Prelims Nuggets

The 'Parsi Lady' being restored at Kilimanoor Palace

Context: Kilimanoor Palace Trust has decided to put the last unfinished painting of Raja Ravi Verma (Parsi lady) for the public display. He died on 02 October 1906.

About Raja Ravi Verma:

Birth: Kilimanoor, Kerala

Learning: he learnt watercolour painting from the royal painter Ramaswamy Naidu, and later trained in oil painting from Dutch artist Theodore Jensen

Specialisation: Oil and water paintings. He focused on realised expression and skin tone. Varma combined European realism with Indian sensibilities. He was inspired from Indian literature to dance drama.

Achievements: Three gold medals at the World’s Columbian Exposition in Chicago in 1893.

Role towards masses: He opened a Lithographic Press in Bombay in 1894 to take his art to masses. His lithographs increased the involvement of common people with fine arts and defined artistic tastes among common people.

Important work:

Shakuntala
Nair Lady Adorning Her Hair
There Comes Papa
Galaxy of Musicians
Damayanti talking with a swan
Maharaj Shivaji

Legacy

2014 Indian Hindi-language film, Rang Rasiya (English title: Colours of Passion) explores Varma's inspiration behind his paintings.

The Parsi Lady painting

Angel Tax

Context: In the latest budget, the government has expanded the scope of Angel tax to cover foreign funding. This proposal has created uncertainty among the entrepreneurs.

Angel tax

Angel tax refers to the income tax (30.6 %) imposed on any unlisted company (usually startup enterprises) in receipt of investment which is above the fair market value. Such investment is treated as income from other sources for the tax purpose. This tax was introduced in 2012 in the form of Section 56 (2) of the Income Tax Act to plug money laundering practices.

Earlier, angel tax provisions were applicable only for investments received from resident investors. However, Finance Bill 2023 has extended its applicability to non-resident investors as well.

Issues with Angel tax:

Assessment of Fair market Value: Calculating a startup’s fair market value is subjective and based on negotiations between the startup and investor. Whereas the tax authorities compute the market value based on Discounted cash flow method. The market value arrived under this method tend to be lower than the value agreed by the start-up and investor.
The proposed amendment may deter foreign investors from investing in India and lead some start-ups to consider restructuring their holdings overseas to avoid pressure from concerned foreign investors.

Stringent tax laws like these may result in flipping of start-ups.

Flipping & Reverse flipping:

Flipping refers to an Indian company transforming into a 100% subsidiary of a foreign entity, after it has moved its headquarters overseas, including a transfer of its intellectual property (IP) and others. The same process, but moving back to India, from another country is known as “reverse flipping”.

Virtual Digital Assets

Context: The finance ministry recently placed all the transactions involving virtual digital assets under the Prevention of Money Laundering Act (PMLA) purview.

Definition of VDA under the Finance Act 2022

Any information/code/number/token generated through cryptographic means providing a digital representation of value exchanged with or without consideration. Virtual Digital Assets can be transferred, stored or traded electronically. They can have some inherent value or function as a store of value or Unit of Account or Used for Financial Transaction or Investment.
Non-fungible token.
Any other digital asset as notified by Central Government. Currencies such as Central Bank Digital Currency or any other foreign currency is excluded from this tax.
Centre government has power to exclude any digital asset from the definition of Virtual Digital Asset.

E.g., Bitcoin and other similar Altcoins such as Ethereum, Ripple, Dogecoin etc.

Taxation of Virtual Digital Assets:

Any income arising from the transfer of virtual digital assets will attract tax on the capital gains at the rate of 30%. Additionally, a withholding tax at the rate of 1% will be applicable on the sale of virtual digital assets, if such sale consideration cumulatively exceeds INR 10,000 (approx. USD 130) in any financial year.
Expenses associated with acquiring, holding or selling virtual digital assets are not deductible from the gains arising from their transfer when determining the tax incidence.

E.g., Cost of crypto mining or any other cost cannot be shown as expense to reduce the profit.

Loss from transfer of virtual digital asset cannot be set off against any capital gain made from any other sources like Housing property/shares while paying capital gains tax.
Gifts of virtual digital assets would also be taxable.

VDA under PMLA:

The government brought all the transactions involving crypto assets under the Prevention of Money Laundering Act.
Nature of transactions to be covered under PMLA:

Exchange of virtual digital assets (“VDAs”) with fiat currencies or other VDAs;
Transfer of VDAs;
Provide safekeeping or administration of VDAs or instruments that enable control over VDAs; and
Participate and provide financial services related to an issuer’s offer and sale of VDAs.

All the individuals/instituions involved in the above transactions are required to implement KYC procedure to verify identity of their clients.
They are also required to maintain a record of certain transactions for at least 5 years from the date of each such transaction.
Indian crypto exchanges will have to report suspicious activity to the Financial Intelligence Unit India (FIU-IND).

Only half of PMJDY insurance claims were settled in two years

Context: In the last two financial years, only 329 claims for the accident insurance cover provided to bank account holders under the Pradhan Mantri Jan Dhan Yojana (PMJDY) have been settled out of the 647 claims that were filed.

About PMJDY

PMJDY is a National Mission on Financial Inclusion encompassing an integrated approach to bring about comprehensive financial inclusion of all the households in the country.

The plan envisages universal access to banking facilities with

at least one basic banking account for every household,
financial literacy,
access to credit,
insurance and
pension facility.

Mobile transactions through telecom operators and their established centres as Cash Out Points are also planned to be used for Financial Inclusion under the Scheme.

Benefits under PMJDY

One basic savings bank account is opened for unbanked persons.
There is no requirement to maintain any minimum balance in PMJDY accounts.
Interest is earned on the deposit in PMJDY accounts.
Rupay Debit card is provided to PMJDY account holders.
Accident Insurance Cover of Rs.1 lakh (enhanced to Rs. 2 lakhs for new PMJDY accounts opened after 28.8.2018) is available with a RuPay card issued to the PMJDY account holders.
An overdraft (OD) facility of up to Rs. 10,000 to eligible account holders is available.PMJDY accounts are eligible for Direct Benefit Transfer (DBT), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Atal Pension Yojana (APY), Micro Units Development & Refinance Agency Bank (MUDRA) scheme.

Achievements of PMJDY

48.82 crore beneficiaries banked so far under PMJDY
Rs. 199341.41 crore balance in the bank accounts under PMJDY
6.55 lakh bank Mitras are delivering branchless banking services in the country.

Zero Shadow Day in Bengaluru

Context: Bengaluru witnessed a unique celestial phenomenon called ‘Zero Shadow Day’ on April 25. In this all the vertical objects in the city will not have a shadow for a short period of time.

What is Zero Shadow Day?

It is a day on which the Sun does not cast a shadow of an object at solar noon, when the sun will be exactly at the zenith position (the highest point in the sky).
The Zero Shadow Day is restricted to locations between the tropics, and so places north of Ranchi in India are out of it.
For every point on Earth between the Tropic of Cancer and the Tropic of Capricorn, there are two Zero Shadow Days a year.

Why does a Zero Shadow Day happen?

Movement of the Sun from south to north from winter solstice to summer solstice (Uttarayan)and back from north to south (Dakshinayan) happen because Earth’s rotation axis is tilted at an angle of roughly 23.5° to the axis of revolution around the Sun.
The Sun’s location moves from 23.5°N to 23.5°S of Earth’s equator and back. All places whose latitude equals the angle between the Sun’s location and the equator on that day experience zero shadow day, with the shadow beneath an object at local noon.
The Earth’s rotation axis is inclined at 23.5 degrees to the plane of its revolution around the Sun, which is why we have seasons. This also means that the Sun, in its highest point of the day, will move from 23.5 degrees south of the celestial equator to 23.5 degrees north of the equator (Uttarayan), and back again (Dakshinayan), in a year. The northern most and southern most points are the two solstices, and the crossing of the Sun across the equator are the two equinoxes.

What is an equinox?

During the equinox, the sun crosses the plane of Earth’s equator, making nighttime and daytime (roughly) equal length all over the world.
In the Northern Hemisphere, the spring equinox, or vernal equinox, occurs around March 21, when the sun moves northward across the celestial equator.
The autumnal equinox occurs around September 22 or 23, when the sun crosses the celestial equator going south.
In the Southern Hemisphere, it’s the reverse.

What is a solstice?

A solstice is one of the two times of the year when the positioning and tilt of Earth relative to the sun results in the most amount of daylight time or the least amount of daylight time in a single day.
Technically, a solstice is one of the two the exact moments in the year when the sun reaches its northernmost point (around June 21, when the North Pole tilts closest to the sun) or southernmost point (around December 22, during the winter solstice) from Earth’s equator.
The solstices are traditionally considered to mark the start of summer and winter.
In the Northern Hemisphere, the summer solstice occurs in June and the winter solstice occurs in December.
In the Southern Hemisphere, it’s the opposite.

Malaria set to be a notifiable disease across India

Context: Malaria is all set to become a notifiable disease across India, with Bihar, Andaman and Nicobar Islands and Meghalaya too in the process of putting this vector-borne disease in the category.

Malaria:

Malaria is a potentially life-threatening disease caused by parasites (plasmodium vivax, plasmodium falciparum, plasmodium malariae and plasmodium ovale) that are transmitted through the bite of infected female Anopheles mosquitoes.
India was the only high-burden, high-impact country in the South-East Asia region to report a decline in malaria cases in 2020 as compared to 2019.
- India witnessed 85.1% decline in malaria cases and 83.36% decline in deaths during 2015-2022.
India has the vision to be malaria-free by 2027 and to eliminate the disease by 2030.
India has the availability of near-real-time data monitoring through an integrated health information platform (HIP-Malaria Portal) and periodic regional review meetings to keep a check on malaria growth across India.

What are notifiable diseases?

A notifiable disease is any disease that is required by law to be reported to government authorities. The collation of information allows the authorities to monitor the disease, provides early warning of possible outbreaks, and formulate a plan for their elimination and control.
Registered medical practitioners need to notify such diseases in a proper form within three days, or notify verbally via phone within 24 hours depending on the urgency of the situation. Every government hospital, private hospital, laboratory, and clinic will have to report cases of the disease to the local government authorities.
The onus of notifying any disease and the implementation lies with the state government. Any failure to report a notifiable disease is a criminal offence and the state government can take necessary actions against defaulters.
Notifiable diseases in India: Cholera, diphtheria, encephalitis, leprosy, meningitis, pertussis (whooping cough), plague, tuberculosis, AIDS, hepatitis, measles, yellow fever, malaria, dengue.

The Wagner Group’s actions in Africa

Context: After fighting erupted in Sudan’s capital Khartoum on April 15, questions have been raised over the involvement of the Wagner group, which has been active in African countries for years.

About Wagner Group

The Wagner group is a Russian paramilitary organisation headed by Yevgeny Prigozhin.
Though it has been reportedly engaged in counter-militancy operations in Africa, its involvement is believed to have a more extensive scope covering political, economic and military fields.
There have also been reports of the group supplying arms and weapons, and training regional forces in fighting jihadist threats.
Despite its involvement in the Russia-Ukraine war, the Wagner group’s presence in Africa has continued.
By siding with the domestic actors in a civil war situation, the group’s actions have impacted the democratic process in Africa.

Role of Wagner group

The Wagner group has been active in Sudan, Mali, the Central African Republic, Mozambique and Libya in Africa.
The activities are related to providing direct support to authoritarian governments, supporting rival leadership engaged in internal wars, filling the void created by the withdrawal of the French military engagement, taking part in resource exploitation etc.
The Wagner group presents itself as a security provider to a few governments, mostly authoritarian ones in Africa.
It has also been supporting rival leaders engaged in a civil war.
The group’s ties with Sudan aimed at guarding mineral resources, notably gold mines, and therefore, supported Bashir’s government against international opposition.
It also played a direct role in suppressing the Sudanese uprising in 2019 that toppled Bashir’s regime.

Why does the role of the Wagner group seem to be controversial?

In Sudan, Russia has recently forged a strong relationship with the Rapid Support Forces (RSP) and its commander, General Mohamed Hamadan Dagalo. The latter is a rival leader fighting against the Sudanese army.
Russia is set to sign an agreement with Sudan to build a military base in Port Sudan on the Red Sea.
Hence there is a conflict of interest because Russia has relations with parties involved in the civil war in Sudan

Indigenous suicide drones Nagastra-1

Context: Army has used its emergency powers to order more than 300 indigenous suicide drones ‘Nagastra 1’ from Nagpur-based Solar Industries. The procurement would enable shorter selection time and expedited deliveries of the drones within one year.

Major Highlights

Nagastra 1 is the first indigenous Loiter Munition (LM) which can strike targets within 15-30 km using GPS-enabled precision. It can loiter over a target for a maximum of 60 minutes and has an accuracy of less than 2 metres.
The fixed-wing electric-powered unmanned aerial vehicle (UAV) uses GPS for precision strikes and is capable of destroying various soft-skinned targets using its pre-fragmented high explosive warhead. The munition also carries a day-and-night camera for surveillance as well.
The Nagastra-1 in its 'Kamikaze' mode can search and destroy any target by crashing into it. If the target is not found or the mission is aborted, the munition can be called back and recovered using a parachute.
Developed by: Economic Explosives Limited

Significance

It is a cost-effective weapon against low-value targets. The drones can undertake shallow strikes with precision, without endangering the lives of soldiers.
It will enhance options for armed forces to strike terrorist camps and launch pads across the Line of Control in Pakistan.
The system has over 75% indigenous content, cutting down dependence on foreign sources, and is fully designed and developed in India.

It is also likely to have a strong export potential, given the growing demand for economical stand-off weapons that can deliver precision strikes.

India-made eye drops linked to outbreak of rare strain in US

Context: The EzriCare Artificial Tears, over-the-counter eye drops manufactured by Chennai-based Global Pharma Healthcare, is at the centre of a United States investigation into a multistate outbreak of an extensively drug-resistant bacterium strain associated with multiple types of infections including eye infections in the United States.

Major Highlights

The outbreak strain — VIM-GES-CRPA is a rare strain of the extensively drug-resistant Pseudomonas aeruginosa bacterium which has never been reported before in the US —detected in 68 cases from 16 states.
The organism appears to have spread via a contaminated point source (eye drops) with possible secondary transmission among contacts in some healthcare settings.

About Pseudomonas aeruginosa

Pseudomonas is a bacteria that can be found in the environment, including in water and soil. There are multiple types of Pseudomonas – Pseudomonas aeruginosa causes the most infections in humans.
Pseudomonas aeruginosa can spread to people through contaminated surfaces, equipment, water and more. The bacteria can cause infections in the lungs, blood and other parts of the body. The bacteria could melt through the eye up to the cornea into the bloodstream pretty quickly.

Successful Trial of BMD Interceptor from Naval Platform

Context: Defence Research and Development Organisation (DRDO) and Indian Navy successfully conducted a maiden flight trial of sea-based endo-atmospheric interceptor missile off the coast of Odisha in the Bay of Bengal on April 21, 2023.

Major Highlights

DRDO and the Indian Navy were successful in test-firing an endo-atmospheric interceptor missile, capable of taking down incoming ballistic missiles from sea.
- Endo-atmospheric interception means the missile fired by Indian testing agencies had destroyed the incoming enemy ballistic missile within the Earth’s atmosphere.
- Exo-atmospheric interception, on the other hand, is for destroying incoming enemy ballistic missiles outside of the Earth’s atmosphere at a higher altitude.
The purpose of the trial was to engage and neutralize a hostile ballistic missile threat thereby elevating India into the elite club of Nations having Naval BMD (Ballistic Missile Defence) capability.

India’s Ballistic Missile Defence capability

The BMDs are capable of intercepting incoming long-range nuclear missiles and hostile aircraft including AWACS (airborne warning and control systems).
Prior to this BMD test from a warship, India successfully demonstrated the land-based BMD system with the capability to neutralize ballistic missile threats emerging from adversaries.

In November 2022, India’s DRDO successfully conducted the maiden flight test of Phase-II of the BMD interceptor, code-named AD-1 missile, with a large kill altitude bracket.

AD-1 is a long-range interceptor missile designed for both low exo-atmospheric and endo-atmospheric interception of long-range ballistic missiles and aircraft.
It is propelled by a two-stage solid motor and equipped with an indigenously developed advanced control system, navigation, and guidance algorithm to precisely guide the vehicle to the target.
The successful trial of AD-1 from both land-based and sea-based platforms would provide great operational flexibility to the Indian armed forces.

Origins of the BMD Program

India launched the BMD program after the war with Pakistan in the Kargil sector in 1999 to counter the enemy nation’s widening spectrum of ballistic missiles that usually delivered both conventional and nuclear warheads.
The two-tiered BMD program involved Prithvi missile-based Air Defense that can intercept enemy missiles at altitudes of 50 km to 180 km in the first layer. The Pradyumna interceptor has replaced the Prithvi Air Defense BMD already.
- The Prithvi Air Defense system was first tested in 2006, then making India only the fourth nation globally to have such capabilities, after the United States, Russia, and Israel.
The second layer under the program is the Advanced Air Defense system for low-altitude interceptions. The Advanced Air Defense system is designed to destroy hostile missiles at 15 km to 40 km altitudes.
- The Advanced Air Defense system got tested for the first time in 2007. Since then, both systems have gone through successive and multiple rounds of tests and are now in the process of deployment with the Indian armed forces.

India’s Other Missile Capabilities

India conducted the first successful Anti-Satellite Test under its Mission Shakti project in March 2019, taking India to a league of nations such as the United States, Russia, and China possessing such a capability.

While the India-made Akash missile is part of the air defence systems possessed by the Indian armed forces, it is now in the process of inducting the Russian-origin S-400 Truimf, even though the Ukraine war has delayed the delivery of these air defence missiles to India.

In 2021, the Indian Navy inducted INS Dhruv, a nuclear missile tracking warship, to join an elite club of nations such as the US, Russia, China, the United Kingdom, and France to have such a platform. The 17,000-tonne INS Dhruv was developed by the DRDO in collaboration with the National Technical Research Organization (NTRO), and built by Hindustan Shipyard Limited. It can be used to provide early warning of attacks by ballistic missiles launched from Pakistan and China.

LockBit ransomware

Context: Cybercriminals have developed new ransomware LockBit designed to target macOS devices, making this the first major ransomware operation to specifically target Apple computers (both older Macs and newer ones running on Apple Silicon).

About LockBit ransomware

It was first reported in September 2019 and dubbed the “abcd” virus, due to the file extension used when encrypting victims’ files.
The LockBit ransomware is designed to infiltrate victims’ systems and encrypt important files.
The virus is categorised as a “crypto virus” due to its requests for payment in cryptocurrency to decrypt the files on the victim’s device.
LockBit gang operates on the ransomware-as-a-service (Raas) model and comes from a line of extortion cyberattacks.
- In this model, willing parties put down a deposit for use in a custom attack and make profits through the ransom payment.
- The ransom is divided between the LockBit developer team and attacking affiliates.
The gang behind the LockBit ransomware reportedly maintains a dark web portal to recruit members and release data of victims who refuse to meet their demands, as part of their business model.

How does LockBit ransomware work?

It works as a self-spreading malware, not requiring additional instructions once it has successfully infiltrated a single device with access to an organisational intranet.
It is also known to hide executable encryption files by disguising them in the .PNG format, thereby avoiding detection by system defences.
Attackers use phishing tactics and other social engineering methods to impersonate trusted personnel or authorities to lure victims into sharing credentials.
The ransomware places an encryption lock on all system files, which can only be unlocked via a custom key created by the LockBit gang. The process leaves behind a ransom note, with instructions to restore the system, and has reportedly also included threatening blackmail messages.

Incidents of attacks

Earlier in January 2023, the LockBit gang was reportedly behind a cyber-attack on the U.K. postal services, causing international shipping to grind to a halt.
In the past, LockBit ransomware has been used to target enterprises and organisations in the U.S., China, India, Ukraine, and Indonesia. Attacks have also been recorded throughout Europe, including in France, Germany, and the U.K.

The EU’s new crypto legislation

Context: The Markets in Crypto Assets (MiCA) regulation has been passed by the European Parliament, marking a significant step in bringing the largely unregulated cryptocurrency markets under government regulation.

More on news:

The MiCA will be the world's first comprehensive set of rules for crypto assets and will apply to the 27-country block European Union. After receiving formal approval by member states, the regulation will come into effect, marking a crucial development in the evolution of cryptocurrency markets.

Coverage under MiCA

The MiCA legislation has a broad definition of "cryptoassets," encompassing digital representations of value or rights that use cryptography for security and can be transferred and stored electronically via distributed ledger technology or similar tech.
This definition includes both traditional cryptocurrencies like Bitcoin and Ethereum and newer ones such as stablecoins.
However, MiCA will not regulate cryptoassets that are classified as transferable securities, function like shares or their equivalent, or are already considered financial instruments under existing regulations. Additionally, non-fungible tokens (NFTs) will largely be excluded from MiCA's scope.
The legislation will also not regulate central bank digital currencies issued by the European Central Bank or digital assets issued by national central banks of EU member countries acting in their capacity as monetary authorities, nor will it regulate cryptoassets-related services offered by them.