The Hindu News Analysis 06/06/2020

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1)Financial Stability Report is published by which of the following?

  • a.  World Economic Forum
  • b.  International Monetary Fund
  • c.  World Bank
  • d.  None of the above

Answer : d

  • Global Financial Stability Report is released by International Monetary Fund (IMF)
  • Financial Stability Report is released by Reserve Bank of India (RBI).

2)EQUIP sometimes seen in the news recently is a five year vision plan associated with which of the following sector?

  • a.  Education
  • b.  Agriculture
  • c.  Skill Development
  • d.  Artificial Intelligence

Answer : a

  • The Centre has released a five-year vision and action plan to transform higher education by doubling enrolment and employability, addressing inequalities of access, and revamping governance and funding mechanisms.
  • The Education Quality Upgradation and Inclusion Programme (EQUIP) is likely to involve investment of Rs. 1.5 lakh crore over the next five years, much of which will have to be raised from the market.

3)Consider the following statements

  1. There is no Minimum Support Price (MSP) for Milk in India.
  2. Prices of Milk in India is regulated by the Department of Fisheries, Animal Husbandry & Dairying.

Which of the statement(s) given above is/are correct?

  • a.  1 only
  • b.  2 only
  • c.  Both 1 and 2
  • d.  Neither 1 nor 2

4)Consider the following statements with respect to Mahatma Gandhi Bunkar Bima Yojana

  1. The basic objective of the scheme is to provide enhanced insurance cover to the handloom weavers.
  2. The Scheme will be administered through the State Bank of India.

Which of the statement(s) given above is/are correct?

  • a.  1 only
  • b.  2 only
  • c.  Both 1 and 2
  • d.  Neither 1 nor 2

Answer : a

  • The Scheme will be administered by the Life Insurance Corporation (LIC).
  • The basic objective of the scheme is to provide enhanced insurance cover to the handloom weavers in the case of natural as well as accidental death and in cases of total or partial disability

News:- India, China hold talks, agree to resolve differences peacefully.

Both sides agreed “to handle their differences through peaceful discussion bearing in mind the importance of respecting each other’s sensitivities,
concerns and aspirations and not allow them to become disputes”, the Ministry of External Affairs told.

China has appointed a new Army commander, Lieutenant General Xu
Qiling, to oversee the People’s Liberation Army Ground Force on the India
border, amid the ongoing tensions across the Line of Actual Control.

News:- Massive spike in foreign flows into market.

FDI vs FPI :- FDI and FPI routes are used by foreign funds for entirely different purposes. Investments through the FDI route are strategic in nature, and meant for the long term. Several FDI investors also get a say in the management of the investee company, including board seats.

By contrast, portfolio investments are short-term in nature, with investors having the liberty to buy or sell stock on the bourses. Also, FPIs are allowed to invest only in listed securities, while FDI investments can be made even in unlisted assets.

“The requirement for foreign investors to compulsorily register as FPIs if they invest less than 10% in an Indian listed company appears to be an unintended consequence of the FPI vs. FDI classification,”.

Recently RBI hiked the FPI limit in Corporate bonds to 15%.

FII ( Foreign Institutional Investor) :- Foreign Institutional Investor (FII) is an investor of group of investors who bring FPIs. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds. They participate in the secondary market of economy. To participate in the market of India, FIIs must register themselves with Securities and Exchange Board of India (SEBI).

News:- Kamal launches volunteer initiative for COVID-19 relief

Makkal Needhi Maiam founder Kamal Haasan on Friday launched ‘Naame Theervu’ (We are the solution) – an initiative to bring volunteers together to help Chennai in its efforts to control the spread of COVID-19.


Govt issues draft rules for drones

News: Directorate General of Civil Aviation(DGCA) has issued draft rules for drones termed The Unmanned Aircraft System(UAS) Rules,2020.


Drones or Unmanned aerial vehicles(UAVs): It is an unmanned aircraft piloted from a remote pilot station.DGCA has identified multiple categories of drones: Nano (up to 250 g), Micro ( over 250 g), small (2-25 kg), medium (25-150 kg) and large (over 150 kg).

Key Draft Rules:

  • Who can Operate Drones? Any Indian Citizen 18 years or above or any company registered in India with Chairman and 2/3rd of board in India.
  • Approval: Each drone importer, manufacturer, trader, owner and operator will need to take approval from the Directorate General of Civil Aviation(DGCA).
  • Inspection: DGCA will have powers to inspect a Drone manufacturing or maintenance facility before granting any authorisation under these rules.
  • UIN for drones mandatory: No drone can be owned or operated in India unless it has been allotted a Unique Identification Number (UIN), which will be issued by the DGCA.
  • Drone Ports: The rules propose establishing dedicated drone ports and corridors in permitted areas.
  • Operation of Drones: Only Nano class drones will be allowed to operate in India in general.Further, only a qualified remote pilot will be permitted to operate heavier drones.
  • Use of Drones for Food Delivery: Government hasn’t given permission for that yet.

News:- Ahead of vote for UNSC seat, India launches campaign brochure

The United Nations Charter established six main organs of the United Nations, including the Security Council. It gives primary responsibility for maintaining international peace and security to the Security Council, which may meet whenever peace is threatened.

According to the Charter, the United Nations has four purposes:

  • to maintain international peace and security;
  • to develop friendly relations among nations;
  • to cooperate in solving international problems and in promoting respect for human rights;
  • and to be a centre for harmonizing the actions of nations.

All members of the United Nations agree to accept and carry out the decisions of the Security Council. While other organs of the United Nations make recommendations to member states, only the Security Council has the power to make decisions that member states are then obligated to implement under the Charter.


When a complaint concerning a threat to peace is brought before it, the Council’s first action is usually to recommend that the parties try to reach agreement by peaceful means. The Council may:

  • set forth principles for such an agreement;
  • undertake investigation and mediation, in some cases;
  • dispatch a mission;
  • appoint special envoys; or
  • request the Secretary-General to use his good offices to achieve a pacific settlement of the dispute.

When a dispute leads to hostilities, the Council’s primary concern is to bring them to an end as soon as possible. In that case, the Council may:

  • issue ceasefire directives that can help prevent an escalation of the conflict;
  • dispatch military observers or a peacekeeping force to help reduce tensions, separate opposing forces and establish a calm in which peaceful settlements may be sought.

Beyond this, the Council may opt for enforcement measures, including:

  • economic sanctions, arms embargoes, financial penalties and restrictions, and travel bans;
  • severance of diplomatic relations;
  • blockade;
  • or even collective military action.

A chief concern is to focus action on those responsible for the policies or practices condemned by the international community, while minimizing the impact of the measures taken on other parts of the population and economy.


The Security Council held its first session on 17 January 1946 at Church House, Westminster, London. Since its first meeting, the Security Council has taken permanent residence at the United Nations Headquarters in New York City. It also travelled to many cities, holding sessions in Addis Ababa, Ethiopia, in 1972, in Panama City, Panama, and in Geneva, Switzerland, in 1990.

A representative of each of its members must be present at all times at UN Headquarters so that the Security Council can meet at any time as the need arises.

India is guaranteed a place in the UNSC as it is the sole candidate for Asia Pacific but needs two thirds of the 193 member General Assembly to vote in its favour in a secret ballot scheduled for June 17 in New York.

“To our good fortune, the Islamic Republic of Afghanistan agreed, in a gesture to our friendship, to step aside for the 202122 seat.

EDITORIAL OF THE DAY :- Rethinking the old ways – Pharma Sector

Source – The Hindu

Syllabus – GS 3 – Biotechnology and issues relating to intellectual property rights

Context – Business model of pharma sector needs to change in new post-corona world

Current model of business – Commercial Pharma Companies

Medicines are among humanity’s greatest achievements.

  • Global market for pharmaceuticals is currently worth Rs. 110 lakh crore annually-   1.7% of the gross world product.
  • 55% of this global pharmaceutical spending (  Rs.60 lakh crore) is for brand-name products, which are typically under patent.

Figure 1 – Production and marketing in Pharma sector

Issues with this model

  1. Monopoly– Patenting of medicines leads to monopoly of company in market. This enables them to sell their new products without competition at a price far above manufacture and distribution costs.
  2. Unaffordable for poor– The higher price of patented medicine is harmful for poor people who can’t afford to buy them and leads to vicious cycle of poverty for generations.

Figure 2 – Vicious cycle of poverty

  1. Neglect of diseases–Companies motivated by the prospect of profit tend to neglect diseases suffered mainly by poor people, who cannot afford expensive medicines. The 20 World Health Organization-listed neglected tropical diseases together afflict over one billion people but attract only 0.35% of the pharmaceutical industry’s R&D. Merely 0.12% of this R&D spending is devoted to tuberculosis and malaria, which kill 1.7 lakh people each year.
  2. Ill-effect of insurance– Due to presence of a large number of affluent or well-insured patients, companies tend to set high prices of medicines to maximize their profit.

Suggested Solution – Health Impact Fund – It is as an alternative track on which pharmaceutical innovators may choose to be rewarded. Any new medicine registered with the Fund would have to be sold at or below the cost of manufacture and distribution, but would earn ten annual reward payments based on the health gains achieved with it.

Advantages of the Health Impact Fund

  1. Funding from diverse sources – Government budgeting for health sector and international taxes on carbon emission are few of the sources from which fund can be collected for same.
  2. Favors unprofitable pharmaceutical companies– The Fund would get pharmaceutical firms interested in certain R&D projects that are unprofitable under the current regime — especially ones expected to produce large health gains among mostly poor people. Such projects would predominantly address communicable diseases.
  3. R&D in neglected diseases– This fund will encourage companies to do R&D in neglected tropical diseases. With the Fund in place, there would be much deeper and broader knowledge about such diseases. This will pave way for effective interventions and greater capacities for developing additional, more targeted responses quickly.
  4. Helpful in pandemics– Government’s regulations to use compulsory license system disincentives commercial pharma companies to develop vaccines or medicines to tackle pandemics. This fund will be helpful in situations where the cost of R&D is very high.

Way Forward – In post corona world new methods are needed to resolve the most fundamental challenges humanity is still facing. In public health care, this fund can be a boon as it will invoke conscience of companies about their choice – developing a product and achieving high sales at higher rates or rather developing a product and reducing the overall burden from healthcare.


RBI creates Payment Infrastructure Development Fund

News: Reserve Bank of India(RBI) has created a Payment Infrastructure Development Fund of Rs 500 crores.


  • Aim: To encourage the deployment of Points of Sale(PoS) infrastructure both physical and digital modes in smaller cities, towns and north eastern states.
  • Contribution: RBI will make an initial contribution of Rs 250 crore to the fund. The remaining contribution will come from card-issuing banks and card networks operating in the country.
  • Nodal Department: The fund will be governed by an advisory council and administered by the RBI.

News:- Monetary Policy Committee:-

Monetary Policy Committee (MPC) is a 6 member committee formed after the amendment in the RBI Act, 1934 through the Finance Act, 2016. The basic objective of MPC is to maintain price stability and accelerate the growth rate of the economy.

Monetary policy refers to the policy of the Reserve Bank of India with regard to the use of monetary instruments under its control to achieve the goals of GDP growth and lower inflation rate. The RBI is authorised to made monetary policy under the Reserve Bank of India Act, 1934.

The Monetary Policy Committee (MPC) constituted by the Central Government under Section 45ZB. The MPC determines the policy interest rate required to achieve the inflation target.

Composition of Monetary Policy Committee:-

The 6 member Monetary Policy Committee (MPC) constituted by the Central Government as per the Section 45ZB of the amended RBI Act, 1934. The first meeting of the Monetary Policy Committee (MPC) was held on in Mumbai on October 3, 2016.

The composition of the MPC as on April 2019 is as follows;

1. Governor of the Reserve Bank of India – Chairperson, ex officio; (Shri Shaktikanta Das)

2. Deputy Governor of the Reserve Bank of India, in charge of Monetary Policy –
BP Kanungo (Member, ex officio) 

3. One officer of the Reserve Bank of India to be nominated by the Central Board – Member, ex officio; (Dr. Michael Debabrata Patra)

4. Dr. Ravindra H. Dholakia, Professor, Indian Institute of Management, Ahmedabad – Member

5. Professor Pami Dua, Director, Delhi School of Economics – Member

6. Shri Chetan Ghate, Professor, Indian Statistical Institute (ISI) – Member

Except ex-officio members all members will hold the office for a period of 4 years or until further orders, whichever is earlier.

Instruments of Monetary Policy;

The instruments of monetary policy are of two types:

  1. Quantitative Instruments: General or indirect (Cash Reserve Ratio, Statutory Liquidity Ratio, Open Market Operations, Bank Rate, Repo Rate, Reverse Repo Rate, Marginal standing facility and Liquidity Adjustment Facility (LAF))
  2. Qualitative Instruments: Selective or direct (change in the margin money, direct action, moral suasion)

It is worth to mention that all of the above mentioned instruments of the monetary policy are managed as per the requirement of the economy. These instruments maintain the flow of money supply in the economy so that the rate of inflation can be stabilised for ensuring the growth of the Economy.

News:- Christiano Ronaldo becomes football’s first billionaire .

News:- Earth will make moves against Space

Space is being represented by the two Russian cosmonauts, Anatoly Ivanishin and Ivan Vagner.In the first match between Earth and Space, in
1970, Andrian Nikolayev and Vitaly Sevastyanov matched wits against Viktor Gorbakto and Nikolai Kamanin. The game was drawn.

News:- How archaeologists continued digging from home during the current lockdown:-

The coronavirus pandemic has stopped archaeologists from going to dig at sites, but not a U.K.based team from continuing its research.
Equipped with airborne survey data, a team of volunteers, locked down in their homes, sat and analysed thousands of images derived from Light Detection and Ranging (LiDAR) data.
What is the LiDar Method:- In this method, commonly used by geologists and surveyors to make high resolution maps, laser light is used to survey a site and its reflection is measured with sensor.

The team is currently studying the Tamar Valley in Tasmania.

“Though LiDAR has been used for agriculture and geology related applications, our country has still not used it in archaeology. The problem is that the data needs to be bought and processed by experts. Also, they might be expensive.”

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