10th October 2021 Daily Current Affairs

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Prelims Specific Questions :-

1) Multidimensional Poverty Index Report, is released by which of the following organisation

  1. International Monetary Fund
  2. World bank
  3. United Nation Development Programme
  4. International Labor Organization

2)30×30 target was sometimes seen in the news. It is related to which of the following?

  1. Malaria control programme.
  2. Conservation of land and oceans.
  3. Elimination of Hunger and Malnutrition
  4. Promotion of Electric Vehicles.

3)With reference to International Financial Services Centres Authority (IFSCA), consider the following statements:

  1. 1.It is a statutory body.
  2. 2.At present, the GIFT IFSC in Gujarat is the maiden international financial services centre in India.

Which of the statements given above is/are incorrect?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Prelims specific news items –

1) I-Sprint 21 –

I-Sprint21, the global FinTech Hackathon Series of IFSCA was launched recently, where the first Sprint of the series “Sprint01: BankTech” is focussed on FinTechs for the Banking sector.

Sprint 01: BankTech is hosted jointly by IFSCA and GIFT city in collaboration with NITI Aayog. In Union Budget 2020-21 finance minister envisaged on supporting a “World Class FinTech Hub” at GIFT IFSC.

What is Sprint01: BankTech hackathon?

Under its banner a series of Hackathons cutting across the spectrum of banking, insurance, securities and fund management have been planned in IFSC.

“Sprint01: BankTech” hackathon is first under the I-Sprint series focussing on the Banking Sector and is one of its kind being backed by a Regulator. It shall be conducted virtually and is open to eligible FinTechs from across the Globe.

IFSCA –  International Financial Services Centres Authority

(A statutory authority established by Government of India)

Important news :-

1) Global pact on minimum corporate tax of 15% – #GS3 #GS2

A milestone global deal to ensure big companies pay a minimum tax rate of 15% and make it harder to avoid taxation has been agreed after Ireland, Estonia and Hungary signed up to an accord, which U.S. President Joe Biden said levelled the playing field.

The deal aims to end a four-decade-long “race to the bottom” by governments that have sought to attract investment and jobs by taxing multinational companies only lightly and allowing them to shop around for low tax rates.

The deal aims to prevent large firms from booking profits in low-tax countries like Ireland regardless of where their clients are, an issue that has become ever more pressing with the rise of “Big Tech” giants that can easily do business across borders.

Out of the 140 countries involved, 136 supported the deal, with Kenya, Nigeria, Pakistan and Sri Lanka abstaining for now.

The Paris-based Organisation for Economic Cooperation and Development (OECD), which has been leading the talks, said the deal would cover 90% of the global economy.

About Organisation for Economic Cooperation and Development (OECD) –

  • Headquarters: Paris, France.
  • Total Members: 38.
  • Formation on 16 April 1948 as OEEC (Organisation for European Economic Co-operation )and Reformed in September 1961 as OECD
  • India is not a member, but a key economic partner.
  • The OECD is an intergovernmental economic organisation, founded to stimulate economic progress and world trade.
  • Most OECD members are high-income economies with a very high Human Development Index (HDI) and are regarded as developed countries.

Reports and Indices by OECD

  • Government at a Glance report.
    • International Migration Outlook.
    • OECD Better Life Index.

2) Environmentalists alarmed as Himachal witnesses lesser snow –

The hill state of Himachal Pradesh has been gradually witnessing lesser snow in the past decade and the area under the snow is also decreasing.

The trend triggered by climate change has alarmed environmentalists, considering the importance of seasonal snow cover as a major input in controlling the hydrology of the river basins in the ecological fragile State.

A recent study conducted jointly by the State Centre on Climate Change and Space Applications Centre (ISRO) Ahmedabad, using Advanced Wide Field Sensor (AWiFS) satellite data has revealed that all major river basins including Satluj, Ravi, Chenab and Beas have witnessed an overall decrease of 18.5% in area under snow in 2020-21 winters in comparison to 2019-20.

3) Vayalar Award for Benyamin –

Novelist gets literary honour for Manthalirile 20 Communist Varshangal

Manthalirile 20 Communist Varshangal, a novel by Benyamin, has won the 45th Vayalar Ramavarma Memorial Literary Award.

4) Green pacts inked at India, Denmark summit – #GS2

India and Denmark signed two agreements on research in climate change, while another MoU on setting up a “green hydrogen” electrolyser plant was signed between Reliance Industries and Danish company Stiesdal Fuel Technologies as Prime Minister Narendra Modi met with Prime Minister of Denmark Mette Frederiksen on Saturday.

This was the first summit-level visit to India since the COVID pandemic, and the first State visit by a Danish leader since a bilateral freeze on ties a decade ago.

‘New dimensions’

“We also took a decision today that we will continue to expand the scope of our cooperation, adding new dimensions to it. We have initiated a new partnership in the field of health. In order to increase the agricultural productivity and income of farmers in India, we have also decided to cooperate in agriculture related technology,” said Prime Minister Modi after the bilateral summit, adding that joint ventures on food safety, cold chains, food processing and water management.

5) Exercise Malabar Phase-II to be held next week in Bay of Bengal

The Quadrilateral group comprising India, Australia, Japan and the U.S. is scheduled to hold Phase-II of the Malabar naval exercise next week, according to official sources.

This is the first military engagement among the Quad partner countries since Australia, the U.S. and the U.K. unveiled the AUKUS initiative to deepen cooperation on a range of “emerging security and defence capabilities” which includes equipping Australian with at least eight nuclear powered submarines (SSN).

Phase-I of Malabar, also its 25th edition, was hosted by the U.S. and held off Guam from August 26-29.

The Japan Maritime Self Defence Force (JMSDF) vessels, which arrived in India for the bilateral exercise JIMEX, will participate in Phase-II. These include Izumo class helicopter carrier Kaga and guided missile destroyer Murasame along with their integral SH60K helicopters.

The Malabar exercise commenced in 1992 as an India-U.S. exercise. In 2015, Japan joined as a permanent member and Australia was included in the 2020 edition.

6) Why natural gas prices are soaring around the world –

This is supposed to be an off season. Winter is yet to set in. But natural gas prices soared over the past few months, especially in Europe. The price of natural gas in Europe is now six times higher than what it was last year. Across the continent, natural gas inventories are falling. On Wednesday, the benchmark Dutch gas futures price jumped 40% in the morning trade to touch €162.13 a megawatt-hour, an eight-year high, but reversed course after Russian President Vladimir Putin assured Europe of supplies. But even after the day’s fall, gas prices in Europe remained twice as high as they were a month earlier. And on Friday, prices started rising again. What’s driving up the prices?

Supply constraints

A host of reasons, from economic recovery to geopolitics, are attributed to the price rise. Global energy demand fell last year when economies slipped into COVID-induced lockdowns. When growth returned this year, especially to Asian economies, demand shot up and energy producers struggled to meet the growing demand, pushing up prices. Even in the U.S., the world’s largest natural gas producer, prices rose from $1.7 per million British thermal units on March 31 to $6.3 per mBtu on October 5. Europe, which is heavily dependent on imports to meet its energy demand, was particularly hit hard.

As part of Europe’s shift towards cleaner energy, many countries had moved away from coal to gas to produce electricity. This increased Europe’s reliance on gas. On the other side, the continent’s natural gas production has shrunk over the years, as many countries shut down production fields over environmental concerns. 

Energy geopolitics

As prices shot up amid growing worldwide demand and falling production in Europe, supplies from Russia via a pipeline that passes through Ukraine and Poland also shrank, which made the situation worse. 

The International Energy Agency said this week Russian exports to Europe this year were lower than they were in 2019. This has fuelled speculation that Mr. Putin is using the energy crunch in Europe to get approval from the EU for the Nord Stream 2 pipeline.

7) Lunar samples brought by Chinese mission studied

Samples brought back by U.S. and Soviet missions were more than 2.9 billion years old. The samples acquired on China’s Chang’e-5 mission late last year were around 1.96 billion years old suggesting volcanic activity persisted longer than believed.

Oceanus Procellarum or “Oceans of Storms,” bringing back lunar samples.

 “The Oceanus Procellarum region of the Moon is characterised by high concentrations of potassium, thorium, and uranium,elements that generate heat through long-lived radioactive decay and may have sustained prolonged magmatic activity on the nearside of the Moon,” wrote the article’s authors.

How Black Holes are formed –

Black holes form when a massive star undergoes a supernova explosion towards the end of its lifetime. The black hole forms from the remnants of the explosion.

8) Nobel Prize 2021 –

The 2021 Nobel Prize in Physiology or Medicine-

The 2021 Nobel Prize in Physiology or Medicine was jointly awarded to David Julius, 66, at the University of California, San Francisco, and Ardem Patapoutian, 54, at Scripps Research, La Jolla, California, “for their discoveries of receptors for temperature and touch”.

The two researchers discovered the molecular mechanism by which our body senses temperature and touch. Being able to do this opens the field for a lot of practical chemistry whereby individual cells and pathways can be tweaked, suppressed or activated to quell pain or sensation. How the body senses external stimuli is among the oldest excursions of natural philosophy.

Capsaicin (8-methyl-N-vanillyl-6-nonenamide), the active component of chili peppers, generates the burning sensation when eating spicy food. Studies on capsaicin showed that when it acted on sensory nerves it induced ionic currents, or the gush of charged particles along a membrane.

Patapoutian and his colleagues were working on how pressure and force affected cells. Following an approach similar to that of Professor Julius, they identified 72 potential genes that could encode an ion channel receptor and trigger sensitivity to mechanical force, and it emerged that one of them coded for a novel ion channel protein, called Piezo1. Via Piezo1, a second gene was discovered and named Piezo2. Sensory neurons were found to express high levels of Piezo2 and further studies firmly established that Piezo1 and Piezo2 are ion channels that are directly activated by the exertion of pressure on cell membranes.

Professor Julius and Professor Patapoutian used the chemical substance menthol to identify TRPM8, a receptor activated by cold.

The Nobel Prize for Physics for 2021

The Nobel Prize for Physics for 2021 has been awarded to climatologists Syukuro Manabe of Princeton University, U.S., and Klaus Hasselmann of Max Planck Institute for Meteorology, Hamburg, Germany, and physicist Giorgio Parisi of Sapienza University of Rome, Italy. The prize has been given for their “groundbreaking contributions to our understanding of complex physical systems”. Professors Manabe and Hasselmann will share half the prize and Professor Parisi will receive one-half of the prize. Professors Manabe and Hasselmann bagged the Prize “for the physical modeling of Earth’s climate, quantifying variability and reliably predicting global warming”. Professor Parisi won “for the discovery of the interplay of disorder and fluctuations in physical systems from atomic to planetary scales”.

Professor Manabe and collaborators made pioneering attempts at modeling atmospheric warming due to the increase in carbon dioxide. He estimated that a doubling of carbon dioxide would lead to a temperature rise of 2 degrees. His model confirmed that the rise in temperature was, indeed, due to the increase in carbon dioxide, because it predicted rising temperatures close to the ground and cooling of outer layers of the atmosphere.

The term, weather, refers to day-to-day variations in temperature and rainfall, whereas climate describes longtime effects and also seasonal and average behavior over a long time. While it is very difficult to predict the former, the latter appears predictable, as for instance, in the anticipated regularity of monsoons year after year. The striking aspect of Professor Hasselmann’s work is that he built a connection between the rapid, randomly varying, “noiselike” weather patterns and inferred from these the “signal” of climate. He built a stochastic climate model that connects the two.

The Nobel Prize for Chemistry

The Nobel Prize for Chemistry has been awarded to German scientist Benjamin List of the Max Planck Institute and Scotlandborn scientist David W.C. MacMillan of Princeton University “for the development of asymmetric organocatalysis”. Developed by the duo in 2000, this novel technique of catalysis is an efficient, “precise, cheap, fast and environmentally friendly” way to develop new molecules.

What is catalysis?

Catalysis is a term used to describe a process in the presence of a substance (the catalyst) that controls and influences the rate and/or the outcome of the reaction. The substance — the catalyst — which helps in achieving this remains intact and is not consumed during the reaction and neither becomes a part of the final product. The catalyst is subsequently removed so as not to add impurity to the final product.

Two very different catalysts —metals and enzymes— were routinely used by chemists before Dr. List and Dr. MacMillan developed the asymmetric organocatalysts. As the name denotes, metal catalysts often use heavy metals.

This makes them not only expensive but also environmentally unfriendly as sufficient care needs to be taken to ensure the final product does not contain even traces of the catalyst. There are several other challenges when metal catalysts are used. The heavy metals used in these catalysts are often highly sensitive to the presence of oxygen and moisture.

In the case of enzyme catalysts, the problem arises from their very large sizes. They are often 10,000 times larger than the actual target medicine and can take just as long to make. Enzymes, which are proteins found in nature, are wonderful catalysts.

Unlike enzyme catalysts which are huge, asymmetric organocatalysts are made of a single amino acid. They are not only environmentally friendly but also quicken the reaction and make the process cheaper. Most importantly, asymmetric organocatalysts allow only one mirror image of the molecule to form as the catalysts are made from a single, circular amino acid. Chemists often want only one of these mirror images, particularly when producing drugs.

Organic catalysts have a stable framework of carbon atoms, to which more active chemical groups can attach. These often contain common elements such as oxygen, nitrogen, sulphur or phosphorus. This means that these catalysts are both environmentally friendly and cheaper to produce.

9) India may need to rescind digital tax –

India may have to withdraw digital services tax or the equalisation levy and give a commitment not to introduce such measures in the future if the global minimum tax deal comes through.

In a major reform of the international tax system, 136 countries, including India, have agreed to an overhaul of global tax norms to ensure that multinationals pay taxes wherever they operate and at a minimum 15% rate.

However, the deal requires countries to remove all digital services tax and other similar measures and to commit not to introduce such measures in the future, as per the Organisation of Economic Cooperation and Development (OECD) implementation plan released late on Friday.

The proposed two-pillar solution of the global tax deal consists of two components —Pillar One which is about reallocation of additional share of profit to the market jurisdictions and Pillar Two consisting of minimum tax and subject to tax rules.

Equalisation Levy was introduced in India in 2016, with the intention of taxing the digital transactions i.e. the income accruing to foreign e-commerce companies from India. It is aimed at taxing business to business transactions.

Equalisation Levy is a direct tax, which is withheld at the time of payment by the service recipient. The two conditions to be met to be liable to equalisation levy:

  • The payment should be made to a non-resident service provider;
  • The annual payment made to one service provider exceeds Rs. 1,00,000 in one financial year.

Services Covered Under Equalisation Levy:-

Currently, not all services are covered under the ambit of equalisation Levy. The following services covered:

Online advertisement

Any provision for digital advertising space or facilities/ service for the purpose of online advertisement

As and when any other services are notified will be included with the aforesaid services.

Equalization Levy is charged at the rate of 6% on the amount of consideration received/receivable by the non-resident. The person making the payment is liable for the deposit of EL to the Government treasury and all related compliances viz.

India along with 135 countries and jurisdiction agreed to implement the new international tax system. This aims to ensure that multinational enterprises (MNEs) are subjected to a minimum 15 per cent tax rate from 2023.

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