Daily Mains Practice Questions 20-03-2023

KEY POINTS

·        At least two global weather forecasters have pointed to a 50 per cent chance of an El Nino developing in the second half of 2023.

·        The impact of a warming of the Pacific Ocean on the South West Monsoon, and in turn on crop output, is subject to a number of variables.

·        The paper observes that there is a higher chance of an El Nino turning into a drought if the warming of the oceans were to occur between April and November.

·        Fodder inflation is at about 30 per cent already, without the monsoon having set in, an issue that needs attention.

·        Reservoir levels are 92 per cent of what they were at this time last year and higher than the 10-year average level for this period, but there are signs of stress in the southern States.

·        Investment in farm trenches and field plastic mulches does not evoke interest either.

·        Banks and the district administration should work in tandem, as debt distress has often been linked to borewells.

·        Above all, as the Prime Minister has said, India must realise its potential as a millets producer by diverting crop under paddy and sugarcane towards millets in a dry year.

KEY POINTS

·        The latest global financial developments and recent economic data in India are together raising fears that several major economies worldwide, including India’s, may be headed for a spell of debilitating stagflation

·        With January having logged CPI-based price gains of 6.52%, prices will have to soften so sharply in March as to drag the headline number down by more than 230 basis points to about 4.1% for the RBI’s projection to come true.

·        A look at the components driving inflation shows that core inflation, which strips out the impact of food and fuel prices, still remains stuck at 6.2% for a third straight month, and continues to hover almost at or above the 6% level since May 2021.

·        Prices of four key categories in the food basket that together account for more than a fifth of the Consumer Price Index continued to register significantly high year-on-year inflation, as well as sequential hardening.

·        While policymakers will, therefore, need to stay focused on containing inflation, the rising uncertainty about the growth momentum sustaining in the face of the heightened risks.

·        Yet, failure to engender enduring price stability could lead to stagflation. Unless supply side measures such as GST rationalisation and fuel price cuts are expedited, the overall macroeconomic outlook appears worrying.

KEY POINTS

·        The insurance sector has undergone unprecedented changes in response to the pandemic, necessitating rapid operational adjustments to minimise business disruptions.

·        Insurers responded quickly to this crisis by increasing the digitalisation of sales, customer service, and claims management and enabling their staff to operate in a hybrid working model.

·        In addition, the respondents indicated that data availability and quality appear to be the biggest challenges. Issues related to data privacy are a key challenge.

·        The absence of an effective information-sharing mechanism within the industry and poor or inadequate data to predict fraud has made the identification and prevention of fraudulent activities difficult.

·        One of the important reasons for fraud to occur is the organisational system/controls provide the fraudster with an opportunity to commit fraud.

·        Moreover, digitisation and customer-centric policies may have inadvertently provided opportunities for fraudsters to commit identity theft, misrepresentation, and fraudulent claims.

·        The key objectives of an effective, business driven Fraud Risk Management (FRM) approach should encompass controls that prevent the occurrence of fraud, detect fraud, and provide an effective response mechanism to limit the consequences.

·        Staying informed on the latest developments is critical for detecting new fraud trends.

·        The insurers should conduct periodic market intelligence activities to gather valuable information on the prevailing modus operandi and control weaknesses.

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