 Good evening aspirants, we are very happy to inform you that Shankar A.S. Academy is launching a free online initiative for the benefit of civil service aspirants. We are launching a weekly program on international relations. So we will be posting one class every week and these classes will be explained by Sree T. P. Srinivasan who is a former IFS officer. He also served as former ambassador of India and former permanent representative of India to the United Nations. So he is a man with extremely wide experience in international affairs and highly proficient in current global realities. So this foreign policy initiative will be helpful for aspirants for their preparation and understanding of international relations. The first capsule of this series will be published at 5 p.m. on 14 January 2021 in our YouTube channel. We suggest to the viewers and the aspirants to utilize this unique opportunity and also share this wonderful resource with all your friends. Now let us proceed to our daily news analysis. The list of news articles along with the page numbers is given here for your reference. Let us now take this op-ed column from today's newspaper which focuses on electric mobility and various aspects associated with it. See the article begins with electrical vehicles being a viable option both economically as well as environmentally. See being sustainable to the environment they are capable of yielding profits in the longer run. By doing so they save government expenditure and pushes for energy security through domestic means. We will try to explain what this means. See firstly we all know that India is highly dependent on West Asia for meeting its energy needs mainly because of fossil fuels. And it is also causing a very huge import bill thereby threatening our forex reserves. So shifting to e-vehicles impacts in India's foreign policy by altering the energy security dependence from West Asia to Latin America. Why Latin America? We will see it now. See as per 2018-2019 India is the third largest oil importer in the world. So mainly to reduce this dependence on crude oil the Indian government has brought in policies which aid in increasing the mobility of e-vehicles. See we are all aware of this scheme called FAME that is faster adoption and manufacturing of hybrid and electric vehicles. So this scheme was initially launched in 2015 for a period of two years and later it was subsequently extended from time to time until March 2019. So the first phase of FAME India scheme mainly focused on four areas. First one demand creation that is demand creation for electric vehicles. Second technology platform we need technologies to develop e-vehicles. Third one pilot project and fourth one charging infrastructure. So for creation of demand incentives were given for different vehicle segments. For example if you buy a two wheeler or even three wheelers, autos, four wheelers, even light commercial vehicles, buses. Government has given some kind of incentive for purchasing a e-vehicle. And after expiry of phase one of FAME scheme that is in 2019 government came up with phase two of FAME scheme for a period of three years starting from April 2019. So this phase aimed at generating demand by supporting 7,000 electric buses, 5,00,000 three wheelers, 55,004 wheeler passenger cars etc. The numbers are not important. Just we are saying that government is promoting the demand by diversifying the electric vehicles ranging from two wheelers to four wheelers, LCVs etc. And similar to that of phase one phase two is also aimed at creation of charging infrastructure. Because electric vehicles need charging and charging infrastructure needs to be developed across the highways. As of now we are having oil bunks everywhere. So similar to that charging infrastructure must also be developed. And as we said before electric vehicles promote the energy security of the country and also reduces the import dependency. Further increased use of electric vehicles leads to battery development. See how electric vehicle works. First we charge the battery and this battery is used to rotate the motor. That is engine of a car. So this development of domestic battery alters India's relationship with resource rich Latin America. Why? Because Latin America that is South America is known for Lithium reserves. Particularly there is a triangle called Lithium Triangle in Latin America. The countries are Argentina, Bolivia and Chile. You can remember like this ABC Triangle. So these three countries are known for Lithium and around 80% of Lithium in the world is present in these three countries. So coming back to the discussion. In 2019 a new joint venture company named Kanes-Bidesh India Limited shortly Kabul has been set up with the participation of three central public sector enterprises. They are National Aluminium Company Limited NALCO, Hindustan Copper Limited HCL and Mineral Exploration Company Limited MECL. So these three CPSCs came together and formed a new joint venture called Kabul. So the object of this new joint venture is to ensure a consistent supply of critical and strategic minerals to Indian domestic market. So this joint venture Kabul will also gather strategic mineral assets like lithium, cobalt for an abroad for commercial use and supply to meet the domestic requirement of battery manufacturers. See generally Lithium batteries are known for their high efficiency. See almost all our mobile phones batteries are lithium based batteries. So this company Kabul which is also working on lithium and cobalt will help in building partnerships with other mineral rich countries like Australia, Africa, South America where Indian expertise in exploration and mineral processing will be mutually beneficial. So we will be giving our expertise to explore the minerals in their countries and in return we will be getting strategic minerals for development of local batteries. So for this reason at the start we said that shifting to e-vehicles will alter the India's foreign policy from West Asia to Latin America. So currently India is importing lithium ion batteries from Hong Kong, China, Vietnam and in the past two years the imports of lithium ion batteries have tripled. So recognizing this growing demand the government has brought in policy interventions to supply lithium and cobalt to the battery manufacturers. Interestingly lithium is also used in treatment of bipolar disorder. So it is expected that in the long run lithium may emerge as a metal which helps in treating the excessive carbon emissions. And coming back to India's dependence on Latin America, currently India's biggest trading partners in Latin America are Brazil, Mexico and Venezuela. But if you see majority of trade with these countries is concentrated on crude oil. So as we said before with the shift in trade to lithium and cobalt from crude oil the situation is expected to change. So across the world cobalt is emerging as an important element in rechargeable batteries. More amount of lithium and cobalt will be required for self-sufficiency of lithium batteries in our country. Some of the major producers of cobalt are Congo, Russia, Australia, Cuba, Madagascar, Canada, South Africa etc. So these countries are known for cobalt reserves. So India's initiative to boost the electric mobility and its attempt in understanding the availability of lithium and possibilities of joint ventures with those countries where lithium and cobalt are available will be a long term solution for clean cities, new markets, employment and mainly towards Atman-Irbar Bharat. And before we go on to the next news article, a small question for you. Clean cities, employment, these terms are already covered under sustainable development goals. So find out the number of SDG where employment and clean cities are discussed and mention those SDG numbers in the comment section. Let us move on to next news article discussion. Let us now take up this editorial from today's newspaper which talks about a very heart-wrenching, depressing incident where a deadly fire has led to loss of 10 infants in a hospital in Maharashtra. So the fire accidents are happening on a regular phenomenon across India, mainly in government hospitals. For example, a fire accident occurred in covid wards in Vijaywada, Ahmedabad, etc. So this shows the poor adherence to safety protocols and lack of disaster preparedness among many of our government hospitals. So in this context, let us have a brief discussion on why the fire accidents are happening across the country and what can be done to mitigate them or at least having a disaster response mechanism. Before going further, the relevant syllabus is given here for your reference. Firstly, why fire accidents are happening on a very regular basis? One reason is the poorly trained staff in hospitals who do not know how to respond properly in an emergency situation. Next, if you see, safety protocols are yet to be institutionalized even in places like hospitals. Generally we expect a very high degree of professionalism, a very high degree of safety protocols when it comes to hospitals. But even then, they are yet to be finalized or institutionalized. Then if you see, there is a poor oversight by fire authorities and faulty electrical equipments which are not repaired or which are not maintained properly. So these are the major administrative causes which are leading to hospital fires and most of these fires could be avoided if the authorities are more alert. And after this incident, the Maharashtra government has ordered an inquiry into this incident and also a fire audit of the hospital has been ordered. If you see further, we must notice that hospital fires are not like any other urban fires or like a forest fires. So to avoid them, we must better understand them. So only if we understand why are they happening, we can plan or prepare for mitigating them. So research shows that there are specific factors which trigger fire incidents and aggravate their impact. So let us now look into these technical aspects on what is causing a fire incident in a hospital. See firstly, it is often observed that fire starts in intensive care units and mostly operation rooms. Why because in ICU's operation rooms, high concentration of oxygen is confined in a small space. See most of us know that oxygen is a very important reason for fire. If oxygen is not there, generally fire puts off. Second, see a review of Indian hospital fires identified that higher oxygen availability in intensive care units along with motors, electrical units are main causes of ignition and the presence of plastic materials are further fueling these or aggravating the fire incidents. So by now we have understood what are the administrative reasons and what are the technical reasons for fire incidents. Let us now see what can be done to avoid these types of incidents in the future. Firstly, hospitals should be audited regularly and if any incident or shortcoming is noted, immediately they should be addressed. Second, we need a comprehensive national building safety codes in line with international safety standards. Further, oxygen monitors should be installed in all hospital rooms so that they will ensure the ambient level within the safe norms. And there is a numerical value here. The oxygen level should be a maximum of 23.5% which is set by US National Fire Protection Association, not required for exam. So we should note that the oxygen level should be properly maintained to avoid the mishaps. In addition to these, the electrical appliances like air conditioners which are having spark potential should be kept far away from oxygen areas. See generally during Diwali we often have the fire accidents in go downs of crackers. This happens mainly because of electrical spark or short circuit which is happening in the electrical equipment. So similarly these type of incidents also happen in hospitals and these will be further fueled or aggravated by presence of high concentrated oxygen. So these are the things which need to be done to avoid future mishaps in the hospitals. So as the health sector is expanding, it is essential that all new infrastructure conforms to rigorous safety standards. And it is high time that government sets the bar high enough and it should also ensure hospital authorities adhere to full safety standards in their buildings. In addition to these, the hospital staff should be trained accordingly so that the patients will not be left there whenever fire accidents happen. And central government should also create a public platform where knowledge gained from these inquiries can be shared and certions from the public can be taken to improve the safety standards. Similar to big corporate companies, hospitals should also mandatorily hold regular safety and evacuation drills which are very important to save lives when a disaster happens. So this is all about the discussion of this news article wherein we had a brief discussion on fire incidents in hospitals, what are the reasons for them and what can be done to mitigate or prevent them. Let us move on to next news article discussion. Let us now proceed with this news article from today's editorial page. This article is written by former RBI governor who discusses the challenges that will be faced by Reserve Bank of India in coming out of its current monetary policy. So in this context, let us have a brief discussion on what are the challenges and what is the current monetary policy. The relevant syllabus is given here for your reference. Firstly, what is current monetary policy of Reserve Bank of India? See, as you all know, monetary policy refers to use of monetary instruments under the control of RBI to regulate interest rates, money supplying, even availability of credit, etc. So to manage the financial pressures caused by COVID-19, RBI has gone for Expansionary Monetary Policy or Easy Money Policy. So what is this expansionary policy or easy money policy? See, under this policy, the central bank i.e. RBI reduces statutory bank reserves i.e. CRR, SLR and lowers the key interest rates like report rate and also improves market liquidity to encourage economic activity. So simply put, RBI pushes more money into the market. For this reason, we call it as Expansionary Policy and we also said that RBI will also reduce interest rates. So the consumers will get cheap loans. For this reason, it is called Easy Money or Cheap Money. So thus, Expansionary Policy seeks to stimulate an economy by boosting demand through monetary and fiscal stimulus. So it is intended to prevent or moderate the economic downturns and recessions. See, during COVID-19, almost all the economic activity has come to standstill. Many people lost their jobs. So because of all these issues, people had no money to spend. Even if they are having money, they are not willing to spend because of fear of COVID-19. Because there may be expenses regarding health, etc. So automatically what happens? Demand comes down. When there is no demand, the companies or the industries will face losses. When companies or industries face losses, they cannot give money to their employees. Again, employees of these companies may not be in a position to purchase the things. Again, demand comes down. So this is a cycle wherein one consequence pushes the cost and again this cycle continues to rotate. So to break this cycle, RBI is giving cheap money or easy money to the consumers. So that when they are having money, they will start purchasing. Automatically, demand goes up. When there is demand, companies will start producing. They will get profits. They will pay salaries to their employees. So again, demand increases. One is virtuous cycle. The other is vicious cycle. So accordingly, to ease these pandemic pressures, RBI reduced interest rates like repo rate. Repo rate was reduced to 4%. In addition, RBI flooded the market with an unprecedented amount of liquidity and set up number of measures for targeted assistance to distress sectors. For example, we had something called LT-ORVO, that is long-term repo operations and then targeted long-term repo operations, wherein money is being given for longer 10 years but at the lower interest rates. In addition to this, a 30,000 crore rupees special liquidity scheme was launched for NBFCs, HFCs, etc. So the bottom line is RBI has been pushing a lot of money into the market at cheaper interest rates. So other called it as crisis-driven expansionary policy. The crisis is COVID-19 pandemic. So the issue with such expansionary monetary policy is finding out when to engage, how much to do and when to stop. Which means when to start expansionary policy, how much amount should be given into the market, at what interest rate it should be given and when this expansionary policy should be stopped. This is what is discussed by the author today. So author indicates that reversing this crisis-driven expansionary policy must be a deliberative process and the timing for the same should be planned very, very carefully. But during search reversing, RBI will be facing certain challenges. So what do we mean by reversing? One thing, increasing the reports. Second thing, reducing the excessive liquidity in the market. Let us now see what are the challenges for RBI. First one, to manage the tension between restraining inflation under the same time supporting the recovery of economy. See, one of the major side effects of such expansionary monetary policy is inflation. So when interest rates go down, it becomes cheaper to borrow. So consumers are more willing to buy more goods and services and companies are also in better position to purchase items to expand their businesses, etc. So cheap money leads to increased demand. When there is more demand, automatically the prices will increase, which is what we call as demand-pull inflation. From the MPC review meetings, it became very clear that inflation remained above the target band for the past several months and will be the same in near future also. So what is the target of inflation? It is 4 plus R minus 2 percent, that is maximum 6, minimum 2. Here inflation means CPA inflation. But the December MPC review meeting reported that CPA inflation is around 7.3 percent in September, 7.6 in October and even the inflation projection for the third quarter of the current year is around 6.8 percent. So it can be inferred that all these are above the tolerance range, that is above 6 percent. But even in this scenario, where inflation is too much over the target, Monetary Policy Committee decided not to increase the interest rates. Why? Because there has been a lot of concerns for growth and financial stability. See if interest rates are increased, it will definitely reduce inflation. But at the same time, it will become costly to borrow money, which in turn will affect the liquidity that is fueling the growth. So now because there is cheap money, people are buying goods and companies are also producing lots of goods and services. But not changing interest rates or reducing it is also an issue. It will affect the savers, that is individuals who regularly save money through a bank. That is what we call as fixed deposits, recurring deposits, etc. Because a continued low interest rate or further reduced interest rate to their savings will affect them at this time of high inflation. See many people put their excess money in the bank in terms of fixed deposits, recurring deposits. They will be dependent on the income coming in the form of interest on these deposits. If interest is very less, they will be even more affected during high inflation times. So before normalizing policy rates, RBI has to take into all these points. Next author talks about economic recovery. He feels that recovery will be weak, uneven and unequal. Why uneven and why unequal? Because large industries are already showing the signs of recovery. But small and medium enterprises and the informal sector are still in distress. So to encourage these sectors or enterprises, stimulus is needed. So thus controlling inflation at the same time providing enough liquidity for the recovery is going to be a very challenging task for Reserve Bank of India. Why? If you give more liquidity, inflation will increase. If you want to control inflation, liquidity should be reduced. So both are mutually exclusive. So it is a very big challenge for RBI to manage both these opposing things. Now the second challenge is withdrawing though excess liquidity injected into the market. Here author notes that liquidity injected is not fueling consumption as there is low expenditure. Why there is low expenditure? See RBI has given cheap money despite that there is low expenditure. Why? Because the money or cash is kept as safe deposits. So the consumers instead of spending the money, they are saving the money in the banks. So banks are routinely depositing trillions of rupees with Reserve Bank of India every day. Also people are choosing cash and bank deposits rather than risky options like stock markets. So instead of increased money supply improving the consumption, money is being saved. So the intention of RBI and the government is not getting realized because people are saving instead of spending. Additionally such excess liquidity existing too long is also risky as it might urge investors to invest the excess money into dishonest ventures. So this will threaten the financial stability. So excess money or liquidity must be definitely brought down. The third big challenge for Reserve Bank of India is to restrain the rupee from appreciating out of the line. So what is this appreciation? Appreciation of rupee means Indian rupee becoming costlier in comparison to US dollar. See for example today if 1 dollar equal to 70 rupees and if tomorrow if it reduces to 60 rupees. It means the Indian rupee is appreciating. So the amount of rupees you are getting for 1 dollar has decreased from 70 to 60. So this appreciation will lead to erosion on the value of India's exports. So appreciation of rupee is not good for India's exports. So this sudden strengthening of rupee could be due to many reasons. For example there has been a lot of capital inflows from outside the world. See around 15 billion dollars worth investment came into geo-platforms. Second reason may be the falling crude oil prices. Third one India's current account turned a surplus in 2020. That is current account deficit has turned into current account surplus. So economists are predicting that current account surplus is likely to remain even in first quarter of next financial year. So this is leading to an appreciation of rupee because the surplus is being driven by lower inputs. This indicates a weakness in demand representing slow growth. So in order to maintain export competitiveness of Indian industry steps have to be taken to restrict the appreciation of rupee. So to restrict the appreciation of rupee RBI started buying huge inflows of foreign money. Around 90 billion dollars of foreign money was purchased by RBI in last 10 months. So these are the three different challenges that is the impossible trinity faced by Reserve Bank of India. Why we are saying impossible is the three challenges are mutually conflicting. On one side we need to ensure that inflation is reducing. On the other side we have to ensure that economy is recovering. And on the third side the export competitiveness of India should be preserved. So because of these three mutually conflicting challenges RBI need to make a deliberative policy and the policy should be predictable for supporting the market sentiments. So the conclusion is maintaining a policy balance across all three conflicting objectives can be tricky which is the biggest challenge for Reserve Bank of India. This is all about the discussion of this news article. Have a brief idea on what are the three challenges and how each challenge is affecting the other challenge. That is understand how economy is working. Let us move on to next news article discussion. Let us take up this news article from main page which says that Supreme Court bench to study other verdict today. See in 2018 a constitution bench of Supreme Court led by then CJI Deepak Mishra upheld the validity of other act. But in that verdict court also struck down few provisions. For example it struck down section 57 of other act which allows private entities to use ADAR for verification purposes. Additionally one more section which allows UIDAI that is parent agency of other to share data with specially authorized officers in the interest of national security. So this provision was also struck down. So three out of five judges were of the view that ADAR is valid. Additionally ADAR requirement by CBSE NEET UGC has also been struck down. But ADAR PAN linkage has been upheld. So regarding this verdict of 2018 many review petitions were filed. And today these review petitions are being heard upon by Supreme Court bench. As said before the majority view held by the constitution bench in 2018 declared ADAR an unparalleled identity proof which cannot be duplicated like PAN, ration card and passport. However Justice DOH Chandrachud had a dissenting opinion in 2018 verdict. He said that ADAR is unconstitutional and passage of ADAR bill as money bill is fraud on the constitution. He further held that section 7 of the act which makes ADAR mandatory for state subsidies as unconstitutional. Addition to this data collected for authentication purposes can be held only for six months. But the original ADAR act had said that the data can be held for five years. In this context Justice Chandrachud ordered service providers to delete any information collected by them after linking ADAR with SIM cards. So these are the important provisions regarding to ADAR verdict of 2018. So in a broad sense ADAR act was held constitutional by the Supreme Court bench. But few provisions like allowing private entities to use ADAR as well as allowing UIDAI to share data with specially authorized officers were completely struck down by Supreme Court. Additionally as said before ADAR should not be mandated for CBC, NEET, UGC, school, college, admissions etc. So petitioners have filed review petitions in Supreme Court and Supreme Court is hearing those matters today. The main contentious provision here is ADAR does not come under Ambit of Money Bill according to article 110 and it was fraudfully or deceitfully passed as a money bill. Apart from this petitioners are also arguing on other issues with respect to ADAR act. For example section 2K of ADAR act prohibits any person from parting with any information which is pertaining to one's income. Simply put the income details should not be shared. But the problem here is despite clearly mentioning in the ADAR act the income tax act of 1961 made it compulsory to ensure that PAN card is linked with other details. So this section further states that in case a person fails to intimate ADAR number the PAN card of the person will be invalid. So the petitioners are arguing that the majority verdict of Supreme Court did not look into all these matters. Secondly the petitioner said that ADAR linkage was supposed to be confined to either a benefit, subsidy or service. But filing of income tax returns do not fall under each of these three descriptions. So ADAR should not be mandated for filing of income tax returns. So these are the contentious provisions. First one passing ADAR bill as money bill. Second one mandating ADAR card PAN card linkage as well as compulsory ADAR card for filing of income tax returns. So just have a very brief idea on these aspects because we are expecting more news articles like editorials, VOPEDs in the coming days. So we thought of giving you a very brief idea today so that you will be more informed about ADAR act in coming days. So this is all about the discussion of this news article let us move on to next news article discussion. See this news article mentions that the Delhi High Court upheld the provisions for arrest for tax evasion in GST Act of 2017. So actually GST Act is having a provision for arresting a person if a person has committed offenses like issuing invoices or bill without supply of goods or availing input tax credit fraudulently or collecting any tax amount but failing to pay same amount to government. So for these issues the offenders can be arrested. So the petitioners argued that procedure prescribed under CGST Act was not fair and reasonable because this section which is having provisions for arrest is of criminal nature. So it could not be enacted under article 246A of constitution. See this article deals with special provisions with respect to GST. But the High Court ruled that the sections pertaining to arrest of individuals are constitutional and importantly they fall within the legislative competence of parliament. The High Court also said that scope of article 246A is significantly wide so it grants power to parliament and state legislatures to make all laws with respect to GST. Here while delivering the verdict High Court also used Pith and Substance Doctrine. So what is this P and S doctrine? Let us have a brief discussion over that. See the literal meaning of Pith is true nature or essence of something and the meaning of substance is essential part of something. So P and S means an essential part of something in which its true essence lies. So this doctrine says that where the question is about determining the power of legislature to make a particular law under the three lists union, state, concurrent then what court must look into is the substance of the same. So this doctrine is used whenever the competence of legislature is questioned. So according to this doctrine whenever competence of legislature is questioned what has to be looked into is the substance of the enactment. So we have to focus on the essential part where essence of the act is lying. So if we talk about High Court's verdict the petitioners argued that under article 246a that is special powers with respect to GST Parliament has no power to legislate an act with powers of arrest because provisions of arrest generally relates to criminal nature. But High Court opined that the Pith and substance of the act is about taxation. So the sections of this act are valid and they fall within the competence of Parliament. So instead of going by literary sense we have to take the spirit of the act that is what we mean by Pith and substance. So as for the doctrine if it is found that the legislation is in substance on the matter assigned to legislature then the enactment must be valid completely. In our case the substance of the legislation is with regard to taxation so the act is valid. Additionally if an enactment incidentally or accidentally touches upon the matter which is beyond the competence of particular legislature then also such encroachments do not lead to invalidity of entire act that is if the substance falls within the union list then the incidental encroachment by the law on the state list does not make the law invalid. So instead of going on a strict boundaries with regard to union list, state list and concurrent list what has to be seen is the substance or the spirit of the act that is what we mean by Pith and substance. So this is all about the discussion of this news article. Let us move on to practice questions discussion session. Consider the following statements regarding Fame India scheme. Statement 1, it aims to promote manufacturing of electric and hybrid vehicle technology and to ensure its sustainable growth. Yes, statement 1 is correct. Statement 2, it is being implemented by Ministry of New and Renewable Energy. No, statement 2 is incorrect because Fame India scheme is being implemented by Department of Heavy Industry which comes under Ministry of Heavy Industries and Public Enterprises. So statement 2 is incorrect. Therefore correct answer is option A, one only. See this previous year question appeared in 2018 prelims. The identity platform other provides open application programming interfaces that is APAs. What does it imply? Statement 1, it can be integrated into any electronic device. Statement 2, online authentication using iris is possible. Which of the statements given above are correct? If you see, both statements are correct. So correct answer is option C, both one and two. With help of APAs, other authentication can be used across all government agencies. So both statements are correct. Option C is the correct answer. Consider the following statements with reference to doctrine of Pith and Substance. Statement 1, it was adopted in pre-independence period. Yes, statement 1 is correct. This principle had come to be established by the Privy Council when it determined appeals from Canada or Australia involving the question of legislative competence of federation or the states in those countries. Even in India, the doctrine of Pith and Substance came to be adopted in the pre-independence period under Government of India Act of 1935. Statement 2, according to the doctrine if the substance falls within union list, then the incidental encroachment by the law on state list makes it invalid. Statement 2 is incorrect. As we said before, if the substance is within the ambit of legislature, then act will not be invalid. So statement 2 is incorrect. Therefore, correct answer is option A, one only. Let us take up main questions. What are the challenges facing Reserve Bank of India while exiting the easy money regime that it embarked on to manage the financial pressures unleashed by COVID-19? One more main question. The tragic incidents have become frequent across India in government institutions. We elaborately discuss what causes such incidents and what should be done to avert such incidents in the future. Please write the answers and post them in the comment section. With this, we conclude today's news analysis. If you find this session resourceful, click on the like button, show your appreciation in the comment section, and don't forget to subscribe to our YouTube channel.