The National Disaster Response Fund (NDRF) is a specialized fund set up by the Government of India to finance relief and response measures during natural disasters or calamities. It was established based on the recommendations of the 13th Finance Commission in 2010. The primary objective of the NDRF is to provide timely assistance to states and Union Territories (UTs) in the event of severe disasters, ensuring effective and coordinated response efforts.

Key features of the National Disaster Response Fund (NDRF) include:

• The NDRF is constituted under the Disaster Management Act, 2005, which provides a legal framework for disaster management in India.
• The fund is specifically earmarked for meeting the relief and response expenses incurred by state governments and UT administrations during natural calamities such as floods, cyclones, earthquakes, droughts, and other severe disasters.
• The NDRF receives contributions from the Central Government, with the primary corpus being replenished annually through budgetary allocations. Additionally, the fund can also receive voluntary contributions from individuals, organizations, and other sources.
• The management and administration of the NDRF are overseen by the Ministry of Home Affairs (MHA), Government of India. The fund is disbursed to state governments and UT administrations based on specific criteria and guidelines established by the Central Government.
• States and UTs can utilize the funds from the NDRF to finance various relief measures, including evacuation and rescue operations, provision of food, shelter, medical assistance, and restoration of infrastructure and public services affected by disasters.
• The utilization of funds from the NDRF is subject to regular monitoring and audit to ensure transparency, accountability, and compliance with established guidelines.

Purpose

• To establish a legal and institutional framework for disaster management in India
• To empower the Central Government, State Governments and local authorities for effective management of disasters
• To institute a mechanism for coordination in the response to disaster situations

Key Provisions

• Creates a National Disaster Management Authority (NDMA) at the national level and State Disaster Management Authorities (SDMAs) at the state level, along with District Disaster Management Authorities (DDMAs) at the district level.
• The National Disaster Response Fund (NDRF) is a central pool of funds for emergency response, relief, and rehabilitation during disasters.
• National Plan and State Plans Mandates the creation of a National Plan for disaster management and State Plans aligned with the National Plan.
• Emphasizes proactive measures to reduce the risks of disasters, including early warning systems, vulnerability assessments, and disaster preparedness plans.
• Defines roles and responsibilities for various authorities during disaster situations, including response, relief, and evacuation procedures.
• Encourages community involvement in disaster management activities.

Significance

• The Act provides a much-needed legal framework for a coordinated approach to disaster management in India.
• It emphasizes not only response and relief but also proactive mitigation measures to minimize the impact of disasters.
• The Act empowers various levels of government to work together effectively during disaster situations.

Criticisms

• Some argue that the implementation of the Act has been uneven across different states.
• There are concerns regarding the adequacy of funding allocated for disaster preparedness and mitigation activities.

Reasons for the Severity

Government's Response

Federalism in India is characterized by a unique blend of unitary and federal features, reflecting the country's diverse socio-cultural, linguistic, and geographical landscape.

The features of federalism in India include

• India has a written constitution that delineates the powers and responsibilities of the central government and the state governments. The Constitution of India establishes a federal structure with a division of powers between the Union (central) and the states.
• The Constitution of India provides for a three-fold distribution of legislative powers between the Union List, State List, and Concurrent List. The Union List includes subjects on which the central government has exclusive jurisdiction, the State List includes subjects on which state governments have exclusive jurisdiction, and the Concurrent List includes subjects on which both the central and state governments can legislate.
• The Constitution of India is the supreme law of the land, and both the central and state governments are bound by its provisions. Any law or action inconsistent with the Constitution can be struck down by the judiciary.
• India has an independent judiciary with the Supreme Court as the final interpreter of the Constitution. The judiciary acts as a guardian of federalism by adjudicating disputes between the central and state governments and ensuring that the division of powers is maintained.
• India operates under a dual polity, with separate governments at the central and state levels. Each level of government has its own executive, legislature, and judiciary, and they operate independently within their respective spheres of authority.
• While the Constitution of India establishes a federal structure, it also provides for a degree of flexibility to accommodate changing socio-economic and political realities. The Constitution can be amended through a prescribed procedure, which requires the consent of both the central and state governments.
• Unlike some federal countries where citizens hold dual citizenship (federal and state), India follows the principle of single citizenship. All Indian citizens are citizens of the Union of India, and there is no separate state citizenship.
• Integrated Judiciary While each state has its own High Court, the Supreme Court of India serves as the apex judicial body for the entire country. It has the authority to hear appeals from the High Courts as well as disputes between the central and state governments.
• The Inter-State Council, established by the Constitution, facilitates cooperation and coordination between the central and state governments on matters of common interest, promoting cooperative federalism.

For Prelims: National Disaster Response Fund (NDRF), Federalism, Inter-state Council, Drought, MGNREGA, NDMA, Disaster Management Act, Monsoon For Mains:   1. Analyze the reasons behind the severe drought situation in Karnataka and Evaluate the measures being taken by the Karnataka government to address the drought. Suggest additional long-term solutions for drought mitigation in the state. (250 Words) 2. Explain the significance of the Inter-State Council and other mechanisms for facilitating cooperation between states in disaster management. (250 Words)

 

 

Previous Year Questions   1. Select the correct statement about the Sendai framework (MPSC 2019) 1. This framework is passed by United Nations organisations conference at Sendai (Japan) on 18th March 2015 2. This framework is regarding measures for Disaster Risk Reduction 3. This is an onward step of the Hyogo Framework about disaster management 4. The provisions in this framework are binding on member countries Select the correct code A. 1 and 2     B. 2 and 3         C. 1, 2, 3       D. All the above   Answer - C

 

Source: The Indian Express

CHANDRAYAAN-3

1. Context 

Almost a year after Chandrayaan 3 landed on the Moon, scientists in India have released the findings of studies carried out by one of the instruments on the rover module. The findings comprise the first analysis of the composition of the topsoil in the Moon’s southern latitudes, and support the widely-accepted hypothesis that the lunar surface in the immediate aftermath of the Moon’s formation was covered by a sea of molten material.

 

 2. Chandrayaan-3

• Chandrayaan-3 is the third lunar mission of the ISRO. It follows the Chandrayaan-1 and Chandrayaan-2 missions.
• The primary objective of Chandrayaan-3 is to achieve a successful landing on the Moon's surface, rectifying the setback faced by its predecessor, Chandrayaan-2, in 2019.
• The Chandrayaan-3 mission aims to demonstrate India's capability to soft-land a lander and rover on the lunar surface.
• By executing a precise landing, ISRO intends to showcase the technological advancements and expertise of the Indian space program.
• The mission will contribute to expanding our understanding of the Moon, its geological features, and its evolution.
• To ensure the success of Chandrayaan-3, ISRO has incorporated improvements and modifications based on the lessons learned from Chandrayaan-2.
• These include enhancements in the design and functioning of the lander and rover, as well as improvements in navigation and landing systems.
• Rigorous testing and evaluations have been conducted to address the shortcomings identified during the previous mission.
• It can be expected that they will be similar to those carried by Chandrayaan-2, aiming to study lunar topography, mineralogy, surface composition, and the Moon's environment.
• These instruments will gather valuable data to further our knowledge of the Moon and contribute to scientific research.

Image Source: India Today

3. Chandrayaan-2 Mission and its Objectives and Discoveries

• The Chandrayaan-2 mission, launched on July 22, 2019, had a multifaceted objective.
• While the most discussed goal was to demonstrate the ability to soft-land a lander and rover on the unexplored south pole of the Moon, it also aimed to expand lunar scientific knowledge through various studies.
• These studies included detailed investigations of topography, seismography, mineral identification and distribution, surface chemical composition, topsoil thermo-physical characteristics and the lunar atmosphere composition.

4. Chandrayaan 2 Orbiter

• Despite the challenges faced by the Vikram lunar lander, which crash-landed on the Moon's surface on September 6, 2019, the Mission's orbiter remained fully operational.
• The orbiter gathered a wealth of new information about the Moon and its environment, significantly contributing to our understanding of the lunar surface, sub-surface and exosphere.
• The data collected by the orbiter added valuable insights into the exploration of permanently shadowed regions and the study of craters and boulders beneath the regolith.

 

5. Reasons for Failure of the Vikram Lander

• The landing attempt of the Chandrayaan-2 Mission's Vikram lander encountered a setback when ISRO lost contact shortly before the scheduled touchdown on September 7.
• The lander was decelerating but failed to slow down to the required safe landing speed of 2 meters per second.
• Designed to absorb an impact even at 5 meters per second, Vikram hit the Moon's surface at a much higher speed, resulting in damage to itself and its instruments.
• The crash landing of the Vikram lander prevented the successful demonstration of soft landing technology in space.
• However, ISRO identified and rectified the small error responsible for the failure, paving the way for the upcoming Chandrayaan-3 mission to showcase this technology without any glitches.
• Furthermore, the crash landing also resulted in missed opportunities for gathering additional data about the lunar terrain, composition and mineralogy.

 

6. The Way Forward

• The lander Vikram and rover Pragyaan was equipped with instruments to conduct surface observations, which, combined with the orbiter's support, could have provided diverse sets of data contributing to a more comprehensive understanding of the Moon.
• With Chandrayaan-3 on the horizon, ISRO aims to overcome previous challenges, achieve a successful soft landing on the Moon, and advance scientific exploration by collecting valuable information about our celestial neighbour.

 

For Prelims: Vikram lander, Chandrayaan-3, Chandrayaan-2, Moon, ISRO, lunar mission, celestial body,  For Mains:  1. Discuss the primary objective of Chandrayaan-3 and its significance in India's space exploration efforts. (250 Words)

 

 

Previous Year Questions 1. In the context of space technology, what is "Bhuvan", recently in the news?  (UPSC 2010)  A. A mini satellite, launched by ISRO for promoting the distance educa­tion in India B. The name given to the next Moon Impact Probe, for Chandrayan-II C. A geoportal of ISRO with 3 D imaging capabilities of India D. A space telescope developed by India Answer: C 2. What will be India's second moon mission by ISRO? (Maharashtra Talathi  2019)  A. Chandrayaan 1          B. Chandrayaan 1.A       C. Chandrayaan 2          D. Chandrayaan 3 Answer: C 3. Chandrayaan - 2 was launched from which of the following states by ISRO? (DSSSB LDC 2019)  A. Maharashtra           B.  Rajasthan             C.  Kerala             D.  Andhra Pradesh Answer: D 4. The phases of the moon as we see from the Earth are due to changing relative positions of the sun, the earth and the moon. Which of the following statements is true?  (CTET  2022)   A. on a full moon day, the earth comes between the sun and the moon B. on a new moon day, the moon is in between the earth and the sun C. on a full moon day, the moon is in between the earth and the sun D. on a new moon day, the earth is between the sun and the moon. E. on a new moon day, the sun is between the moon and the earth  1. A, B          2.  B, C          3. C, D          4. A, E Answer: 1 5. ISRO is related to:  (SSC JE EE  2020)  A. space research          B. agricultural research           C. seed research        D. marine research Answer: A 6. “The experiment will employ a trio of spacecraft flying in formation in the shape of an equilateral triangle that has sides one million kilometres long, with lasers shining between the craft.” The experiment in question refers to (UPSC 2020)  A. Voyager-2          B. New Horizons          C. LISA Pathfinder          D. Evolved LISA Answer: D   1. India has achieved remarkable successes in unmanned space missions including the Chandrayaan and Mars Orbiter Mission, but has not ventured into manned space missions, both in terms of technology and logistics? Explain critically (UPSC GS3, 2017) 2.Discuss India’s achievements in the field of Space Science and Technology. How the application of this technology has helped India in its socio-economic development? (UPSC GS3, 2016)

Source: The Indian Express

 

FOREIGN DIRECT INVESTMENT (FDI)

 

 

1. Context

A day after expressing concern over the use of predatory pricing strategies by e-commerce players in the country, Commerce and Industry Minister Piyush Goyal on Thursday stated that the government has no intention of halting online commerce but desires fair play so that small retailers can survive and coexist.

 

2. FDI in India

• India's net foreign direct investment (FDI) inflows experienced a decline, decreasing by nearly 31% to $25.5 billion during the first 10 months of the 2023-24 fiscal year. The Finance Ministry attributed this decline to a broader trend of slowing investments in developing countries, while expressing optimism for a potential increase in investments in the current calendar year.
• Although global FDI flows overall saw a 3% rise to approximately $1.4 trillion in 2023, economic uncertainty and elevated interest rates impacted global investment, resulting in a 9% decrease in FDI flows to developing nations, as outlined in the Ministry's February assessment of economic performance.
• Reflecting the global trend of reduced FDI flows to developing countries, gross FDI inflows to India also experienced a slight decline, from $61.7 billion to $59.5 billion during the period from April 2023 to January 2024. In terms of net inflows, the corresponding figures were $25.5 billion versus $36.8 billion. The decrease in net inflows was primarily attributed to an increase in repatriation, while the decline in gross inflows was minimal.
• While a modest uptick in global FDI flows is anticipated for the current calendar year, attributed to a decrease in inflation and borrowing costs in major markets that could stabilize financing conditions for international investment, significant risks persist, according to the Ministry. These risks include geopolitical tensions, elevated debt levels in numerous countries, and concerns regarding further fragmentation of the global economy

 

3. Foreign Direct Investment (FDI)

Foreign Direct Investment (FDI) refers to the investment made by individuals, businesses, or governments from one country (the home country) into another country (the host country) with the objective of establishing a lasting interest or significant degree of influence in the foreign business or enterprise

Key Aspects:

• FDI involves the transfer of funds and resources from one country to another. This capital inflow can help stimulate economic growth in the host country by providing funds for investment in infrastructure, technology, and other areas.
• FDI often leads to the creation of jobs in the host country. When foreign companies establish subsidiaries or invest in existing businesses, they typically hire local employees, which can help reduce unemployment and improve living standards
• Foreign investors often bring advanced technologies, processes, and management practices to the host country. This technology transfer can enhance the host country's productivity, competitiveness, and industrial capabilities
• FDI can provide access to new markets for both the host country and the investing company. Foreign investors can tap into the host country's consumer base, while the host country gains access to the investing company's global distribution networks.
• FDI can contribute to overall economic development in the host country by promoting industrialization, improving infrastructure, and fostering innovation and entrepreneurship.

4.FDI Routes in India

India has several routes through which Foreign Direct Investment (FDI) can enter the country. These routes are regulated by the Reserve Bank of India (RBI) and the Department for Promotion of Industry and Internal Trade (DPIIT), and they define the conditions, limits, and sectors in which FDI is allowed

1. Automatic Route: Under the automatic route, FDI is allowed without the need for prior approval from the RBI or the government. Investors only need to notify the RBI within a specified time frame after the investment is made. This route is available for most sectors, except those that are prohibited or require government approval.

2. Government Route: In sectors or activities that are not covered under the automatic route, FDI requires government approval. Investors must apply for approval through the Foreign Investment Facilitation Portal (FIFP) or the Foreign Investment Promotion Board (FIPB), depending on the sector.

4.1. Examples

• Under the automatic route, FDI of up to 100% is allowed for manufacturing of automobiles and components.
• For the manufacturing of electric vehicles (EVs), 100% FDI is allowed under the automatic route.
• In single-brand retail trading, 100% FDI is allowed, with up to 49% allowed under the automatic route. Beyond 49%, government approval is required.
• Multi-brand retail trading (supermarkets and department stores) with FDI is permitted in some states, subject to certain conditions and restrictions. The FDI limit is typically capped at 51%.
• FDI in the insurance sector is allowed up to 74%, with up to 49% under the automatic route. Beyond 49%, government approval is needed
• In the telecom sector, 100% FDI is allowed, with up to 49% under the automatic route. Beyond 49%, government approval is required
• In the defense sector, FDI up to 74% is allowed under the automatic route, with government approval required for investments beyond 49%
• In most segments of the media and broadcasting sector, including print and digital media, 100% FDI is allowed, with up to 49% under the automatic route

4.2.Sectors where FDI Prohibited

• FDI is prohibited in the atomic energy sector, which includes activities related to the production of atomic energy and nuclear power generation.
• FDI is generally prohibited in the gambling and betting industry, which includes casinos and online betting platforms
• FDI is not allowed in the lottery business, except for state-run lotteries
• FDI is prohibited in chit funds, which are traditional Indian savings and credit schemes.
•  Nidhi companies are non-banking finance companies (NBFCs) that facilitate mutual benefit funds. FDI is typically not permitted in these entities
• While FDI is allowed in single-brand retail trading, it is generally prohibited in multi-brand retail trading of agricultural products. Some states have allowed it under specific conditions, but this remains a highly regulated area.
• FDI is not allowed in the trading of transferable development rights (TDRs) pertaining to the construction of real estate

5. Foreign Portfolio Investors (FPIs)

Foreign Portfolio Investors (FPIs) refer to foreign individuals, institutions, or funds that invest in financial assets in a country, such as stocks, bonds, mutual funds, and other securities. FPIs are distinct from Foreign Direct Investors (FDIs), who typically make long-term investments in companies and assets to establish a lasting interest

Key Aspects:

• FPIs invest in a country's financial markets, primarily by buying and selling securities traded on stock exchanges and fixed-income instruments like bonds and government securities
• FPIs often seek to diversify their investment portfolios by spreading their investments across different asset classes, sectors, and countries. This diversification helps manage risk and enhance returns
• FPIs have the flexibility to buy and sell securities in the secondary market, providing liquidity to the market and contributing to price discovery
• FPIs typically have a shorter investment horizon compared to Foreign Direct Investors (FDIs). They may engage in short-term trading or hold securities for a few months to a few years.
• FPIs are subject to regulatory frameworks and restrictions in the countries where they invest. These regulations are designed to ensure that foreign investments do not pose undue risks to the local financial markets and economy.

6.Foreign Portfolio vs. Foreign Direct Investment

 

FPI (Foreign Portfolio Investment)	FDI (Foreign Direct Investment)
FPI involves the purchase of financial assets such as stocks, bonds, mutual funds, and other securities in a foreign country. These investments are typically made with the intention of earning returns on capital and do not result in significant control or ownership of the underlying businesses	FDI entails making an investment in a foreign country with the primary objective of establishing a lasting interest and significant control or influence over a business enterprise or physical assets. FDI often involves the acquisition of a substantial ownership stake (typically at least 10%) in a company or the establishment of new business operations.
FPI is generally characterized by a shorter investment horizon. Investors in FPI may engage in trading and portfolio rebalancing activities, and their investments are often more liquid. The focus is on earning capital gains and income from investments.	FDI is characterized by a longer-term commitment. Investors in FDI intend to engage in the day-to-day management or decision-making of the business, contribute to its growth and development, and generate profits over an extended period.
FPI investors typically have little to no influence or control over the companies in which they invest. They are passive investors who participate in the financial markets and rely on market dynamics to drive returns.	FDI investors actively participate in the management and decision-making of the businesses they invest in. They often seek to exercise control over company operations and strategy, which may include appointing board members or key executives.
FPI investments are often made through financial instruments like stocks, bonds, and securities. Investors may use instruments like mutual funds or exchange-traded funds (ETFs) to gain exposure to foreign markets	FDI investments involve a direct equity stake in a company, either through share acquisition or the establishment of a subsidiary or branch in the host country. FDI can also involve the purchase of real assets such as land, factories, or infrastructure
FPI can provide short-term capital inflows, but it may be more susceptible to market volatility and sudden capital outflows. It may not have as direct an impact on job creation and economic development as FDI.	FDI often contributes to long-term economic development by creating jobs, stimulating infrastructure development, transferring technology and expertise, and enhancing the competitiveness of local industries
FPI investments are subject to regulations that vary by country and may include foreign ownership limits, reporting requirements, and tax considerations.	FDI is subject to regulations that can be more stringent and may involve government approval, sector-specific conditions, and investment protection measures

 

 

 

 

For Prelims: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc For Mains: General Studies III: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment

 

 

Previous Year Questions   1. Both Foreign Direct Investments (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. (UPSC CSE 2011)   Which one of the following statements best represents an important difference between the two? A.FII helps bring better management skills and technology, while FDI only brings in capital B.FII helps in increasing capital availability in general, while FDI only targets specific sectors C.FDI flows only into the secondary markets, while FII targets primary market D.FII is considered to the more stable than FDI   Answer (B)

 

Source: indianexpress