Current Affairs 12th May

‘Cases rising in 15 States; positivity rate at 21%’ #GS3 #SnT

The national COVID-19 positivity rate stood at 21% and 310 of the 734 districts had reported positivity greater than or equal to the national average.

At the Health Ministry briefing, Dr. Bhargava said the country now had the RTPCR testing capacity of about 16 lakh a day and Rapid Antigen Test (RAT) capacity of about 17 lakh a day. Stating that a total of 19,45,299 tests were conducted on April 30, the highest ever in the world, he said the 30-crore landmark was achieved by May 7.

Karnataka, Kerala, Tamil Nadu, West Bengal, Odisha, Punjab, Assam, Jammu and Kashmir, Goa, Himachal Pradesh, Puducherry, Manipur, Meghalaya, Tripura, Nagaland and Arunachal Pradesh have shown continued increasing trend in daily new COVID-19 cases. On the other hand, 18 States and Union Territories have recorded continued plateauing or a decrease in cases.

Indicating a change in policy, the ICMR chief said since the infection was spreading fast during the second wave, RT-PCR tests had been rationalised and RAT (Rapid Antigen Testing) increased for early detection, isolation and home care. He said multiple 24×7 RAT booths were to be set up in cities, towns and villages.

Advocating aggressive RAT usage in rural and remote areas, Dr. Bhargava said these tests would be allowed at all the government and private health care facilities. RAT booths would have to be set up in schools, colleges, residents’ welfare association offices and other places, in cooperation with local communities. The government would also encourage public-private partnership models.

Health Ministry spokesperson Lav Agarwal said an early declining trend had been noticed in the past couple of days, with the number of new cases coming down from about 4.14 lakh on May 7 to 4.03 lakh cases on May 9, and from 3.66 lakh to 3.29 lakh in the past 24 hours.

There were about 37 lakh active cases, while over 1.90 crore patients had recovered so far.

Moody’s lowers India’s growth projection to 9.3% #GS3 #Economy

Moody’s Investors Service sharply scaled down this year’s growth projection for India to 9.3% from its earlier estimate of 13.7%, citing “the negative impact of the second wave” of the COVID-19 pandemic.

It warned that the spread of the coronavirus as well as the rate of vaccinations will have a direct impact on economic outcomes.

“The credit profile of India is increasingly constrained by obstacles to economic growth, a high debt burden and weak financial system. Policymaking institutions have struggled to tackle and contain these risks, exacerbated by the coronavirus pandemic,” the global rating agency said in a credit opinion note.

“Shortage of vaccines and logistical difficulties in reaching a large rural population [about two-thirds of the population] complicate the vaccine roll-out,” it pointed out, noting that only around 10% of the country’s population had received at least one dose of the vaccine by early May.

The severe second wave of COVID-19 infections will slow the near-term economic recovery and could weigh on longer-term growth dynamics.

“As of now, we expect the negative impact on economic output to be limited to the April to June quarter, followed by a strong rebound in the second half of the year, adding that spending will have to be redirected towards healthcare and virus response relative to what the government had budgeted in February.

Factoring in fresh pandemic-related spending, the agency expects a wider general government fiscal deficit of about 11.8% of GDP in 2021-22, instead of its previous estimate of 10.8%. “We expect the combined impact of slower growth and wider deficit to drive the general debt burden to 90% of GDP in 2021-22, gradually rising to 92% in 2022-23.

Cut in GST can make vaccines cheaper, say experts #GS3 #SnT #Economy

An array of measures, including reduction in GST (Goods and Services Tax) rates, zero GST rate on critical raw materials, permitting GST-free imports as well as direct cash incentives to producers, can be used by the Central government to make COVID-19 vaccines and other critical supplies cheaper, say tax experts.

At present, GST is levied at the rate of 5% on vaccines and 12% on COVID-19 drugs and oxygen concentrators for domestic supplies and commercial imports. For oxygen concentrators imported for personal use, the government has reduced GST rate from 28% to 12% and waived Customs duties.

Union Finance Minister Nirmala Sitharaman on Sunday launched a staunch defence of the GST levies on COVID-19 relief supplies after West Bengal Chief Minister Mamata Banerjee wrote to Prime Minister Narendra Modi mooting an exemption from these taxes amid the pandemic’s escalating second wave.

The Finance Minister had said that exemption to vaccine from GST would be counterproductive without benefiting the consumer.

“If the government is exploring free vaccination to all the citizens, then the consumer of such vaccine will be the government. Thus, no matter at what rate it is taxed, it may not directly impact the pocket of common man. It would be more of a revenue sharing issue between the Centre and the States,” notes Siddharth Surana, adviser at tax consultancy RSM India.

Under the present policy, the Centre is providing free vaccines to those above 45 years, while the States and individuals have been asked to foot the bill for the rest. Tax implications matter not just for vaccines, but also other critical drugs and equipment.

A taxation expert, on condition of anonymity, says reducing the GST on final products as well as raw materials, or zero-rating supplies, will be a better option than an outright GST exemption.

Saket Patawari, executive director (indirect tax) at advisory firm Nexdigm, observes that the government could take measures to slash costs, including a possible special incentive scheme to refund taxes, outside the ambit of the GST law.

“A concessional GST rate of 1% can be levied for COVID-19 vaccines. Suppliers would be allowed GST credit benefit, which could be claimed as refund under an ‘inverted duty structure refund’, typically claimed by pharmaceutical companies. Alternatively, the entire COVID-19-related supply chains can be taxed at 5%, he suggests.

The tax expert quoted earlier asserts that reducing GST rates of raw materials could minimise the input tax credit issues and other options could also be considered to cut prices of COVID-19 supplies.

Experts have also called for easing of imports of critical medical equipment and materials by exempting them from Integrated GST, by putting end-use conditions in certain cases, if needed, to ensure they are not misused.

Queries raised on DRDO’s COVID drug #GS3 #SnT

A drug developed by the Defence Research and Development Organisation (DRDO) has been approved by the Drug Controller General of India (DCGI) for “emergency use” in those with moderate to severe COVID , but independent experts say that from the information so far available, the drug’s utility in COVID care has not been established.

The lack of published data on its performance in human trials, opaqueness on whether the phase-3 trial objectively evaluated the benefit from, or lack of it, of the drug and the drug’s history — of being an unapproved anti-cancer drug and therefore potentially able to harm healthy cells — some of the concerns contributing to the uncertainty. 2-Deoxy-D-Glucose drug has historically been extensively tested for treating cancer but is so far an unapproved drug.

The Institute of Nuclear Medicine and Allied Sciences (INMAS), a lab of the DRDO, in collaboration with Dr Reddy’s Laboratories (DRL), Hyderabad, too has been studying this drug, in the context of radiation therapy for cancer.

Medical mechanism

The drug had been tested in trials and was given to Dr Reddy’s Laboratories in 2014 as part of a collaboration, according to Dr. Sudhir Chandna, Additional Director, INMAS, DRDO. The basic mechanism of the drug involves inhibiting glycolysis, or one of the ways in which cells break down glucose for energy. This approach while used to starve and kill cancer cells, could in theory work in inhibiting virus cells too, that were almost entirely dependent on glycolysis for replication.

Tests at the Centre for Cellular and Molecular Biology, Hyderabad, last year indicated that the drug demonstrably killed virus cells after which it progressed to trials in people.

Dr Reddy’s in its application to the SEC for Phase-2 trials in June 2020, noted that while the drug was yet unapproved, it had been tried in 218 clinical trials so far as an anti-cancer drug.

Announcing the success of the drug, a press statement from from the DRDO said: “Clinical trial results have shown that this molecule helps in faster recovery of hospitalised patients and reduces supplemental oxygen dependence. Higher proportion of patients treated with 2-DG showed RT-PCR negative conversion in COVID patients.”

“Cancer cells depend heavily on glucose for their survival and hence by tagging them with 2DG we can restrict cancer cell growth. Similarly, it can also affect high glucose utilising normal cells like brain cells (neurons) and could cause brain related side effects.

U.S. in touch with Indian vaccine makers #GS2 #IR

The United States has been in contact with the Serum Institute of India and other vaccine manufacturers to boost production of vaccines against COVID-19. Addressing a virtual press meet, Charge d’Affaires Ambassador Daniel B Smith described the second wave in India as a development that has “global implications” and expressed continued support from the Biden administration which has committed $100 million in assistance.

“We are watching carefully the production levels at the SII and elsewhere. We have been in close touch with the SII to try to determine what raw materials we could provide, and assistance that we can provide to help boost production. “The U.S. has also diverted enough of Oxford AstraZeneca manufacturing supplies from its own pre-existing orders to produce over 20 million vaccine doses in India.”

The U.S., he said, will not use the Oxford AstraZeneca vaccine as of now as it has “three vaccines available and the Biden administration has determined that that is sufficient for our needs”. However, he said the policy regarding the extra Oxford AstraZeneca doses is yet to be finalised.

China’s population growth slows to lowest rate in decades #GS2 #IR

China’s once-in-a-decade population census has recorded a slowing population growth rate that will likely see China’s population peak — and be overtaken by India’s — by as early as 2025, experts said, with the number of births falling for the fourth consecutive year.

The seventh census, released by the National Bureau of Statistics (NBS) in Beijing, noted 12 million babies were born last year, the lowest number since 1961, a year when China was in the midst of a four-year famine unleashed by Mao Zedong’s Great Leap Forward policy in 1958 that devastated the farm sector and claimed millions of lives.

China’s population was 1.41 billion in 2020, according to the census, increasing by 72 million since the last census in 2010, recording a 5.38% growth in this period. The average annual growth was 0.53%.

The slowing growth rate, a consequence of China’s stringent family planning rules over decades — known as the “one-child policy” but involving a range of varying restrictions across urban and rural areas — has evoked concerns of a rapidly ageing society and the impact on China’s labour force, and fears that China will, as some experts have said, “get old before it gets rich”.

The census recorded 264 million in the age group of 60 and over, up 5.44% since 2010 and accounting for 18.70% of the population. Those in the 15-59 age group were 894 million persons, down by 6.79% since 2010 and accounting for 63.35% of the population.

Chinese experts on Tuesday acknowledged the seriousness of the problem, without linking it directly to the history of the Communist Party’s harsh family planning policies, at a time when it is planning to mark its 100th anniversary in July.

In the lead up to the anniversary, China’s Internet regulator said it had deleted more than 2 million posts containing “harmful” discussions of history, the South China Morning Post reported, with the party clamping down on any adverse commentary about its present or past.

China loosened family planning rules and allowed couples to have two children in 2016, but that has failed to mark a boom amid changing lifestyles and declining preferences, particularly in urban areas, for larger families.

Population decline

“China will likely enter a period of population decline soon,” Huang Wenzheng, a fellow at the Center for China and Globalisation, in Beijing, told official broadcaster China Global Television Network. “This might be the biggest challenge the nation faces in the next century.”

The impact on the labour force and healthcare is a particular concern. China’s workforce in the 15-59 age bracket peaked at 925 million in 2011, the Ministry of Human Resources and Social Security said previously. That number was down to 894 million in this census and would drop to 700 million by 2050, according to the Ministry.

The census did not offer a specific year for the population to peak, but experts said that could happen by 2025. “China’s population will peak in the future, but there remains uncertainty as to when specifically it will happen. “For the next stage, we should continue to pay attention to changes in population growth and respond actively to risks and challenges in demographic development,” he said.

The findings from the census were not entirely dire. The census also shed light on China’s increasingly educated workforce and its rapid pace of urbanisation. The number of people with a university education was 218 million, up to 15,467 per 100,000 of the population compared with 8,930 in 2010.

The average years of schooling for 15 and above increased from 9.08 years to 9.91 years and the illiteracy rate dropped from 4.08% to 2.67%, in part due to policies for nine years of compulsory and free education.

The urban population touched 901 million, accounting for 63.89%, up from 49.68% in 2010 with an increase of 236 million urban residents in the last decade.

What’s happening in Jerusalem? #GS2 #IR

On Monday, Israeli armed forces stormed Al-Aqsa Mosque in the Haram esh-Sharif in Jerusalem, ahead of a march by Zionist nationalists commemorating Israel’s capture of the eastern half of the city in 1967. More than 300 Palestinians were injured in the raid. In retaliation, Hamas, the Islamist militant group that runs Gaza, fired dozens of rockets that killed two Israelis. Israel launched an airstrike on Gaza in response, killing 26 Palestinians, including militants and nine children.

What led to escalation?

Tensions have been building up since the start of Ramzan in mid-April when Israeli police set up barricades at the Damascus Gate outside the occupied Old City, preventing Palestinians from gathering there. As clashes erupted, the police removed the barricades, but tensions were already high. The threatened eviction of dozens of Palestinian families in the East Jerusalem neighborhood of Sheikh Jarrah escalated the crisis further in the last week of Ramzan.

Clashes erupted on the night of May 7 in Jerusalem between Palestinian protesters and Israeli police in which hundreds of Palestinians and over a dozen police personnel were injured. The Israeli authorities had given permission to the Jerusalem Day march, traditionally taken out by far-right Zionists through the Arab Quarter of the Old City. Ahead of the march on May 10 (which was rerouted given the tensions), Israeli armed forces stormed Al-Aqsa Mosque with rubber bullets, stun grenades and tear gas to evict Palestinians, who Israel said had camped with stones and Molotov cocktail. Hamas issued an ultimatum to the Israeli troops to stand down from Al-Aqsa. By the evening, they launched rockets. Israeli strikes followed.

Sheikh Jarrah dispute

Hundreds of thousands of Palestinians were forced out of their homes when the State of Israel was created in historic Palestine in 1948 (the Palestinians call the events ‘Nakba’, or catastrophe). Twenty-eight of those Palestinian families moved to Sheikh Jarrah in East Jerusalem to settle there.

In 1956, when East Jerusalem was ruled by Jordan, the Jordanian Ministry of Construction and Development and the UN Relief and Works Agency facilitated the construction of houses for these families in Sheikh Jarrah. But Israel would capture East Jerusalem from Jordan in 1967.

By the early 1970s, Jewish agencies started demanding the families leave the land. Jewish committees claimed that the houses sat on land they purchased in 1885 (when Jews, facing persecution in Europe, were migrating to historic Palestine that was part of the Ottoman Empire).

Earlier this year, the Central Court in East Jerusalem upheld a decision to evict four Palestinian families from their homes in Sheikh Jarrah in favour of Jewish settlers. The Israeli Supreme Court was scheduled to hear the case on May 10. But the hearing was postponed on advice from the government amid the ongoing violence in Jerusalem. The issue remains unresolved.

Why Jerusalem?

Jerusalem has been at the centre of the Israeli-Palestinian conflict. According to the original 1947 UN Partition Plan, Jerusalem was proposed to be an international city. But in the first Arab Israel war of 1948, the Israelis captured the western half of the city, and Jordan took the eastern part, including the Old City that houses Haram esh-Sharif.

Al-Aqsa Mosque, Islam’s third holiest site, and the Dome of the Rock are situated within Haram esh-Sharif (Noble Sanctuary). One side of the compound, called Temple Mount by the Jews, is the Wailing Wall (Western Wall), which is believed to be the remains of the Second Jewish Temple, the holiest site in Judaism.

Israel captured East Jerusalem from Jordan in the 1967 Six-Day War and annexed it later. Since its annexation, Israel has expanded settlements in East Jerusalem, which is now home for some 220,000 Jews. Jews born in East Jerusalem are Israeli citizens, while Palestinians in the city are given conditional residency permits. Palestinians in East Jerusalem, unlike other parts of the occupied West Bank, can, however, apply for Israeli citizenship. Very few Palestinians have done so.

Israel sees the whole city as its “unified, eternal capital”, a claim endorsed by Donald Trump when he was U.S. President but not recognised by most other countries. Palestinian leaders across the political spectrum have maintained that they would not accept any compromise formula for a future Palestinian state unless East Jerusalem is its capital.

SEBI pitches for ‘person in control’ over ‘promoter’ #GS3 #Economy

Markets regulator SEBI proposed to rationalise the definition of ‘promoter group’ and move to the concept of ‘person in control’ as well as lower the minimum lock-in periods for promoters and other shareholders after an IPO. In a consultation paper, the watchdog has also suggested streamlining the disclosures requirement of group companies.

The Securities and Exchange Board of India (SEBI) has sought comments from the public on the proposals, the window being open till June 10.

With regard to lock-in periods, SEBI has proposed that if the objective of the issue involves offer for sale or financing other than for capital expenditure for a project, then the minimum promoters’ contribution of 20% should be locked-in for one year from the date of allotment in the Initial Public Offer (IPO). Currently, the lock-in period is three years.

“Promoters’ holding in excess of minimum promoters’ contribution shall be locked in for a period of six months as opposed to the existing requirement of one year from the date of allotment in the IPO.

The entire pre-issue capital held by persons other than promoters should be locked in for six months from the date of allotment in the IPO as against the current norm of one year.

In addition, the regulator has suggested rationalising the definition of ‘promoter group’ as the current definition focusses on encompassing holdings by a common group of individuals or persons and often results in including unrelated companies with common financial investors.

The regulator has proposed to do away with the current definition of promoter group as the deletion would rationalise the disclosure burden and bring it in line with the post listing disclosure requirement.

‘Changing scenario’

Citing the changing investor landscape, SEBI said there was a need to revisit the concept of ‘promoter’ to a concept of ‘person in control’ and a period of three years has been proposed for such a shift over in a smooth and progressive manner without causing disruption.

“Unlike the past, the concentration of ownership and controlling rights does not vest completely in the hands of the promoters or promoter group. There has been a significant increase in the number of private equity and institutional investors who invest in companies and take up substantial shareholding, and in some cases, control.

Such investors invest in unlisted firms and continue to hold shares post listing, many times being the largest public shareholders, having special rights, such as the right to nominate directors. Aggregate promoters’ holdings in the top 500 listed firms by market value, peaked at 58% in 2009 and is on a downward trend.

WHO classifies India variant as being of global concern. What does it mean? #GS3 #SnT

The World Health Organization on Monday classified a coronavirus variant first identified in India as a “global variant of concern”. This variant called B.1.617 was classified as a variant under investigation (VUI) by authorities in the UK earlier in May. It has already spread to more than 17 countries and several countries have put travel restrictions for passengers coming from India as a result of the surge in cases here.

How does the WHO define a variant of concern?

The WHO says that a variant of interest (VOI) becomes a variant of concern (VOC) if, through a comparative assessment, it has been demonstrated to be associated with increase in transmissibility or detrimental change in COVID-19 epidemiology, increase in virulence or change in clinical disease presentation or a decrease in effectiveness of public health and social measures or available diagnostics, vaccines, therapeutics. Alternatively, a variant may be classified as a VOC by the WHO in consultation with the WHO SARS-CoV-2 Virus Evolution Working Group.

Is B.1.617 the reason for the current surge in India?

Last week, the Indian government said that this variant also called the “double mutant variant” could be linked to a surge in the cases of coronavirus seen in some states. This admission was a change in the Centre’s previous stance when it said that the strain was not identified in enough samples to establish a sufficient link to the current surge. Even so, the government said that the link was not “fully established”.

Earlier in March, India’s Health Ministry said that a new “double mutant variant” of the coronavirus had been detected in addition to many other strains or variants of concern (VOCs) found in 18 states in the country.

B.1.617 was first designated as a VUI on April 1 by the UK health authorities who requested India to send samples of the B.1.617 strain to carry out wider studies on it and determine how effective existing vaccines are against it.

How do variants of a virus emerge and why?

Variants of a virus have one or more mutations that differentiate it from the other variants that are in circulation. While most mutations are deleterious for the virus, some make it easier for the virus to survive.

Essentially, the goal of the virus is to reach a stage where it can cohabitate with humans because it needs a host to survive. This means, any virus is likely to become less severe as it keeps evolving, but in this process it can attain some mutations that may be able to escape the body’s immune response or become more transmissible.

The SARS-CoV-2 virus is evolving fast because of the scale at which it has infected people around the world. High levels of circulation mean it is easier for the virus to change as it is able to replicate faster.

The B.1.617 variant of the virus has two mutations referred to as E484Q and L452R. Both are separately found in many other coronavirus variants, but they have been reported together for the first time in India.

The L452R mutation has been found in some other VOIs such as B.1.427/ B.1.429, which are believed to be more transmissible and may be able to override neutralising antibodies. The WHO has said that laboratory studies suggest that samples from individuals who had natural infection may have reduced neutralisation against variants which have the E484Q mutation.

So how are variants of the coronavirus classified and what does it mean?

Public Health England (PHE) says that if the variants of SARS-CoV-2 are considered to have concerning epidemiological, immunological or pathogenic properties, they are raised for formal investigation.

At this point, the variants emerging from the B.1.617 lineage are designated as Variants Under Investigation (VUI) with a year, month, and number (For instance, the three variants first identified in India are called VUI-21APR-01, VUI-21APR-02 and VUI-21APR-03) by PHE. Following a risk assessment with the relevant expert committee, the variants identified in India may be designated Variant of Concern (VOC) by the UK health authority.

The US Centers for Disease Control and Prevention (CDC), on the other hand classifies variants into three categories– variant of interest (VOI), variant of concern (VOC) and variant of high consequence. In the US, the B.1.526, B.1.526.1, B.1.525 (previously designated UK1188 and first identified in the UK), and P.2 (identified first in Brazil) variants. On the other hand, the B.1.1.7, B.1.351, P.1, B.1.427, and B.1.429 variants circulating in the US are classified as variants of concern.

The CDC defines a VOI as, “A variant with specific genetic markers that have been associated with changes to receptor binding, reduced neutralization by antibodies generated against previous infection or vaccination, reduced efficacy of treatments, potential diagnostic impact, or predicted increase in transmissibility or disease severity.”

While a VOC is defined as “A variant for which there is evidence of an increase in transmissibility, more severe disease (e.g., increased hospitalizations or deaths), significant reduction in neutralization by antibodies generated during previous infection or vaccination, reduced effectiveness of treatments or vaccines, or diagnostic detection failures.”

So far, the CDC has not found variants of high consequence in circulation in the US.

How a US pipeline came under a cyberattack, how it impacts oil prices #GS3 #Security

A ransomware attack on a key US pipeline network has led to a disruption in fuel supplies in the eastern part of the United States.

Colonial Pipeline Company, which transports about 45 per cent of all petrol and diesel consumed on the east coast of the US was forced to shut down operations after a cyberattack on May 7.

The shutdown led to the US federal government declaring a regional emergency to allow transportation of fuels through tanker trucks to tide over the impact of shortages. What kind of attack was this, and how did it impact oil prices?

What is a ransomware attack?

A ransomware attack is a cyber-attack using malware that encrypts the victim’s files and requires users pay a ransom to decrypt the files.

According to experts, with companies having moved to real-time backups, hackers have, as in the case of the Colonial Pipeline attack, also added the element of downloading all the data on an enterprise network before encrypting it.

The hackers can then threaten to leak the data if the ransom is not paid.

The US Federal Bureau of Investigation confirmed on Monday that a criminal gang called Darkside was responsible for compromising the Colonial Pipeline network.

How did this attack impact oil prices?

Oil prices rose in response to the attack on Colonial Pipeline, with the price of Brent crude rising to $69 per barrel on Monday before falling to $67.8 on Tuesday.

The Colonial Pipeline company has said that it is restoring operations in a phased manner with the goal of “substantially restoring operations” by the end of the week.

Experts noted that a prolonged shutdown of the operations of the pipeline could push up petrol prices in the US as demand peaks during the summer. The disruption has already led to an uptick in international refining margins, pushing up the price of auto fuels.

An increase in the price of petroleum products in Asia could provide a further push to petrol and diesel prices in India, which are already at record high levels.

Crude oil prices have risen over the past fortnight despite a surge in Covid-19 infections in Asia due to expectations of increasing crude oil demand from the US and Europe.

How can oil and gas companies deal with such attacks?

Experts noted that there was a need to move towards fortifying approaches to prevent attacks including employing a zero-trust security framework in enterprise networks.

“A zero-trust approach means anything is suspected whenever any activity is done on the network, and every user, including the CEO, will have to be verified time and again,” said a cybersecurity consultant who did not wish to be named.

This expert added that other measures such as Cloud Access Security Brokers (CPAB), which act as intermediaries between users and cloud service providers, could “give teeth” to an overall cybersecurity strategy.

The expert noted that India’s oil and gas PSUs were making efforts to beef up security, and that organisations managing critical infrastructure such as pipelines and refineries were required by the government to implement certain security measures.

The Ministry of Petroleum and Natural Gas did not respond to emailed requests for comment on the vulnerability of critical oil and gas infrastructure to cyber attacks.

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