Daily Mains Practice Questions 11-03-2023

KEY POINTS

·        The Finance Ministry’s March 7 notification placing all transactions involving virtual digital assets under the purview of the Prevention of Money Laundering Act (PMLA) is a much-needed, even if belated, step.

·        The government has been struggling in recent years to formulate an appropriate regulatory response to deal with the pandemic-era upsurge in advertisements soliciting investment in virtual assets as well as reports of actual investment.

·        Even if this is discounted as a speculative guesstimate, measures and disclosures by the government indicate that the volume of trade in unregulated virtual assets has grown sizeably in recent years.

·        The decision to mandatorily bring all trade in virtual digital assets under the PMLA now lays the onus of ascertaining the provenance of all activity, including safekeeping.

·        As it has pointed out, the fact that a few countries have moved to regulate virtual assets, and some others have banned them outright.

·        India, which holds the presidency of the G-20, has been repeatedly stressing the need for a globally coordinated regulatory response to deal with crypto assets.

·        While the Centre’s decision to add the PMLA monitoring requirements, following the introduction of a tax regime for virtual digital assets in last year’s Budget.

KEY POINTS

·        The immediate issue of concern is the prospects of the kharif crop during an El Nino event.

·        Rice could still be managed as the northern States of Haryana, Punjab and Uttar Pradesh do have access to irrigation.

·        The accompanying table shows how agricultural production (as per GDP data) has moved when there have been episodes of El Nino, 2015-16 being the larger one.

·        The kharif season attains more prominence as the timing coincides with the festival season when typically there is higher spending on consumer products including automobiles post-harvest.

·        So a poor kharif crop tends to slow down festival spending. Therefore, close monitoring of El Nino is important and the government should be prepared with a contingency plan.

·        Further, concerns on the prospects of the wheat crop remain at this point of time, even though there has been a spell of rain in north India.

·        The IMD could study the past patterns and indicate the regions that would be most vulnerable. States should provide consultancy services to the farmers to be prepared for such an adversity and advise on cropping action.

·        And finally the government needs to ensure that banks are sensitive to this issue so that credit flow to farmers remains uninterrupted.

KEY POINTS

·        The Railways offer an efficient and economic mode of logistics movement given their pan-India network, and can play an important role in enabling a coordinated and integrated logistics system.

·        Currently, the modal mix in terms of freight movement is skewed by a considerable extent towards road transport, with 65% of freight movement by road.

·        The effect is an increased burden on roads, and, therefore, significant congestion, increased pollution, and resultant logistics cost escalations.

·        A look at the comparable costs of different forms of transportation suggests that freight movement cost is the highest in the road sector — nearly twice the rail cost.

·        However, the convenience of road transport has taken precedence over cost, and the railways in India have been losing freight share to other more flexible modes.

·        The national transporter faces several infrastructural, operational and connectivity challenges, in turn leading to a shift of freight traffic to roads.

·        The increased transit time by rail and pre-movement and post-movement procedural delays such as wagon placement, loading and unloading operations, multi-modal handling, etc., hamper freight movement by rail.

·        An integrated logistics infrastructure with first and last-mile connectivity is essential to make rail movement competitive with roads, and facilitate exports by rail to neighbouring countries such as Nepal and Bangladesh.

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