Daily Current Affairs for UPSC – 27 May 2023

Daily Current Affairs for UPSC 2023

Q) Which one of the following statements is not correct about Passive funds?

1. It is an investment vehicle that tracks a market index.
2. The return on these funds is usually low.
3. Exchange-traded funds are a type of passive fund.
4. Fund manager decides the type of securities provided under it.

Daily Current Affairs for UPSC – 26 May April 2023

Explanation:

• Option (1) and (2) are correct: A passive fund is an investment vehicle that tracks a market index, or a specific market segment, to determine what to invest in. Passively managed index funds face performance constraints as they are designed to provide returns that closely track their benchmark index, rather than seek outperformance. They rarely beat the return on the index, and usually return slightly less due to fund operating costs.
• Option (3) is correct: Tracker funds, such as ETFs (exchange traded funds) and index funds fall under the banner of passive funds. Passively managed investment products like ETFs, index funds etc. tend to have lower expense ratios because the investment team has almost negligible role to play in terms of selection of stocks and determination of investment timing. Consequently, the fund management charges and transaction costs are minimal, thereby resulting in lower costs for the investors.
• Option (4) is incorrect: Unlike with an active fund, the fund manager does not decide what securities the fund takes on under passive funds. This normally makes passive funds cheaper to invest in than active funds, which require the fund manager to spend time researching and analysing opportunities to invest in.

Q) Consider the following statements about insurance sector in India:

1. India’s share in the global insurance market is less than two percent.
2. In India, the market share of non-life insurance premium is higher than the market share of life insurance premium.
3. Foreign direct investment of up to 26 percent is allowed under the automatic method in the insurance sector.

Which of the statements given above is/are correct?

1. 1 and 2 only
2. 2 and 3 only
3. 1 and 3 only
4. 1, 2 and 3

Explanation:

• Statement 1 is correct but statement 2 is incorrect: The Insurance sector in India consists of total 57 insurance companies. Out of which, 24 companies are the life insurance providers and the remaining 33 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. There are six public sector insurers in the non-life insurance segment. In addition to these, there is a sole national re-insurer, namely General Insurance Corporation of India (GIC Re). India Insurance market stands at $131 Bn as of FY22. In terms of market share, the share of life insurance in total premium in India is 75.24% and the share of non-life premium is 24.76%. India’s insurance penetration was pegged at 4.2% in FY21, with life insurance penetration at 3.2% and non-life insurance penetration at 1%. India is ranked 11th in global insurance business. India’s share in global insurance market was 1.72% during 2020. India is ranked 10th in life insurance and 14th in non-life insurance in the world.
• Statement 3 is correct: Foreign Direct Investment (FDI) in the industry under the automatic method is allowed up to 26%. Both the Life Insurance and the Non-life Insurance is regulated by the IRDAI (Insurance Regulatory and Development Authority of India). It is an Autonomous body, setup in 1999, on the recommendations of R N Malhotra committee. It is tasked with the regulation of the insurance sector in India.

Q) With reference to ‘Fortification’, consider the following statements:

1. Vitamins A and D are added to improve the nutritional value of food.
2. In India, fortified rice is being supplied under the Integrated Child Development Services programme.
3. The consumption of iron-fortified foods by patients with sickle-cell anaemia helps increase immunity.

Which of the statements given above is/are correct?

1. 1 and 2 only
2. 2 and 3 only
3. 1 and 3 only
4. 1, 2 and 3

Explanation:

• Statement 1 is correct: Fortification is the addition of key vitamins and minerals such as iron, iodine, zinc, Vitamins A and D to staple foods such as rice, wheat, oil, milk and salt to improve nutritional value and provide a public health benefit with minimal risk to health.
• Statement 2 is correct: To address anaemia and micro-nutrient deficiency in India, the Union Government approved the Centrally Sponsored Scheme on “Fortification of Rice & its Distribution under Public Distribution System” in 2021. Fortified rice will be supplied across the Targeted Public Distribution System (TPDS) under the National Food Security Act (NFSA), Integrated Child Development Services (ICDS), Pradhan Mantri Poshan Shakti Nirman-PM POSHAN and other welfare schemes in a phased manner by 2024.
• Statement 3 is incorrect: Sickle-cell anaemia and thalassemia result in an excess of iron in the body. The consumption of iron-fortified foods by such patients can reduce immunity and affect organs. One major problem with chemical fortification of foods is that nutrients don’t work in isolation but need each other for optimal absorption. Undernourishment in India is caused by monotonous cereal-based diets with low consumption of vegetables and animal protein. Adding one or two synthetic chemical vitamins and minerals will not solve the larger problem, and in undernourished populations can lead to toxicity.

Q) Consider the following statements about National Company Law Tribunal (NCLT):

1. The NCLT is a quasi-judicial authority incorporated under the Companies Act.
2. National Company Law Appellate Tribunal decisions can be challenged in the Supreme Court.

Which of the statements given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Explanation:

• Statements 1 and 2 are correct: Recently in a relief to Zee Entertainment Enterprises (ZEEL), the National Company Law Appellate Tribunal (NCLAT) has set aside a National Company Law Tribunal (NCLT) order directing the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) to review their initial approvals to the Zee-Sony merger. National Company Law Tribunal (NCLT) is a quasi-judicial authority incorporated for dealing with corporate disputes that are of civil nature arising under the Companies Act. The Central Government constituted NCLT under section 408 of the Companies Act. National Company Law Appellate Tribunal decisions can be challenged in the Supreme Court on a point of law. NCLAT was constituted under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of the National Company Law Tribunal(s) (NCLT), with effect from 1st June 2016.

Q) With reference to Period Poverty, consider the following statements:

1. It is the lack of access to menstrual education and hygiene products.
2. Tampon tax is the value-added tax imposed on menstrual hygiene products.
3. Namibia is the first country to abolish the sales tax on sanitary pads.

Which of the statements given above is/are correct?

1. 1 only
2. 1 and 2 only
3. 2 and 3 only
4. 1, 2 and 3

Explanation:

• Statement 1 is correct: Period poverty refers to the lack of access to menstrual hygiene products, adequate sanitation facilities, and menstrual education. It primarily affects individuals who menstruate and face financial constraints, making it difficult for them to afford or access necessary menstrual supplies. Period poverty can result in negative consequences for those affected, including compromised hygiene, health issues, limited educational and economic opportunities, and social stigma.
• Statement 2 is correct: Tampon tax refers to the value-added tax (VAT) or sales tax imposed on menstrual hygiene products, including tampons, pads, and menstrual cups. These products are essential for individuals who menstruate, yet in many countries, they are categorized as non-essential or luxury items, subjecting them to taxation.
• Statement 3 is incorrect: Since Kenya became the first country to scrap VAT on sanitary pads and tampons in 2004, at least 17 countries have followed suit, according to research by the Thomson Reuters Foundation. Among the latest countries to pass laws to abolish the tampon tax are Mexico, Britain and Namibia.

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