CRITICAL MINERALS
1. Context
The Ministry of Mines in 2023 identified 30 critical minerals deemed essential for the nation’s economic development and national security. While the report highlighted India’s complete import dependency for 10 critical minerals, it did not fully address a more pressing concern — the extent and nature of dependency on China
2. What are Critical Minerals?
Critical minerals are raw materials that are essential for economic and national security, but whose supply may be at risk due to geological scarcity, geopolitical issues, trade policy, or other factors
Critical minerals are typically defined by governments or organizations based on their importance to the economy and the potential risks to their supply
- Rare Earth Elements (REEs): neodymium, dysprosium, terbium
- Lithium
- Cobalt
- Graphite
- Gallium
- Indium
- Tungsten
- Platinum Group Metals (PGMs)
.jpg)
3. Why are critical minerals important?
- Minerals such as copper, lithium, nickel, and cobalt, along with certain rare earth elements, are considered critical due to their essential role in the global transition to greener and cleaner energy sources.
- According to the International Energy Agency (IEA), the demand for lithium surged by 30% in 2023, with nickel, cobalt, graphite, and rare earth elements experiencing growth between 8% and 15%, collectively valued at $325 billion.
- The IEA's Global Critical Minerals Outlook 2024 report indicates that achieving the world's goal of limiting global warming to 1.5 degrees Celsius within a net-zero emissions framework will necessitate a significant increase in demand for these minerals.
- By 2040, copper demand is projected to rise by 50%, nickel, cobalt, and rare earth elements by 100%, graphite by 300%, and lithium by 800%, which is vital for battery production.
- Developing sustainable supply chains for these minerals is therefore crucial. In India, the absence of readily available reserves has led to complete import dependence for minerals such as lithium, cobalt, and nickel.
4. What is being done to spur production?
- Although India possesses natural reserves of several critical minerals, they remain largely unexplored and untapped. For example, despite holding 11% of the world's ilmenite deposits, which is the primary source of titanium dioxide used in numerous applications, India still imports a billion dollars' worth of titanium dioxide annually, as noted by former Mines Secretary Vivek Bharadwaj.
- Additionally, the "lucky" discovery of lithium reserves in the Union Territory of Jammu and Kashmir (J&K) by the Geological Survey of India (GSI) while exploring for limestone has raised hopes for achieving some level of self-sufficiency in lithium. Announced in February as India's first lithium find, these reserves are estimated at 5.9 million tonnes, prompting the government to expedite their extraction.
- Recognizing the risks of relying on a limited number of countries for these minerals and their processing, the central government amended the Mines and Minerals (Development and Regulation) Act, 1957 in August 2023 to allow mining concessions for 24 critical and strategic minerals.
5. Way Forward
The list of what's considered "critical" can vary by country and change over time based on technological developments and geopolitical situations. The management of critical minerals is an ongoing challenge that requires balancing economic needs, environmental concerns, and geopolitical realities
|
For Prelims: Critical minerals, Ministry of Mines, carbon emissions, cleaner energy, lithium, cobalt, nickel, graphite, tin, copper, Selenium, Cadmium, Centre of Excellence on critical minerals, Australia's CSIRO, Geological Survey of India,
For Mains:
1. What are critical minerals? Discuss their significance for a country's economic development and national security. Explain how the identification of critical minerals helps in reducing import dependency and ensuring resource security. (250 Words)
|
|
Previous Year Questions
1. With reference to the mineral resources of India, consider the following pairs: (UPSC 2010)
Mineral 90%Natural sources in
1. Copper Jharkhand
2. Nickel Orissa
3. Tungsten Kerala
Which of the pairs given above is/are correctly matched?
A. 1 and 2 only B. 2 only C. 1 and 3 only D. 1, 2 and 3
Answer: B
2. Recently, there has been a concern over the short supply of a group of elements called 'rare earth metals.' Why? (UPSC 2012)
1. China, which is the largest producer of these elements, has imposed some restrictions on their export.
2. Other than China, Australia, Canada and Chile, these elements are not found in any country. 3. Rare earth metals are essential for the manufacture of various kinds of electronic items and there is a growing demand for these elements.
Which of the statements given above is/are correct?
A. 1 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
Answer: C
3. In India, what is the role of the Coal Controller's Organization (CCO)? (UPSC 2022)
1. CCO is the major source of Coal Statistics in Government of India.
2. It monitors progress of development of Captive Coal/Lignite blocks.
3. It hears any objection to the Government's notification relating to acquisition of coal-bearing areas.
4. It ensures that coal mining companies deliver the coal to end users in the prescribed time. Select the correct answer using the code given below:
A. 1, 2 and 3 B. 3 and 4 only C. 1 and 2 only D. 1, 2 and 4
Answer: A
4. Which of the following statements best describes the term 'Social Cost of Carbon'? It is a measure, in monetary value, of the (UPSC 2020)
A. long-term damage done by a tonne of CO2 emission in a given year.
B. requirement of fossil fuels for a country to provide goods and services to its citizens, based on the burning of those fuels.
C. efforts put in by a climate refugee to adapt to live in a new place.
D. contribution of an individual person to the carbon footprint on the planet Earth.
Answer: A
5. Direction: It consists of two statements, one labelled as ‘Statement (I)’ and the others as ‘Statement (II)’. You are to examine these two statements carefully and select the answer using the codes given below: (UPSC ESE 2018)
Statement (I): Green energy refers to one which does not harm the ecosystem of planet earth. Statement (II): All renewable energy is green energy.
A. Both Statement (I) and Statement (II) individually true and Statement (II) is the correct explanation of Statement (I)
B. Both statement (I) and Statement (II) are individually true, but Statement (II) is not the correct explanation of Statement (I)
C. Statement (I) is true, but Statement (II) is false
D. Statement (I) is false, but Statement (II) is true
Answer: C
6. Which type of battery is used in the recently launched world's first fully electric cargo ship by change? (Delhi Police Constable 2017)
A. Lead Acid B. Manganese C. Lithium ion D. Nickel metal hydride
Answer: C
7. White gold is an alloy of (UPSC CAPF 2022)
A. gold, nickel and palladium
B. gold, cobalt and palladium
C. gold, titanium and platinum
D. gold, magnesium and palladium
Answer: A
8. Graphene is frequently in news recently. What is its importance? (UPSC 2012)
1. It is a two-dimensional material and has good electrical conductivity.
2. It is one of the thinnest but strongest materials tested so far.
3. It is entirely made of silicon and has high optical transparency.
4. It can be used as 'conducting electrodes' required for touch screens, LCDs and organic LEDs. Which of the statements given above are correct?
A. 1 and 2 only B. 3 and 4 only C. 1, 2 and 4 only D. 1, 2, 3 and 4
Answer: C
9. Graphite and diamonds are__________. (WBCS Prelims 2020)
A. isotopes B. isomers C. isotones D. allotropes
Answer: D
10. Consider the following statements: (UPSC 2020)
1. Coal ash contains arsenic, lead and mercury.
2. Coal-fired power plants release sulphur dioxide and oxides of nitrogen into the environment. 3. High ash content is observed in Indian coal.
Which of the statements given above is/are correct?
A. 1 only B. 2 and 3 only C. 3 only D. 1, 2 and 3
Answer: D
11. Which of the following can be found as pollutants in the drinking water in some parts of India? (UPSC 2013)
1. Arsenic
2. Sorbitol
3. Fluoride
4. Formaldehyde
5. Uranium
Select the correct answer using the codes given below.
A. 1 and 3 only B. 2, 4 and 5 only C. 1, 3 and 5 only D. 1, 2, 3, 4 and 5
Answer: C
12. In the context of solving pollution problems, what is/are the advantage/advantages of the bioremediation technique? (UPSC 2017)
1. It is a technique for cleaning up pollution by enhancing the same biodegradation process that occurs in nature.
2. Any contaminant with heavy metals such as cadmium and lead can be readily and completely treated by bioremediation using microorganisms.
3. Genetic engineering can be used to create microorganisms specifically designed for bioremediation.
Select the correct answer using the code given below:
A. 1 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
Answer: C
13. Due to improper/indiscriminate disposal of old and used computers or their parts, which of the following are released into the environment as e-waste? (UPSC 2013)
1. Beryllium
2. Cadmium
3. Chromium
4. Heptachlor
5. Mercury
6. Lead
7. Plutonium
Select the correct answer using the codes given below.
A. 1, 3, 4, 6 and 7 only B. 1, 2, 3, 5 and 6 only
C. 2, 4, 5 and 7 only D. 1, 2, 3, 4, 5, 6 and 7
Answer: B
14. When was the Geological Survey of India (GSI) of India founded? (UPRVUNL Staff Nurse 2021)
A. 1851 B. 1951 C. 1871 D. 1931
Answer: A
|
Source: The Hindu
STARLINK DEVICES
1. Context
Billionaire Elon Musk has denied claims that his space company SpaceX’s satellite internet technology, Starlink is being used by militants in Manipur. This came after the Indian Army and police seized weapons and what looked like a Starlink-branded satellite router and antenna. Starlink is still pending approval in India, though it will be starting in Bangladesh and Bhutan in 2025
2. What is Starlink?
- Starlink operates a large network of low Earth orbit satellites to provide broadband internet with fast speeds and low latency. This enables users not only to access essential services but also to stream content, play online games, make video calls, and engage in other data-intensive activities, as stated by the company.
- It is widely used in remote areas, on sea vessels, in disaster-hit zones, and in regions where internet access is limited or controlled by authoritarian governments.
- The Starlink system consists of thousands of satellites orbiting Earth at approximately 550 km. While it offers global coverage, SpaceX notes that it is not permitted to provide services in certain regions
- Starlink is a satellite internet constellation project developed by SpaceX, the private aerospace company founded by Elon Musk. The project aims to provide global internet coverage, particularly to remote or underserved regions that lack reliable broadband infrastructure.
- Starlink uses a network of low Earth orbit (LEO) satellites, which are placed much closer to the Earth compared to traditional geostationary satellites. This proximity allows Starlink to offer high-speed, low-latency internet services
3. Key Features of Starlink
-
Global Coverage: Starlink aims to provide internet access anywhere on Earth, especially to rural or remote locations where ground-based internet services are unavailable or expensive.
-
Low Earth Orbit Satellites: Unlike traditional satellite internet, which uses satellites in geostationary orbit (22,000 miles above Earth), Starlink’s satellites orbit at altitudes between 340 km and 1,200 km. This reduces latency (the time it takes for data to travel between the user and the satellite).
-
High-Speed Internet: Starlink provides broadband-level speeds, typically ranging from 50 Mbps to 150 Mbps, with some users reporting speeds of up to 200 Mbps. Latency can be as low as 20-40 milliseconds, which is comparable to or better than traditional cable internet.
-
Affordable Equipment: To access the Starlink service, users need a dish (referred to as the "Starlink Kit") that includes a phased array antenna, a Wi-Fi router, and cables. The setup is designed to be easy and self-installable.
-
Ongoing Expansion: As of 2024, Starlink continues to launch additional satellites to expand its coverage and improve service reliability
4. Can Starlink internet be controlled?
- International borders are not rigid, and refining satellite internet coverage to match these borders with exact precision is challenging. This is further complicated by the fact that many borders are disputed or ambiguous, while satellites overhead continuously transmit encrypted signals.
- This encryption serves to prevent interference from militants or other malicious entities attempting to hack into the service. The central concern is whether militants in regions like Manipur could effectively access Starlink satellite internet in India.
- If these [Starlink] devices were purchased from outside India, by any means, they could still be used, as the device would then be authorized.
- The issue is whether the device has a location-tracking feature. If you buy a [Starlink] terminal in the U.S. and bring it to India, it might not work due to the change in geographical location—unless the terminal has an inbuilt location identifier."
5. Latest Controversy
- On December 16, the Spear Corps of the Indian Army posted photos on Elon Musk-owned X, showing guns, ammunition, and homemade mortars seized by army and police units in Manipur.
- Among the items, X users noticed a small satellite device and a router, which had the SpaceX logo. In response to a claim by an X user that Mr. Musk’s technology was being used by terrorists, the billionaire refuted the accusation, stating, "This is false.
- Starlink satellite beams are turned off over India." The Starlink device also displayed the markings "RPF/PLA," referring to a Myanmar-based Meitei extremist group banned in India. According to Starlink's website and coverage map, the service availability in Myanmar is not listed.
- This is not the first instance of SpaceX facing controversy in India. Last month, the Andaman and Nicobar islands police apprehended smugglers with over 6,000 kg of methamphetamine and a Starlink device allegedly used for communication and navigation, despite the service being banned in Indian waters. Additionally, in August, Starlink equipment was found being sold on the B2B platform IndiaMART
|
For Prelims: Low Earth Orbit (LEO) satellites, Starlink
For Mains: GS II & III - Governance, Cybersecurity and National Security
|
Source: The Hindu
SPEED GUN
1. Context
The world of today is a world in motion. People constantly want to get somewhere. The heavens are filling up with satellites, our skies with airplanes and rockets, our seas with ships and submarines, and our land with cars, bikes, and trains. Humans have developed laws, rules, technologies, and subsequently entire industries to make sure all these vehicles move smoothly, without harming humans or each other. A small but significant piece of this picture is the speed gun
2. What is a Speed Gun?
A speed gun is a device used to measure the speed of a moving object without physically contacting it. It operates by emitting electromagnetic radiation, typically in the form of radio waves or laser beams, which is reflected off the moving object. The device then analyzes the change in frequency of the reflected signal using the Doppler effect to calculate the object's speed.
Speed guns are commonly used by law enforcement officers to monitor vehicle speeds on roads, as well as by sports coaches to assess the speed of athletes, such as in baseball or track and field. They are also employed in various industries where precise motion tracking is needed
3. What is a Doppler Effect?
- The Doppler effect, named after Austrian physicist Christian Doppler, is based on the concept of relative velocity. Imagine a man standing at the center of a field, blowing a whistle.
- The sound waves spread outward in concentric circles, and a woman at the edge of the field will hear the waves as they reach her. These waves have a specific frequency and wavelength, where higher frequencies produce a higher pitch.
- If the man moves toward the woman in a buggy, the sound waves in front of the buggy become compressed. From the woman’s perspective, the waves would travel faster because they now combine the speed of the buggy with the speed of the sound wave, causing the waves to reach her more frequently.
- As a result, she hears a higher pitch. Conversely, if the buggy moves away, the pitch will be lower, as the waves are stretched out. This is why a train's horn sounds higher in pitch when it's approaching a station and lower when leaving – this is the Doppler effect in action.
- The speed gun, initially developed for military purposes during World War II, uses the Doppler effect with radio waves instead of sound waves. It consists of a radio transmitter and a receiver.
- The transmitter sends out radio waves that are directed at an object, and the receiver collects the reflected waves. If the object is moving toward the speed gun, the frequency of the reflected waves will be slightly higher than that of the transmitted waves.
- A computer inside the speed gun calculates the object’s speed based on this frequency difference
4. How are Speed and effects linked?
- All electromagnetic waves travel at a constant speed, which is equal to the speed of light in that particular medium. In a vacuum, this speed is denoted as c, approximately 299,792,458 meters per second.
- When the speed gun detects a change in frequency, it directly corresponds to the Doppler shift caused by the movement of the object.
- This principle is particularly useful because it enables the speed gun to function accurately over a wide range of distances and speeds, unaffected by air resistance.
- To determine the speed of a moving object, the speed gun calculates the difference between the received and emitted frequencies. This difference is then multiplied by c and divided by twice the emitted frequency.
- This formula illustrates that the difference in frequency is directly proportional to the object's speed: the faster the object moves, the greater the frequency difference will be.
- Essentially, the only requirement is that the object moves significantly slower than the speed of light — which holds true in nearly all practical uses of the speed gun
5. Challenges
- The technology to emit radio waves is now widespread. The concept is straightforward: when an antenna is powered by an alternating current at a radio-wave frequency, it generates radio waves. These waves typically fall within the 30 Hz to 300 billion Hz frequency range.
- For a long time, equipment to produce these waves was bulky. This changed with the invention of transistors in the 1940s, which allowed for the creation of more compact and efficient electronic circuits. These circuits simplified the generation of radio waves and made transmitters significantly smaller.
- However, radio waves have inherent limitations that transmitters cannot fully compensate for. For instance, radio waves spread out as they travel through the air. If an antenna is 5 cm long, the emitted waves will spread by 22º in each direction, creating a beam 44º wide. This broad beam could hit multiple moving vehicles, leading to inaccurate speed measurements.
- Continuous-wave radar, which emits radio waves and tracks their reflections continuously, may also result in errors caused by multiple vehicles. While engineers have developed systems to reduce these errors, these solutions tend to be more complex and costly.
- As a result, LIDAR speed guns, which use light detection and ranging technology, are increasingly replacing radar guns. LIDAR operates in a similar manner but uses laser light instead of radio waves. Laser light has much lower divergence, offering better precision and targeting
|
For Prelims: Doppler Effect, LIDAR (Light Detection and Ranging)
For Mains: GS III - Science and technology - Application of Technology in Governance and Public Administration
|
Source: The Hindu
QUANTUM SATELLITE
1. Context
On December 13, Ajai Chowdhry, chairman of the Mission Governing Board of the National Quantum Mission, said India plans to launch a quantum satellite in “2-3 years for quantum communications”
2. What is the National Quantum Mission?
- The National Quantum Mission (NQM), spearheaded by the Department of Science & Technology, aims to harness quantum physics to advance communication and sensing technologies.
- The advent of computers in the mid-20th century marked a turning point in human history, enabling transformative innovations like satellites, telecommunications, weather predictions, and drug discovery.
- However, these technological advancements are now approaching their limits due to the constraints of classical physics, which underpins their functioning.
- To address this, researchers globally are exploring quantum physics phenomena to develop next-generation technologies.
- Quantum physics not only encompasses the outcomes achievable through classical physics but also offers additional possibilities, making these emerging technologies more adaptable and capable of solving complex challenges.
- In April 2023, the Union Cabinet approved the NQM with a budget of ₹6,000 crore for implementation from 2023 to 2031. A proposed quantum satellite forms an integral component of this initiative
3. Quantum Satellite
- A quantum satellite refers to a communication satellite that employs quantum physics to ensure the security of its transmissions.
- Communication encompasses technologies designed to transmit and receive signals, with a critical focus on safeguarding these transmissions against unauthorized interception, especially when messages traverse vast distances and multiple networks.
- The emergence of quantum computers poses a significant challenge to existing methods of securing communications.
- However, quantum physics has also provided innovative solutions for enhancing security, and quantum satellites are anticipated to play a key role in implementing these advanced protective measures
- A quantum satellite is a specialized spacecraft designed to leverage principles of quantum physics, particularly for secure communication and advanced scientific research.
- These satellites typically employ quantum technologies like quantum key distribution (QKD), which ensures highly secure data transmission by encoding information in quantum states, such as the polarization of photons.
3.1.Features and Applications:
-
Secure Communication: Quantum satellites enable secure communication by using QKD. Any attempt to intercept the quantum-encoded data disrupts the quantum states, immediately alerting the system to potential eavesdropping.
-
Quantum Entanglement: Some quantum satellites generate and distribute entangled photon pairs over long distances, facilitating experiments and communication protocols that exploit quantum entanglement.
-
Global Quantum Network: They act as nodes in a global quantum network, connecting ground stations and facilitating ultra-secure communications between geographically distant locations.
-
Scientific Research: Quantum satellites support experiments in fundamental physics, such as testing Bell's inequalities or studying quantum phenomena in space.
Examples
|
4. Security
- Encryption involves concealing information by transforming it using a specific method, known as a cipher. A simple example is the Caesar cipher, which shifts the letters of the alphabet by a fixed number. For instance, if the shift is 5, the phrase BIRDS FLY AWAY becomes GNWIX KQD FBFD.
- Imagine a third person, X, attempting to intercept the message. Without knowledge of the encryption method, X cannot decode the text.
- This approach to security is called cryptographic security, which relies on protecting the encryption key by embedding it within a complex mathematical problem. While an adversary like X could potentially solve the problem using a powerful computer to uncover the key, the difficulty of the problem determines the time and computational resources required.
- Modern Advanced Encryption Standard (AES) ciphers remain challenging even for the most powerful supercomputers. However, quantum computers might have the potential to solve such problems more efficiently
|
How can quantum physics protect messages?
Quantum cryptography leverages the principles of quantum physics to secure communication, with its most well-known application being quantum key distribution (QKD). In the earlier example, Anil encrypted a message using a key, which Selvi, possessing the same key, used to decrypt it. QKD focuses on securely sharing this key between Anil and Selvi. If Kaushik tries to intercept the transmission, the intrusion is immediately detected, and the key-sharing process is terminated. Quantum physics offers several mechanisms to guard against eavesdropping. One such method involves quantum measurement, which refers to observing the properties of quantum systems like photons (particles of light). According to quantum physics, measuring a quantum system alters its state. If the key is encoded in a photon stream and Kaushik intercepts and measures the photons, their state will change, alerting Anil and Selvi that the key has been compromised. Another approach is to use quantum entanglement, where two photons are interconnected in such a way that any change to one photon instantly affects the other, enabling secure detection of interference |
5. Challenges
The practical application of Quantum Key Distribution (QKD) often differs from its theoretical model. This has led the U.S. National Security Agency (NSA) to advocate for post-quantum cryptography over quantum cryptography. The NSA's critique highlights five technical drawbacks:
- Lack of authentication: QKD does not inherently authenticate the transmission source.
- Hardware limitations: Being hardware-dependent, QKD systems are difficult to upgrade or patch.
- High costs and risks: QKD increases infrastructure expenses and insider threat vulnerabilities, limiting its potential use cases.
- Limited security: The actual security of QKD systems is constrained by hardware and engineering designs, rather than the idealized "unconditional security" promised by quantum physics.
- Susceptibility to denial-of-service attacks: An eavesdropper can disrupt transmissions, effectively preventing legitimate users from communicating.
Additionally, the no-cloning theorem in quantum physics prohibits the replication of quantum information, making it impossible to amplify signals to compensate for transmission losses
|
For Prelims: National Mission on Quantum Technologies & Applications, Internet-of-Things,
For Mains:
1. Discuss the need for implementing the National Mission on Quantum Technologies and Applications. (250 Words)
|
|
Previous Year Questions 1. Which one of the following is the context in which the term "qubit" is mentioned? (UPSC 2022) A. Cloud Services B. Quantum Computing C. Visible Light Communication Technologies D. Wireless Communication Technologies Answer: B |
Source: The Hindu
EUROPEAN FREE TRADE ASSOCIATION (EFTA)
1. Context
The Swiss decision to suspend the most favoured nation clause in the Double Taxation Avoidance Agreement will not delay the ratification and implementation of the already signed trade agreement between India and the EFTA bloc
2. About European Free Trade Association
The European Free Trade Association (EFTA) is an intergovernmental organization that aims to facilitate free trade and economic cooperation among its member states. EFTA was established on May 3, 1960, as an alternative trade bloc to the European Economic Community (EEC), which later evolved into the European Union (EU). The founding members of EFTA were Austria, Denmark, Norway, Portugal, Sweden, Switzerland, and the United Kingdom.
The key aspects of EFTA
EFTA comprises four member countries: Iceland, Liechtenstein, Norway, and Switzerland. The organization has experienced changes in membership over the years, with some countries joining or leaving.
- EFTA's primary objectives include promoting free trade and economic cooperation among its member states. It aims to facilitate the reduction or elimination of barriers to trade in goods and services, enhance economic relations, and foster mutual understanding and collaboration in various economic sectors.
- While EFTA is a distinct organization, its member states often have close economic ties with the European Union. EFTA countries have developed various agreements and arrangements with the EU to facilitate trade and economic cooperation. However, EFTA member states are not part of the EU Customs Union or the EU Single Market.
- EFTA has engaged in numerous free trade agreements (FTAs) with countries and regions around the world. These agreements aim to reduce or eliminate tariffs and other trade barriers, promoting the flow of goods and services. EFTA countries have FTAs with countries in Europe, Asia, Africa, and South America.
- The EFTA Surveillance Authority oversees the application of EFTA's rules in its member states. It monitors compliance with agreements, including ensuring that competition rules and other regulations are adhered to by member countries.
- The EFTA Court serves as the judicial body for the EFTA states. It handles disputes related to the interpretation and application of EFTA law. The court's decisions contribute to the legal framework of EFTA's trade and economic agreements.
- Over the years, EFTA has seen changes in its membership. Some countries have joined, while others have left. Accession to EFTA involves negotiations and the fulfillment of certain criteria, reflecting the organization's commitment to free trade and economic cooperation.
- EFTA member countries have diverse and developed economies. They are known for their high living standards, economic stability, and competitiveness. The organization provides a platform for these countries to collaborate and engage in trade with partners around the world.
- While trade is a central focus, EFTA member states also collaborate in other areas, including research and development, innovation, and cultural exchanges. The organization serves as a forum for discussing and addressing various economic and policy issues.
Main Goals of EFTA
- To promote free trade and economic integration among its member states.
- To strengthen member states' economies and improve their competitiveness on the global market.
- To cooperate with other countries and international organizations to further liberalize trade and promote economic development.
Institutional Structure
- The EFTA Council is the organization's highest governing body, consisting of representatives from each member state. It meets regularly to discuss and decide on important matters related to EFTA's objectives and activities.
- The EFTA Secretariat, based in Geneva, Switzerland, provides administrative support and facilitates communication among member states.
- EFTA actively engages in negotiations and establishes free trade agreements (FTAs) with various countries and regions outside the organization, contributing to the expansion of economic cooperation.
Current Status of EFTA
- Despite not being part of the EU, EFTA members maintain close economic ties with the EU through a series of bilateral agreements.
- They participate in the European Single Market and are part of the Schengen Area, allowing for the free movement of goods, services, capital, and people.
- EFTA remains an important economic player in Europe, with a combined GDP of over €1 trillion and a population of over 13 million.
Benefits of EFTA Membership
- EFTA's free trade agreements and common market have led to a significant increase in trade and investment between member states and their trading partners.
- EFTA's focus on free trade and economic cooperation has helped to stimulate economic growth in member states.
- By cooperating on research and development, innovation, and education, EFTA member states have become more competitive in the global market.
- EFTA membership has contributed to a higher standard of living and greater prosperity for the citizens of member states.
Challenges for EFTA
- The EU remains EFTA's largest trading partner, but it also poses a significant challenge. The EU's larger size and economic power give it an advantage in negotiations, and some EFTA businesses have expressed concerns about being at a disadvantage compared to their EU counterparts.
- With the ongoing integration of the EU, EFTA needs to ensure that it remains relevant and attractive to potential members and trading partners. The association needs to continue to find ways to differentiate itself from the EU and to offer unique benefits to its members.
- The global economy is constantly evolving, and EFTA needs to be able to adapt to these changes. The association needs to focus on emerging markets and new technologies to ensure that its members remain competitive in the long term.
3. The Way Forward
EFTA remains a vital economic force in Europe. The association is well-positioned to continue to prosper in the coming years, thanks to its strong member states, its focus on free trade and economic cooperation, and its adaptability. By continuing to adapt to the changing global economy and by finding ways to differentiate itself from the EU, EFTA can ensure that it remains a relevant and successful organization for its members in the years to come.
|
For Prelims: European Union, free trade, European Free Trade Association, European Economic Community
For Mains:
1. Examine the impact of Switzerland's policy on tariff-free entry for all industrial goods on India's potential gains from the ongoing India-EFTA Free Trade Agreement negotiations. (250 Words)
2. Discuss the strategies and opportunities for EFTA to remain relevant, differentiate itself, and adapt to the evolving global economy. (250 Words)
|
Source: The Indian Express
PREVENTION OF MONEY LAUNDERING ACT (PMLA)
1. Context
With some of its high-profile money laundering proceedings falling in court, the Enforcement Directorate (ED) has decided not to rely solely on “criminal conspiracy” as the “predicate offence” based on which it registers such cases — it should also include the offence under the Prevention of Money Laundering Act (PMLA) related to that conspiracy
2. Why is the PMLA verdict under review?
The PMLA verdict is under review because of several concerns raised by petitioners and legal experts about the constitutionality of the law and the extent of the powers granted to the Enforcement Directorate (ED).
Specific Concerns
- The PMLA's retrospective application, allowing for the prosecution of offences committed before the law's enactment, has been challenged as violative of the fundamental right against ex post facto laws.
- The PMLA places the burden of proof on the accused to establish innocence, a departure from the general principle of criminal law that presumes innocence until proven guilty.
- Critics argue that the PMLA's provisions are overly broad and draconian, giving the ED excessive powers to arrest, detain, and seize assets without adequate judicial oversight.
- The PMLA's lack of adequate safeguards against arbitrary actions and misuse of power has raised concerns about the potential for abuse of authority by the ED.
- The PMLA's provisions have been criticized for potentially infringing upon fundamental rights such as the right to personal liberty, the right to property, and the right against self-incrimination.
3. Money laundering
- Money laundering is the illegal process of making large amounts of money.
- This money is generated by criminal activity but may appear to come from a legitimate source.
- Criminal activities include drug trafficking, terrorist funding, illegal arms sales, smuggling, prostitution rings, insider trading, bribery and computer fraud schemes that produce large profits.
3.1. Different stages in money laundering
Generally, money laundering is a three-stage process:
- Placement: The crime money is injected into the formal financial system.
- Layering: Money injected into the system is layered and spread over various transactions and book-keeping tricks to hide the source of origin.
- Integration: Laundered money is withdrawn from the legitimate account to be used for criminal purposes. Now, Money enters the financial system in such a way that the original association with the crime is disassociated. The money now can be used by the offender as legitimate money.
All three sources may not be involved in money laundering. Some stages could be combined or repeated many times.
3.2. Impact of Money Laundering on Economic Development
Money laundering can have a significant impact on economic development by:
- When money laundering occurs, it can undermine public confidence in banks and other financial institutions. This can lead to increased risk aversion and a decline in investment, which can hamper economic growth.
- Money laundering can distort economic activity by directing funds away from legitimate businesses and into criminal enterprises. This can lead to inefficient allocation of resources and slower economic growth.
- Money laundering can facilitate corruption by providing a means to conceal the proceeds of corrupt activities. This can weaken governance and undermine the rule of law, further hindering economic development.
- Money laundering can also lead to a loss of tax revenue, as criminals seek to evade taxes on their illicit gains. This can deprive governments of much-needed funds for essential services, such as education and healthcare.
- Money laundering is often used to finance organized crime groups, which can lead to an increase in violence and instability.
- Money laundering can also be used to finance terrorist activities, posing a serious threat to international security.
- Money laundering can also have a direct impact on individuals and businesses, who may lose money or be victims of fraud as a result of this crime.
4. Prevention of Money-Laundering Act, 2002 (PMLA)
The Prevention of Money-Laundering Act, 2002 (PMLA) is a comprehensive legislation enacted by the Indian Parliament to combat money laundering and other financial crimes. It aims to prevent the use of proceeds of crime, particularly those derived from drug trafficking, organized crime and corruption, from being laundered and utilized to finance further criminal activities or to gain legitimacy.
4.1. Key Features of the PMLA
- The PMLA prohibits the process of money laundering, defined as the act of concealing or disguising the proceeds of crime.
- The PMLA empowers the Enforcement Directorate (ED), the designated agency for investigating money laundering cases, to attach and seize property derived from or involved in money laundering.
- The PMLA provides for the confiscation of property that is involved in money laundering, even if it is not in the possession of the accused person.
- The PMLA grants the ED extensive powers to conduct searches, make arrests, and detain individuals suspected of money laundering.
- The PMLA facilitates international cooperation in combating money laundering through mutual legal assistance treaties and other mechanisms.
4.2. Significance of the PMLA
The PMLA has played a crucial role in strengthening India's anti-money laundering framework and enhancing its global standing in combating financial crimes. It has enabled the investigation and prosecution of numerous money laundering cases, leading to the recovery of substantial illicit funds.
4.3. Challenges in Implementing the PMLA
Despite its significance, the implementation of the PMLA has faced certain challenges, including:
- The PMLA and other laws, such as the Narcotics Drugs and Psychotropic Substances Act, have overlapping jurisdictions, which can lead to confusion and delays in investigations.
- There have been concerns about the lack of adequate safeguards against arbitrary actions and misuse of power under the PMLA.
- The ED faces resource constraints in terms of manpower and infrastructure, which can hamper its ability to effectively investigate and prosecute money laundering cases.
5. About the Directorate of Enforcement
- The Directorate of Enforcement (ED) is an agency in India that primarily deals with the enforcement of economic laws and regulations to combat money laundering, foreign exchange violations, and financial fraud.
- The ED is part of the Department of Revenue under the Ministry of Finance, Government of India.
- The Directorate of Enforcement was established on 1st May 1956, as the "Enforcement Unit" within the Department of Economic Affairs.
- Its primary focus was on preventing and detecting violations of the Foreign Exchange Regulation Act (FERA) of 1947.
- Over the years, the agency's role expanded, and in 1999, the Enforcement Directorate was established as a separate entity under the Ministry of Finance.
- The enactment of the Prevention of Money Laundering Act (PMLA) in 2002 further broadened its jurisdiction, giving it the power to investigate cases related to money laundering.
- Since its establishment, the ED has played a crucial role in combating economic offences and ensuring compliance with economic laws in India.
- It has been involved in several high-profile cases, including those related to financial scams, money laundering by influential individuals, and cross-border financial crimes.
- The ED collaborates with various domestic and international agencies, including financial intelligence units, law enforcement agencies, and Interpol, to gather information, share intelligence, and effectively coordinate efforts to combat economic offences.
5.1. Functions and Roles of ED
- Enforcing Economic Laws: The primary function of the ED is to enforce two key economic laws in India: the Prevention of Money Laundering Act (PMLA) and the Foreign Exchange Management Act (FEMA). It ensures compliance with these laws and investigates money laundering, foreign exchange violations, and economic fraud cases.
- Money Laundering Investigations: The ED investigates cases involving money laundering, which is the process of concealing the origins of illegally obtained money to make it appear legitimate. It identifies and seizes properties and assets derived from illicit activities and prevents their further use.
- Foreign Exchange Violations: The ED is responsible for investigating cases related to violations of foreign exchange laws and regulations. It monitors and controls foreign exchange transactions to maintain the stability of the Indian rupee and prevent illegal activities such as smuggling and illegal money transfers.
- Financial Frauds: The ED also investigates and takes action against financial frauds, including bank frauds, Ponzi schemes, and other fraudulent activities affecting the Indian financial system. It works closely with other law enforcement agencies, such as the Central Bureau of Investigation (CBI), to tackle complex financial crimes.
|
For Prelims: Prevention of Money Laundering Act, ED, CBI, Foreign Exchange Management Act,
For Mains:
1. Critically evaluate the Prevention of Money Laundering Act, 2002 (PMLA) in its effectiveness in combating money laundering in India. (250 Words)
|
|
Previous Year Questions
1. Which one of the following is not correct in respect of Directorate of Enforcement? (CDS 2021)
A. It is a specialized financial investigation agency under the Department of Revenue, Ministry of Finance.
B. It enforces the Foreign Exchange Management Act, 1999.
C. It enforces the Prevention of Money Laundering Act, 2002.
D. It enforces the Prohibition of Benami Property Transaction Act, 1988.
2. The Prevention of Money Laundering Act, 2002 become effective since which one of the following dates? (UKPSC RO/ARO 2012)
A. July 2002 B. August 2003 C. July 2004 D. July 2005
3. FEMA (Foreign Exchange Management Act) was finally implemented in the year (UPPSC 2013)
A. 1991 B. 1997 C. 2000 D. 2007
4. The Foreign Exchange Regulation Act was replaced by the ______ in India. (SSC Steno 2020)
A. Foreign Exchange Currency Act
B. Foreign Exchange Finances Act
C. Foreign Exchange Funds Act
D. Foreign Exchange Management Act
5. "Central Bureau of Intelligence and Investigation" is listed in the __________ list given in the Seventh Schedule of the Constitution of India. (SSC CGL 2017)
A. Union B. State C. Global D. Concurrent
Answers: 1-D, 2-D, 3-C, 4-D, 5-A
|
Source: The Indian Express
