50 important concepts for prelims 2017 40 per cent of the country’s large dams, “but 82 per cent area of the state is rainfed. We also highlight the fact that groundwater is the

Shubham’s IAS, SCO-181, Sector 38-C, Chandigarh. Contact:75979-00000, 75972-40000. www.shubhamsias.com Page 1

50 important concepts for prelims 2017

Concept No. 1 Proposed National Water Commission and Mihir Shah Panel report

National Water Commission Proposed

The Prime Minister’s Office (PMO) is receptive to the idea of forming the proposed National

Water Commission (NWC) by merging the Central Water Commission (CWC) and the

Central Ground Water Board (CGWB).

The NWC was the key recommendation of a report by Mihir Shah committee that was

tasked with reorganising river water management in the country.

Background

Since 1945 the CWC has been tasked with managing surface water and its associated

structures such as dams and barrages. The CGWB, on the other hand, is largely concerned

with the quality of groundwater.

Utility of Integration

1. The proposed NWC pushes for an integrated policy, greater cognisance of over-

extraction of groundwater.

2. It will also maintain environmental stability by ensuring States that share water do not

draw from river basins more than what is ecologically tenable.

Who is Mihir Shah?

Mihir Shah , water policy expert, member of the erstwhile Planning Commission and in

recent months head of several committees tasked with reforming India’s water laws, says

existing institutions are inadequate to address our water needs.

Views from interview of Mihir Shah

The proposed National Water Commission (NWC) subsumes the Central Water

Commission (CWC) and Central Ground Water Board (CGWB). How specifically does it

improve national water management?

The CWC (set up in 1945) and CGWB (set up in 1971) were created in an era when India

faced a very different set of challenges. Then it was crucial to create irrigation capacity to

ensure food self-sufficiency. But today the challenge is different. At huge cost (around

Rs.400,000 crore) we have created 113 million hectares of irrigation potential. But is this


water reaching the farmers? No. As the Chief Minister of Maharashtra has said, the State

has 40 per cent of the country’s large dams, “but 82 per cent area of the state is rainfed.

We also highlight the fact that groundwater is the main source of water in India. This

means we cannot go on endlessly drilling for groundwater through tubewells, which is

what CGWB has promoted thus far. This has actually aggravated India’s groundwater crisis,

as water tables fall and water quality declines, with arsenic, fluoride and even uranium

entering our drinking water.


Concept No. 2 L-G is administrative head of Delhi

Decision of Delhi HC

The Delhi High Court held that the Lieutenant Governor was its “administrative head” and

that it “continues to be a Union Territory.”

The High Court also set aside the AAP government’s contention that the L-G was supposed

to act “only on the aid and advice of the Ministers”.

Implications of Judgement

1. Delhi continues to be a Union Territory even after the Constitution (69th Amendment)

Act, 1991 inserting Article 239AA making special provisions with respect to Delhi.

2. The court also quashed several notifications issued by Chief Minister Arvind Kejriwal

after returning to power in February 2015, terming them “illegal” as they were issued

“without concurrence of the L-G.”

Unless the Supreme Court adopts a diametrically opposite view, the Aam Aadmi Party,

which has engaged in a turf war with the Centre over who rules Delhi, will have to abide by

the categorical ruling that the Lt Governor is not bound to act on the aid and advice of the

Council of Ministers.

Debate that has arisen

The popular debate will continue about whether the right balance has been struck between

the Union government’s responsibility in exercising control over an area in which

Parliament, other key central institutions, and foreign missions are located and the

democratic principle that people are ruled by a representative government.

Relevant Constitutional Provisions under Article 239 and 239AA

Article 239 Administration of Union territories

(1) Save as otherwise provided by Parliament by law, every Union territory shall be

administered by the President acting, to such extent as he thinks fit, through an

administrator to be appointed by him with such designation as he may specify.

(2) Notwithstanding anything contained in Part VI, the President may appoint the Governor

of a State as the administrator of an adjoining Union territory, and where a Governor is so

appointed, he shall exercise his functions as such administrator independently of his

Council of Ministers.

Article 239AA Special provisions in respect of Delhi


1. UT of Delhi shall be called National capital territory of Delhi and administrator of Delhi

shall be called Lieutenant Governor.

2. There shall be a separate Legislative assembly and Council of Ministers for Delhi.

3. Legislative assembly shall have the power to make laws on all matters of State and

Concurrent list with the exception of public order, police and land.

However, Parliament also has the power to make laws with respect to any matter

(mentioned in all the three lists) relating to Delhi.

In case of conflict between law made by legislative assembly and law made by Parliament

with respect to a particular matter, law made by Parliament shall prevail. However, law

made by legislative assembly can prevail if the law has been reserved for the consideration

of the President and has received assent of the President.

4. The strength of Council of Ministers shall not exceed 10% of total strength of the

legislative assembly (The strength of Legislative assembly of Delhi is 70 members).

5. Lieutenant Governor is required to act in by accordance with the aid and advice of

Council of Ministers except in those matters where he is required to act in his own

discretion.


Concept No. 3. Benami Transactions (Prohibition) Amendment Act, 2016 comes into

force

The Benami Transactions (Prohibition) Amendment Act, 2016, designed to curb black

money and passed by parliament in August 2016, came into effect.

The new law amended the Benami Transactions Act, 1988 and renamed as the Prohibition

of Benami Property Transactions (PBPT) Act, 1988. The amendment act also to strengthen

the parent Act in terms of legal and administrative procedure.

What is benami transaction?

The benami (without a name) transaction refers to property purchased by a person in the

name of some other person. The person on whose name the property has been purchased

is called the benamdar and the property so purchased is called the benami property. The

person who finances the deal is the real owner.

Key Highlights Benami Transactions (Prohibition) Amendment Act, 2016

1. Persons indulging in benami transactions may face up to 7 years’ imprisonment and fine.

2. Furnishing false information is punishable by imprisonment up to 5 years and fine

3. Properties held benami are liable for confiscation by government without compensation

4. Initiating Officer may pass an order to continue holding property and may then refer

case to Adjudicating Authority which will then examine evidence and pass an order.

5. Appellate Tribunal will hear appeals against orders of Adjudicating Authority. High Court

can hear appeals against orders of Appellate Tribunal.


Concept No. 4. PM Narendra Modi launches Pradhan Mantri Gramin Awas Yojana

Prime Minister Narendra Modi has launched the Pradhan Mantri Gramin Awas Yojana

(PMAY-G), flagship housing for all scheme.

Features

1. Under PMAY-G Government aims to provide affordable, environmentally safe and secure

pucca house to every rural household living below the poverty line by 2022.

2. PMAY-G has replaced previous rural housing scheme Indira Awas Yojana. The

beneficiaries for this scheme will be selected using the Socio Economic Census 2011 data

and validating it through the Gram Sabha.

3. Under it, financial assistance will be provided for construction of dwelling units and

upgradations of existing unserviceable kutcha houses. The unit cost for houses has been

increased with convergence of a minimum support of nearly Rs. 1.5 lakh to Rs. 1.6 lakh to a

household is available. If the beneficiary desires, then there is also a provision of Bank loan

upto Rs. 70,000.

4. The entire payments will be done through transparent IT/DBT mode with Aadhaar

linked Bank accounts with consent, to ensure complete transparency and accountability.

5. Houses built under the scheme will have cooking space, electricity provision, LPG, toilet

and bathing area, drinking water etc through convergence.


Concept No. 5. India signs landmark civil nuclear deal with Japan

India signed Nuclear Deal with Japan

India signed a historic civilian nuclear deal with Japan during the annual bilateral summit

held in Tokyo. However, the final seal on the text had to wait legislative clearance from

Japan, which has 13 civil nuclear agreements with countries including France and the U.S.

India is the first non-member of the non-proliferation treaty (NPT) to have signed such a

deal with Japan.

Importance of Nuclear Deal:

1. The deal is significant as it will help guarantee Japan’s continued support to India’s civil

nuclear programme. The deal is critical to India’s renewable energy plans.

2. Apart from the Russian reactors, the planned nuclear reactors with France and the U.S.

depend on Japanese parts.

3. That apart, the deal will bring Japan into the Indian nuclear market where France and

Russia already have a strong presence.

Changing equation of India-Japan on Nuclear pact

When India conducted its nuclear tests in 1998, Japan was the country that took it the

hardest: it put all political exchanges with India on hold, froze aid and announced economic

sanctions within hours.

A thaw in ties didn’t come until 2001, when sanctions were lifted. And then, in 2009, the

two countries began an annual strategic dialogue. This has now come to fruition with the

signing of the nuclear cooperation agreement in Tokyo during Prime Minister Narendra

Modi’s visit.

Significance of deal with respect to India’s NSG status

This is Japan’s first nuclear deal with a non-signatory to the Non Proliferation Treaty, and it

recognises India’s exemplary record in nuclear prudence. It is indeed a much-needed moral

boost as New Delhi strives for membership in the Nuclear Suppliers Group (NSG). The

move will boost the meagre, and dipping, bilateral trade of $15 billion, and lift the strategic

military and defence relationship.

Procedural Requirements of the deal


The nuclear deal has to be approved by Japan’s Parliament. Mr. Abe must bring the deal to

Parliament in early 2017 to ensure that the commercial agreement for Westinghouse’s six

reactors in Andhra Pradesh that is due in June 2017 comes through.

Controversial Clause

The ‘Note on Views and Understanding’ which was signed directly after the nuclear

cooperation agreement contains contentious clauses that effectively allow Japan to invoke

an “emergency” suspension of supplies if India were to test a nuclear weapon, and to

contest any compensation claims from India in court.

India has traditionally refused to link its nuclear trade with pre-conditions on testing,

holding it is a matter of nuclear sovereignty, and instead giving a voluntary moratorium on

tests


Concept No. 6. Nawaz Sharif inaugurates Gwadar port; CPEC becomes a reality

(Direct question is likely to be asked)

Gwadar port inaugurated

The Gwadar port, a strategic deep seaport in the China-Pakistan Economic Corridor,

became operational in Pakistan’s restive Balochistan after a Chinese commercial ship laden

with around 250 containers set off for West Asia and Africa.

Prime Minister Nawaz Sharif inaugurated the start of operational activities at the coastal

town of Gwadar in southwestern Balochistan Province, which saw a suicide bombing claim

as many as 52 lives.

With the operationalization of the Gwadar port, the multi-billion dollar China-Pakistan

Economic Corridor (CPEC), linking western China to the Arabian Sea, became a reality.

What is CPEC?

The China–Pakistan Economic Corridor is an economic corridor aimed to facilitate trade

along an overland route that connects Kashgar and Gwadar through construction of

network of highways, railways, and pipelines.

Intended to rapidly expand and upgrade Pakistani infrastructure as well as deepen and

broaden economic links between Pakistan and the People's Republic of China. The corridor

is considered to be an extension of China's ambitious One Belt, One Road initiative.

Infrastructure projects under the aegis of CPEC will span the length and breadth of

Pakistan, and will eventually link the city of Gwadar in south-western Pakistan to China's

north-western autonomous region of Xinjiang via a vast network of highways and railways.

The Karakoram Highway between Rawalpindi and the Chinese border will be completely

reconstructed and overhauled.

Many of the infrastructure and energy projects that are part of CPEC, worth an estimated

$46 billion, are already under way. Of this, $35-38 billion is committed in the energy sector,

in gas, coal and solar energy across Pakistan, with the combined expected capacity crossing

10,000 MW. In addition, the 3,000-km rail and roadway project is expected to generate

700,000 jobs by 2030.

How will it affect/impact India?


1. First and foremost it runs through POK which is a disputed territory between India and

Pakistan. So if china is going ahead with this project, it signifies that they consider it a part

of Pakistani territory.

2. China gets access to Gwadar port through which China gets a strategic naval presence to

encircle India from third side and ensuring a strategic military asset.

3. Chinese troops can quickly mobilize in the times of war.

4. China gets a leverage of keeping an eye on LOC.

India’s Isolation over CPEC:

China sees CPEC as a physical link between its One Belt, One Road (OBOR) project and the

Maritime Silk Route (MSR).

India has refused to be a part of either. That Sri Lanka, Bangladesh and Afghanistan are all

on board the OBOR and the MSR should give India pause.


Concept No. 7. US likely to withdraw from Trans Pacific Partnership and revisit visa

norms:(Question can be asked on TPP and work visas)

President-elect Donald Trump said America would withdraw from Trans-Pacific

Partnership (TPP) and an investigation would be launched into visa abuses that undercut

American workers.

Indian IT companies that use the H-1B visa programme to bring workers to America could

be affected by this move. After announcement by Donald Trump, China has shown interest

in joining TPP.

Background:

President Barack Obama has championed the TPP deal of 12 Pacific Rim countries that

notably excludes China. The H-1B visa programme that brings in 85,000 skilled workers to

America every year – a large number of them from India – will be the target of

investigation.

What is H-1B visa?

The US H-1B visa is a non-immigrant visa that allows US companies to employ graduate

level workers in specialty occupations that require theoretical or technical expertise in

specialized fields such as in IT, finance, accounting, architecture, engineering, mathematics,

science, medicine, etc.

What is TPP?

The Trans-Pacific Partnership (TPP) or Trans Pacific Partnership Agreement (TPPA) is a

trade agreement among twelve of the Pacific Rim countries—notably not including China.

It is currently awaiting ratification to enter into force.

Member nations of TPP:

The member states are the US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New

Zealand, Canada, Mexico, Chile and Peru.

Objective of TPP:

The pact aims to deepen economic ties between these nations, slashing tariffs and fostering

trade to boost growth. The agreement was designed to potentially create a new single

market, something like that of the EU.

How big a deal is the TPP?


The 12 countries have a collective population of about 800 million - almost double that of

the European Union's single market. The 12-nation would-be bloc is already responsible

for 40% of world trade. The deal was seen as a remarkable achievement given the very

different approaches and standards within the member countries, including environmental

protection, workers' rights and regulatory coherence - not to mention the special

protections that some countries have for certain industries.

And that's why the prospect of the US pulling out is being seen as such a blow for those

who signed up.


Concept No. 8. India joins CERN as an associate member (Direct question is likely to

be asked)

India became associate member of CERN:

India became an associate member of the European Organisation for Nuclear Research

(CERN), the world’s largest nuclear and particle physics laboratory and best known as

operator of the Large Hadron Collider, which found the elusive Higgs boson in 2012.

Relevance of the membership:

1. India was inducted as an ‘Observer’ at CERN in 2004. The latest upgrade allows Indian

companies to bid for lucrative engineering contracts and Indians can apply for staff

positions at the organisation.

The associate membership would cost India CHF (Swiss Franc) 11.5 million (approximately

Rs. 78 crore) annually though it still wouldn’t have voting rights on decisions of the Council.

2. An associate member of CERN is represented in the council, which is responsible for the

crucial decisions of the organisation.

Operational in January:

The agreement was signed by chairman of Atomic Energy Commission and Secretary,

Department of Atomic Energy (DAE), and CERN Director General. The Union Cabinet had

cleared India’s participation last year and it will formally become a member around

January after depositing an instrument of ratification.

India’s active involvement in the past:

Incidentally, Pakistan became an associate member of the body in 2014.

India’s association with CERN goes back decades with an active involvement in the

construction of the Large Hadron Collider (LHC).

About CERN?

CERN is the world’s biggest laboratory of particle physics and operates the Large Hadron

Collider (LHC). CERN is based in Geneva on the French-Swiss border. It has 22 member

states and four associate member states and other associate members transitioning to full

member status.

What is Large Hadron Collider?

The Large Hadron Collider (LHC) is the world's largest and most powerful particle collider,

the largest, most complex experimental facility ever built, and the largest single machine in


the world. It was built by the European Organization for Nuclear Research (CERN) between

1998 and 2008 in collaboration with over 10,000 scientists and engineers from over 100

countries, as well as hundreds of universities and laboratories.

It lies in a tunnel 27 kilometres (17 mi) in circumference, as deep as 175 metres (574 ft)

beneath the France–Switzerland border near Geneva, Switzerland.

The aim of the LHC is to allow physicists to test the predictions of different theories of

particle physics, including measuring the properties of the Higgs boson and searching for

the large family of new particles predicted by super-symmetric theories, as well as other

unsolved questions of physics.


Concept No. 9. BBIN (Direct question can be asked)

What is BBIN?

The Bangladesh, Bhutan, India, Nepal (BBIN) Initiative is a sub-regional architecture of

countries in South Asia. It meets through official representation of member states to

formulate, implement and review quadrilateral agreements across areas such as water

resources management, connectivity of power, transport, and infrastructure.

Significance of BBIN:

Along with its potential as a road link that will extend to rail and waterways reducing

circuitous shipping routes by 1,000 km, the BBIN grouping is also seen as India’s way of

countering Pakistan in the SAARC grouping.

With India pulling out of the SAARC, any hopes of the South Asian body clearing the

agreement ended, which gave the BBIN grouping even more prominence.

What is Motor Vehicle Agreement?

India proposed a SAARC Motor Vehicle Agreement during the SAARC Summit in 2014. Due

to objections from Pakistan, an agreement could not be reached. India instead pursued a

similar motor vehicle agreement with the BBIN.

The Bangladesh-Bhutan-India-Nepal Motor Vehicles Agreement was signed on 15 June

2015. It enables vehicles to enter any of the four nations without the need for trans-

shipment of goods from one country's truck to another's at the border.

Under the system, cargo vehicles are tracked electronically, permits are issued online and

sent electronically to all land ports. Vehicles are fitted with an electronic seal that alerts

regulators every time the container door is opened.

Prior to the signing of the BBIN Motor Vehicle Agreement, the truck would have had to

travel 1550 km through Indian territory to reach Agartala. Officials cited this as an example

of the time and cost savings that the BBIN Motor Vehicle Agreement would bring.

Response of member nations:

India, Bangladesh and Nepal have already ratified the MVA, after Foreign Ministers of the

BBIN nations signed an agreement to allow ease of motor vehicular traffic on June 15, 2015

and diplomats did a trial run among the countries.


Bhutan’s National Assembly or Lower House had cleared the Bill and forwarded it to the

National Council with the hope it would be passed by year end.

However, protests from the Opposition, mainly over environmental concerns of vehicular

pollution increasing have derailed the process. Bhutan’s National Council (NC) voted down

the sub-SAARC motor vehicle zone among Bangladesh, Bhutan, India and Nepal (BBIN).


Concept No. 10. Dabba Trading (Direct Question can be asked in Prelims)

In actual trading, you place an order through the stock exchange and when a counterparty

matches your price, a trade is completed. The counterparty may be anyone and this trade is

charged and taxed accordingly, payable by both sides.

But in case of illegal dabba trade, your trades are not monitored by tax departments and

there is one shady operator who takes care of all the trades and maintains a book of the

trades instead of the exchange. He often serves as the counterparty too. All transactions

take place by cash and these trades unlike normal trades, take place even when the actual

markets are closed.

There are many types of dabba trades. In some cases, the operator mediates between the

two parties and takes a charge from them.


In recent times, it does not happen as petty shop trades. This is a well-developed and huge

black money market. They have separate softwares and terminals similar to that used in

actual exchanges.

Growing trades in illegal market leads to transaction losses to exchanges and tax losses to

Government, thus creating a tunnel for black money.


Concept No. 11. All you need to know about FCNR(B) (Direct Question can be asked)

What are foreign currency non-resident deposits?

Foreign currency non-resident deposits, usually abbreviated as FCNR(B) – the B stands for

banks, are term deposits that non-resident Indians (NRIs) can open with banks in India.

These deposits are denominated in foreign currencies permitted by the Reserve Bank of

India. This term deposit was started in 1993 and is available in tenures of one to five years.

How does FCNR(B) work?

Under the FCNR(B) scheme, banks have to pay an annual interest at a rate of LIBOR/Swap

plus 200 basis points for terms between 1-3 years and LIBOR/Swap plus 300 basis points

for terms between 3-5 years. 100 basis points is 1 percentage point. LIBOR or London

Interbank Offered Rate is the benchmark interest rate at which international banks lend to

each other. These vary according to currencies and the term for which the loan is taken.

This structure is decided by the RBI and banks use the LIBOR rate on the last working day

of a month to fix the FCNR(B) rate for the following month.

Why was FCNR(B) started?

FCNR(B) goes back to 1975 when they were known as FCNR(A) – with A for accounts.

FCNR deposits were started in order to shore up foreign exchange. This was the pre-

liberalisation era and there were very few ways that India could raise funds – foreign

exchange reserves are used by a country to finance its current account deficit (CAD).

What is a currency risk?

Indian banks have most of their deposits in rupees and thus make most of their

investments in the Indian currency. When a NRI invests $1,000 under the FCNR(B) scheme

for 3 years, it raises the bank’s deposits by Rs 67,000 (considering $1=Rs 67). The bank

then invests this amount.

But in case over the period the value of the rupee depreciates to Rs 69. The bank will have

to spend Rs 69,000 to get pay back the $1,000. (This excludes interest payments). This is

called currency risk. On the other hand the bank stands to gain if the rupee appreciates.

If banks are dealing in FCNR(B), where does the RBI come in?

RBI came into the picture in 2013 when it introduced the three-month swap window for

FCNR(B) deposits with a term for three years or more. Under this swap window RBI


allowed banks to exchange (or swap) their FCNR(B) deposits with it by paying an interest

at a fixed rate of 3.5%. During the period, the interest rate ceiling on these deposits was

also increased to LIBOR/Swap plus 400 basis points.

The idea meant giving banks a 3.5% subsidy to bring in foreign exchange.

But why did banks want to pay 3.5%?

In order to shift the currency risk to the RBI, the 3.5% can be considered as the banks’

hedging costs. If the swap window did not exist banks would have had to hedge rupee

depreciation risk by entering swap agreements at as high as 7% as at that time the rupee

was seeing significant downward pressure.

How FCNR’s will put additional pressure on strength of rupee?

80% of the FCNR(B) deposits swapped during the three-month were of a three-year tenure.

This means that the banks swapped around $27 billion (Rs 1.67 lakh crore) between

September and December 2013 with the RBI for rupees.

Now RBI will have to give back the money in dollars. The average exchange rate in

September-December 2013 was Rs 62. At present, the exchange rate is hovering around Rs

67, down by 8%. But banks will pay back the amount with an annual interest of 3.5%,

which means for the banks the effective exchange rate will be around Rs 69.

For the banks, this was a decent hedge – with only a minor depreciation – as they would

have invested the money exchanged from RBI in high-return assets. On the other hand RBI

will not have to bear any currency risk.


Concept No. 12. RBI proposes ‘Islamic window’ in banks (Direct Question can be asked) RBI proposed Islamic Window: The Reserve Bank of India (RBI) has proposed the opening of “Islamic window” in conventional banks for “gradual” introduction of Sharia-compliant or interest-free banking in the country. Significance of the Islamic Banking: 1. Financial Inclusion: Both the Centre and the RBI have been exploring the possibility of introduction of Islamic banking for a while now to ensure financial inclusion of those sections of society that remain excluded due to religious reasons. 2. Reducing the impact of harmful products and practices: Shariah principles forbid any investment that would support industries or activities that are considered harmful to the people and the society in general. This includes usury, speculation and gambling, irrespective of whether these are legal or not in a given territory. 3. It promotes the principle of financial justice: Financial justice is a basic requirement for the functioning of Islamic finance products. Western or conventional financing looks forward to profit through interest payments and makes the beneficiary completely liable for any risk. Contrary to this, Islamic financing paves way for the sharing of net profit/loss and the risk involved in a proportional manner between the lender and the beneficiary. Therefore, if a financier is expecting a claim on profits of a project, it is necessary that he/she should also carry a proportional share of the loss of that project. 4. Accelerating economic development: Islamic finance companies certainly have profit creation and growth as their objectives. Thus in the Islamic banking industry, each bank will invest in promising business ventures and attempt to out-perform its competitors, in order to attract more funds from its depositors. This will eventually result in a high return on investments both for the bank and the depositors. This is unlikely in a conventional bank, where depositors redeem returns on their deposits based on a pre-determined interest rate.


What is Sharia/Islamic Banking? Islamic banking refers to a system of banking or banking activity that is consistent with the

principles of the Shari’ah (Islamic rulings). The principles which emphasise moral and

ethical values in all dealings have wide universal appeal. For example, Islamic or Sharia

banking is a finance system based on the principles of not charging interest. The charging

of interest is prohibited under Islam.


Concept No. 13. Virtual Currency surge (Direct Question can be asked)

Uno-coin explores the possibility to promote its usage leveraging the demonetisation effect

in the economy:

Unocoin, an Indian bitcoin start-up, has unveiled a new app that will allow consumers to

buy, sell, send, receive and store bitcoins, all in one place, from any remote device.

Details:

Unocoin has become the first company in the country to offer a full-featured mobile bitcoin

app. This includes 24/7 access to real-time bitcoin market prices and instantaneous trading

transactions.

The company has also unveiled a point of sale app to enable physical stores to accept

bitcoin as a mode of payment.

What is a virtual currency?

A virtual currency or virtual money is a type of unregulated, digital money, which is issued

and usually controlled by its developers, and used and accepted among the members of a

specific virtual community.

Benefits of virtual Currency/Bitcoin:

1. User Anonymity: Unless a user voluntarily publishes his Bitcoin transactions, his

purchases are never associated with his personal identity, much like cash-only purchases,

and cannot be traced back to him.

2. No Third-party Interruptions: One of the most widely publicized benefits of Bitcoin is

that governments, banks and other financial intermediaries have no way to interrupt user

transactions or place freezes on Bitcoin accounts.

3. Purchases Are Not Taxed: Since there is no way for third parties to identify, track or

intercept transactions that are denominated in Bitcoins, one of the major advantages of

Bitcoin is that sales taxes are not added onto any purchases.

4. Very Low Transaction Fees: Since Bitcoin transactions have no intermediary institutions

or government involvement, the costs of transacting are kept very low.

5. Mobile Payments: Bitcoin users can pay for their coins anywhere they have Internet

access.


Possible threats after widespread use of virtual currency:

1. They don't really protect the consumer and there are also some risks in terms of stability

of the platforms, volatility of the price and also classic cyber-threats like theft, hacking and

loss.

2. Bitcoin has often been associated with illegal activities such as money laundering and the

trade in illegal goods, mainly because its transactions can be carried out anonymously.

Difference between digital currency and virtual currency?

Digital currencies are exactly what they sound like: currencies stored and transferred

electronically. For instance, Rupee stored in a bank account are supposed to be a

representation of rupees actually held somewhere, whereas “Virtual” can be defined as “not

based in physical reality,” and virtual currencies are those which are not intended for use in

“real life,” or expenditure on real assets. Virtual currencies to be thought of as “Internet

money,” but you can now spend it in person at physical businesses.


Concept No. 14. Maharashtra becomes first state to adopt Fly Ash Utilization Policy Maharashtra became the first state in the country to adopt the Fly Ash Utilization Policy. Key Facts 1. The policy seeks 100% use of fly ash generated from thermal power plants and biogas plants for construction activities. 2. Facilitates use of fly ash to make bricks, blocks, tiles, wall panels, cement and other construction materials. 3. The policy extends use of fly ash to 300 kms radius of power plant from earlier 100 kms radius of power plant. What is fly ash? Fly ash is a fine, glass powder by-product recovered from gases of burning coal in thermal power plants during production of electricity. They are micron sized earth elements primarily consisting silica, alumina and iron. What are environmental concerns? The Fly ash causes air pollution. It can also contaminate water and soil systems. The wet disposal of Fly ash results in leaching of toxic heavy metals in ground water system. Recyclable Uses Fly ash can be used as a replacement for some of the Portland cement contents of concrete.

It can be used in the production of bricks for building construction.


Concept No. 15. Marrakesh meet: Conference of Parties 22

UN Conference on Climate Change, Marrakesh:

In year 2016, the UN conference on climate change was held in Marrakech, Morocco with

an emphasis on raising the commitment of all countries to reduce greenhouse gas (GHG)

emissions. In this conference, nations have adopted the Paris Climate change agreement

concluded in 2015.

Outcomes of the conference:

The Paris Agreement on climate change was forged on the consensus that man-made

climate change does have a scientific basis that the developed countries are responsible for

accumulated emissions, and that future action should focus on shifting all nations to a clean

energy path.

Not much progress was made at Marrakech on raising the $100 billion a year that is

intended to help the poorer nations. Political commitment and resource mobilisation will

be crucial to meet targets for mitigation of emissions and adaptation.

Why Himalayas being chosen a subject of discussion in CoP 22

India also hosted a special side event during the UN Climate Change Conference at

Marrakech, Morocco, on the 12 Himalayan States that face the impact of a changing climate.

The Centre represented the 12 Himalayan States at the Conference of the Parties (CoP 22)

of the UN Framework Convention on Climate Change. Almora-based G.B. Pant National

Institute of Himalayan Environment and Sustainable Development was given the task of

representing the 12 Himalayan States.

The Himalayas provide water to 1.3 billion people in Asia, but have been inadequately

represented over the past three decades in climate change discussions. Currently, the

Himalayas are not spoken about even at discussions in international forums on mountain

countries.

Environment Ministry to send a proposal to UN to designate international year of

Himalayas:

After a successful session on Himalayas at the Conference of the Parties (CoP 22), the

Environment Ministry will now start preparing a proposal to be sent to the U.N. General

Assembly requesting it to declare a year as the International Year of Himalayas and to

declare a day in a year as the International Himalaya Day.


State of emission Levels

While global carbon emission saw “almost no growth” last year, India’s emission grew by

5.2 per cent in 2015, says a study.

Global carbon emissions from burning fossil fuels are projected to rise only slightly in

2016, marking three years of slowdown in emissions. Third year of almost no growth in

emissions is unprecedented at a time of strong economic growth.

State of Emission Levels

The researchers identified decreased use of coal in China and the U.S. as the main reason

behind the three-year slowdown in emissions.

China, the biggest emitter of carbon dioxide (CO2) at 29 per cent, saw emissions decrease

by only 0.7 per cent in 2015.

The U.S., the second biggest emitter of CO2 at 15 per cent, also reduced its coal use while

increasing its oil and gas consumption and saw emissions decrease 2.6 per cent in 2015.

India contributed 6.3 per cent of all global CO2 emissions in 2015, the study said. The

researchers said that global carbon emissions did not grow last year and the projected rise

of only 0.2 per cent for 2016 marks a clear break from the rapid emissions growth of 2.3

per cent per year in the decade to 2013, with just 0.7 per cent growth seen in 2014.

Background: Paris Climate Change Agreement

Negotiations were held in the framework of the yearly UNFCCC Climate Change Conferences on measures to be taken after the second commitment period under Kyoto Protocol ends in 2020. This resulted in the 2015 adoption of the Paris Agreement, which is a separate instrument under the UNFCCC rather than an amendment of the Kyoto protocol.174 countries and the European Union have signed up the Paris Climate Change Agreement against global warming.

Here are some of the key elements of the Paris deal:

1. Temperature Goals:

The objective of the agreement is to keep the global temperature rise "well below" 2

degrees Celsius compared with pre-industrial times. At that level, scientists believe the

worst effects of climate change can be avoided. The agreement also includes an aspirational

https://en.wikipedia.org/wiki/Paris_Agreement


goal of limiting the temperature rise to 1.5 degrees C. Temperatures have already risen by

almost 1 degree C since the industrial revolution.

2. Individual Targets:

Countries are required to set their own national targets (Intended Nationally Determined

Contributions) for reducing their greenhouse gas emissions. Those targets aren't legally

binding, but countries must report on their progress and update their targets every five

years. The first cycle begins in 2020.

Only developed countries are expected to slash their emissions in absolute terms.

Developing nations are "encouraged" to do so as their capabilities evolve over time.

3. Transparency:

There is no penalty if countries miss their emissions targets. Instead, the agreement relies

on transparency rules to motivate countries to fulfil their pledges. All countries must report

on their efforts to reduce their emissions.

4. Money:

The agreement says wealthy countries should continue to offer financial support to help

poor countries reduce their emissions and adapt to climate change. Actual dollar amounts

were kept out of the agreement itself, but wealthy nations had previously pledged to

provide $100 billion annually in climate finance by 2020.

5. Loss and damage:

In a victory for small island nations threatened by rising seas, the agreement includes a

section recognizing "loss and damage" associated with climate-related disasters. The U.S.

long objected to addressing the issue in the agreement, worried that it would lead to claims

of compensation for damage caused by extreme weather events.

Present status of Green Climate Fund (GCF) as on 1st Jan, 2017

Industrialised countries have committed $100 billion per year by 2020 for a Green Climate

Fund (GCF) to help developing countries invest in green energy and mitigate effects of

climate change on developing countries.

However, the GCF has so far raised only $10 billion and allocated money to about eight

projects since it was set up.

Requirement for Paris Agreement to come into force


To come into force, the Paris agreement needs ratification from 55 countries that account

for at least 55 per cent of the planet’s greenhouse gas emissions. The agreement has

already been ratified by more than 55 countries emitting more than 55% of greenhouse gas

emissions. India ratified the agreement on 2nd October, 2016. As the required number of

countries have ratified the agreement, the agreement has come into force in Marrakesh

meet.

India’s emission reduction targets

The Indian government said it would reduce carbon emissions relative to its GDP by 33% to 35% from 2005 levels by 2030. Thus, India is not committed to reduction in absolute amount of emissions but only relative amount of emissions produced per unit of GDP.

India also pledged that 40% of the country's electricity would come from non-fossil fuel-based sources, such as wind and solar power, by 2030.

All of the 190 countries participating in the COP21 talks in Paris are expected to publish

Intended Nationally Determined Contributions, which list each country's carbon emission

reduction goals.

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Documents

50 important concepts for prelims 2017 40 per cent of the country’s large dams, “but 82 per cent area of the state is rainfed. We also highlight the fact that groundwater is the