CAA-15-august-iastoppers
Current Affair Analysis

15th August 2019 Current Affairs Analysis -IASToppers

Why India celebrates Independence Day on 15 August? Bone substitutes from eggshells; Operation Number Plate; One-time partial credit guarantee schemes to PSBs; What is Asset–liability mismatch? ‘Promotion of Agricultural Mechanization for In-Situ Management of Crop Residue in the State of Punjab, Haryana, Uttar Pradesh & NCT of Delhi’ scheme; Sub-Mission On Agricultural Mechanization; What is a ‘negative’ interest? How does negative rate policy work? What happened during Gulf War? How was India involved? Haryana Administrative Tribunal; RBI’s framework for regulatory sandbox; What is regulatory sandbox (RS)? FinTech (Financial technology) Services in India; Boko Haram; Location of Nigeria; Palani panchamirtham; ‘Geographical Indication’ (GI)
By IT's Current Affairs Analysis Team
August 15, 2019

Contents

Polity & Governance

  • Why lawyers have objected to setting up of Haryana Administrative Tribunal

Government Schemes & Policies

  • Government issues one-time partial credit guarantee schemes to PSBs

Economy

  • RBI issues final norms for regulatory sandbox
  • How does negative rate policy work?

Environment, Ecology & Disaster Management

  • Crop residue burning declines 41 pc in Punjab, Haryana, UP, Delhi

Bilateral & International Relations

  • History of Nigerian terror group Boko Haram
  • What happened during Gulf War? How was India involved?

Indian History

  • Why India celebrates Independence Day on 15 August

Art & Culture

  • ‘Panchamirtham’ of Palani temple gets GI tag

Science & Technology

  • Indian researchers develop bone substitutes from eggshells

Key Facts for Prelims

  • RPF Launches “Operation Number Plate” across Indian Railways

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Polity & Governance

Why lawyers have objected to setting up of Haryana Administrative Tribunal

The Punjab and Haryana High Court Bar Association has suspended work indefinitely since a notification came out on July 24 for setting-up the Haryana Administrative Tribunal.

Haryana-Administrative-Tribunal-2-IASToppers Current Affairs Analysis

  • The Tribunal is meant to adjudicate over the service matters of the state employees that earlier would be directly heard by the High Court.

What is the issue?

  • Following a recommendation from the Haryana government, the Ministry of Personnel, Public Grievances and Pensions issued a notification for establishing the Haryana Administrative Tribunal.
  • The next day, judges at the High Court stopped hearing the service matters from Haryana with the reasoning that the court no more had the power in view of the notification.

What is Haryana Administrative Tribunal?

Haryana-Administrative-Tribunal-IASToppers

  • It is a quasi-judicial body on the lines of Central Administrative Tribunal for redressal of the grievance of state employees concerning their employment.
  • In the absence of the Tribunal, the employees directly approach the High Court.
  • It is aimed at reducing a large number of pending cases before the High Court and quick disposal of the grievances of employees.

Protests

  • Bar Association of India argue that Tribunal members do not enjoy powers like judges who hold constitutional posts.
  • Stakeholders were not consulted by the Haryana government before issuance of the notification.
  • The tribunal has only one member which can neither decide the matter finally nor take up such cases where the cases of Service Rules are challenged.

Under which law are the Tribunals setup?

  • Article 323-A, which came by way of 42nd constitutional amendment in 1976, enabled the Centre to enact The Administrative Tribunals Act, 1985 for setting-up the Tribunals for adjudication over “disputes and complaints with respect to recruitment and conditions of service of persons”.
  • The Centre under the Act can establish the Tribunal for its own employees and also has the power to establish one for a state after receiving a request from the state government.
  • Two or more states can also agree for a single tribunal.
  • The Tribunal is to be headed by a Chairman which is a retired High Court Judge, and a number of Judicial and Administrative Members.
  • The Chairperson can be removed only by the President of India. The Tribunal can also have benches at different locations.

Do any other states have the Tribunal?

  • Recently, the Union Government issued notification for abolishing the Himachal Pradesh Administrative Tribunal which had been in existence since 2015. It was established first in 1986 and abolished in 2008, but re-established in 2015.
  • Kerala, Karnataka, West Bengal and Maharashtra have also their own tribunals.
  • In August 2019, Odisha Administrative Tribunal was abolished.
[Ref: Indian Express]

 

Government Schemes & Policies

Government issues one-time partial credit guarantee schemes to PSBs

India has operationalised a partial guarantee scheme announced in the budget for non-banking and housing finance companies (NBFCs and HFCs), which will allow state-run banks (PSBs) to purchase their assets.

Partial-credit-guarantee-scheme-to-PSBs-3IASToppers

About the Scheme:

Partial-credit-guarantee-scheme-to-PSBs-IASToppers

  • The name of the scheme is ‘Partial Credit Guarantee offered by Government of India to Public Sector Banks (PSBs) for purchasing high-rated pooled assets from financially sound Non-Banking Financial Companies (NBFCs)/Housing Finance Companies (HFCs)’.
  • The Scheme would enable the public sector banks (PSBs) to purchase pooled assets of financially sound Non-bank financial institution (NBFCs) amounting to Rs. one lakh crore.
  • The Department of Economic Affairs will provide government guarantee of up to 10% of the fair value of assets purchased by a bank from a stressed NBFC or HFC.
  • The scheme is capped at Rs 1 lakh crore and will be open for up to six months.

Objective

  • To address temporary asset liability mismatches of otherwise solvent NBFCs/HFCs without having to resort to distress sale of their assets for meeting their commitments.
  • The stress on NBFCs and HFCs is seen as a key reason for a slowdown in the economy, as it has caused reduced credit flow to small businesses and consumers.

Significance:

  • It would provide liquidity to the NBFC Sector and enable them to continue to play their role in meeting the financing requirements of economy including MSME, retail and housing.

What is Asset–liability mismatch?

  • In finance, an asset–liability mismatch occurs when the financial terms of an institution’s assets and liabilities do not correspond.
  • Banks’ primary source of funds is deposits, which typically have short- to medium-term maturities. They need to be paid back to the investor in 3-5 years. In contrast banks usually provide loans for a longer period to borrowers.
  • Home loans, for instance, can have a tenure of up to 20 years. Providing such loans from much shorter maturity funds is called asset-liability mismatch. It creates risks for banks that need to be managed.

What are the consequences of asset-liability mismatch?

asset-liability-management-in-commercial-banks-

  • The most serious consequences of asset-liability mismatch are interest rate risk and liquidity risk.
  • Because deposits are of shorter maturity they are repriced faster than loans. Every time a deposit matures and is rebooked, if the interest rates have moved up bank will have to pay a higher rate on them.
  • Because of this faster adjusting of deposits to interest rates, asset-liability mismatch affects net interest margin or the spread banks earn.
  • Liquidity issues also arise when loans and deposits have different maturities. Depositors have to be repaid when their funds mature, but banks cannot recall their loans.
  • They will have to find new deposits or else they will not be able to service their depositors. In an acute situation they may have to pay really high interests to raise funds.

How do banks manage asset-liability mismatches?

  • Most banks have elaborate institutional arrangement to manage asset-liability mismatches. The interest rate risk is usually managed by pricing a large percentage of loans at variable interest rates that move in harmony with market rates.
  • Fixed rate loans are, therefore, usually priced at a huge mark up to variable rate loans to entice borrowers to opt for the latter.
  • This takes care of interest rate risks as loans are linked to a benchmark and repriced when the benchmark rate moves up.
  • Sophisticated derivatives are also used to manage interest rate risk. Liquidity risk involves a more hands on management.
  • RBI requires banks to have dedicated asset-liability management committees to manage liquidity risks.
[Ref: PIB, Economic Times]

 

Economy

RBI issues final norms for regulatory sandbox

The Reserve Bank of India (RBI) issued the final framework for regulatory sandbox in order to enable innovations in the financial technology space.

RBI-regulatory-sandbox-3-IASToppers

About RBI’s framework for regulatory sandbox

  • The RBI permitted startups, banks and financial institutions to set up regulatory sandbox (RS) for live testing of innovative products in areas like retail payments, digital KYC and wealth management.

Significance

  • It will highlight an existing gap in the financial ecosystem.
  • It will bring benefits to consumers or the industry and/or perform the same work more efficiently.

Criteria

  • RBI will launch the sandbox for entities that meet the criteria of minimum net worth of ₹25 lakh as per their latest audited balance sheet.
  • The entity should either be a company incorporated and registered in the country or banks licensed to operate in India.

What is regulatory sandbox (RS)?

  • A regulatory sandbox (RS) refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may (or may not) permit certain regulatory relaxations for the limited purpose of the testing.

Benefits of RS:

  • Regulators obtain the benefits and risks of emerging technologies and their implications, enabling them to take a considered view on the new regulations that may be needed to support useful innovation.
  • Incumbent financial service providers improve their understanding of how new financial technologies might work, which helps them to appropriately integrate such new technologies with their business plans.
  • Users of an RS can test the product’s viability without the need for a larger and more expensive roll-out saving money.
  • By providing a structured and institutionalized environment for evidence-based regulatory decision-making, the dependence of the regulator on industry/stakeholder consultations only is correspondingly

Limitation of RS:

  • Innovators may lose some flexibility and time in going through the RS process.
  • Case-by-case bespoke authorizations and regulatory relaxations can involve time and discretional judgements (this risk may be addressed by handling applications in a transparent manner and following well-defined principles in decision-making).
  • The RBI or its RS cannot provide any legal waivers.
  • Post-sandbox testing, a successful experimenter may still require regulatory approvals before the product/services/technology can be permitted for wider application.
  • Regulators can potentially face some legal issues, such as those relating to consumer losses in case of failed experimentation or from competitors who are outside the RS, especially those whose applications have been/may be rejected.

Eligibility Criteria for Participating in the Sandbox

The target applicants for entry to the RS are FinTech firms which meet the eligibility conditions prescribed for start-ups by the government.

RBI-regulatory-sandbox-6-IASToppers

The focus of the RS will be to encourage innovations where

  • there is absence of governing regulations;
  • there is a need to temporarily ease regulations for enabling the proposed innovation;
  • the proposed innovation shows promise of easing/effecting delivery of financial services in a significant way.

Which services are covered under Sandbox?

An indicative list of innovative products/services/technology which could be considered for testing under RS are as follows.

Innovative Products/Services

  • Retail payments
  • Money transfer services
  • Marketplace lending
  • Digital KYC
  • Financial advisory services
  • Wealth management services
  • Digital identification services
  • Smart contracts
  • Financial inclusion products
  • Cyber security products

Innovative Technology

  • Mobile technology applications (payments, digital identity, etc.)
  • Data Analytics
  • Application Program Interface (APIs) services
  • Applications under block chain technologies
  • Artificial Intelligence and Machine Learning applications

Exclusion from Sandbox Testing

  • The entities may not be suitable for RS if the proposed financial service is similar to those that are already being offered in India unless the applicants can show that either a different technology is being gainfully applied.

An indicative negative list of products/services/technology which may not be accepted for testing is as follows:

  • Credit registry
  • Credit information
  • Crypto currency/Crypto assets services
  • Trading/investing/settling in crypto asset
  • Initial Coin Offerings, etc.
  • Chain marketing services
  • Any product/services which have been banned by the regulators/Government of India.

Suggestion for RBI’s Regulatory Sandbox Model

RBI-regulatory-sandbox-5-IASToppers

  • The RBI could consider a hybrid model for India, combining features of the various structures of Sandbox existing around the world.
  • For example, In Hong Kong, entry to the Fintech Supervisory Sandbox (FSS) is only permitted to licensed banks and their partnering technology firms. In contrast, the Australian Securities and Investment Commission (ASIC) provides a ‘fintech licensing exemption’ and allows eligible fintech businesses to test services for up to 12 months without a financial services or credit license.
  • The sandbox should be made available to both licensed banks and payment system providers as well as unlicensed fintech companies. This would allow complete collaboration between stakeholders and help achieve inter-operability in new products from the get go.
  • Once appropriate conditions are framed, such a sandbox could also exempt participants from registration and reporting obligations under the Payment and Settlement Systems Act, 2007 (“PSSA”).
  • Alternatively, the RBI may grant individual participants specific waivers to particular rules or requirements. For instance, the regulator may exempt start-up participants from the liquidity and net-worth requirements prescribed under the PSSA.
  • Where a specific waiver is not practical, it may issue ‘no enforcement action’ letters. In the UK, the financial regulator issues such letters and agrees not to take disciplinary action against a participant for any unexpected issues that may arise during the testing period. Such letters protect participants from regulatory fines or penalties as long as they adhere to prescribed parameters and treat customers fairly.
  • In addition, India’s payment sandbox should provide each participant a single point of contact within the RBI. This would allow companies to have proactive discussions with the regulator on a continuous basis, giving them access to customised regulatory guidance during product development.

FinTech (Financial technology) Services in India

RBI-regulatory-sandbox-2-IASToppers

  • India is one of the fastest growing fintech markets globally.
  • $1 trillion or 60% of retail and SME (small and medium sized enterprises) credit will be digitally disbursed by 2029.
  • The Indian fintech ecosystem is the third largest in the world.
  • India ranked second in terms of fintech adoption with an adoption rate of 52%.
  • Retail electronic payments are up nine-fold in the last five years, owing to an increased effort to develop payments infrastructure and technology platforms such as Immediate Payments Service (IMPS), Unified Payments Interface (UPI) and Bharat Interface for Money (BHIM), among others.
[Ref: The Hindu]

 

How does negative rate policy work?

Negative rate policy, once considered only for economies with low inflation such as Europe and Japan, is becoming a more attractive option for some other central banks to counter rises in their currencies.

Negative-rate-policy-1-IASToppers

What is a ‘negative’ interest?

  • If a central bank keeps interest negative, financial institutions need to pay regularly to keep money with the central bank instead of earning return on deposits.
  • Major European countries such as Switzerland, Denmark, Sweden and Japan have allowed rates to fall slightly below zero.

How Does It Work?

Negative-rate-policy-IASToppers

  • Under a negative rate policy, financial institutions are required to pay interest to central bank for keeping excess reserves with central banks.
  • Keeping interest rate negative is a typical central bank strategy to push banks to buy alternate assets or explore profitable lending opportunities, instead of keeping the money idle with the central bank.

Why have some central banks adopted negative rates?

  • To battle the global financial crisis triggered by the collapse of Lehman Brothers in 2008, many central banks cut interest rates near zero.
  • A decade later, interest rates remain low in most countries due to subdued economic growth.
  • With little room to cut rates further, some major central banks have resorted to unconventional policy measures, including a negative rate policy.

Examples

  • The European Central Bank (ECB) introduced negative rates in June 2014, lowering its deposit rate to -0.1% to stimulate the economy.
  • The Bank of Japan (BOJ) adopted negative rates in January 2016, to decrease sudden currency rise which could affect its economy adversely.
  • It adopted -0.1% interest rate on a portion of excess reserves held by financial institutions with the BOJ.

Impact on Inflation

  • As negative interest rate encourages banks to buy alternate assets or lend more. It creates some pressure on prices lifting inflation from very low levels.

Pros and Cons

  • Aside from lowering borrowing costs, they help weaken a country’s currency rate by making it a less attractive investment than that of other currencies.
  • A weaker currency gives a country’s export a competitive advantage and boosts inflation by pushing up import costs.
  • Negative rates put downward pressure on the entire yield curve.
  • However, negative rates narrowed the margin financial institutions earn from lending.
  • There are also limits to how deep central banks can push rates into negative territory – depositors can avoid being charged negative rates on their bank deposits by choosing to hold physical cash instead.
  • Prolonged negative rates could hold off on lending and damage the economy.
[Ref: Reuters]

 

Environment, Ecology & Disaster Management

Crop residue burning declines 41 pc in Punjab, Haryana, UP, Delhi

Burning of paddy crop residue, one of the major causes of air pollution, declined by 41 per cent last year over 2016-level in Punjab, Haryana, Uttar Pradesh and Delhi-NCR with the help of a Rs 1,151 crore central scheme.

Stubble-burning-1-IASToppers

About the ‘Promotion of Agricultural Mechanization for In-Situ Management of Crop Residue in the State of Punjab, Haryana, Uttar Pradesh & NCT of Delhi’ scheme

Stubble-burning-IASToppers

  • It is a Central Sector Scheme launched to tackle air pollution and to subsidize machinery required for in-situ management of crop residue in the States of Punjab, Haryana, Uttar Pradesh and NCT of Delhi.
  • It was launched with a total outgo of Rs.1151 Crores for the period from 2018-19 to 2019-20.
  • It is implemented by the Indian Council of Agricultural Research (ICAR) through 60 Krishi Vigyan Kendras (KVKs) of Punjab, Haryana, Delhi and UP.
  • Under the scheme, financial assistance at 50% of the cost is provided to the farmers for purchase of in-situ crop residue management machines on individual ownership basis.
  • The financial assistance for establishment of Custom Hiring Centres (CHCs) of in-situ crop residue management machinery is at 80% of the project cost.

Impact of the scheme

Stubble-burning-4-IASToppers

  • Through this scheme, the paddy residue burning events have reduced by 15% and 41% in 2018 as compared to that in 2017 and 2016.
  • More than 4500 villages in Punjab and Haryana was declared as Zero Stubble Burning Villages during 2018 as not a single crop burning incident was reported from these villages during the year.
  • Within one year of its implementation, the happy seeder/zero tillage technology was adopted in 8 lakh hectares of land in the North- Western States of India.

About Sub-Mission On Agricultural Mechanization:

Sub-Mission-On-Agricultural-Mechanization-for-Farmers

  • Introduced in 2014, this scheme is being implemented to promote the usage of farm mechanization and increase the ratio of farm power to cultivable unit area up to 2 kW/ha.
  • The Central Sector schemes of ‘Promotion and Strengthening of Agricultural Mechanization through Training, Testing and Demonstration’ and ‘Post Harvest Technology & Management’ have been merged with this Sub-Mission.

Objectives

  • Increasing the reach of farm mechanization to small and marginal farmers and to the region where availability of farm power is low
  • Promoting ‘Custom Hiring Centres’ to offset the adverse economies of scale arising due to small landholding and high cost of individual ownership
  • Creating hubs for hi-tech & high value farm equipments
  • Ensuring performance testing and certification at designated testing centers.

Mission Components

  • Promotion and strengthening of Agricultural Mechanization via training, testing and demonstration
  • Demonstration, training and distribution of the Post-Harvest Technology and Management (PHTM)
  • Financial assistance to obtain agricultural machinery and equipment
  • Establish farm machinery banks for custom hiring
  • Promote farm machinery and equipment in selected villages and in the North-Eastern Region

Implementation

  • It is being implemented under the National Mission on Agricultural Extension and Technology.
  • Farm Mechanization programmes are implemented through other missions/schemes such as Remunerative Approach for Agriculture and Allied sector Rejuvenation (RKVY), Mission for Integrated Development of Horticulture (MIDH), National Mission on Oilseeds and Oil Palm (NMOOP) and Sub Mission on Agricultural Mechanization (SMAM).

Funding

  • For the Centrally Sponsored Schemes under SMAM, Government of India contributes 60% and while states contribute 40%.
  • Funding pattern for states of Northern-Eastern and Himalayan region, the share of Govt. of India & State Govt. is 90:10.

Key Facts

  • India accounts for 2.4% of the world’s geographical area and 4% of its water resources, and has 17% of the world’s human population and 15% of the livestock.

To know about Stubble Burning, refer IASToppers’ Mains Article.

[Ref: PIB, The Week]

 

Bilateral & International Relations

History of Nigerian terror group Boko Haram

The emergence of Boko Haram as a violent Islamist insurgent group altered the nature of violence that the Nigeria had been witnessing.

Boko-Haram-1-IASToppers

Who is Boko Haram?

  • In the 2000s, Boko Haram was emerged in Nigeria as a small Sunni Islamic sect advocating a strict interpretation and implementation of Islamic law.
  • It is officially called Jama’a Ahl as-Sunna Li-da’wa wa-al Jihad. It is more commonly known as Boko Haram because of its rejection of Western education and culture.
  • In 2002, a Nigerian Muslim sect leader set up an Islamic school and a mosque in the capital of Borno state in Nigeria in which he spoke openly against corruption and police violence in Nigeria.
  • In 2009, After Boko Haram launched a rebellion against the Nigerian government, the founder of Boko Haram was killed while he was in Police custody. This resulted in war on Nigerian authorities.
  • Over the decade, the violence continued due to the failure of the Nigerian government in controlling Boko Haram, until the group gained international attention by kidnapping 300 school girls in Chibok city. However, after the abduction, the government failed to seriously try to rescue the girls,
  • By 2015, Boko Haram’s attacks began spreading beyond Nigeria’s borders to neighboring nations of Niger, Chad and Cameroon.

Location of Nigeria:

nilgeria

 

  • It is located at the extreme inner corner of the Gulf of Guinea on the west coast of Africa.
  • Nigeria shares land borders with 4 countries: Chad, Niger, Benin, Cameroon.
  • Nigeria’s capital city is Abuja.
[Ref: Indian Express]

 

What happened during Gulf War? How was India involved?  

In an emotive gesture, Iraq recently handed over the remains of 48 Kuwaiti nationals, more than 28 years after the Gulf War ended.

gulf-war-IASToppers

What is Gulf war?

  • The Gulf War was an international conflict that erupted after Iraq, under dictator Saddam Hussain, invaded neighbouring Kuwait, claiming it as its 19th province.
  • It was lasted between August 1990 and February 1991.

What happened during the Gulf War?

In August, 1990, Iraq annexed Kuwait. It annexed for three reasons.

gulf-war-2-IASToppers

  • Iraq could cancel a massive debt that it owed Kuwait
  • Acquire Kuwait’s large oil reserves
  • Iraq claimed Kuwait to be a part of Iraq
  • Immediately after, the United Nations Security Council warned of military action if Iraq’s forces did not retreat by January 15, 1991.
  • After refusing UN’s warnings, a US-led coalition launched Operation Desert Storm, which destroyed Iraq’s air defences, oil refineries, and key infrastructure.
  • This was followed by Operation Desert Sabre, a ground offensive that went on to free Kuwait.
  • The war finally ended on February 28, 1991 when the US declared a ceasefire.

India during the Gulf War

  • When the Gulf War started, India maintained its neutrality.
  • However, it rejected Iraq’s demand for linking the hostilities that were unfolding then with the Palestinian conflict.
  • Between August 13 and October 20 of 1990, India evacuated over 1,75,000 of its nationals from war-torn Kuwait, the biggest such operation by the Indian government.
  • The operation was mentioned in the Guinness Book of World Records as the largest number of people being evacuated by a civilian airliner.
[Ref: Indian Express]

 

Indian History

Why India celebrates Independence Day on 15 August

Lord Mountbatten chose the 15th August on the basis of the second anniversary of Japan’s surrender during world war II.

Independence-Day

  • In 1929, when Jawaharlal Nehru as Congress President gave the call for ‘Poorna Swaraj’, January 26 was chosen as the Independence Day.
  • In fact, Congress party continued to celebrate it 1930 onwards, till India attained independence and January 26, 1950, was chosen as the Republic Day.
  • Lord Mountbatten had been given a mandate by the British parliament to transfer the power to India by June 30, 1948. However, Mountbatten advanced the date to August 1947 to abstain any riot.
  • The Mountbatten determined 15 August because it was the second anniversary of Japan’s surrender during World war II. On August 15, 1945, Japanese Emperor gave a speech, known as the Jewel Voice Broadcast, announcing the surrender of Japan to the Allies.

How did Pakistan get independence on August 14?

  • Actually, it didn’t. The Indian Independence Bill gave August 15 as the date of independence for both the countries.
  • In 1948, Pakistan started marking August 14 as its independence day, either because the ceremony for the transfer of power in Karachi was held on August 14, 1947, or because August 14, 1947, was the 27th of Ramadan, a very sacred date to the Muslims.
[Ref: Indian Express]

 

Art & Culture

‘Panchamirtham’ of Palani temple gets GI tag

The famous Palani panchamirtham, given as ‘prasadam’ at the Murugan temple there, has been granted the Geographical Indication (GI) tag.

Palani-panchamirtham-IASToppers

  • It is the first time a temple ‘prasadam’ from Tamil Nadu has been bestowed with the GI tag.

About Palani panchamirtham

Palani-panchamirtham-1-IASToppers

  • It is an ‘abhishega prasadam’ (food that is a religious offering), which is served in a semi-solid state having banana, jaggery, cow ghee, honey and cardamom.
  • It is one of the main offerings for Lord Dhandayuthapani Swamy, the presiding deity of Arulmigu Dhandayuthapani Swamy Temple, situated on Palani Hills.
  • Not a single drop of water is added during the preparation of the panchamirtham, which gives it its classic semi-solid consistency.
  • It is prepared under the guidance given by the CFTRI (Central Food Technological Research Institute) Mysore, a government of India undertaking.
  • The geographical area for production of panchamirtham is Palani town in Dindigul district, Tamil Nadu.

What is a Geographical Indication?

A ‘geographical indication’ (GI) is a place name used to identify the origin and quality, reputation or other characteristics of products.

About GI tag IASToppers

  • There are currently more than 340 GI in India.
  • The registration of a geographical indication is valid for a period of 10 years which can be renewed from time to time.
  • The Appellate Board or the Registrar of Geographical Indications has the power to remove the geographical indication or an authorised user from the register.

GI registration confers

  • Legal protection to the products.
  • Prevents unauthorised use of a GI by others.
  • Helps consumers get quality products of desired traits.
  • Promotes economic prosperity of producers of goods by enhancing demand in national and international markets.

What Indications cannot be given the status of GI tag?

  • The use of which would be likely to deceive or cause confusion; or
  • The use of which would be contrary to any law for the time being in force; or
  • Which comprises or contains scandalous or obscene matter; or
  • Which comprises or contains any matter likely to hurt the time being in force; religious susceptibilities of any class or section of the citizens of India; or
  • Which would otherwise be dismantled to protection in a court; or
  • Which are determined to be generic names or indications of goods and are, therefore, not or ceased to be protected in their country of origin or which have fallen into disuse in that country; or
  • Which although literally true as to the territory region or locality in which the goods originate, but falsely represent to the persons that the goods originate in another territory, region or locality.

Why is it important?

  • Article 22 of the Trade-Related Aspects of Intellectual Property Rights agreement says unless a geographical indication is protected in the country of its origin, there is no obligation under the agreement for other countries to extend reciprocal protection.
  • Typically, such a name conveys an assurance of quality and distinctiveness, which is essentially attributable to the place of its origin.
  • Products sold with the GI tag get premium pricing also.

How a geographical indication is different from a trade mark?

  • A trade mark is a sign which is used in the course of trade and it distinguishes goods or services of one enterprise from those of other enterprises.
  • Whereas a geographical indication is an indication used to identify goods having special characteristics originating from a definite geographical territory.

GIs and international conventions

GI registration is essential to get protection in other countries.

  • Under Paris Convention for the Protection of Industrial Property, geographical indications are covered as an element of Intellectual property rights (IPR).
  • They are also covered under Articles 22 to 24 of the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement, which was part of the agreements concluded at the Uruguay Round of GATT negotiations.
  • India, as member of the World Trade Organization (WTO), enacted the Geographical Indications of Goods (Registration & Protection) Act, 1999 that came into force from September 15, 2003.

Who can apply for the registration of a geographical indication?

  • Any association of persons, producers, organisation or authority established by or under the law can apply.
  • The applicant must represent the interest of the producers.

Registrar of Geographical Indications:

  • The Controller-General of Patents, Designs and Trade Marks appointed under sub-section (1) of section 3 of the Trade Marks Act, 1999, shall be the Registrar of Geographical Indications.
  • The Central Government may appoint such officers with such designations as it thinks fit for the purpose of discharging, under the superintendence and direction of the Registrar, such functions of the Registrar under this Act, as he may from time to time authorise them to discharge.

Background

  • In 1999, the Parliament had passed the Geographical Indications of Goods (Registration and Protection) Act,1999.
  • This Act seeks to provide for the registration and better protection of geographical indications relating to goods in India.

Key Facts

Geographical-Indication-Tags-India-IASToppers

  • Tamil Nadu so far has 30 GI tags for various products including handicrafts such as Salem fabric and Kancheepuram silk, aricultural items like Virupakshi Hill banana, Erode turmeric and Madurai Malli.
  • The Tirupati Laddu is another temple prasadam which has a GI tag.
[Ref: The Hindu]

 

Science & Technology

Indian researchers develop bone substitutes from eggshells

Indian researchers have developed a process by which bone implant materials can be synthesized from waste eggshells.

eggshells

  • This research will produce bone substitute materials such as ß-tricalcium phosphate (ß-TCP), a commonly used bone substitute material from natural sources, without the use of toxic chemicals, shared the institute in a release.

Key facts:

  • Eggshells are made of largely calcium containing minerals (95.1%) along with small amounts of proteins and water. 
  • Sushruta Samhita, an ancient Sanskrit text on medicine and surgery, describes ‘Asthipoorana’ or bone grafting in which materials having calcium were combined with the latex of the banyan tree to form bone substitutes.
[Ref: The Hindu, Economic Times]

 

Key Facts for Prelims

RPF Launches “Operation Number Plate” across Indian Railways

Railway Protection Force (RPF) of Indian Railways launched a Special Drive with a Code Name – Operation ‘Number Plate’.

Operation-Number-Plate-IASToppers

Objective of Operation Number Plate

  • It was launched to identify and verify all vehicles parked in Railway premises, circulating area, parkings and even in the ‘No Parking’ areas for longer duration.

Need

  • The unidentified vehicles are considered as a serious threat to security and safety of passengers and other stake holders of railways.

About Railway Protection Force

Railway_Protection_Force_Logo

  • The Railway Protection Force is a security force, established by the Railway Protection Force Act, 1957.
  • It is the only central armed police force (CAPF) which has the power to arrest, investigate and prosecute criminals.

Role of RPF

  • To protect and safeguard railway property, passenger area and passenger
  • To remove any obstruction in the movement of railway property or passenger area
  • To Remain vigilant to prevent trafficking in women and children and take appropriate action to rehabilitate destitute children found in Railway areas
  • To do any other act conducive to the better protection and security of railway property, passenger area and passenger
  • To investigate in Railways Act cases
[Ref: PIB]

 

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