Daily Current Affairs (MCQ's) | 19-05-2023

Q1. Consider the following statements with respect to the Liberalised Remittance Scheme (LRS)

1. Credit card spends come under the Liberalised Remittance Scheme (LRS) for foreign exchange outgo while debit cards spends are out of it

2. The LRS payments can be used to invest in assets such as real estate, bonds, and stocks outside India

Which of the above statements is/are correct?

a. 1 only

b. 2 only

c. Both 1 and 2

d. Neither 1 nor 2

Answer (b)

Explanation:

Credit cards put under LRS to check excess forex spends: govt.

• The government sought to clarify its decision to bring overseas credit card spends under the Liberalised Remittance Scheme (LRS) for foreign exchange outgo, stating some individuals were exceeding the

$2.5 lakh annual limit fixed under the scheme.

• While debit card spends were covered under the LRS, data from top money remitters show international credit cards were being issued with limits in excess of the norm, the Finance Ministry said, adding the central bank had urged the government a few times to remove this differential treatment.

Business visits excluded

• The Ministry assured the scheme would not cover bona fide business visits overseas by employees and said the imposition of 20% tax collected at source or TCS for foreign remittances would primarily impact tour travel packages, gifts to non-residents and domestic high net-worth individuals investing in assets such as real estate, bonds, and stocks outside India.

• “Instances have come to notice where the LRS payments are disproportionately high when compared to the disclosed incomes,” the Ministry said, stressing there would be no change in the 5% TCS levied on medical or education expenses abroad, each permitted up to

₹7 lakh a year.

Q2. Which of the following articles are exported by India to the European Union?

1. Coffee

2. Leather

3. Aluminum

4. Paper and Wooden furniture

5. Steel

Select the correct answer from the codes given below

a. 1, 2, 4 and 5 only

b. 1, 2, 3, 4 and 5

c. 1, 2 and 5 only

d. 1, 2 and 4 only

Answer (b)

Explanation:

EU norm threatens coffee, leather export

• The European Union’s approval this week of new deforestation regulations poses a threat to Indian exports of items like coffee, leather, paper and wooden furniture, even as the government grapples with the implications of the EU’s carbon border tax.

• The new EU regulations will affect imports from produce grown on land where deforestation has taken place after December 2020 and will kick in for larger companies from December 2024, with smaller businesses required to comply by June 2025.

• Four levels of penalties have been planned for any violations of this norm, which include monetary fines up to 4% of a firm’s annual turnover in the EU, confiscation of products, confiscation of revenues gained from a transaction and exclusion from public procurement processes.

• As per a research note by Global Trade Research Initiative, the rule will affect 479 tariff lines besides the 777 lines covered by the carbon tax measure, and the two norms are expected to impact almost $10 billion of exports to Europe based on 2022 data.

Carbon tax:

• From January 1, 2026, the EU will start collecting the carbon tax on each consignment of steel, aluminum, cement, fertilizer, hydrogen and electricity. In 2022, India's 27 per cent exports of iron, steel, and aluminum products of value USD 8.2 billion went to the EU.

Q3. Consider the following statements with respect to the Reserve Bank of India’s (RBI) regulatory framework for banks to accept green deposits

1. The banks that accept green deposits will have to disclose more information on how they invest these deposits.

2. A bank may avoid using green deposits to invest in fossil fuel projects that are considered harmful to the climate.

Which of the above statements is/are incorrect?

a. 1 only

b. 2 only

c. Both 1 and 2

d. Neither 1 nor 2

Answer (d)

Explanation:

What are RBI regulations on green deposits?

• Last month, the Reserve Bank of India (RBI) came up with a regulatory framework for banks to accept green deposits from customers. Under the new framework, banks that accept green deposits will have to disclose more information on how they invest these deposits.

What are green deposits?

• Green deposits are not very different from the regular deposits that banks accept from their customers.

• The only major difference is that banks promise to earmark the money that they receive as green deposits towards environment-friendly projects. For example, a bank may promise that green deposits will be used towards financing renewable energy projects that fight climate change.

• A bank may also avoid using green deposits to invest in fossil fuel projects that are considered harmful to the climate.

• A green deposit is just one product in a wide array of other financial products such as green bonds, green shares, etc., that help investors put money into environmentally sustainable projects.

What does the RBI’s regulatory framework say?

• The RBI’s framework for the acceptance of green deposits lays down certain conditions that banks must fulfill to accept green deposits from customers. Firstly, banks will have to come up with a set of rules or policies approved by their respective Boards that need to be followed while investing green deposits from customers.

• These rules need to be made public on the banks’ websites and banks will also have to disclose regular information about the amount of green deposits received, how these deposits were allocated towards various green projects, and the impact of such investments on the environment. A third-party will have to verify the claims made by banks regarding the projects in which the banks invest their green deposits as well as the sustainability credentials of these business projects.

• The RBI has come up with a list of sectors that can be classified as sustainable and thus eligible to receive green deposits. These include renewable energy, waste management, clean transportation, energy efficiency, and afforestation.

• Banks will be barred from investing green deposits in business projects involving fossil fuels, nuclear power, tobacco, gambling, palm oil, and hydropower generation.

• The new rules are aimed at preventing greenwashing, which refers to making misleading claims about the positive environmental impact of an activity. For example, a bank may advertise that their green deposits will have a huge positive impact on the environment, while the actual impact may be minimal. A bank could also invest in projects that are not environment-friendly, perhaps because such projects offer higher returns, under the guise of green investing.

Will green deposits help depositors/investors and the environment?

• Depositors who care about the environment may get some satisfaction from investing their money in environmentally sustainable investment products. However, there are challenges, for the range of projects in which green funds can be invested by the bank is limited by design.

• When it comes to protecting the environment, green investing enthusiasts believe that putting money into green projects may be one of the best ways to help the environment. Critics, however, argue that green investment products are often just a way to make investors feel good about themselves and that these investments don’t really do much good to the environment.

• Noted finance expert Aswath Damodaran, for instance, calls green investing “a feel-good scam” that enriches only consultants.

• Second, in a complex world where any action involves second-order effects that are difficult to see, it can be extremely hard to know if a project is really environmentally sustainable.

Q4. Which of the following statements is/are correct?

1. The facility to provide free airtime for political parties during elections is covered under the 2003 amendment to the Representation of People Act, 1951.

2. This provision is exclusive to Indian democracy across the world

3. Currently there are 6 national parties in India

Select the correct answer from the codes given Below

a. 1 and 2 only

b. 2 and 3 only

c. 1 and 3 only

d. 1, 2 and 3

Answer (c)

Explanation:

Elections and the airwaves

In the recently-concluded Karnataka Assembly elections, political parties were provided free airtime on public broadcasters, All India Radio (Akashvani) and Doordarshan during elections. The allotment was available to six recognised national parties — the Bharatiya Janata Party (BJP), the Indian National Congress (INC), the Bahujan Samaj Party (BSP), the National People’s Party (NPP), the Aam Aadmi Party (AAP) and the Communist Party of India (Marxist) and one recognised State party, the Janata Dal (Secular). The parties were allocated a base time of 45 minutes and additional slots based on performance in previous polls. A total of 630 minutes of free airtime was issued under this allotment.

What is the rationale of the scheme?

The facility to provide free airtime for political parties during elections was given statutory basis through the 2003 amendment to the Representation of People Act, 1951. The Supreme Court, in its famed judgment (The Secretary, Ministry of Information and Broadcasting vs Cricket Association of Bengal and ANR, 1995), held that airwaves are public property and its use should serve the greater public good. Elections being the lifeblood of a democracy, the misuse or abuse of airwaves to gain unfair electoral advantage is a key regulatory apprehension of governments around the world.

In the U.S., for example, the Federal Communications Commission, which regulates the electronic media in the country, devised the fairness doctrine to keep electioneering on the airwaves equitable. The now defunct fairness doctrine placed a positive obligation on broadcasters who carry political content of one candidate on its programme to extend the same to another candidate in the electoral fray.

In the U.K. too, political parties are allocated designated slots by Parliament, called the party political broadcasts (PPBs) to convey important political information to the people. The British Communication watchdog, Ofcom, is responsible for ensuring that PPBs are included in every licensed public service television channel and commercial radio services. Similar requirements are adopted in Singapore, Brazil and Japan.

What is the working of the scheme?

In the Karnataka elections, the BJP received 167 minutes of broadcast time on both DD and Akashvani, while the Congress got 174 minutes and the JD(S) got 107 minutes. Time vouchers are distributed by a lottery system by the Election Commission in a transparent process to obviate any preferential treatment in getting primetime slots.

The transcripts of political parties are vetted to ensure that they adhere to relevant codes. These codes proscribe any content which are inter alia critical of other countries, attack religions or other communities or incites violence and personal attacks. In case of any disagreements over the content of the script as vetted by the public broadcaster, it is referred to an Apex Committee comprising members from Akashvani and DD whose decision is final.

In the Indian media landscape, due to the pattern of ownership of media houses, the public generally identify a broadcaster as being affiliated with one political party or the other.In this regard, State-sponsored airtime provides more diversity and colour to the electoral process.

For example, the NPP, which was a rank outsider in the Karnataka elections, was afforded the same base time of 45 minutes as the INC and the BJP. Since the content being aired has to adhere to specific codes, it upholds the principle of fair play.

The guidelines by the Election Commission of India (ECI) also require that a maximum of two panel discussions are also aired by Akashvani and DD. These discussions provide an excellent platform for parties, both big and small, to debate and criticise each other’s policies and manifestos, and in general promote an informed citizenry.

What are the operational challenges?

The fact that the scheme is available to national and recognised State parties may attract arguments that it is not truly equitable. In light of the recent retraction of the national party status for the Nationalist People’s Coalition (NPC) and the Trinamool Congress (TMC), this observation becomes important. However, the ECI is constrained by the considerations of practicality and the fact that airwaves are not an infinite resource.

The Apex Committee comprises officials from Akashvani and DD and are expected to sit in review of their own decision in case of conflict with the political party on the content of the transcript. This leaves scope for conflicts of interest and therefore, a more representative committee may be constituted.

There are also calls for extending the provision to cover private broadcasters akin to the fairness doctrine of the U.S. A designated slot may be mandated for private channels to air content equitably and provide a platform for smaller parties and candidates. The political broadcast may be clearly differentiated from regular news broadcasts and programmes.

The 2024 General Elections will witness unprecedented levels of electioneering in the media. As spaces for sober, fair, considered and thoughtful debates shrink in a frenzy to grab attention, it is imperative that airwaves are used to nourish and enrich the Indian democracy and set standards for other electoral democracies.

Q5. Consider the following statement about Chola administration

1. It was highly centralized polity leaving little autonomy to villages

2. Rajaraja Chola started the practice of appointing crown princes or Yuvaraj as the head of either revenue or military departments

Which of the above statements are correct?

a. 1 only

b. 2 only

c. Both 1 and 2

d. Neither 1 nor 2

Answer (b)

Explanation:

Reforms by Rajaraja

1. He was the first to introduce the system of auditing the village accounts. He was not a lawmaker but a guardian of the law. It was a State with the least bureaucracy. However, it was a very democratic state. Autonomy was given to village assemblies and the local self- government was given importance.

2. He started the practice of appointing crown princes or Yuvaraj as the head of either revenue or military departments.

3. He was the first to issue Tamil inscriptions with detailed dynastic history.

4. He constructed the famous Brihadeswara or Rajarajeshwara temple at Tanjore, the biggest temple in India.