sustainable agriculture through Earth observations. Global Water Watch is a data platform offering free, global information on water reservoirs and river systems using AI and Earth Observation algorithms, developed by Deltares, WRI, and WWF

TRISHNA

Source: Phys org

Context: New research from Stockholm University, in collaboration with other institutions, reveals that brown fat, a crucial heater organ in placental mammals, evolved exclusively in modern placental mammals.

What are Placental mammals ?

Placental mammals, classified under the subclass Eutheria , are animals that have a placenta, a vascular organ formed during gestation for nutrient exchange between the mother and fetus. They carry their fetus in the uterus until birth at an advanced stage, nourishing them through the placenta. This allows for longer fetal growth , resulting in larger and more mature offspring at birth.

Fossil evidence suggests they evolved around 163-157 million years ago .

Marsupials, on the other hand, give birth to relatively undeveloped young , which continue to grow in a pouch outside the womb, nourished by a short-lived placenta. Over 330 species of marsupials exist, with examples including kangaroos and koalas.

Feature Placental Mammals Marsupials Birth Process Give birth to relatively developed young Give birth to relatively undeveloped young, which continue to grow and develop outside the womb, typically in a pouch Placenta Have a well-developed placenta Have a less-developed, short-lived placenta that nourishes their young for a few days before birth Gestation Period Longer gestation period, allowing for larger and more mature offspring at birth Shorter gestation period, resulting in less mature offspring at birth, which continue to develop externally Heat Production Possess fully evolved brown fat for heat production Possess a not fully evolved form of brown fat, lacking thermogenic function Epipubic Bone Do not have an extra pubic bone for pouch support Have an extra pubic bone, the epipubic bone, to support their pouch Examples Humans, dogs, cats, elephants, etc. Kangaroos, koalas, opossums, etc.

Placental mammals

UPSC CURRENT AFFAIRS – 10 June 2024 [PDF]

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