Daily Current Affairs 22 April 2020 | UPSC Current Affairs 2020

Current Affairs Of Today Are

1) The Indian Council of Medical Research (ICMR)

The Indian Council of Medical Research (ICMR) directed the States not to use the COVID-19 rapid testing kits for the next two days following reports of wide variations in results.
The kits would be tested and validated by ICMR teams and an advisory issued in the next two days. If they were found to be not up to the mark, replacements would be sought from the manufacturers, ICMR spokesperson Dr. R.R. Gangakhedkar said.
The Rajasthan government decided to halt rapid antibody tests after an experts’ team questioned the use of the newly distributed Chinese kits following inaccurate results.
Rajasthan Health Minister Raghu Sharma said, “We did rapid tests on 168 confirmed cases but only 5.4% tested positive for antibodies. The majority of the confirmed cases tested negative.”
The ICMR said of the total COVID-19 tests conducted so far, 69% were asymptomatic cases and 31% symptomatic
Dr. Gangakhedkar said 80% of cases came with no symptoms or very mild symptoms, 15% with moderate symptoms and 5% needed ICU aid

Indian Council of Medical Research

The Indian Council of Medical Research (ICMR), the apex body in India for the formulation, coordination, and promotion of biomedical research, is one of the oldest and largest medical research bodies in the world. The ICMR is funded by the Government of India through the Department of Health Research, Ministry of Health and Family Welfare.
ICMR's 26 national institutes address themselves to research on specific health topics like tuberculosis, leprosy, cholera, and diarrhoeal diseases, viral diseases including AIDS, malaria, kala-azar, vector control, nutrition, food & drug toxicology, reproduction, immuno-hematology, oncology, medical statistics, etc. Its 6 regional medical research centers address themselves to regional health problems and also aim to strengthen or generate research capabilities in different geographic areas of the country.
The council's research priorities coincide with National health priorities such as control and management of communicable diseases, fertility control, maternal and child health, control of nutritional disorders, developing alternative strategies for health care delivery, containment within safety limits of environmental and occupational health problems; research on major non-communicable diseases like cancer, cardiovascular diseases, blindness, diabetes, and other metabolic and hematological disorders; mental health research and drug research (including traditional remedies). These efforts are undertaken to reduce the total burden of disease and to promote the health and well-being of the population.

RT-PCR

As the Indian Council of Medical Research (ICMR) has issued new testing guidelines for Covid-19 and has also allowed rapid antibody testing in India, experts believe that it will help the agencies to enhance screening and identifying capabilities.
To ensure speedy detection of coronavirus cases, those residing in Covid-19 hotspots or areas which have reported large numbers of cases may have to undergo a rapid antibody testing. The ICMR in its interim advisory has recommended the use of the rapid antibody test in the country's coronavirus hotspots.
Presently the government uses the PCR (polymerase chain reaction) tests to detect novel coronavirus from samples of the throat or a nasal swab of people with symptoms or high-risk individuals who might have come in contact with positive patients.

What is the difference between existing and new testing kits

Existing testing system: The present Covid-19 detection tests being carried out in the country are called PCR (polymerase chain reaction), which require nasal or throat swabs. It takes about five hours for the results to come out.
Rapid antibody testing: The rapid testing kits are quicker to get early results. They use blood samples of suspected patients and normally takes around 15-30 minutes to give the result. Under this, one has to clean their finger with an alcohol swab and use the lancet provided for finger-pricks.

Why antibody rapid test is important

Reports suggest that after a request from states, including Maharashtra, Telangana, Andhra Pradesh, and few other states, ICMR sent its recommendation a few days back to start antibody rapid test in the country.
These kits can be used from small clusters in the town upto the village-level to find out the number of infections quickly, which is important in the present situation. Thousands of migrant workers returned to their native places since the lockdown and there is a possibility that a small section (3 out of 10, as per ICMR estimate) may have carried the virus.
As per Health Ministry officials, these rapid antibody tests are most suitable to detect whether the disease is spreading in the hotspots.
Experts say that an antibody test doesn't always pick up the early viral infection but they can indicate if someone has any particular virus even if they are asymptomatic. This type of test is important for community surveillance and investigation purpose.

Where is this test available

As per reports, India has already started the process to buy these antibody rapid test kits for the country.
A source from the Health Ministry suggested that India already has purchased around 5 lakh testing kits from the USA, China, and South Korea. ICMR has already given approval to a dozen such kits for Covid-19, which are likely to be available in the market soon. One Bengaluru-based company is also working on this project and their rapid testing kits are likely to be available soon.

What is the cost of anti-body rapid test

These new testing kits are priced between Rs 2,000-3,000 depending on their availability and supply.
Under the existing PCR test, in private labs, the government has already put a cap of Rs 4,500 for the Covid-19 test. This includes Rs 1,500 for a screening test for suspect cases and an additional Rs 3,000 as confirmation test charges.

Source: The Hindu

2) CBDT sticks with Budget’s tax target

Even as the COVID19 pandemic and the lockdown to combat it has brought the economy to a near standstill, the Centre has gone ahead and set its Income Tax authorities a daunting target of collecting ₹13.2 lakh crore for the fiscal year ending in March 2021.
In a correspondence to all Principal Chief Commissioners of Income Tax (PCCIT) dated April 16, the Central Board of Direct Taxes (CBDT) has spelled out zone wise targets for the collection of corporate tax, personal income tax and security transaction tax (STT).
The figures, which are a reiteration of the revenue receipt estimates spelled out by Finance Minister Nirmala Sitharaman in the Union Budget presented in February, comprise a corporation tax component of ₹6.81 lakh crore, personal income tax of ₹6.25 lakh crore and STT at ₹13,000 crores.
However, the pandemic has emerged as the single biggest challenge to the economy and the IMF earlier this month cut its projection for India’s annual GDP growth in the current fiscal year to 1.9%, from an earlier forecast for a 5.8% expansion

Expert Opinion

No way it can be achieved in such a challenging environment with a variety of factors like the massive hit to the economy and massive layoffs of employees in the corporate sector,” a top tax expert from Ahmedabad
Another expert from Mumbai said that the personal income tax collection would be affected hugely because most of the companies had cut salaries of employees or sent the employees on furlough (leave without pay). “All airlines, hospitality companies, and several others have cut salaries and sent the employees on a rotation basis on furlough, so that will hit the tax collections very badly

Central Board of Direct Taxes

Functions and Organisation

The Central Board of Direct Taxes is a statutory authority functioning under the Central Board of Revenue Act, 1963. The officials of the Board in their ex-officio capacity also function as a Division of the Ministry dealing with matters relating to levy and collection of direct taxes.

Historical Background of C.B.D.T.

The Central Board of Revenue as the apex body of the Department, charged with the administration of taxes, came into existence as a result of the Central Board of Revenue Act, 1924. Initially, the Board was in charge of both direct and indirect taxes. However, when the administration of taxes became too unwieldy for one Board to handle, the Board was split up into two, namely the Central Board of Direct Taxes and Central Board of Excise and Customs with effect from 1.1.1964. This bifurcation was brought about by the constitution of two Boards u/s 3 of the Central Board of Revenue Act, 1963.

Source: The Hindu

3) Can a drug use to treat severe sepsis be deployed for critically ill COVID-19 patients?

Sepsivac, a drug jointly developed by the Ahmedabadbased Cadilla Pharmaceuticals and the Council for Scientific and Industrial Research (CSIR), will be tested in 50 COVID19 patients at the AllIndia Institute of Medical Sciences in Delhi and Bhopal, and Post Graduate Institute of Medical Education and Research, Chandigarh.
Sepsivac was originally developed for treating sepsis by a class of pathogens called gram-negative bacteria, that are known to cause lifethreatening infections. Given the similarities in the immunesystem response in critically ill COVID-19 patients, it is theorized, the therapy could stimulate a benign response.
A large number of cytokines, chemicals signaling the presence of an infection, are produced in the early stages of the body’s response against infection to stimulate the production of antibodies.
However, cytokines also cause inflammation of organs and can be counterproductive in protecting the body.
Keeping them in check is the goal of so-called immunomodulators or medicines like Sepsivac.
The drug uses the Mycobacterium w (formally known as mycobacterial indicus pranii) as it produces a different immunesystem response.
Previous randomized trials in sepsis patients showed 11% absolute reduction and 55.5% relative reduction in mortality. Sepsivac reduces the days on a ventilator, in ICU and hospital and incidence of secondary infection, Cadilla Pharmaceuticals have claimed on their website.

Source: The Hindu

4) Why are oil prices in negative terrain?

Prices of West Texas Intermediate (WTI), the American benchmark for crude oil, fell to less than zero in Monday’s trade. The price of a barrel of WTI fell to minus, yes, that’s right, minus $37.63 a barrel. What this means is that sellers have to pay buyers to get rid of their crude! This is unprecedented in the oil market, even accounting for its notoriety for being volatile

Why did prices fall like this?

We need to understand a bit of the oil market and trading dynamics here. WTI oil is traded as futures contracts in the NYMEX (New York Mercantile Exchange) where traders buy and sell monthly futures such as, for instance, May futures, June futures and so on. The sellers of such futures will have to deliver a barrel of crude oil at the contracted price in the contracted month just as buyers will have to take delivery at the contracted date.
As with all trading in commodities, there’s huge speculative participation in oil futures trading too. So speculators buy and sell contracts with no intention of taking delivery (in the case
of buyers) or offering delivery (in the case of sellers) of the physical oil, on the contracted date. These speculators have to unwind their “positions” on the contract expiry date. If they fail to do so, they will have to take physical delivery of the crude oil on the contracted date.
What happened on Monday was that speculators who had taken large bets on May futures began to unwind their “positions”. This was because the futures contracts are set to expire today, Tuesday. Those not intending to take physical delivery have to square off their contracts before the expiry date. So, speculators who did not want to take delivery in May proceeded to unwind their “positions,” leading to the massive fall in prices.
It could be that these were financial speculators who never take physical delivery and hence closed their contracts. Or, these could also be deliverybased traders backing out as the bottom has fallen off demand for oil. In reality, it would be a combination of both categories of traders. The bottom line, though, is that prices fell as demand for oil is falling and the world, especially America, is running out of storage space.

May WTI futures prices went negative but June futures prices are still at $20.43 a barrel. Why?

This could be due to two reasons. Traders expect demand to recover by June as lockdowns are lifted across the world and economic activity resumes. Second, traders also expect that storage space may be created as existing inventory is drawn down. America is also talking about adding to its strategic storage by taking advantage of the low prices. This could create a demand for oil. Finally, contract expiry for June contracts is still a few weeks away, giving speculators that much more time to speculate.

Market reports talk about contango trades in the oil market. What do they mean?

Simply put, contango kicks in when prices of a commodity in the futures market are considerably higher for deliveries many months later, compared to prices for immediate delivery. For instance, while May oil futures are negative and June is at $20.43 a barrel, November futures for the same grade of oil ended at a hefty $31.66 a the barrel on Monday. Contango trades happen when traders anticipate a surge or rise in demand and value the commodity higher for the future.

So, why can’t traders buy cheap oil now and store them for release in the future when demand and prices rise?

That’s exactly what traders are now doing. Such practice became famous during Iraq’s invasion of Kuwait in 1990 when a trader took massive positions at cheap prices ahead of the invasion and sold them when prices rose after the invasion. Oil was stored in tankers floating on the sea and unloaded at considerably higher prices. Traders are doing the same now. Yearlong hiring contracts for VLCC (very large crude carriers) that can store up to 2 million barrels of oil are soaring through the roof. According to a report in the Wall Street Journal, VLCC hiring charges for yearlong contracts are now at $72,500 a day, compared to $30,500 a day a year ago.

The prices of Brent grade are still at $20.58 a barrel for May futures. What’s the reason for the difference?

Brent oil has traditionally quoted higher than WTI with the gulf being about $67 a barrel between the two. Brent is a superior grade produced in the North Sea off the British coast and is the accepted benchmark for this part of the world. The market that it serves is considerably larger than that of the United States and demand is, therefore, higher. Transporting oil from the U.S. to Asia is not economical thus limiting the scope for the WTI grade. Refineries in Europe are configured for Brent rather than WTI. Prices of Brent are therefore always higher than that of WTI. Importantly, unlike WTI futures on NYMEX, Brent futures traded in London can be settled by cash when the contract expires. In other words, a trader who has bought oil for May delivery is not forced to take physical delivery of the oil but can settle the contract in cash. This big difference between WTI and Brent has ensured that Brent futures will not crash like that of WTI.

How is India benefiting from this price crash?

In two ways. First, the oil import bill will fall sharply this fiscal year, giving tremendous relief to the government on the external account front. With merchandise exports from India badly hit due to the lockdown in the West, foreign exchange earnings are under pressure. With oil prices falling and foreign exchange outgo reducing, the pressure on the current account balance is off. In fact, we may be looking at a positive balance in the current account if the global economic recovery is quick and our exports recover. Second, India is quietly building up its strategic reserves, taking advantage of the cheap prices. India can hold over 39 million barrels of oil at its strategic reserves in Visakhapatnam, Mangalore, and Padur, near Udupi. These are underground salt caverns converted and built to store crude oil.

Source: The Hindu

5) Targeted Long Term Repo Operations (TLTRO)

The Reserve Bank of India has allowed banks to exclude loans extended to nonbanking finance companies from the funds availed under the Targeted Long Term Repo Operations (TLTRO) for determining priority sector targets. This is intended to incentivize banks to lend to NBFCs.
Securities kept in the held-to-maturity category will now be excluded from the computation of adjusted nonfood bank credit,
The banking regulator had announced TLTRO worth ₹50,000 crores for banks on April 17.
The funds availed of under the facility should be deployed in investmentgrade bonds, commercial papers (CPs) and nonconvertible debentures (NCDs) of NBFCs, the RBI had said. At least 50% of the total funds availed should be invested in mid and smallsized NBFCs, including microfinance institutions, the RBI had mandated.
The central bank had further clarified that if banks failed to deploy the funds availed within 30 days, there will be steep penalties.
“However, if a bank fails to deploy funds within the specified time frame, the interest rate on undeployed funds will increase to the prevailing policy repo rate plus 200 bps (basis points) for the number of days such funds remain undeployed.
This incremental interest will have to be paid along with regular interest at the time of maturity,” the RBI said.
The first tranche of ₹25,000 crores in the next round of TLTRO will be made on April 23.

What is LTRO?

The LTRO is a tool under which the central bank provides one-year to three-year money to banks at the prevailing repo rate, accepting government securities with matching or higher tenure as the collateral.

How is it different from LAF and MSF?

While the RBI’s current windows of liquidity adjustment facility (LAF) and marginal standing facility (MSF) offer banks money for their immediate needs ranging from 1-28 days, the LTRO supplies them with liquidity for their 1- to 3-year needs. LTRO operations are intended to prevent short-term interest rates in the market from drifting a long way away from the policy rate, which is the repo rate.

Why is it important?

As banks get long-term funds at lower rates, their cost of funds falls.
In turn, they reduce interest rates for borrowers.
LTRO helped RBI ensure that banks reduce their marginal cost of funds-based lending rate, without reducing policy rates.
LTRO also showed the market that RBI will not only rely on revising repo rates and conducting open market operations for its monetary policy but also use new tools to achieve its intended objectives.

Source: The Hindu

6) Currency Exchange Rate Index

The rupee has been losing value (or depreciating or weakening) against the dollar over the past few months.

The exchange rate of rupee is one of the markers to compare the Indian economy’s competitiveness vis-a-vis other economies (also amid the Covid-19 outbreak).
Another measure for comparison is looking at the growth rates of Gross Domestic Product (GDP) and Gross Value Added (GVA).
High-frequency data like sales of automobiles etc. can also be used as a proxy to compare economies.

Key Points

Exchange Rate

The price of one currency in terms of the other is known as the exchange rate.
A currency’s exchange rate vis-a-vis another currency reflects the relative demand among the holders of the two currencies.
For e.g. If the US dollar is stronger than the rupee (implying value of the dollar is higher concerning a rupee), then it shows that the demand for dollars (by those holding rupee) is more than the demand for rupees (by those holding dollars).
This demand, in turn, depends on the relative demand for the goods and services of the two countries.

Index for Exchange Rate

Since a country interacts with many countries, it wants to see the movement of the domestic currency relative to all other currencies in a single number rather than by looking at bilateral rates.
That is, it would want an index for the exchange rate against other currencies, just as it uses a price index (CPI or WPI) to show how the prices of goods, in general, have changed.
The Reserve Bank of India tabulates the rupee’s Nominal Effective Exchange Rate (NEER) about the currencies of 36 trading partner countries.

This is a weighted index — that is, countries with which India trades more are given greater weight in the index.
A decrease in this index denotes depreciation in rupee’s value whereas an increase reflects appreciation.

There is one more measure that is even better at capturing the actual change. This is called the Real Effective Exchange Rate (REER) and is essentially an improvement over the NEER because it also takes into account the domestic inflation in the various economies.
The REER is the weighted average of NEER adjusted by the ratio of domestic prices to foreign price.

Impact of Inflation on Exchange Rate

Many factors affect the exchange rate between any two currencies ranging from the interest rates to political stability (less of either result in a weaker currency). Inflation is one of the most important factors.
Illustration: Imagine that the Rupee-Dollar exchange rate was exactly 1 in the first year. This means that with Rs 100, one could buy something that was priced at $100 in the US. But suppose the Indian inflation is 20% and the US inflation is zero. Then, in the second year, an Indian would need Rs 120 to buy the same item priced at $100, and the rupee’s exchange rate would depreciate (reduce in value) to 1.20.

Comparison between NEER and REER

As the chart shows, in NEER terms, the rupee has depreciated to its lowest level since November 2018. The rupee has been steadily losing value — showing the Indian economy’s reducing competitiveness— since July 2019.
In REER terms also, the rupee has depreciated in March and fallen to its lowest level since September 2019.
The difference between trends of NEER and REER was due to India’s domestic retail inflation being lower relative to the other 36 countries. As domestic inflation started rising, the REER, too, started depreciating like the NEER.
Gross Domestic Product (GDP) is a measure of economic activity in a country. It is the total value of a country’s annual output of goods and services. It gives the economic output from the consumers’ side.
Gross Value Added (GVA) is the sum of a country’s GDP and net of subsidies and taxes in the economy. It provides the rupee value for the number of goods and services produced in an economy after deducting the cost of inputs and raw materials that have gone into the production of those goods and services.

Source: Indian Express

7) SWAYAM and SWAYAM Prabha

Recently, the Union Minister for Human Resource Development held a detailed review of the National online education platform SWAYAM and the 32 Direct-to-Home (DTH) Television Education Channels SWAYAM Prabha.

Key Points

Translation to Regional Language: All the SWAYAM Courses and SWAYAM Prabha videos to be translated into ten regional languages in a time-bound manner.
Acceptance of SWAYAM Credits: It has also been decided that the University Grants Commission (UGC) and All India Council for Technical Education (AICTE) will follow up with Universities and institutions to accept SWAYAM credits.
This will enable students to do part of their course through Massive open online courses (MOOC) and part in various colleges.
Incentives to Faculties: To encourage faculty to provide more courses under SWAYAM, it has been decided to provide appropriate incentives for their career.

SWAYAM

Study Webs of Active Learning for Young Aspiring Minds (SWAYAM), was launched on July 9, 2017, by the Ministry of Human Resource Development to provide one integrated platform and portal for online courses.
This covers all higher education subjects and skill sector courses.
The objective is to ensure that every student in the country has access to the best quality higher education at an affordable cost.
Academicians from hundreds of institutions throughout the country are involved in developing & delivering Massive open online courses (MOOCs) through SWAYAM in almost all disciplines from senior schooling to Post Graduation.

SWAYAM Prabha

It is an initiative of the Ministry of Human Resources Development to provide 32 High-Quality Educational Channels through DTH across the length and breadth of the country on a 24X7 basis.
It has curriculum-based course content covering diverse disciplines.
This is primarily aimed at making quality learning resources accessible to remote areas where internet availability is still a challenge.
The DTH channels are using the GSAT-15 satellite for program telecasts.

University Grants Commission

It came into existence on 28th December 1953 and became a statutory body by an Act of Parliament in 1956, for the coordination, determination, and maintenance of standards of teaching, examination, and research in university education.
The head office of the UGC is located in New Delhi.

Source: PIB

8) 5th Annual Meeting of NDB

Recently, the Union Minister of Finance attended the 5th Annual Meeting of the Board of Governors of New Development Bank (NDB) through video-conference in New Delhi.

Key Highlights of the Meeting

India appreciated NDB’s efforts in establishing itself as a credible Global Financial Institution, delivering its mandate successfully by taking a more sustainable and inclusive approach.
NDB fast-tracked financial assistance of about $5 billion to BRICS countries including Emergency Assistance of $1 billion to India to combat the Covid-19 pandemic.

The assistance under this facility was suggested to be enhanced to $10 billion.

Brazil thanked India for sending critical drugs for the timely management of novel coronavirus in Brazil.
NDB was encouraged to take appropriate actions to join the G-20 forum along with other Multilateral Development Banks (MDBs) and International Financial Institutions (IFIs) like the World Bank, Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), etc.
India urged NDB to follow novel practices in supporting the BRICS nations for achieving their Sustainable Development Goals.
Measures taken by India to respond to the health crisis and to mitigate its impact were highlighted. Few of them are:

India Covid-19 Emergency Response and Health System Preparedness Package: Allocation of $2 Billion (₹15,000 crores) by the Government of India for strengthening the healthcare system.
Pradhan Mantri Garib Kalyan Yojana: Announcement of a scheme of social support measures amounting to $23 Billion (₹1.70 lakh crore) to alleviate the hardship of the poor and the vulnerable.
Insurance cover of $67,000 (₹50 lakh) per person to over 2.2 million frontline health workers and others provision of relief to firms in statutory and regulatory compliance matters
Easing of monetary policy by the Reserve Bank of India (RBI) and a three-month moratorium on loan installments.
Creation of a Covid-19 Emergency Fund for SAARC countries.
India’s efforts in supplying critical medicine to the countries in need (e.g. Operation Sanjeevani), to tackle the Covid-19.

New Development Bank

It is a multilateral development bank jointly founded by the BRICS countries (Brazil, Russia, India, China, and South Africa) at the 6th BRICS Summit in Fortaleza, Brazil in 2014.
It was formed to support infrastructure and sustainable development efforts in BRICS and other underserved, emerging economies for faster development through innovation and cutting-edge technology.
It is headquartered in Shanghai, China.
In 2018, the NDB received observer status in the United Nations General Assembly, establishing a firm basis for active and fruitful cooperation with the UN.
Objectives:

Fostering the development of member countries.
Supporting economic growth.
Promoting competitiveness and facilitating job creation.
Building a knowledge-sharing platform among developing countries.

To fulfill its purpose, the Bank supports public or private projects through loans, guarantees, equity participation, and other financial instruments.
NDB has so far approved 14 projects in India for an amount of $4,183 million.

Source: PIB

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