DAILY NEWS ANALYSIS (UPSC) |01 Jan 2021| RaghukulCS

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  • DAILY NEWS ANALYSIS (UPSC) |01 Jan 2021| RaghukulCS
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DAILY NEWS ANALYSIS (UPSC) |01 Jan 2021| RaghukulCS

UPSC News Analysis


Context: With the global money laundering and terror funding watchdog expected to undertake a review of India’s mechanisms to deal with suspicious transactions and financial crimes in 2021, State Bank of India’s compliance head has stressed the need for financial institutions to raise the bar on monitoring such activity. FATF review scheduled for this year.

Topic in syllabus: Prelims – Economy | International organisations

What is money laundering?

·       Money laundering is the illegal process of making “dirty” money appear legitimate instead of ill-gotten.

·       Criminals use a wide variety of money laundering techniques to make illegally obtained funds appear clean.

·       Online banking and cryptocurrencies have made it easier for criminals to transfer and withdraw money without detection.

·       The prevention of money laundering has become an international effort and now includes terrorist funding among its target.

·       The process of laundering money typically involves three steps: placement, layering, and integration.

    • Placement puts the “dirty money” into the legitimate financial system.
    • Layering conceals the source of the money through a series of transactions and bookkeeping tricks.
    • In the final step, integration, the now-laundered money is withdrawn from the legitimate account to be used for whatever purposes the criminals have in mind for it.

About FATF:

·       The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog.

·       The inter-governmental body sets international standards that aim to these illegal activities and the harm they cause to society. prevent

·       As a policy-making body, the FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

·       With more than 200 countries and jurisdictions committed to implementing them.  The FATF has developed the FATF Recommendationsor FATF Standards, which ensure a co-ordinated global response to prevent organised crime, corruption and terrorism. They help authorities go after the money of criminals dealing in illegal drugs, human trafficking and other crimes. 

·       The FATF also works to stop funding for weapons of mass destruction.

·       The FATF reviews money laundering and terrorist financing techniques and continuously strengthens its standards to address new risks, such as the regulation of virtual assets, which have spread as cryptocurrencies gain popularity.  

·       The FATF monitors countries to ensure they implement the FATF Standards fully and effectively, and holds countries to account that do not comply.


Context: The designated authority under the Ministry of Commerce and Industry has recommended the levy of anti­dumping duty on viscose spun yarn imported from China, Vietnam and Indonesia.

Topic in syllabus: Prelims – Economy

About Anti-Dumping duty:

·       An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.

·       In order to protect their respective economy, many countries impose duties on products they believe are being dumped in their national market; this is done with the rationale that these products have the potential to undercut local businesses and the local economy.

·       While the intention of anti-dumping duties is to save domestic jobs, these tariffs can also lead to higher prices for domestic consumers.

·       In the long-term, anti-dumping duties can reduce the international competition of domestic companies producing similar goods.

·       The World Trade Organization (WTO)–an international organization that deals with the rules of trade between nations–also operates a set of international trade rules, including the international regulation of anti-dumping measures.

What is Countervailing duty?

·       Countervailing duties or CVDs are tariffs on imported goods that are imposed to offset subsidies given by the exporting country’s government.

·       CVDs help offset any negative domestic impacts that producers of the same good might experience due to foreign competition, who in this case, would receive a subsidy to export the same good.


Context: With small businesses unable to reopen or find traction after Covid-19 lockdown in Gujarat, the Non-Performing Assets (NPAs) under the Pradhan Mantri MUDRA Yojana (PMMY) have risen to over Rs 587 crore at the end of September 2020.

Topic in syllabus: Prelims – Economy

About Pradhan Mantri MUDRA Yojana:

·       Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched by the Hon’ble Prime Minister on April 8, 2015 for providing loans up to 10 lakh to the non-corporate, non-farm small/micro enterprises.

·       These loans are classified as MUDRA loans under PMMY.

·       These loans are given by Commercial Banks, RRBs, Small Finance Banks, MFIs and NBFCs. The borrower can approach any of the lending institutions mentioned above or can apply online through this portal www.udyamimitra.in.

·       Under the aegis of PMMY, MUDRA has created three products namely ‘Shishu’ (upto ₹50k), ‘Kishore’ (above ₹50k- upto ₹5 lacs) and ‘Tarun’ (above ₹5 Lacs upto ₹10 Lacs) to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of graduation / growth.

·       Any Indian Citizen who has a business plan for a non-farm income generating activity such as manufacturing, processing, trading or service sector whose credit need is up to Rs 10 lakh

·       The usual terms and conditions of the lending agency may have to be followed for availing of loans under PMMY. 

o   The business should be either one of the following:

o   Small manufacturing enterprise

o   Shopkeepers

o   Fruit and Vegetable vendors

o   Artisans

o   ‘Activities allied to agriculture’, e.g. pisciculture, bee keeping, poultry, livestock, rearing, grading, sorting, aggregation agro industries, diary, fishery, agriclinics and agribusiness centres, food & agro-processing, etc. (excluding crop loans, land improvement such as canal, irrigation and wells)

Important news in short

·       V.G. Somani, Drug Controller General of India (DCGI), indicated at a webinar on Thursday that the country was close to approving a COVID­19 vaccine.

 ·       Output from India’s eight core sectors hit a three-month low in November, contracting 2.6% in the festive month with coal, fertilizers and electricity the only sectors to record positive growth on a year ­on ­year basis, suggesting the economy is still not out of the woods.

·       Brexit becomes a reality on Thursday as Britain leaves Europe’s customs union and single market, ending nearly half a century of often turbulent ties with its closest neighbours.

Examples related to Ethics (GS-4) in today’s newspaper

·       In the controversy over sitting in the classroom, a student of class 10 fired three bullets at a classmate of his own, which led to his death. (Case study – How to prevent juvenile crimes? | Role of Family, Society and Educational Institutions in Inculcating Values.)

UPSC Editorial Analysis


Title: Acclimatising to climate risks

Written by: Abinash Mohanty (a Programme Lead at the Council on Energy, Environment and Water, an independent, not-for-profit policy research institution)

Topic in syllabus: Environment, Disaster management (GS-3)

Analysis about: This editorial talks about why policymakers, industry captains and citizens must make climate proof choices this year.


·       Several parts of north India are in the grip of a severe cold wave. While winter may be longer and harsher in some regions due to La Niña, forecasters suggest that 2021 would still be among the Earth’s hottest years recorded. Rising temperatures have led to a sharp increase in climate extreme events in recent years.

How severely we are facing the challenge of climate change?

·       A recent report by the Council on Energy, Environment and Water found that 75% of districts in India,
home to over half the population, were vulnerable to extreme climate risks.

·       The country recorded 310 extreme climate events after 2005 alone. Further, between 1990 and
2019, India incurred losses exceeding $100 billion.

·       Also, the intensity of floods increased eightfold and that of associated events such as landslides and heavy rainfall increased by over 20 times since 1970.

·       Drought affected districts have increased by a yearly average of 13 times over the last two decades.

·       The frequency of cyclones has also doubled. Over 40% of Indian districts now show a swapping trend:
flood prone areas are becoming drought prone, and vice versa.

How can we build climate resilience?

·       India should create an Environment and Health De­risking Mission to increase emergency preparedness, secure critical resources and build resilient infrastructure and governance systems to counter the increasing frequency and intensity of extreme climate events.

o   The Mission should also focus on democratising local climate related and weather-related data along with integrating risk projections in national, sub­national and district disaster and climate plans.

o   There is need of revival, and recreation of traditional climate resilient practices, with a special focus on indigenous communities

·       India needs a comprehensive Climate Risk Atlas to present a risk informed decision-making toolkit for policymakers at the national, State, and district level.

o   Such an Atlas should identify, assess and project chronic and acute risks at a granular level to better prepare against extreme climate events, urban heat stress, water stress, crop loss, vector borne diseases, and biodiversity collapse.

·       To finance climate action at scale, risk financing instruments and risk retention and identification tools
should be supplemented by contingency and adaptation funds such as the Green Climate Fund.

o   This will enhance the public finance pool and gear up efficient allocation across sectors at risk by mobilising investments on critical infrastructures and resilient community actions.

·       As the permanent chair of the recently formed Coalition for Disaster Resilient Infrastructure, India
should play a pivotal role in attracting private investments into climate proofing of infrastructure.

o   It should also promote adaptation based infrastructure investment decision making in these countries.

o   Further, an equal focus should be on championing a culture of localised risk assessments among members from the Global South.


·       Ignoring low probability risks could be catastrophic for the economy as well as society. This year, policymakers, industry captains and common citizens must make climate proof choices.


Title: Pakistan’s theatrics at the UN pose no challenge to India

Interview of: T.S. Tirumurti (India’s Permanent Representative at the UN)

Topic in syllabus: Bilateral, Regional and Global Groupings and Agreements involving India and/or affecting India’s interests. Important International Institutions, agencies and fora – their Structure, Mandate (GS-2)

Analysis about: This interviews gives us officially the stance of India on different issues. (Important for answers to quote these points directly). As a member of the UNSC beginning January 1 India is having some goals to achieve. Let us see.


  What is 1267 committee on ISIL/Al Qaeda?

·       The Al-Qaida Sanctions Committee is one of three Security Council committees dealing with counter-terrorism.

·       It was established on 15 October 1999, pursuant to UN Security Council Resolution 1267.

·       Initially dealing with both al-Qaeda and the Taliban, hence previously known as the Al-Qaida and Taliban Sanctions Committee, it was split on 17 June 2011, creating the new Taliban Sanctions Committee to separately deal with the Taliban.

·       Resolution 1267 (1999) and subsequent resolutions have all been adopted under Chapter VII of the United Nations Charter and require all UN Member States to inter alia: “freeze the assets of, prevent the entry into or transit through their territories by, and prevent the direct or indirect supply, sale and transfer of arms and military equipment to any individual or entity associated with Al-Qaida, Osama bin Laden and/or the Taliban as designated by the Committee”.

·       The Al-Qaida Sanctions Committee, like other Security Council committees, is composed of Member State representatives from the 15 members of the United Nations Security Council.

·       These are the five permanent members, China, France, the Russian Federation, the United Kingdom and the United States, and ten other rotating members.

As a member of the UNSC beginning January 1, What will India’s first intervention be?

·       The Tunisian Presidency of the Security Council has planned for two High-level events in the first two weeks — one on Peace and Security in Fragile Contexts and the other on International Cooperation in Combating Terrorism, where India expect to participate at a high level.

Comprehensive Convention on International Terrorism | the issue of countering terrorism | The application of the 1267 committee on ISIL/Al Qaeda:

·       Counter­terrorism is a major priority area for India when we are on the Security Council.

·       As for the 1267 Sanctions Committee on ISIL (Da’esh), it is important that its decisions are taken in an impartial and apolitical manner and those that refuse to implement its decisions are held accountable.

·       The inability of the United Nations to agree on a Comprehensive Convention on International Terrorism
(CCIT) remains one of the glaring shortcomings in the international legislative framework which could have boosted enforcement efforts to destroy safe havens of terrorists, their financial flows and their support networks.

Tensions between India and China:

·       Bilateral issues are best handled bilaterally. As far as we are concerned, we are entering the Security Council with a positive and progressive agenda.

Activism from UN agencies on India’s internal issues (Jammu & Kashmir, Citizenship Amendment Act, the Hathras rape case, restrictions on NGOs, etc.):

·       These issues concern India’s internal affairs. The officials who have made comments on these matters were obviously overstepping their mandates.

·       We sincerely hope that irrespective of whether we are in the Security Council or not, these UN agencies restrain themselves and deal only with those matters which are within their mandate.

Pakistan has also forwarded a “dossier” of allegations against India on the issue of terrorism in the run up to the UNSC term. How much of a challenge are such actions by Pakistan?

·       No country or international organisation would humour anyone inciting terrorism and encouraging
separatism within UN member states under whatever justification.

·       The laughable attempt of Pakistan submitting a “dossier”, is yet another farce played out on the international community.

UNSC reforms:

·       The reality is that, while the overwhelming majority of UN member states firmly support the comprehensive reforms of the Security Council, a handful of status quoists have consistently opposed any reform.

·       The reform of the Security Council is not driven by the Security Council but through the so ­called Intergovernmental Negotiation (IGN) process under the General Assembly.

·       India is determined to work towards immediate and time bound text based negotiations.

What is that one single outcome to be achieved by the end of India’s UNSC tenure in 2022?

·       To show the world the importance of “reformed multilateralism” and inevitably the important place that India enjoys in that construct for promoting international peace and security.

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