 A very good evening aspirants, welcome to the Hindu Newspaper analysis brought to you by Shankar Iyer's Academy. Today's date is 18th of July 2023, displayed here are the list of news articles that we are going to discuss today. So without much delay, let us get into the first news article discussion. Take a look at this news article, it talks about a court case regarding the allocation of funds for relocating people living in a forest area in Tengu Marahada village Neelgiri's district. See the National Compensatory Afforestation Fund Management and Planning Authority, insured called a SCAMPA, has stated that it has around 8,154.84 crore rupees in funds as of March 31, 2023. However, it is hesitant to allocate approximately 74 crore rupees for relocating these people. The government council said in the Mitra's High Court that the money for relocation should come from the state SCAMPA fund and not from the national funds. This is the crux of the news article given here. In this context, we are going to discuss about SCAMPA fund in detail. But before that, you should understand what is compensatory afforestation. See the concept of compensatory afforestation is quite simple. Suppose a forest land is diverted for non-forest producers like industrial or infrastructure development. Now an equivalent area of non-forest land must be afforestated. We do this in order to compensate for the ecological services provided by the forest. But we all know that this new afforestered land will take time to mature and provide similar benefits like the original forest. So to address this, the Forest Conservation Act of 1980 mandates that the net present value in short quarters NPV of the diverted forest is calculated for a period of 50 years and this amount is recovered from the user agency responsible for the forest diversion. Know that the NPV varies depending on the quality of the forest. It ranges from lower value for poor quality forest to higher values for very dense forest. Suppose there is a forest area of 100 hectares. It has to be diverted for a development project. The forest is categorized as a dense and high quality forest. So as per the Forest Conservation Act, the user agency responsible for the forest diversion will have to compensate for the loss. They have to pay the NPV for a period of 50 years. In this example, the forest is dense and high quality. So it will have a higher NPV value. Let's assume that the NPV for this forest is determined to be 10 lakh per hectare for the 50 year period. Now we can calculate the total NPV for the entire forest area. The entire forest area to be diverted is 100 hectares. So total NPV will be equal to 100 hectares into 10 lakh rupees. This is equivalent to 10 crore rupees. So now the user agency responsible for the forest diversion will have to pay a total NPV of 10 crore rupees to compensate for the ecological services provided by the forest over the 50 year period. Know that an expert committee determines the NPV for each forest patch. Recently recommendations have been made to revise the NPV values to ensure adequate compensation. The user agencies are required to deposit the funds for compensator forestation and pay the NPV among other charges. Note that the user agencies themselves are not responsible for forestation work. The state government takes charge of forestation activities. In short, the user agency bears the entire expenditure including the purchase of land while the state government eventually transfers the land to the forest department for maintenance and management. Now how was Kampa created? See the Supreme Court in 2002 in Goda government versus Union of State case ordered the creation of Kampa fund. See this case is very important. Make note of it. The National Compensatory Afforestation Fund Management and Planning Authority in short called as Kampa was established in 2004 to manage the Compensatory Afforestation Fund CAF and it acts as the custodian of the Kampa fund. Later the Compensatory Afforestation Fund Act was enacted in 2016. Under the CAF Act, a National Compensatory Afforestation Fund and a State Compensatory Afforestation Fund are created. The funds are maintained in the public account of India and the public account of each states respectively. These funds receive payments for compensatory afforestation, the net present value of forest, NPV and other project specific payments. According to the regulations, 10% of the fund collected go to the national fund while 90% is allocated to state fund. This ensures that the funds are utilized at both the national and state levels for afforestation and related activities. Know that the utilization of funds is not limited only to compensatory afforestation. The CAF Act allows for various projects and activities. This includes the clearing of catchment areas, assisted natural regeneration, forest and wildlife management, infrastructure development, wildlife conservation, village relocation from protected areas, awareness and training programs, provisions of wood saving equipment and other related. That's all you have to know about Kampa Fund and Compensatory Afforestation. I hope you got a clear picture about the fund. So with these learned points, now let us move on to the next news article discussion. Look at this editorial article. This article is speaking about trade dispute between India and the US. See, India and the US earlier had six trade disputes pending at the World Trade Organization, WTO. As we all know, recently our Prime Minister Modi made an official visit to the US. During this visit, India and US made a commitment to resolve all six trade disputes. Currently, all the disputes are resolved and the countries have informed the WTO's dispute settlement body, DSB, about the resolution of all the pending disputes. This is the background of the news article given here. So in this news article discussion, let us understand the trade dispute between India and the US and then we'll also see how the trade disputes were resolved. Before that, the syllabus relevant to this news article is highlighted here for your reference. You can go through it. Now let's start with the six trade disputes. See, out of the six disputes, three were initiated by India and the rest three were initiated by the United States. The first dispute is the countervailing measures imposed by the US. See, in June 2014, the US imposed countervailing duty measures on certain hot rolled carbon steel flat products from India. The US said that this particular product received an export subsidy from the Indian government and this affected fair trade. So the US imposed countervailing duty measures. Here, countervailing duty measures refers to the special measures that are being taken to neutralize the negative effect of subsidy. For example, let us consider Indian government is providing subsidy to the steel exporters of India who are exporting steel to the US. On the other hand, the US is not providing any kind of subsidies to its domestic manufacturers. Now what happens in this situation? In this scenario, the subsidized steel from India would be cheaper than the domestically manufactured steel in the US. As the company or people tend to buy cheaper one, they will prefer the cheaper steel from India rather than domestic one. This would affect the domestic industries, right? So to counter this unfair subsidy, the US would tend to impose countervailing duty measures. This means that the US will increase the import duties of steel from India. As a result, the price of the steel from India will get increased and it safeguards the US's domestic steel manufacturers. Now coming back to the trade disputes. See, India approached the WTO against the US decision of imposing countervailing duty measures on certain hot rolled carbon sheet flat products from India. India pointed out that it does not confer any subsidy on the India exporters. Subsequently, India has achieved a significant victory at the WTO. The WTO appellate body held that the countervailing duty measures imposed by the United States are inconsistent with various provisions of the agreement on subsidies and countervailing measures in short called as ASCM. This WTO ruling has favored India, but the US was not satisfied with the WTO's ruling and the US has not complied with the rulings and recommendations of the WTO dispute panel. So the dispute continued for a long time. Currently both the countries has agreed to grant market access to Indian steel and aluminium products. This market access will restore opportunities for Indian steel and aluminium exports and this is how the first dispute got resolved. Then the second dispute is regarding domestic content requirements and subsidies provided by the US in the energy sector. Here the term domestic content requirement DCR refers to the policy tool that is used by the governments to encourage local industries to grow and to reduce dependence on imports. See the domestic content requirement mandates that a certain percentage of equipment used in the production process must be domestically produced. So this policy promotes intergenious manufacturing and reduces the dependency on imports. So India approached the WTO against the domestic content requirement of the US in the energy sector. India had claimed that the domestic content requirements and subsidies instituted by the various state governments in the US violated several provisions of the trade related investment measures in short called as terms agreement and subsidies and countervailing measures agreement. Additionally India pointed out that the domestic content requirement by the US will discourage imports from India into the US. Finally the WTO ruled in favour of India. The WTO's appellate body held that subsidies and mandatory local content requirements instituted by several American states. Breached global trade rules. So the panel asked the US to ensure that these states are in conformity with trade rules. Thirdly in 2013 the US approached the WTO against India's domestic content requirement for solar cell and solar modules. See India mandated the domestic content requirement in the production of solar cells and modules under the Jawaharlal Nehru National Solar Mission JNNSM. Under the mission the government also provided subsidies to the domestic solar cell manufacturers. The US approached the WTO and it stated that the domestic content requirement of India would create a significant impact on the exporters of the solar cells in the US. The WTO's appellate body declared that the domestic content requirements of India as illegal. The WTO also ruled that India subsidies for solar power contribute WTO trade rules and India must remove the subsidies or face trade sanction. But this time India did not comply with the rules of WTO and the dispute remained resolved for many years. Currently both the US and India has committed to end the domestic content requirements. This provided a way to end another two disputes. Now coming to the fourth dispute. See the fourth dispute is regarding certain export related measures taken by India. See India is providing various export subsidies under several schemes like export promotion, capital goods scheme, special economic zones scheme, merchandise exports from India scheme and etc. These schemes consist of exceptions and detections from custom duties and other taxes. So these schemes promote export from India. The US approached the WTO against these schemes by stating that these schemes violate global trade rules and it affects the domestic industries of the US. The WTO ruled in favor of the US and it ordered India to withdraw the controversial schemes. But India took only certain measures to curb the US's concern. So the problem was not resolved fully. However, in the recent trade dispute settlement agreement, India committed to resolve the problems as soon as possible. So this dispute also got resolved. Now talking about the fifth and sixth dispute. See in 2018 the US imposed an import duty of 25% on steel products and 10% on certain aluminium products from India on grounds of national security. India opposed this move and it approached the WTO. This is the fifth dispute. See in retaliation to US's import duty on steel products and aluminium products from India, in June 2019, India imposed custom duties on 28 American products including chickpeas, lentils and apples. As a result, the US exports to India were affected. So the US approached the WTO. See both these issues were pending before the WTO but now as part of the dispute settlement agreement, India and the US have committed to end the tussle. The US agreed to grant market access to Indian steel and aluminium products whereas India agreed to remove additional duties on 8 US products including chickpeas, lentils and apples. So these are all the trade disputes which got resolved due to Modi's visit to US. So to conclude finding mutually agreed solutions to long-standing disputes will strengthen the bilateral relations between any two countries. So the countries in the world must follow this strategy to end long-standing trade disputes. This would provide a way for global trade peace. That's all regarding this wonderful news article. With these learned points, now let us move on to the next news article discussion. Take a look at this editorial article. This article talks about digital personal data protection bill which is likely to be tabled in the monsoon session of the parliament. The monsoon session is about to begin from July 2020. But the issue here is only the draft bill was placed in the public domain and the final bill was not placed before the public. The bill tries to amend the provisions of the RTA Act which is a major concern. So in this news article discussion, we shall see some of the important points regarding the bill. Before that, the syllabus relevant to the news article is highlighted here for your reference. You can go through it. First of all, what is personal data? See, personal data is information that relates to an identified or identifiable individual. For example, personal data may include name, address, email address, personal identification number, registration number, photo, fingerprints, etc. In simple terms, personal data is the one which is used to identify an individual. Businesses as well as government entities process personal data for delivery of goods and services. Processing of personal data also helps in law enforcement. But the problem is unchecked processing of personal data may lead to adverse implications for privacy which has been recognized as a fundamental right. It may also lead to financial loss, loss of reputation and profiling. Also, currently India does not have a standard law on data protection. Till now, we are depending on the Information Technology IT Act 2000. But this IT Act is not enough to ensure the protection of personal data in this age of new threats. So in 2017, the central government constituted a committee of experts on data protection chaired by Justice B. N. Sri Krishna. This committee examined the issues relating to data protection in the country. Based on the recommendations of the committee, the Personal Data Protection Bill was introduced in Lok Sabha in December 2019. But in August 2022, the bill was withdrawn from parliament due to severe criticism from the public. But then in November 2022, the Ministry of Electronics and Information Technology released the Draft Digital Personal Data Protection Bill 2022 for public feedback. So with this basic understanding, now let us see the features of the newly drafted Digital Personal Data Protection Bill. See the scope of the bill is very large. It has 23 amendments and a lot of provisions. We will see only the provisions that are relevant for our examination. Firstly, according to the government, the purpose of the bill is to make provisions for the processing of digital personal data. The bill will recognize the right of individuals to protect their personal data and also the need to process personal data for lawful purposes. Basically, the bill will allow processing of digital personal data within India where it is collected online or offline. Note that it also allows processing of data outside India if it is for offering goods or services or profiling individuals in India. Secondly, the bill says that personal data may be processed only for a lawful purpose for which an individual has given consent. Another important provision of the bill is that data fiduciaries will be obligated to maintain the accuracy of data, keep data secure and delete data once its purpose has been met. Here, data fiduciary means the service provider who determines the purpose and manner of data processing. For example, Google is a data feudatory. Now, another important feature of the bill is it grants rights to individuals including the right to obtain information, seek correction and erase the data and grievance reticence. The central government will also establish the Data Protection Board of India to adjudicate cases regarding the provisions of the bill. These are some of the major provisions that you have to make note of. Now, let us see what the editorial has got to tell us. Firstly, the bill tries to amend Section 8 Clause 1 J in the RTI Act which exempts 10 categories of information from disclosure to citizens. Let me explain how this amendment will greatly weaken the citizens' right to information. See, if this amendment is passed, it would allow for the legal denial of any information that could be associated with a person. This means that if public information officer that is PIO decides not to disclose information, he will simply relate it to some person and deny providing the information. Essentially, this proposal indirectly gives power to deny information solely on the grounds of being personal information. So, with these amendments, the majority of information with the exception of budgets can be denied to citizens. So, the right to information would essentially become the right to deny information. Consequently, this change would make the RTI Act ineffective. Additionally, the bill treats private and government entities differently regarding consent and storage limitations even when they perform similar commercial functions like banking or telecom services. This may violate the right to equality for private sector providers. Thirdly, concerns arise about the Independence of the Data Protection Board of India. Since the central government will determine its composition, appointment process and terms, this raises questions about its impartial functioning. Next important issue is, the bill does not provide the right to data portability and the right to be forgotten to individuals whose data is being processed. Finally, the bill requires all data feudatories to obtain verifiable consent from the legal guardian before processing the personal data of a child. To comply with this provision, every data feudatory will have to verify the age of everyone signing up for its services. This may have adverse implications for anonymity in the digital space. Ultimately, this bill will potentially endanger both the right to privacy and the right to information, as the article says. These are some of the concerns around the bill. See, the bill is aimed to ensure right of individuals to protect their personal data. But the success of the bill is questionable. Now, we have to wait and see how the bill turns out. So, with these learnt points, now let us move on to the next news article discussion. Take a look at this news and numbers article from text and context page. According to the article, global minimum tax will come into force from next year. So far, around 50 jurisdictions have taken steps to implement the global minimum tax. And by 2025, it is expected that almost 90% of companies having a revenue of more than 750 million euro will be subjected to the levy. This is the crux of the news article given here. In this context, let us learn what is this global minimum tax, the need for such a global minimum tax and the issues to be resolved around it. So, what is a global minimum tax? See, as the name itself suggests, it is a policy that sets a minimum tax rate for big businesses around the world. In this case, the minimum tax rate is 15%. This will ensure that large companies cannot exploit tax loopholes or relocate to countries with lower tax rates to avoid paying their fair share of taxes. So, the ultimate aim of this global minimum tax is to create a level playing field and prevent tax evasion by establishing a minimum standard for taxation worldwide. The Organization for Economic Cooperation and Development, in short, called as OECD, is the developer of this particular framework. See, we all know that tax evasion is illegal, but tax avoidance is the use of legal methods to minimize the amount of tax to be paid by an individual or a business. For example, India might tax a company 20%, whereas Mauritius, an island country, can tax the same company 10%. So, the company in India might have a shell company in Mauritius and show records that the work done by the Indian company is not done in India but in Mauritius. If they can show such records, they can easily avoid taxation in India. For this reason, tax avoidance is legal, but many developing countries like India face issues when it comes to tax avoidance. So, there has been a long-standing demand to address the loopholes in the international tax regime. So, instead of having different tax rates, which varies depending upon the countries, this global minimum corporate tax proposes a standard minimum taxation percentage of 15%. This proposal was agreed upon by 136 countries and jurisdictions under the Organization for Economic Cooperation and Development, OECD, in 2021. It was originally planned for implementation in 2023, but the effective date has been postponed to 2024. Remember, this agreement consists of two main components, often referred to as pillars. The first pillar focuses on revising tax regulations to address profit shifting and tax-based erosion caused by tax avoidance practices. It aims to ensure that corporate profits or taxed in the jurisdictions where they were earned. Now, the second pillar of the agreement is about the concept of a minimum tax rate. It proposes a minimum tax rate of 15% to be applied to corporate income. So, by implementing the minimum tax rate, it is estimated that around $150 billion in additional tax revenue could be generated for countries that adopt the 15% minimum tax. Even though the proposal is innovative, it has its own issues. For example, there is an issue of local levies on digital transactions. These local levies can be counterproductive to the concept of global minimum corporate tax. Also, there is a lack of political will to ensure greater fairness and equity in revenue sharing. So, these issues needed to be sorted out for effective implementation of global minimum corporate tax. That's all regarding global minimum corporate tax. So, with these learned points, now let us move on to the next news article discussion. Look at this news article. It talks about the National Multidimensional Poverty Index MPI in India. It says that India has experienced a significant decline in multidimensional poverty. According to the report of Nitya Yoke, the percentage of multidimensionally poor individuals decreased by 9.89 percentage points. That is from 24.85 percentage in 2015 to 16 to 14.96 percentage in 2019 to 21. This means that approximately 13.5 crore or 135 million people in India lifted themselves out of multidimensional poverty during this period. This is about the article given here. We'll discuss about the details of the report in this news article discussion. Before that, we'll briefly say about the National MPI. Firstly, what is multidimensional poverty? See, usually poverty is commonly understood as a lack of income or material resources. But multidimensional poverty expands this definition. It basically considers various dimensions of well-being beyond just income. These dimensions typically include factors like health, education and standard of living. So, India's National MPI captures multiple and simultaneous deprivations faced by households across these macro dimensions of health, education and living standards. You can see that in the image given here. The indicators and the weightage allocated for them are also displayed here. Remember, this index is released by Nithya Yog. So, with this basic understanding, let us see what the report says. See, firstly, the report highlights that there is decline in poverty in rural and urban areas. The decline was faster in rural areas. The percentage of multidimensionally poor decreased from 32.59 percentage to 19.28 percentage. This improvement can be attributed to a reduction in the number of multidimensionally poor individuals in states like Bihar, Uttar Pradesh, Mathya Pradesh, Odisha and Rajasthan. On the other hand, if we take Delhi, Kerala, Goa, Tamil Nadu and the Union territories, these regions were identified as regions with the least number of people facing multidimensional poverty. Now, coming to urban areas. See, here also, multidimensional poverty saw a decline from 8.65 percentage to 5.27 percentage. Uttar Pradesh experienced the largest decline in the number of poor individuals. In UP alone, 3.43 crore people escaped multidimensional poverty. Now, how does this change reflect in the overall MPI value? See, the MPI value quantifies the extent of multidimensional poverty. This value has almost halved from 0.117 to 0.066 between 2015-16 and 2019-21. Also, the intensity of poverty decreased from 47 percentage to 44 percentage. So, we can say that these figures indicate an overall positive trend in reducing multidimensional poverty in India. This is a major contribution towards achieving SDG target 1.2. See, SDG target 1.2 aims to reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions. So, this decline in poverty indicates that India is well on course to achieve the SDG target 1.2 much ahead of 2030. But here, we should also note that around 14.96 percentage of the population still face multidimensional poverty as per the report. These are all some of the take-away points that I have to note from this news article discussion. See, make note of the data that I just mentioned. These data will be a value addition in your answer writing. So, with these learnt points, now let us move on to the next news article discussion. Take a look at this column article from the editorial page. Recently, the Reserve Bank of India and the Central Bank of the UAE agreed to establish a common framework on currencies. This framework enables the use of local currencies of India and UAE for cross-border transactions. This means that the Indian rupee and the UAE dirham will be used for bilateral transactions between India and the UAE once the framework gets established. The common framework helps to reduce the dependency on a third country's currency like the US dollar for settling transactions. This is the crux of the news article given here. In this context, let us understand the implications and significance of using the Indian rupee and the UAE dirham for bilateral transactions. First, we will see about the implications. See, as per the MOU between the RBI and the Central Bank of the UAE, all current account balances including exports and imports and certain permitted capital account transactions could be settled using either the Indian rupee or the UAE dirham. So, to facilitate the settlement process, the two central banks will establish a local currency settlement system. Apart from this, the banks will also interlink their payments messaging systems to facilitate transactions between India and the UAE. This is the first implication. Then, the other implication is the development of a rupee dirham for an exchange market. See, the establishment of the rupee dirham settlement mechanism tends to develop the rupee dirham for an exchange market. This rupee dirham for an exchange market would help to price the two currencies independently rather than relying on the exchange rates of other currencies like the dollar and the euro. These are the two main implications of facilitating the rupee dirham settlement mechanism. Now, coming to the significance. See, as we all know, India is the process of internationalization of its rupee. Here, internationalization of rupee is a process that involves increasing the use of the rupee in cross-border transactions. By facilitating the India UAE local currency settlement system, it could potentially serve as a precursor for other bilateral currency settlement mechanisms. So, the India UAE local currency settlement system could act as an important step for the internationalization of the rupee. This is one of the major significance. Now, talking about the problems. See, the UAE's trade surplus with India is widening in recent months. This means that India is having a trade deficit with the UAE. In this situation, if the rupee dirham settlement comes into place, what will happen? As the UAE has a trade surplus, the excess rupee will end up in the hands of UAE's businesses or banks. The problem here is that the UAE businesses or banks cannot use the rupee for transactions with other countries. This is because the Indian rupee is not a global currency like the US dollar. So, this ultimately discourages the rupee dirham settlement system. To resolve this problem, the RBI indicated some steps. For example, the RBI said that the Indian government should promote investment by UAE-based firms using the excess rupee. If this happens, on one hand, it will promote the rupee dirham settlement system. And on the other hand, the UAE investors will get a return from India. Okay, these are some of the takeaway points from this editorial article. So, these learnt points. Now, let us move on to the next part of the news article discussion, which is the preliminary practice question discussion. Now, look at this first question. Here, four options are given and you have to find which one of the following group of items is included in India's foreign exchange reserves. See, India's foreign exchange reserves comprises of foreign currency assets HCA, gold held by the RBI and special drawing rights SDRs and reserve tranche position RTP in the International Monetary Fund IMF. Okay, so the correct answer for the question here is option B, foreign currency assets, gold holdings of the RBI and SDRs. Now, look at this question about National Multidimensional Poverty Index. You have to find how many of the given or indicators used to measure the index. See, the correct answer here is option D, all the five, school attendance, antenatal care, cooking fuel, electricity and even bank account or the indicators used to measure the National Multidimensional Poverty Index. So, here the correct answer is option D, all the five. Moving on, look at this question about OECD. Three statements are given and you have to find how many statements are correct here. See, the correct answer for the question is option B, only two. First statement is incorrect here. OECD is not an organization formed by oil exporting countries of Middle East for their cooperation and development. It is an intergovernmental economic organization founded to stimulate economic progress and world trade. Most OECD members are high income economies with a very high human development index and are regarded as developed countries. Okay, so the first statement is alone incorrect here. And the other two statements which says India is not a member is correct. International migration outlook is actually released by OECD. Okay, so the correct answer here is option B, only two. Now look at this last question. The compensation of forestation fund can be utilized for how many of the following purposes? Five purposes are given. First one is forest and wildlife management. Second one is village relocation from protected area. Third one is dam construction for local population. Fourth one is renovation of roads. Fifth one is civic and municipal purposes. See here the correct answer is only two. Only the first statement and second statement is correct here. Only for forest and wildlife management and a village relocation from protected area, the camp of funds can be used. Okay, so here the correct answer is option A, only two. Now moving on, displayed here are the main practice questions for you today. Just go through the questions, try to answer it in the comment section. With this, we came to the end of the news article discussion. If you like the video, hit like, do comment and don't forget to subscribe to Shankar Iyer's Academy YouTube channel. Now thank you for listening.