UPSC CURRENT AFFAIRS – 13 April 2024

InstaLinks : help you think beyond the issue but relevant to the issue from UPSC prelims and Mains exam point of view. These linkages provided in this ‘hint’ format help you frame possible questions ina 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. This helps you study a topic holistically and add new dimensions to every current event to help you think analytically

InstaLinks : help you think beyond the issue but relevant to the issue from UPSC prelims and Mains exam point of view. These linkages provided in this ‘hint’ format help you frame possible questions ina 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. This helps you study a topic holistically and add new dimensions to every current event to help you think analytically

Table of Contents:

GS Paper 3:

• Disinvestment in India: A Key Agenda for the Next Government

Facts for Prelims (FFP)

• Misleading Advertisements

• Reports in News

• India-Mauritius Tax Treaty

• Financial Services Institutions Bureau (FSIB)

• Homoeopathy Symposium

• Brightest-ever cosmic explosion

• Mercenary spyware

• Eurasian Otter

• Baobab trees

Mapping

• Khavda Solar Park (Gujarat’s Kutch)

Disinvestment in India: A Key Agenda for the Next Government

#### GS3 Paper

Syllabus: Indian Economy: LPG Reforms/Disinvestment Policy

Source: BS

Context: The Union Finance Minister recently reaffirmed the government’s commitment to the privatisation policy. The policy, part of the Aatmanirbhar Bharat package, aims for disinvestment in both strategic and non-strategic sectors, with a plan to maintain minimal presence of central public-sector enterprises (CPSEs).

What is Disinvestment?

Disinvestment is the process of reducing or liquidating government ownership in a company or asset, typically through the sale of shares or assets to private or public investors. It is often undertaken to raise capital, improve efficiency, or reduce government intervention in the economy.

Process of Disinvestment in India:

In India, the disinvestment process is overseen by the Department of Investment and Public Asset Management (DIPAM), operating under the Ministry of Finance. DIPAM’s main goal is to manage the government’s investments in public sector enterprises and supervise the disinvestment of government equity in these enterprises. Additionally, in 2005, the government established the National Investment Fund (NIF) to serve as a channel for the proceeds generated from the disinvestment of Central Public Sector Enterprises. The creation of NIF aimed to ensure transparent and efficient utilization of these funds for various developmental purposes.

Approaches:

• Minority Disinvestment: Govt. retains >51%, ensuring control.

• Majority Divestment: hands control but retains some stake.

• Complete Privatisation: 100% control transferred (full privatisation)

Methods of Disinvestment:

Methods | Description

Initial Public Offering (IPO) | Offer of shares by an unlisted Public Sector Enterprise (PSE) or the Government to the public for subscription for the first time.

Further Public Offering (FPO) | Offer of shares by a listed Public Sector Enterprise (PSE) or the Government to the public for subscription.

Offer for Sale (OFS) | Auction of shares by promoters through the Stock Exchange platform. This method has been extensively used by the Government since 2012.

Strategic Sale | Sale of a substantial portion of Government shareholding (up to 50% or as determined) of a PSE along with transfer of management control.

Institutional Placement Program (IPP) | Offering where only Qualified Institutional Buyers can participate. These buyers are perceived to possess the expertise to invest in capital markets.

CPSE Exchange Traded Fund (ETF) | Disinvestment through the ETF route allows the simultaneous sale of the Government’s stake in various PSEs across diverse sectors through a single offering.

Trends of Disinvestment in India:

The trend of disinvestment in India has evolved significantly since 1991. Initially slow due to political constraints, it gained momentum in the late 1990s and early 2000s, with significant earnings between 1999 and 2004. However, between 2004 and 2009, disinvestment slowed again due to political pressures. From 2009 to 2014, there was a resurgence, with earnings rising to INR 1.2 lakh crore. Since 2014, there has been a rapid increase in disinvestment revenues, totalling INR 4.48 lakh crore by 2020. Recent initiatives like the Atmanirbhar Bharat package and the National Monetisation Pipeline aim to further enhance private sector participation and unlock the value of public assets.

In recent years, the government has largely met or exceeded its disinvestment targets, notably surpassing goals in 2017-18 and 2018-19. In the fiscal year 2023-24, the revised estimate for disinvestment revenue was Rs 30,000 crore, lower than the initially budgeted Rs 51,000 crore.

Recent examples of disinvestment in India:

• IPO of 3.5% LIC shares

• Privatisation of Air India

• Sale of minority holdings in CPSEs including IDBI Bank, SCI, Concor, and others

Latest Disinvestment Policy

The latest disinvestment policy classifies the public sector into strategic and non-strategic sectors.

• In non-strategic sectors, the government will exit all businesses except for a ‘bare minimum’ presence in four key strategic sectors: Atomic energy, space and defence Transport and telecommunications

• Atomic energy, space and defence

• Transport and telecommunications

• Power, petroleum, coal, and other minerals

• Banking, insurance, and financial services

• States will be incentivized for disinvestment in their public sector companies.

This policy marks a departure from past approaches, providing a framework for deciding the ownership pattern of 439 CPSEs. It also includes the monetization of surplus land and the creation of the National Land Monetization Corporation.

Challenges related to Disinvestment in India:

Challenges | Description

Political Sensitivity | Disinvestment is a politically sensitive issue in India, with opposition from various political parties and trade unions.

Valuation Complexity | Valuing public sector enterprises can be challenging due to their unique structures and market conditions, leading to potential discrepancies.

Labour Concerns | Disinvestment often raises fears among employees regarding job security and wage cuts, leading to potential resistance and labour unrest.

Investor Appetite | Finding suitable buyers for shares in public sector enterprises (e.g., in the case of Air India), especially those with poor financial performance, can be difficult.

Regulatory Hurdles | Disinvestment processes are subject to complex regulatory frameworks, including approval requirements and compliance standards.

Legal Risks | Disinvestment decisions and processes can face legal challenges, including disputes over valuation, terms, and adherence to regulations.

Bureaucratic Delays | Bureaucratic procedures and decision-making processes can slow down the disinvestment process, leading to inefficiencies and delays.

Economic Impact | Disinvestment proceeds may impact government revenue streams and fiscal deficits, requiring careful management and planning for economic stability.

Private monopoly | Complete privatization can lead to public monopolies transforming into private monopolies, which may exploit their dominant position to raise service costs and maximize profits.

Way Forward:

• NITI Aayog recommends: Direct submission of disinvestment proposals to CCEA for faster processing.

• Direct submission of disinvestment proposals to CCEA for faster processing.

• Appointment of advisors and asset valuers to expedite disinvestment.

• Establishment of an independent professional agency to accelerate the Asset Monetization Program.

• Increase operational autonomy and governance measures for PSEs, such as listing on stock exchanges, to enhance transparency and performance.

• Provide fair valuation of government entities to boost bidder confidence in the disinvestment process.

• Reduce government involvement in the management and operations of PSEs by reforming boards and organizational structures to attract more buyers and achieve better valuations.

• Communicate the economic benefits of disinvestment to counter political resistance and public scepticism.

• Focus on selling assets based on market appeal rather than solely unloading underperforming ones, including profitable enterprises.

Conclusion:

Disinvestment is vital for India’s economic growth. Experts note that transferring ownership of PSEs to private entities through disinvestment enhances economic efficiency. They also suggest that the size of disinvestment alone doesn’t significantly improve PSU performance; rather, changes in leadership and market factors like innovation and technology drive economic efficiency.

Insta Links:

• Disinvestment of Public Sector Units (PSUs)

Prelims Links:

Q1. In the context of governance, consider the following: (UPSC 2010)

• Encouraging Foreign Direct Investment inflows

• Privatization of higher educational Institutions

• Down-sizing of bureaucracy

• Selling/offloading the shares of Public Sector Undertakings

Which of the above can be used as measures to control the fiscal deficit in India?

(a) 1, 2 and 3 (b) 2, 3 and 4 (c) 1, 2 and 4 (d) 3 and 4 only

Ans: D

Q2. Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)? (UPSC 2011)

• The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt.

• The Government no longer intends to retain the management control of the CPSEs.

Which of the statements given above is/are correct?

(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2

Ans: D

Misleading Advertisements

#### Facts for Prelims (FFP)

Source: TH

Context: The Supreme Court declined a second apology from Baba Ramdev and Patanjali in a contempt case over misleading advertisements.

What are Misleading Advertisements?

Misleading advertisements are promotional messages or claims that deceive or mislead consumers about the characteristics, benefits, or efficacy of a product or service. These ads may contain false or exaggerated information, leading consumers to make purchasing decisions based on inaccurate perceptions

The Supreme Court criticized the deliberate violations of the Drugs and Magic Remedies Act.

The Drugs and Magic Remedies (Objectionable Advertisements) Act of 1954 prohibits misleading claims about drugs and magic remedies. Section 4 prohibits false impressions about a drug’s true character, while Section 5 bans the advertisement of magic remedies for treatment, defining them as items alleged to have miraculous powers for diagnosis, cure, or mitigation.

Reports in News

#### Facts for Prelims (FFP)

Reports | Descriptions

IMF’s Global Financial Stability Report 2024 | Key findings: The IMF warns of rising cyber threats endangering macro-financial stability, with extreme losses reaching $2.5 billion. Cyberattacks have nearly doubled since the pandemic, with financial firms, especially banks, facing the brunt.

India ranks 10th in cybercrime, with advance fee payment frauds being the most common, according to the World Cybercrime Index developed by the University of Oxford and UNSW Canberra

Plastic Overshoot Day 2024 Report | Released by Earth Action

Key Findings: In 2024, it’s projected for September 5th globally and April 23rd in India. There has been over 7% rise in global plastic waste since 2021, with 12 countries responsible for 60% of mismanaged plastic waste, including China, India, and Russia.

India is categorized as a Low-Waste-Producing Polluter with a high Mismanaged Waste Index (MWI)

Plastic Overshoot Day (similar to Earth Overshoot Day) marks when global plastic waste surpasses the world’s capacity to manage it, leading to pollution.

Global hepatitis report 2024 | Released by WHO

India accounted for over 11% of the global burden of hepatitis B & C cases, ranking second after China.

Hepatitis is liver inflammation caused by various factors, such as drugs, alcohol, and autoimmune disorders. Symptoms can range from jaundice and fever to chronic illness. The five main strains are A, B, C, D, and E, with B and C leading to chronic disease, liver cirrhosis, cancer, and death. While a vaccine exists for type B, none is available for type C.

World Hepatitis Day, observed on July 28 each year, aims to raise awareness about viral hepatitis and its global impact.

Government initiatives to tackle hepatitis include: the National Viral Hepatitis Control Program (aiming to eliminate viral hepatitis as a public health threat by 2030 in India); Universal Immunization Programme (UIP) (provides free vaccination against hepatitis B and other vaccine-preventable diseases, including tuberculosis, polio, pneumonia, and measles, among others)

Financing for Sustainable Development Report 2024 | Released by United Nations Department of Economic and Social Affairs (UNDESA)

Key findings: Developing countries face a significant financing gap for achieving Sustainable Development Goals (SDGs), estimated between $2.5 trillion and $4 trillion annually. Systemic risks like the COVID-19 pandemic and more frequent disasters strain national financing frameworks

Recommendations: Enhance tax capacity to boost tax revenue for SDGs.

UN DESA (HQ: New York City; est.1948), supports countries in making informed decisions by offering information via publications, databases, and international discussions at forums like the UN General Assembly and ECOSOC. It releases report the World Social Report (since 1997)

India-Mauritius Tax Treaty

#### Facts for Prelims (FFP)

Source: LM

Context: India and Mauritius amended their double taxation avoidance agreement (DTAA) to include a principal purpose test (PPT) aimed at curbing tax avoidance.

• However, the amended protocol has not been ratified or notified by the Income Tax Department.

• There were concerns that investments through Mauritius might face increased scrutiny by tax authorities, potentially affecting past investments as well.

Double taxation occurs when the same income is taxed twice in two different jurisdictions before it becomes net income.

To address this issue and encourage international economic activities, countries sign Double Taxation Avoidance Agreements (DTAAs).

These agreements establish agreed-upon tax rates and jurisdictions for specific types of income received by tax residents of one country from another country.

DTAA aims to prevent international double taxation and promote capital investment, trade, and economic activities between the signatory nations.

The agreements may cover various categories of income, depending on the types of businesses and holdings citizens have in each other’s countries.

Financial Services Institutions Bureau (FSIB)

#### Facts for Prelims (FFP)

Source: Economic Times

Context: The Financial Services Institutions Bureau (FSIB) has recommended Manoj Mittal, currently the Managing Director of IFCI, as the new Chairman and Managing Director of the Small Industries Development Bank of India (SIDBI).

• Additionally, Sanjay Shukla has been selected as the Managing Director of the National Housing Bank (NHB)

About FSIB:

Constituted in 2022 under Department of Financial Services (Ministry of Finance), by Central Government replacing Bank Board Bureau.

The Financial Services Institutions Bureau (FSIB) is an organization responsible for selecting directors for state-owned banks and financial institutions in India.

It acts as a head-hunter, identifying and recommending suitable candidates for leadership positions within the financial sector.

#### Facts for Prelims (FFP)

Source: BS

Context: India’s share of Web3 developers globally has surged from 3% in 2018 to 12% in 2023, leading among emerging markets, states a report by Hashed Emergent.

The ecosystem is young, with over 50% of developers joining in the past two years, and female participation has risen from 3% to 14% in five years. The country has a thriving Web3 sector with 1,000 startups and received $250 million in investment in 2023, mainly in finance, entertainment, and infrastructure subsectors.

Brightest-ever cosmic explosion

#### Facts for Prelims (FFP)

Source: BBC

Context: A significant astronomical discovery regarding the brightest burst of light ever recorded, occurred in 2022.

Researchers found that the burst originated from an exploding star, known as a supernova, located in a distant galaxy. However, the intensity of the burst surpassed expectations, leading to questions about its cause and implications. The burst’s extraordinary brightness, labelled as the “Brightest Of All Time” (B.O.A.T.), puzzled astronomers.

What are Supernovas?

They are massive stellar explosions that occur at the end of a star’s life cycle. They produce and eject vast amounts of energy and material into space. These explosions are responsible for creating and dispersing heavy elements such as gold, platinum, lead, and uranium into the universe.

While supernovas are known to produce heavy elements like gold, the researchers found no evidence of such elements in this particular explosion. This discovery challenges existing theories about the origin of heavy elements in the universe and raises doubts about the role of supernovas in their production.

Mercenary spyware

#### Facts for Prelims (FFP)

Source: Business Line

Context: Apple issued threat notifications to iPhone users in India and 91 other countries, warning of potential attacks by mercenary spyware, including Israel’s Pegasus spyware.

• The notifications, sent via email, highlighted the possibility of specific targeting due to the user’s identity or activities.

• While Apple didn’t attribute the attack to any entity, it emphasized the seriousness of the warning and the rarity and sophistication of mercenary spyware attacks.

About Mercenary Spyware:

Mercenary spyware refers to sophisticated surveillance software developed and sold by private companies to governments and other entities.

Unlike traditional cybercriminal activities, mercenary spyware is often used for targeted surveillance, intelligence gathering, and espionage purposes.

This type of spyware can infiltrate devices such as smartphones and computers, allowing the attacker to monitor communications, track location, access files, and gather sensitive information remotely.

Mercenary spyware attacks are typically highly advanced and difficult to detect, posing significant threats to individual privacy, security, and human rights.

Examples of mercenary spyware include Pegasus, developed by the NSO Group in Israel, which has been implicated in various surveillance scandals targeting journalists, activists, politicians, and other high-profile individuals worldwide.

Eurasian Otter

#### Facts for Prelims (FFP)

Source: Economic Times

Context: The first Eurasian otter in India was radio-tagged in the Satpura Tiger Reserve (STR) in Madhya Pradesh.

• The Eurasian otter was first photographed in the STR in 2016, expanding its known range to central India.

Previous News about Eurasian Otters (17th March 2023):

Baobab trees

#### Facts for Prelims (FFP)

Source: DTE

Context: The Global Society for the Preservation of Baobabs and Mangroves (GSPBM) has launched a pioneering initiative to revive Madagascar’s iconic baobab trees.

Previous News about Baobab Trees:

Khavda Solar Park (Gujarat’s Kutch)

#### Mapping

Source: BS

Context: Khavda Solar Park in Gujarat’s Kutch, is the world’s largest renewable energy park (5 times the size of Paris City). It boasts of 2 GW of commissioned capacity with plans to add 4 GW in the current fiscal year and 5 GW annually thereafter.

The Khavda Solar Park is near Vighakot village in Gujarat’s Kutch district. Situated near the Pakistan border, it aims to generate 30 gigawatts of electricity from solar panels and wind turbines across 72,600 hectares of land when fully operational.

Khavda was chosen for its ideal conditions for renewable energy generation, including abundant sunlight and strong wind speeds. Additionally, its remote location and barren land minimize land use conflicts and maximize the potential for large-scale energy production