• Current Affairs, 6 May 2020



    • New horizons:The ‘Long March-5B’ rocket blasting off from the Wenchang Space Centre in Hainan on Tuesday.APTu Haichao
    • China on Tuesday successfully launched a new rocket and prototype spacecraft, state media said, in a major test of the country’s ambitions to operate a permanent space station and send astronauts to the Moon.
    • ‘The Long March 5B’ rocket took off from the Wenchang launch site in the southern island of Hainan and eight minutes later an unmanned prototype spaceship successfully separated and entered its planned orbit, according to the Xinhua news agency. A test version of a cargo return capsule also separated from the rocket, Xinhua added.
    • The spaceship will one day transport astronauts to a space station that China plans to complete by 2022 — and eventually to the Moon. It will have capacity for a crew of six.
    • Return on Friday
    • The spaceship and capsule are slated to return to a landing site by Friday after completing their test flights, Ji Qiming of the China Manned Space Agency told a press conference. Leader of the command headquarters for the flight mission Zhang Xueyu said the launch had “strengthened confidence and determination” for the next stages of China’s space programme.
    • The United States is so far the only country to have successfully sent humans to the Moon. But Beijing has made huge strides in its effort to catch up, sending astronauts into space, satellites into orbit and a rover to the far side of the Moon.
    • The successful maiden flight of the 54-metre Long March 5B — which has a take-off mass of about 849 tonnes — should reassure China, following failures of the 7A model in March and 3B model in April. “The new spaceship will give China an advantage in the area of human spaceflight over Japan and Europe,” said Chen Lan, an independent analyst at GoTaikonauts.com. Assembly of the Tiangong space station is expected to begin this year and finish in 2022.
    • China plans to send an astronaut to the Moon in about a decade and then build a base there.




    • When complex systems come to catastrophes, i.e. critical points of instability, they re-emerge in distinctly new forms, according to the science of complex systems. The COVID-19 global pandemicis a catastrophe, both for human lives and for economies. Economists cannot predict in what form the economy will emerge from it.
    • Viral economies: On coronavirus impact
    • Machines do not have the capacity for emergence. Once built, their capabilities inevitably reduce with increasing entropy. On the other hand, living systems evolve and acquire new capabilities over time. Fritjof Capra and Pier Luigi Luisi point out in The Systems View of Life: A Unifying Visionthat among all living species, humans have a special ability. Only humans consciously develop new concepts, new scientific ideas, and new language in their search for new visions. Institutions of governance are human inventions for directing human endeavours and for providing stability. Thomas S. Kuhn explained in The Structure of Scientific Revolutions why new ideas are invariably resisted by prevalent power structures in societies. The scientific establishment determines which ideas are worthy of admission. The King’s advisers do not want outsiders to dilute their influence in the court. The Establishment resists change. Therefore, fundamental reforms of ideas and institutions in human societies are always difficult, until a crisis.
    • The COVID-19 catastrophe has challenged the tenets of economics that have dominated public policy for the past 50 years. Here are seven radical ideas emerging as pathways to build a more resilient economy and a more just society.
    • “De-Growth”. The obsession with GDP as the supreme goal of progress has been challenged often, but its challengers were dismissed as a loony fringe. Now, Nobel laureates in economics (Joseph Stiglitz, Amartya Sen, Abhijit Banerjee, Esther Duflo and others) are calling upon their profession to rethink the fundamentals of economics, especially the purpose of GDP. A five-point ‘de-growth’ manifesto by 170 Dutch academics has gone viral amidst the heightened Internet buzz during the lockdown. Goals for human progress must be reset. What should we aspire for? And how will we measure if we are getting there?
    • Coronavirus | PM holds meeting to discuss strategies to attract more foreign investments, boost economy
    • Boundaries between countries are good. Boundary-lessness is a mantra for hyper-globalisers. Boundaries, they say, impede flows of trade, finance, and people. Therefore, removing boundaries is good for global growth. However, since countries are at different stages of economic development, and have different compositions of resources, they must follow different paths to progress. According to systems’ theory, sub-systems within complex systems must have boundaries around them, albeit appropriately permeable ones, so that the sub-systems can maintain their own integrity and evolve. This is the explanation from systems science for the breakdown of the World Trade Organization, in which all countries were expected to open their borders, which caused harm to countries at different stages of development. Now COVID-19 has given another reason to maintain sufficient boundaries.
    • Government is good. Ronald Reagan’s dictum, “Government is not the solution… Government is the problem”, has been up-ended by COVID-19. Even capitalist corporations who wanted governments out of the way to make it easy for them to do business are lining up for government bailouts.
    • Coronavirus | IMF projects 1.9% growth for India in 2020
    • The “market” is not the best solution. Money is a convenient currency for managing markets and for conducting transactions. Whenever goods and services are left to markets, the dice is loaded against those who do not have money to obtain what they need. Moreover, by a process of “cumulative causation”, those who have money and power can acquire even more in markets. The “marketization” of economies has contributed to the increasing inequalities in wealth over the last 50 years, which Thomas Piketty and others have documented.
    • “Citizen” welfare, not “consumer” welfare, must be the objective of progress. In economies, human beings are consumers and producers. In societies, they are citizens. Citizens have a broader set of needs than consumers. Citizens’ needs cannot be fulfilled merely by enabling them to consume more goods and services. They value justice, dignity, and societal harmony too. Economists’ evaluations of the benefits of free trade, and competition policy too, which are based on consumer welfare alone, fail to account for negative impacts on what citizens value.
    • Competition must be restrained: Collaboration is essential for progress. Faith in “Darwinian competition”, with the survival of only the fittest, underlies many pathologies of modern societies and economies. From school onwards, children are taught to compete. Companies must improve their competitive abilities. Nations too. Blind faith in competition misses the reality that human capabilities have advanced more than other species’ have, by evolving institutions for collective action. Further progress, to achieve the Sustainable Development Goals for example, will require collaboration among scientists in different disciplines, and among diverse stakeholders, and collaboration among sovereign countries. Improvement in abilities to share and govern common resources have become essential for human survival in the 21st century.
    • Intellectual property belongs to the public. The earth’s resources must be conserved. We are living in an era of knowledge. Just as those who owned more land used to have more power before, now those who own knowledge have more power and wealth than the rest. Intellectual property monopolies are producing enormous wealth for their owners, though many were developed on the back of huge public investments. Moreover, powerful technologies can be used for benign or malign purposes. It is imperative to evolve new institutions for public ownership of technologies and for the regulation of their use.
    • The paradigm shift necessary after the crisis will not be easy. There will be resistance to shifts in social, economic, and political power towards those who have less from those who have more within the present paradigm.
    • The financial crisis of 2008 was a crisis of liquidity in the system. Recovery was achieved by putting more fuel into the system. The system then moved on; in basically the same shape it was before. COVID-19 has revealed structural weaknesses in the global economy. Putting fuel in the tank will not be sufficient. The vehicle must be redesigned too. While global attention understandably is focused on relief and recovery, this is the time to design for resilience.
    • The economic system cannot be redesigned by domain experts devising solutions within their silos. Such as, trade experts recommending new trade policies, intellectual property experts recommending reforms of intellectual property rights, and industry experts recommending industry policies. All the pieces must fit together. Most of all, they must fit into the new paradigm, which will be very different to the one in which the experts had developed their domain knowledge.
    • Innovations are required at many levels to create a more resilient and just world. Innovation is essential in the overall design of the economy. Innovations will be required in business models too, not just for business survival but also to move businesses out of the 20th century paradigm that “the business of business must be only business”. Changes will also be necessary in our life patterns, our work and consumption habits, and in our personal priorities.
    • The redesign of economies, of businesses, and our lives, must begin with questions about purpose. What is the purpose of economic growth? What is the purpose of businesses and other institutions? What is the purpose of our lives? What needs, and whose needs, do institutions, and each of us, fulfil by our existence?




    • Recently, the Supreme Court held that Co-operative banks established under a State law and multi-State level co-operative societies come within the ambit of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act of 2002.

    Important Points

    • Conflicting decisions by high courts:The judgment came in view of several conflicting decisions by high courts on the issues of
    • Whether the Co-operative banks can be called ‘Banks (financial Institution)’ under the Banking Regulation Act of 1949 or,
    • Whether the Parliament has legislative competence to regulate financial assets of cooperative banks formed under state law.
    • The argument was that under Lists I and II of the 7thSchedule, the Constitution provides for distinct fields of legislative entries for the state legislature and Parliament and once there is already a valid law made by the state referring to its own field, there should not be a parallel parliamentary law on the same topic.

    Supreme Court verdict:

    • Upholding the central government notification of January 28, 2003 which brought co-operative societies within the purview of the Sarfaesi Act, the Supreme court said Co-operative banks come within the definition of “Banks”under the Banking Regulation Act, 1949 for the purposes of the Sarfaesi Act.
    • The recovery procedure under the Sarfaesi Act is also applicable to co-operative banks and there is no clash with the Banking Regulation Act, 1949.
    • The court also ruled that the Parliament has legislative competence to provide procedures for recovery of loans under the Sarfaesi Actwith respect to cooperative banks.
    • The court was of the opinion thatrecovery of dues would be an essential function of any financial institution and co-operative banks cannot carry on any activity without compliance of provisions of the banking Act and any other legislation applicable to such banks and the RBI Act.

    Sarfaesi Act

    • Banks utilize Sarfaesi Act as an effective tool for bad loans (Non Performing Asset) recovery.
    • The Sarfaesi Act is effective only against secured loanswhere banks can enforce the underlying security.
    • Following are the main objectives of the Sarfaesi Act.
    • Provides the legal framework for securitization activities in India.
    • It gives the procedures for the transfer of NPAs to asset reconstruction companies for the reconstruction of the assets.
    • Enforces the security interest without Court’s intervention.
    • Gives powers to banks and financial institutions to take over the immovable property that is pledged to enforce the recovery of debt.
    • Major feature of Sarfaesi is that itpromotes the setting up of asset reconstruction companies (ARCs) and asset securitization companies (SCs) to deal with NPAs accumulated with the banks and financial institutions.
    • The Act provides three alternative methods for recovery of non-performing assets, namely:
    • Securitisation
    • Securitization is the practice of pooling together various types of debt instruments (assets) such as mortgages and other consumer loans and selling them as bonds to investors.
    • Asset Reconstruction
    • Asset reconstruction is the activity of converting a bad or non-performing asset into performing asset with the help of Asset reconstruction companies.
    • Enforcement of Security without the intervention of the Court.
    • If the borrower defaults, the bank may enforce security interests by:
    • Take possession of the security;
    • Sale or lease or assign the right over the security;
    • Appoint Manager to manage the security;
    • Ask any debtors of the borrower to pay any sum due to the borrower.



    • The Covid-19 pandemic has left its impact on all sectors of the economy including the Medium, Small and Micro Enterprises (MSMEs)
    • Earlier the government had declared the relief package namely, the PM Garib Kalyan Yojana for the poor to help them fight the battle against Coronavirus (Covid-19), the second package is expected to primarily focus on the MSME sector.

    MSMEs in India

    Definition of MSMEs:

    • In February 2018, the Union Cabinet decided the criterion of an annual turnover (in line with the imposition of GST) for defining MSMEs.
    • Formally, MSMEs were defined in terms of investment in plant and machinery/equipment. But this criterion for the definition was criticized because credible and precise details of investments were not easily available by authorities.
    • According to the proposed definition (which is yet to be formally accepted), the categorisation would be:
    • Micro Enterprise: An annual turnover less than Rs 5 crores.
    • Small Enterprise: An annual turnover between Rs 5 crores and Rs 75 crores.
    • Medium Enterprise: An annual turnover less than Rs 250 crores.

    Statistical Data about MSMEs in India:


    • Total Number of MSMEs: According to the Annual Report of the Department of MSMEs (2018-19), there are 6.34 crore MSMEs in the country.
    • Rural-Urban Distribution: Around 51% of these are situated in rural India and 49% of them are situated in urban India.
    • Employment: Both rural and urban MSMEs together employ over 11 crore people but 55% of the employment happens in the urban MSMEs.
    • Category-wise Distribution: 99.5% of all MSMEs fall in the micro category. While micro enterprises are equally distributed over rural and urban India, small and medium ones are predominantly in urban India.
    • Social Distribution of MSMEs: About 66 % of all MSMEs are owned by people belonging to the Scheduled Castes (12.5%), the Scheduled Tribes (4.1%) and Other Backward Classes (49.7%).
    • Gender Ratio in MSMEs: The gender ratio among employees is largely consistent across the board at roughly 80% male and 20% female.
    • Geographical Distribution: Seven Indian states account for 50 % of all MSMEs. These are Uttar Pradesh (14%), West Bengal (14%), Tamil Nadu (8%), Maharashtra (8%), Karnataka (6%), Bihar (5%) and Andhra Pradesh (5%).

    Problems Faced by MSMEs in India

    • Too Small to get Registered:
    • Being out of the formal network, these MSMEs do not have to maintain accounts, pay taxes or adhere to regulatory norms etc., which brings down their costs. But in a time of crisis, it also constrains a government’s ability to help them.
    • Lack of Financing:
    • Most of the MSME funding comes from informal sourcesand it explains why the Reserve Bank of India’s efforts to push more liquidity towards the MSMEs have had a limited impact. Also, the government has launched schemes in this regard.
    • Further, banks dither from extending loans to MSMEs due to the high ratio of bad loans.
    • According to a 2018 report by the International Finance Corporation (part of the World Bank),the formal banking system supplies less than one-third (or about Rs 11 lakh crore) of the MSME credit need that it can potentially fund.
    • Delays in Payments to MSMEs:
    • It is one of the biggest reasons for financial turmoil in the MSME sector.
    • MSMEs face delays in payment from their buyers which also includes the government. It also faces delays in GST refunds.

    Problem Aggravated due to Covid-19

    • Declining Revenues: MSMEs are already struggling — in terms of declining revenues and capacity utilisation — in the lead-up to the Covid-19 crisis.
    • Unavailability of Cash: The total lockdown has raised an issue of the existence of MSMEs primarily due to unavailability of cash which subsequently will result in the job losses.
    • Lack of Labour Availability: The return of migrant labourers will create an issue of lack of labour availability.
    • Loan Against Collateral : Loans to MSMEs are mostly given against property (as collateral) but in times of crisis, property values fall and that inhibits the extension of new loans.
    • Steps Taken: To ease the firms’ financial distress during this period, the Reserve bank of India has announced several measures such as a moratorium on term loans, and easier working capital financing. Some public sector banks have also opened up emergency credit lines for businesses.

    Way Forward

    • The government can provide tax relief (GST and corporate tax), give swifter refunds, and provide liquidity to rural India (may be throughPM-Kisan) to boost demand for MSME products.
    • A credit guarantee by the government can help as it assures the bank that its loan will be repaid by the government in case the MSME falters. If such defaults happen, credit guarantees are shown as a departmental expense in the Budget.



    • Iran’s parliament has passed a bill allowing the government to slash four zeros from the rialand authorizing its replacement with another basic unit of currency called the toman (redenomination).
    • Under the bill, Iran’s national currency will be changed from the rial to the Toman, which is equal to 10,000 rials.


      • It is the process whereby a country’s currency is revalued due to significant inflation and currency devaluation, or when a country adopts a new currency and needs to exchange the old currency for a new one at a fixed rate.
      • In simpler words, it is exchanging old currency for new currency, or changing the face value of existing notes in circulation.

    Important Points

    • Eliminating the four zeros was a necessary action to simplify financial transactions.
      • It would vastly simplify financial calculations by eliminating the need for Iranian shoppers to carry loads of rials to make purchases, which they have to do because of inflation.
    • According to the Iran’s Students News Agency (ISNA), the bill needs to be approved by the Guardian Council, body of conservative clerics that supervises the Parliament.
    • After its approval, the Central Bank of Iran will have two years to implement the change for removing rial from circulation and issuing toman instead.


    • This move comes after a sharp fall in the value of the currency as a result of crippling US sanctions.
    • The currency has been devalued 3,500 times since 1971. It declined steadily since the Iranian Revolution, 1979 brought the religious government to power.
    • The idea of removing four zeros has been floated since 2008 but gained strength after 2018 when the US exited Iran’s 2015 nuclear deal and reimposed sanctions and the rial lost more than 60% of its value.

    Chronology of US-Iran Relations

    • 1953: Overthrow of Mossadeq
    • The US and British intelligence agencies planned a coup to oust Iran’s democratically elected Prime Minister, Mohammad Mossadeq.
    • He sought to nationalise Iran’s oil industry, which was against the US’s capitalist interests.
    • 1979: Iranian Revolution
    • TheUS-backed Shah of Iran, Mohammed Reza Pahlevi was forced to leave the country in 1979, following months of demonstrations and strikes against his rule by secular and religious opponents.
    • This led to the return of Islamic religious leader Ayatollah Khomeini from exile and following a referendum, the Islamic Republic of Iranwas proclaimed on 1st April 1979.
    • 1979-81: US Embassy Hostage Crisis
    • The US embassy in Tehran was seized by protesters in November 1979 and American hostages were held inside for 444 days.
    • The final 52 hostages were freed in January 1981, the day of US President Ronald Reagan’s inauguration(ceremony to mark the commencement of a new 4-year presidential term).
    • 2002-13: Nuclear Fears and Sanctions
    • In 2002 an Iranian opposition group revealed that Iran was developing nuclear facilities including a uranium enrichment plant.
    • In pursuance of this, several sanctions are imposed by the United Nations(UN), the US and the European Union (EU) against Iran.
    • US President George Bush denounces Iran as part of an“axis of evil” with Iraq and North Korea.
    • This causes Iran’scurrency to lose two-thirds of its value in two years.
    • 2013-16: Closer ties and a nuclear deal
    • In September 2013, Iran’s new moderate President Hassan Rouhani took office.
    • In 2015, after a flurry of diplomatic activity, Iran agreed on a long-term deal on its nuclear programme- Joint Comprehensive Plan of Action(JCPOA) with a group of world powers known as the P5+1 – the US, UK, France, China, Russia and Germany.
    • Under the accord, Iran agreed to limit its sensitive nuclear activitiesand allow in international inspectors in return for the lifting of crippling economic sanctions.
    • 2018-19: US-Iran Tensions in current times
    • Policy of maximum pressure:In May 2018, the US abandoned the nuclear deal and reinstated economic sanctions against Iran.
    • Policy of strategic patience:Iran acted with restraint, with thinking that by abiding by the nuclear deal it could get economic favour from the EU. However, this policy failed to work for Iran and thereby it began a counter-pressure campaign.
    • In June 2019, Iranian forces shot down a US military drone over the Strait of Hormuzand then began the cycle of response and escalation between the two countries.



    • Amidst the ongoing Covid-19pandemic, medical practitioners have reported a condition called silent or happy hypoxia, in which patients have extremely low blood oxygen levels, yet they do not show signs of breathlessness.
    • It has left medical practitioners confused and many of them are now advocating for its early detection as a means to avoid a fatal illness called Covid pneumonia.

    Important Points

    • Hypoxia
    • It is a condition wherein there is not enough oxygen available to the blood and body tissues.
    • Hypoxia can either be generalised,affecting the whole body, or local, affecting a region of the body.
    • Normal arterial oxygenis approximately 75 to 100 millimetres of mercury (mm Hg) and normal pulse oximeter readings usually range from 95 to 100%.
    • Values under 90% are considered low.
    • When levels fall below 90%, patients could begin experiencing lethargy, confusion or mental disruptions because of insufficient quantities of oxygen reaching the brain.
    • Levels below 80% can result in damage to vital organs.
    • Silent Hypoxia
    • It is a form of oxygen deprivation that is harder to detectthan regular hypoxis because patients appear to be less in distress.
    • Covid pneumonia,a serious medical condition found in severe Covid-19 patients, is preceded by silent hypoxia.
    • Many Covid-19 patients with oxygen levels below 80% look at ease and alert. There have been a few cases of oxygen levels below 50% as well.
    • Those with such low levels of oxygen would normally appear extremely ill but not in silent hypoxia cases.
    • In many cases, Covid-19 patients with silent hypoxiadid not exhibit symptoms such as shortness of breath or coughing until their oxygen fell to acutely low levels, at which point there was a risk of acute respiratory distress (ARDS) and organ failure.
    • Reasons:
    • The reason why people are left feeling breathless is not because of the fall in oxygen levelsitself but due to the rise in carbon dioxide levels that occur at the same time, when lungs are not able to expel this gas efficiently.
    • In some Covid-19 cases, this was not the response and patients did not feel breathless.
    • It happened because in patients with Covid pneumonia, the virus causes air sacs to fall,leading to a reduction in levels of oxygen. However, the lungs initially do not become stiff or heavy with fluid and remain compliant meaning they are able to expel carbon dioxide and avoid its buildup. Thus, patients do not feel short of breath.
    • A medical device called apulse oximeter can be used in the early detection of silent hypoxia.
    • Active Covid-19 or suspected cases can check their oxygen levels early on by using the device.
    • A fall in oxygen levels can serve as a signal for seeking additional treatment immediately.
    • Concerns have been raised against it arguing that the frequent use of the device would lead to increased anxiety.

    ·         Pulse Oximeter

    • It is a test used to measure the oxygen level(oxygen saturation) of the
    • The device measures the saturation of oxygen in red blood cells(RBCs) and can be attached to a person’s fingers, toes, nose, feet, ears or forehead.
    • The method is easy and painlessand the device can be reused or disposed of after use.
    • It is generally used to check the health of patients with known conditions that affect blood oxygen levels like heart and lung conditions.

    ·         Covid Pneumonia

    • It is a potentially deadly conditionin Covid-19 patients which affects the lungs’ ability to transfer oxygen and causes breathing difficulties.
    • When a person cannot inhale enough oxygen and exhale enough carbon dioxide, the pneumonia can lead to death.
    • Covid pneumonia is especially severe because it is viral and it completely affects the lungs instead of small parts.
    • Other kinds of pneumoniawhich are caused mainly by bacteria and can be treated using antibiotics are less severe than Covid pneumonia.
    • Patients are required to be put on ventilator supportin such severe cases to ensure adequate circulation of oxygen in the body.



    • Recently, China has successfully launched the Long March 5B’ rocketand prototype spacecraft.
    • It is being considered as China’s successful step to operate a permanent space station and send astronauts to the Moon.
    • India is also planning to launch its own space station.
    • A space station is a spacecraft capable of supporting crew members, designed to remain in space for an extended period of time and for other spacecraft to dock.
    • One fully functional space station in the Earth’s lower orbit is the International Space Station and astronauts conduct different experiments in it.

     Important Points

    • Long March 5B’ Rocket:
    • It was launched from the Wenchang launch site in the southern island of Hainan.
    • It weighs 849 tonnes.
    • Unmanned Prototype Spaceship:
    • It is expected to transport astronauts to a space station that China plans to complete by 2022 — and eventually to the Moon. It will have capacity for a crew of six.
    • Future Missions by China:
    • The assembly of the Tiangong space station is expected to begin in 2020 and finish in 2022.
    • China plans to send an astronaut to the Moon in about a decade and then build a base there.
    • The United States is so far the only country to have successfully sent humans to the Moon.

    International Space Station (ISS)

    • ISS is a habitable artificial satellite – the single largest man-made structure in low earth orbit. Its first component was launched into orbit in 1998.
    • It circles the Earth in roughly 92 minutes and completes 15.5 orbits per day.
    • The ISS programme is a joint project between five participating space agencies: NASA (United States), Roscosmos (Russia), JAXA (Japan), ESA (Europe), and CSA (Canada) but its ownership and use has been established by intergovernmental treaties and agreements.
    • It serves as a microgravity and space environment research laboratory in which crew members conduct experiments in biology, human biology, physics, astronomy, meteorology, and other fields.
    • Continuous presence at ISS has resulted in the longest continuous human presence in the low earth orbit.
    • It is expected to operate until 2030.

No comments found


Your email address will not be published. Required fields are marked *

Follow us on: