Why in the News?

• Recently, India has officially been included in JP Morgan's Government Bond Index-Emerging Markets (GBI-EM). 
• This inclusion is expected to bring nearly $20-25 billion into the country over the next 10 months, aiding India in managing its external finances, bolstering foreign exchange reserves, and strengthening the rupee.

Indian Bond Market:

• Importance of Bond Markets:
  • Bond markets are advantageous for corporate entities and government bodies, providing a flexible and efficient capital-raising mechanism.
  • They help companies avoid equity dilution.
  • The cost of capital is reduced since interest expenses on debt instruments are tax-deductible, making bonds a more attractive financing option than other methods.
• India's Bond Market:
  • India’s bond market plays a crucial role in its economic framework.
  • As of September 2023, the government bond market size is $1.3 trillion, with corporate bonds at $0.6 trillion.

• Challenges in Indian Bond Markets:
  • Narrow investment base
  • Insufficient participation by foreign investors
  • Virtually nonexistent secondary market
  • Private placement (sale of stock shares or bonds to pre-selected investors and institutions rather than publicly on the open market)
• Solutions:
  • Inclusion in Global Indices
  • Presence of market makers on both buy and sell-side
  • No credit default swaps
  • “Bonds bhi ‘Sahi Hain’” marketing campaign to attract all age groups in society
  • Credit enhancement frameworks
  • Incentivizing the issuer

What is the JP Morgan Emerging Market Index?

• Created in the early 1990s, it is the most widely referenced index for emerging market bonds and serves as benchmarks for local market and corporate EM bonds.
• It started with the issuance of the first Brady bond, denominated in U.S. dollars, issued by developing countries and backed by U.S. Treasury bonds.
• It expanded to include the GBI-EM (in 2005) and the Corporate Emerging Markets Bond Index (CEMBI).

What was JP Morgan’s Announcement?

• JP Morgan announced the inclusion of Indian Government Bonds (IGBs) in its emerging markets bond index starting June 28, 2024.
• 23 IGBs meet the index eligibility criteria, with a combined notional value of approximately Rs 27 lakh crore or $330 billion.
• Only IGBs under the Fully Accessible Route (FAR), introduced by the RBI in 2020 to enable non-residents to invest in specified Government of India dated securities, are eligible for the index.

Impact of IGBs Inclusion:

• India is expected to reach the maximum weight of 10% in the GBI-EM Global Diversified Index (GBI-EM GD).
• Higher weightage will prompt global investors to allocate more funds (~$2-3 billion flows to India every month) for investment in Indian debt.
• This will reduce risk premia, help finance India’s fiscal and current account deficit (CAD), enhance the liquidity and ownership base of government securities (G-secs), and support the diversification of the investor base for Indian government securities.
• It could help lower funding costs slightly and further develop domestic capital markets.

Will Higher Inflows be a Concern for RBI?

• When the Reserve Bank of India (RBI) removes dollars from the market, it must release an equal amount in rupees.
• While higher inflows will boost the rupee, the RBI will need to use its tools to manage resultant inflationary pressures.

Source: IE

Why in the news ?

• The recent issues with the NEET and UGC NET exams have revealed significant flaws in India's examination system, with the National Testing Agency (NTA) being heavily criticised. 
• The government responded by removing the NTA director and initiating investigations that led to several arrests.
• However, a comprehensive and systematic solution is crucial to prevent future crises and to maintain the integrity and reliability of mass-scale testing.

Problems Associated with India’s Examination System:

• The High-Stakes Exam Culture:
  • The current system relies on a single high-stakes exam for professional course selection, which has several issues.
  • This encourages rote learning over conceptual understanding, leading to the growth of coaching centres.
  • These centres focus on exam strategies rather than holistic education, generating substantial profits while putting students under intense pressure and limiting personal growth.
• Mismatched Aptitude and Course Selection:
  • This is particularly evident in engineering, where the number of graduates has decreased by 40% over the past five years, indicating a lack of sustained interest post-admission.
  • The current selection process does not adequately consider students' genuine interests and aptitudes.
• The Undermined School System:
  • The dominance of coaching institutions has severely impacted the school system, especially in higher classes (11th and 12th grades).
  • The focus on rote-based learning compromises the holistic personality development envisioned in policies like the National Education Policy (NEP) 2020.
  • This shift from comprehensive education to narrow exam preparation harms students' overall development.
• Flaws in Assessment and Evaluation:
  • The 10th and 12th Class Board exams are summative assessments that encourage cramming rather than deep learning.
  • Although NEP 2020 advocates for formative and competency-based assessments, the 2022-23 deadline for implementing these reforms has passed without significant progress.

The Necessity of Robust Examination Systems:

• Ensuring Fairness and Integrity:
  • The primary purpose of any examination system is to ensure fairness and integrity in the assessment process.
  • A robust system minimises the chances of malpractice and fraud, ensuring that results reflect the true capabilities and knowledge of the candidates.
  • The recent reliance on pen-and-paper exams has exposed vulnerabilities, including paper leaks and impersonation.
• Enhancing Credibility and Trust:
  • A reliable examination system is crucial for maintaining the credibility of educational institutions and the government.
  • Transparent and secure exam processes build trust among stakeholders, including students, parents, and employers.
  • This trust is foundational for the legitimacy of educational credentials and, by extension, the career prospects of students.
• Promoting Holistic Assessment:
  • A robust system would integrate multiple forms of assessment, including formative assessments, project-based evaluations, and practical applications.
  • This approach provides a more holistic view of a student's capabilities, including critical thinking, problem-solving, and practical skills.

Proposals for Systematic Reforms to Prevent Malpractices and Frauds:

• Adapting to Technological Advancements:
  • The education sector must keep pace with rapid technological advancements.
  • A robust examination system would leverage technology for conducting, preparing, and evaluating exams.
  • Online testing platforms, AI-based proctoring, and automated evaluation can enhance the efficiency and reliability of the examination process.
  • AI-based proctoring can detect even minor discrepancies, reducing the likelihood of cheating and ensuring a fair assessment environment.
  • Teachers contributing to the question bank and testing items for difficulty levels would create a participative system, aligning with NEP 2020 objectives.
• Standardising Assessment Methods:
  • The government should introduce a system where 40% of the admission weightage is based on eight quarterly academic assessments conducted online over two years.
  • These assessments, taken within schools, would be proctored using AI-based fraud detection to ensure integrity.
  • The question banks should emphasise critical thinking, conceptual understanding, and problem-solving skills.
  • Another 40% weightage should be assigned to social and professional aptitude, assessed through two six-week internships related to the chosen field of study and mandatory participation in social upliftment programs like NSS/NCC.
  • The remaining 20% weightage should be allocated to the final NEET/JEE exam, conducted online at least twice a year, allowing students to choose their best score for final consideration.
• Supporting Continuous and Comprehensive Evaluation:
  • One of the critical flaws in the current system is the reliance on a single, high-stakes exam to determine a student's future.
  • A robust examination system would support continuous and comprehensive evaluation, spreading assessments over a period and incorporating various forms of evaluation.
  • This approach reduces pressure on students and provides multiple opportunities to demonstrate their abilities, leading to a more accurate and fair assessment of their knowledge and skills.
• Addressing Logistical Challenges:
  • Conducting large-scale exams poses significant logistical challenges, from managing exam centres to ensuring the timely distribution and collection of exam papers.
  • A robust system that utilises online platforms can streamline these processes, reducing logistical burdens and potential errors and delays.
  • Online exams can be administered simultaneously across multiple locations, ensuring uniformity and reducing logistical complexity.
• Revitalising School Education:
  • By focusing on continuous assessments and reducing the stakes of a single exam, the proposed system can redirect attention back to schools, fostering a more holistic education environment.
  • Reformed assessment systems should prioritise concept-based understanding, fulfilling NEP 2020's mandate and significantly reducing the potential for examination fraud.
• Reducing the Influence of Coaching Centers:
  • The current high-stakes exam system has led to the proliferation of coaching centres, which focus on teaching students how to crack exams rather than fostering a deep understanding of the subjects.
  • A robust examination system that emphasises continuous and varied assessments would reduce reliance on coaching centres, encouraging a more balanced and holistic educational approach.
  • This shift would allow students to focus more on conceptual learning and personal development rather than merely preparing for exams.
• Preparing Students for Future Challenges:
  • A robust examination system is not just about assessing students' current knowledge but also about preparing them for future challenges.
  • By incorporating assessments that evaluate critical thinking, problem-solving, and practical skills, the system can better prepare students for higher education and professional environments.
  • This comprehensive approach ensures that students are not only academically proficient but also equipped with the necessary skills to succeed in their future endeavours.

Conclusion

The ongoing crisis in mass-scale examinations highlights the urgent need for systemic reform in India's education system.Implementing continuous assessments, evaluating social and professional aptitudes, and leveraging technology for secure testing are crucial for ensuring exam integrity and effectiveness. These reforms can transform education, promote genuine learning, and safeguard millions of students' futures.

Source: IE

Why in the News?

• An opposition parliamentarian has called for the removal of the Sengol from the Lok Sabha, labelling it a symbol of "rajdand/rajtantra (monarchy)." 
• This demand has sparked a contentious debate between the government and the Opposition.

What is a Sengol?

• Definition: A sengol (or chenkol) is a royal sceptre symbolising kingship, righteousness, justice, and authority.
• Historical Origin: It is a traditional symbol from the Chola era in Tamil Nadu.
• Description: The Sengol is a golden sceptre, richly adorned with intricate designs, reflecting the grandeur of ancient Tamil culture.
• Cultural Significance: Among the Madurai Nayakas, the Sengol was placed before the goddess Meenakshi in the temple, then transferred to the throne room, symbolising the king’s role as a divine agent.

Significance in the Present Context:

• Accountability and Legitimacy: Like the Sengol legitimised ancient rulers, democratic institutions hold elected representatives accountable to the constitution and the people.
• Ethical Leadership: Democratic leaders are expected to uphold justice, integrity, and the rule of law, mirroring the dharmic kings of the past.
• Symbolic Representation: The Sengol’s symbolism of righteous rule parallels the democratic institutions representing the will and welfare of the people.

1947 Sengol Ceremony Involving Nehru:

• Government’s Claim: The government asserts that C Rajagopalachari suggested the ceremony to Nehru.
• Debates on Historical Accuracy: This claim is contested, with little contemporary evidence supporting the Sengol as a key symbol of power transfer in 1947.
• Lack of Comprehensive Records: Limited records exist about the ceremony where Nehru was reportedly handed a Sengol by Hindu leaders from Tamil Nadu.
• Undocumented and Exaggerated Claims: The event is not widely documented, and claims of Lord Mountbatten ceremonially handing it over seem exaggerated.
• Post-Event Placement: Nehru accepted the Sengol as a mark of honour, but it was later placed in a museum, suggesting it was not central to the power transfer.

Source: TH

Why in the news ?

• Recently, the RBI published the 29th issue of the Financial Stability Report (FSR) . 
• This report provides the combined evaluation of the Sub-Committee of the Financial Stability and Development Council (FSDC) regarding the Indian financial system’s resilience and the risks to financial stability.

Key Highlights of the Financial Stability Report (FSR):

[1] Global Economic Context:

• Heightened Global Risks: The global economy is facing significant challenges such as:
• Geopolitical Tensions: Conflicts or political disagreements between countries that can affect global stability.
• Elevated Public Debt: Many countries have high levels of debt, which can be risky if they struggle to repay it.
• Slow Progress in Disinflation: Prices of goods and services are not decreasing quickly, affecting economic stability.
• Resilience: Despite these challenges, the global financial system remains strong and stable.

[2] Indian Economy and Financial System:

• Robust and Resilient: India’s economy and financial system are strong and capable of handling shocks or problems.
• Banking Sector Support: Banks and financial institutions are in good health and are providing the necessary support for economic activities.

[3] Financial Metrics for Scheduled Commercial Banks (SCBs):

• Capital Ratios:
• Capital to Risk-Weighted Assets Ratio (CRAR): Measures a bank’s financial strength. A CRAR of 16.8% indicates that for every 100 units of risk, the bank has 16.8 units of capital to cover potential losses.
• Common Equity Tier 1 (CET1) Ratio: A stricter measure of a bank’s core capital. A CET1 ratio of 13.9% shows a strong base of high-quality capital.
• Asset Quality:
• Gross Non-Performing Assets (GNPA) Ratio: Measures the percentage of a bank’s loans that are not being repaid. A GNPA ratio of 2.8% means that 2.8% of total loans are in trouble.
• Net Non-Performing Assets (NNPA) Ratio: Similar to GNPA but considers provisions already made. An NNPA ratio of 0.6% means that 0.6% of total loans, after accounting for provisions, are in trouble.

[4] Macro Stress Tests for Credit Risk:

• Stress Scenarios and Projections:
• Baseline Scenario: Banks are expected to have a CRAR of 16.1% by March 2025 under normal conditions.
• Medium Stress Scenario: Banks are expected to have a CRAR of 14.4% by March 2025 under moderate stress.
• Severe Stress Scenario: Banks are expected to have a CRAR of 13.0% by March 2025 under severe stress.
• Interpretation: These tests show how banks might perform under different levels of economic stress, ensuring banks are prepared for tough times.

[5] Health of Non-Banking Financial Companies (NBFCs):

• CRAR: NBFCs have a CRAR of 26.6%, indicating strong financial health.
• GNPA Ratio: NBFCs have a GNPA ratio of 4.0%, meaning 4% of their loans are not being repaid.
• Return on Assets (RoA): NBFCs have a RoA of 3.3%, indicating good profitability from their assets

Source: TH

Why in the News?

• Recently, Global drug users reached 292 million in 2022, marking a 20% increase over the past decade. This data was released by the United Nations Office on Drugs and Crime (UNODC).

About UNODC:

• Global Role:
• Leader in the fight against illicit drugs and international crime, responsible for implementing the UN’s lead programme on terrorism.
• Headquarters:
• Vienna, Austria.
• Establishment:
• Formed in 1997 through the merger of the United Nations Drug Control Programme and the Centre for International Crime Prevention.
• Functions:
• Educates people about the dangers of drug abuse. 
• Strengthens international action against illicit drug production and trafficking.
• Improves crime prevention and assists with criminal justice reform.
• Supports States in ratifying and implementing legal instruments against terrorism.
• Funding:
• Relies mainly on voluntary contributions from governments.
• India and UNODC:
• India works closely with UNODC on multiple fronts, including drug control, crime prevention, and anti-terrorism measures.

Cannabis Use: 

• According to the WHO, cannabis is a generic term for the various psychoactive preparations of the plant Cannabis sativa. The derived products of cannabis include:
• THC: The major psychoactive constituent in cannabis is Delta-9 tetrahydrocannabinol (THC).
• Marijuana (Ganja): Frequently used to refer to cannabis leaves or other crude plant material.
• Hashish: Refers to unpollinated female cannabis plants.
• Cannabis Oil (Hashish Oil): A concentrate of cannabinoids obtained by solvent extraction of the crude plant material or resin.

International Laws Regulating Cannabis:

• Commission on Narcotic Drugs (CND): 
• Founded in 1946, the CND is the UN agency mandated to control substances under global drug control conventions.
• 1961 Single Convention on Narcotic Drugs: 
• Cannabis has been on Schedule IV, the most dangerous category, since the convention’s inception. 
• Despite this, many jurisdictions have legalised cannabis for medicinal and recreational use. 
• Over 50 countries now allow medicinal cannabis programs, and recreational use has been legalised in Canada, Uruguay, and 15 US states.

Indian Context: Narcotic Drugs and Psychotropic Substances Act (NDPS), 1985:

• Illegalization: 
• The Act illegalizes any mixture of charas and ganja, or any drink prepared from them.
• Legal Exceptions: 
• The law does not ban the use of seeds and leaves of the cannabis plant if these are not mixed with other parts of the plant. 
• For example, bhang, commonly consumed during the Holi festival, and chutney made from cannabis seeds are not illegal.

Source: UN

Why in the News?

• Recently, a mainland serow, also known as the Himalayan Serow (Capricornis sumatraensis thar), was sighted at an unusually low elevation of 96 metres above mean sea level in Raimona National Park, Assam. 
• This is the lowest recorded elevation for this species outside its natural habitat in Bhutan, indicating a significant range extension.

About Himalayan Serow:

Details:

• Herbivore species.
• Also known as Thar.
• Resembles a cross between a goat, a donkey, a cow, and a pig.

Recognition:

• Official state animal of Mizoram.

Distribution:

• Found at altitudes between 2,000 metres and 4,000 metres (6,500 to 13,000 feet).
• Found across the India-Bhutan border in Phibsoo Wildlife Sanctuary and Royal Manas National Park.
• Present in eastern, central, and western Himalayas, but not in the Trans-Himalayan region.

Conservation Status:

• IUCN Red List: Vulnerable
• CITES: Appendix I
• Wildlife Protection Act, 1972: Schedule I

Raimona National Park:

• Location: Located in the Bodoland Territorial Region (BTR) of Assam.
• Establishment: Declared a national park in June 2021, making it the sixth national park in Assam.
• Geography: Shares its northern boundary with Bhutan, forming part of the transboundary conservation landscape.
• Ecology: Characterised by dense forests, rivers, and grasslands, part of the greater Manas Biosphere Reserve and an extension of the Manas National Park.
• Flora: Diverse vegetation including semi-evergreen forests, mixed deciduous forests, and grasslands.
• Fauna: Rich wildlife habitat hosting species like Asian elephants, tigers, clouded leopards, golden langurs, Indian gaur, various deer species, hornbills, great pied hornbills, migratory birds, reptiles, and amphibians.

Source: TH

Q1. Consider following statements about agriculture export in India: 

1. Agricultural exports in FY24 declined from that in FY23.
2. Since 1991 economic reforms, every year India has witnessed surplus in external trade of agricultural products.

Which of the statements given above is/are correct? 

(a) 1 only  

(b) 2 only  

(c) Both 1 and 2  

(d) Neither 1 nor 2 

Q2. Consider the following statements about the importance of agricultural exports for a country:

1. Increased agricultural exports always lead to a decrease in domestic food prices. 
2. Agricultural exports can enhance a country's foreign exchange reserves. 
3. A focus solely on agricultural exports can lead to neglect of food security needs in the exporting country. 

Which of the options given below is/are correct? 

(a) 1 and 2 only  

(b) 2 and 3 only  

(c) 1 only  

(d) 1, 2 and 3 

Q3. Consider the following statements about factors affecting agricultural exports in a country: 

1. A rise in global agricultural prices can influence a country's agricultural exports. 
2. A well-designed export policy that simplifies procedures and reduces trade barriers can significantly boost agricultural exports. 

Which of the options given below is/are correct? 

(a) 1 only  

(b) 2 only  

(c) Both 1 and 2  

(d) Neither 1 nor 2 

Q4. Consider the following statements about the impact of an export ban on farmers and consumers in a country: 

1. It will increase food inflation for consumers in the short term. 
2. It can lead to loss of opportunity for farmers to earn extra income. 

Which of the options given below is/are correct? 

(a) 1 only  

(b) 2 only  

(c) Both 1 and 2  

(d) Neither 1 nor 2 

Q5. Consider the following statements about India's agricultural trade: 

1. Rice is the largest agricultural product exported from India. 
2. Pulses are the largest imported agricultural product in India.. 

Which of the options given below is/are correct? 

(a) 1 only  

(b) 2 only  

(c) Both 1 and 2  

(d) Neither 1 nor 2 

Q6. The target of India's Agriculture Export Policy 2018 was to: 

(a) To prioritise the interest of farmers over the interest of consumers. 

(b) To reduce diversification of our export basket and focus on few products only in which India has potential to be a global leader. 

(c) To double agricultural exports to US$ 30+ Billion by 2025. 

(d) To double agricultural exports to US$ 60+ Billion by 2022. 

Q7. In the context of international trade, dumping refers to a situation where a country exports a good at a price that is: 

(a) Company exporting goods at a price that is much higher than the price it charges in its domestic market. 

(b) Higher than the cost of production in the exporting country.  

(c) Lower than the price at which the goods are sold in any other third country.  

(d) Company exporting a good at a price that is artificially lower than the price it charges in its domestic market. 

Q8. Which ministry is responsible for recommending anti-dumping duty in India? 

(a) Ministry of Finance  

(b) Ministry of Agriculture  

(c) Ministry of Commerce and Industry  

(d) Ministry of External Affairs 

Q9. Consider the following statements about anti-dumping duty: 

1. An anti-dumping duty is a direct tax. 
2. The World Trade Organization (WTO) permits member countries to impose anti-dumping duties under certain conditions. 

Which of the options given below is/are correct? 

(a) 1 only  

(b) 2 only  

(c) Both 1 and  2  

(d) Neither 1 nor 2 

Q10. Who of the following appoints the President of GST Appellate Tribunal? 

(a) Central Government on recommendation of the GST Council. 

(b) Central Government in consultation with the Chief Justice of the Supreme Court. 

(c) Collegium of the Supreme Court. 

(d) Ministry of Finance in consultation with GST Council 

Q11. Who of the following is qualified to be appointed as President of the GST Appellate Tribunal?

1. Retired judge of Supreme Court of India
2. Retired judge of high court of a state with at least 5 years of service
3. A person with distinguished career in field related to taxation

Select the correct answer using the code given below: 

(a) 1 and 2 only 

(b) 2 and 3 only 

(c) 1 and 3 only 

(d) 1, 2 and 3  

Q12. GST Appellate Tribunal is a: 

(a) Constitutional Body 

(b) Statutory Body 

(c) Executive body 

(d) Ad hoc body established by the Supreme Court 

Q13. Provision for Tribunals has been introduced in Indian Constitution via: 

(a) 35th Amendment Act, 1974 

(b) 42nd Amendment Act of 1976 

(c) 73rd Amendment Act, 1992 

(d) 61st Amendment Act, 1988 

Q14 Which of the following statements best describe “Front Running”? 

(a) Front running is the practice of purchasing a security based on advance non-public information regarding an expected large transaction. 

(b) Front-running is a common strategy employed by day traders to capitalize on short-term market fluctuations. 

(c) Front-running is a legitimate investment tactic where brokers prioritize their clients' orders by charging a premium fee for faster execution. 

(d) Front-running is simply the act of a broker recommending a stock to a client. 

Q15. Which of the following statements best explain the difference between Front Running and Insider Trading? 

(a) Front runner uses publicly available information while insider trading involves use of non-public information. 

(b) While front running is legal in India, insider trading is illegal. 

(c) Front runner uses non-public information about upcoming trades while “Insider Trading” involves trading a security based on material, non-public information about the company itself. 

(d) None of the above 

Q16. Cost Inflation Index (CII) in India is released by: 

(a) Central Board of Direct Taxes (CBDT)  

(b) Securities and Exchange Board of India (SEBI)  

(c) Reserve Bank of India (RBI)  

(d) National Stock Exchange of India (NSE) 

Q17. Consider the following statements with reference to Cost Inflation Index (CII) in India: 

1. It is used to track the price of consumer goods.
2. CII in India has a base year of 2001.

Which of the statements given above is/are correct? 

(a) 1 only 

(b) 2 only 

(c) Both 1 and 2 

(d) Neither 1 nor 2 

Q18. Periodic Labour Force Survey (PLFS) is published by: 

(a) Ministry of labour & employment 

(b) Ministry of commerce and industry 

(c) Ministry of social justice and empowerment 

(d) Ministry of Statistics and Programme Implementation 

Q19. If employment grows at growth rate of GDP:

(a) Employment elasticity of growth is positive 

(b) Employment elasticity of growth is negative 

(c) Employment elasticity of growth is undefined 

(d) None of the above 

Q20. Lorenz curve is related to which of the following parameters? 

(a) Employment 

(b) GDP growth rate 

(c) Inequality 

(d) Exchange rate fluctuation