AMIGOS IAS Daily Current Affairs (6^th Sept 2024)

The First global ‘legally binding’ pact on use of AI

GS 3: Science and Technology: AI pact 

About the news

• The United States, the European Union, and the United Kingdom are anticipated to sign the Council of Europe’s convention on artificial intelligence (AI), marking the first “legally binding” international treaty governing the use of this groundbreaking technology.
• This treaty, which focuses on human rights in regulating both public and private-sector AI systems, is viewed as a major milestone among key players in AI development. It addresses concerns that varying national regulations could impede the advancement of AI technology.
• Formally titled the Council of Europe Framework Convention on Artificial Intelligence and Human Rights, Democracy, and the Rule of Law, the treaty was opened for signature at a Council of Europe Ministers of Justice conference held in Vilnius, Lithuania.
• Drafted over 24 months with input from more than 50 countries, the treaty employs a risk-based approach to AI’s design, development, use, and decommissioning.
• It holds signatories accountable for any harmful or discriminatory outcomes of AI systems, requiring them to ensure these systems respect equality and privacy rights and offer legal recourse to victims of AI-related rights violations.
• According to Council of Europe Secretary, the convention is designed to ensure responsible AI use while upholding human rights, the rule of law, and democratic principles.
• Once ratified, member states will need to align their AI systems with human rights protections, ensure they do not undermine democratic institutions, and implement measures to protect democratic processes throughout the AI lifecycle.
• National security and research and development are among the areas exempt from the treaty’s scope. The treaty also obliges parties to address AI-related risks in both public and private sectors.
• This treaty comes alongside other AI regulations such as the G7 pact on AI, Europe’s AI Act, and the Bletchley Declaration.
• Although labelled ‘legally binding,’ the treaty lacks punitive sanctions and relies on monitoring for compliance.

Forum on China-Africa Cooperation (FOCAC) summit

GS 2: International Relations: China-Africa Cooperation

Why is it in the news?

• Chinese President Xi Jinping pledged $51 billion in funding to African countries during the ninth Forum on China-Africa Cooperation (FOCAC) summit in Beijing. This commitment includes $50.7 billion in financial assistance for 30 infrastructure projects across the continent.
• The move comes as China seeks to reduce its large-scale infrastructure investments due to recent economic pressures at home.

More about the news

• FOCAC, established in 2000, is a strategic partnership platform between China and African nations, with a summit held every three years, alternating between China and an African host.
• The forum includes 53 African nations, excluding Eswatini due to its diplomatic ties with Taiwan, and the African Union Commission.
• This year’s summit, themed “Joining Hands to Advance Modernization and Build a High-Level China-Africa Community with a Shared Future,” will see African leaders engage in bilateral talks with China on political and economic cooperation.
• The summit is noted to be the largest diplomatic event hosted by China in recent years, with UN Secretary-General António Guterres as a special guest.
• The agenda includes addressing governance, industrialization, agricultural development, and enhanced cooperation under China’s Belt and Road Initiative (BRI), with a focus on establishing a consensus and action plan for the next three years.
• China’s relationship with Africa has evolved significantly since the 1950s when it supported decolonization movements and established trade relations. By the 1970s, China’s support helped displace Taiwan in international forums.
• The Tanzania-Zambia railway, completed in 1976, marked China’s first major infrastructure project in Africa. Over the decades, China has become Africa’s largest bilateral trading partner, with trade reaching $282 billion in 2023.
• China imports 20% of Africa’s exports, mainly raw materials, and provides about 16% of African imports, including manufactured goods. Africa is a crucial partner in the BRI, which aims to recreate historical Silk Road routes through extensive infrastructure investments, with China reportedly investing over $120 billion in the initiative over the past decade.
• Despite the growing relationship, China faces accusations of ‘debt trap diplomacy,’ where large loans for strategic projects lead to debt and increased influence over borrowing countries. The Hambantota port in Sri Lanka is a notable example of this issue.
• Critics argue that defaults on such loans result from domestic mismanagement rather than intentional debt traps, a view that China rejects.
• The 2024 FOCAC summit is significant as it occurs amid China’s prolonged economic slowdown post-pandemic, with challenges such as deflation and high unemployment.
• Reports suggest that China is shifting from large-scale infrastructure projects to smaller, more sustainable initiatives, including advanced green technologies. African countries, however, are likely to seek more substantial lending despite China’s reduced lending from a peak of $28 billion in 2016 to about $4.6 billion in 2023.
• Countries like Kenya are pushing for funding to complete major projects, such as the Standard Gauge Railway to Uganda, and concerns persist about trade imbalances favouring China.

Understanding Vertical Fiscal Imbalance (VFI)

GS 3: Economy: Fiscal Federalism

Why is it in the news?

• In India’s federal system, a significant vertical fiscal imbalance (VFI) exists where the States, despite incurring 61% of the revenue expenditure, collect only 38% of the revenue receipts.
• This imbalance is primarily due to the concentration of revenue-raising powers with the Union government while States are burdened with substantial expenditure responsibilities. Consequently, States rely heavily on transfers from the Union government to meet their expenditure needs.

An Analysis

• Reducing VFI becomes crucial as it addresses the inefficiency in financial management between the Union and State governments. The Union government efficiently collects major taxes like Personal Income Tax and Corporation Tax, while States are better positioned to provide public goods and services.
• Addressing VFI ensures that expenditure responsibilities align more closely with revenue sources, improving overall fiscal efficiency. The 15th Finance Commission highlighted that India’s VFI is larger and has been increasing compared to other federations, exacerbated by crises like the COVID-19 pandemic.
• The Finance Commission’s role involves determining the distribution of Union taxes to the States and addressing VFI through these transfers. It must decide how to allocate the net proceeds of taxes collected by the Union government and distribute these taxes across States.
• In addition to tax devolution, the Finance Commissions recommend grants to States under Article 275 of the Constitution, typically for specific needs and limited durations.
• Other transfers, such as those under Article 282, involve substantial Union government spending on State and Concurrent list subjects through centrally sponsored and central sector schemes. However, these are conditional grants tied to specific projects.
• Thus, tax devolution from net proceeds remains the sole unconditional transfer to States.
• To quantify VFI, we use a method where we compare the sum of Own Revenue Receipts (ORR) and tax devolution from the Union government with the Own Revenue Expenditure (ORE) of the States. If the ratio of ORR plus tax devolution to ORE is less than 1, it indicates a shortfall. Subtracting this ratio from 1 gives a proxy for VFI.
• Our calculations show that to eliminate VFI, the share of net proceeds devolved to the States should be around 48.94%, whereas the 14th and 15th Finance Commissions recommended 42% and 41%, respectively.

• Many States are advocating for the 16th Finance Commission to fix the share of tax devolution at 50% of the net proceeds. This demand is supported by the exclusion of significant cesses and surcharges from the net proceeds.
• Our analysis suggests that increasing the devolution to approximately 49% of net proceeds would eliminate VFI, providing States with more untied resources to better address local needs and enhance expenditure efficiency.
• This adjustment would promote a more balanced and cooperative fiscal federalism, aligning resources with expenditure responsibilities more effectively.

Accessing UNFCCC’s Loss and Damage Fund

GS 3: Environment and Biodiversity: Climate finance

Why is it in the news?

• Following the recent landslides in Kerala’s Wayanad district, there is a debate about whether subnational entities can access the UNFCCC’s Loss and Damage Fund (LDF).
• While Kerala’s need for this compensation is clear, accessing these funds proves challenging due to the complex process involved.  

An Analysis

• The LDF, established at the 2022 UNFCCC Conference (COP27) in Egypt, aims to support regions facing economic and non-economic losses from climate change, such as extreme weather and rising sea levels.
• Managed by a Governing Board with the World Bank as the interim trustee, the LDF is working on mechanisms for direct access and rapid disbursement. However, climate funds are often slow to reach local communities, and the LDF may encounter similar issues.
• India has incurred over $56 billion in damages from weather-related disasters between 2019 and 2023. Despite this significant financial impact, the country has prioritized mitigation over adaptation in its National Climate Action Policy and budgets, leading to relatively subdued participation in Loss and Damage dialogues at COP meetings.
• Given the high vulnerability of certain regions to climate change, increased engagement in these dialogues could be highly beneficial.
• Hence, there is an urgent need for India to develop a clear legal and policy framework to effectively manage climate finance, particularly for adaptation and loss and damage. Aligning with principles of locally led adaptation is essential for protecting vulnerable communities.
• Although the introduction of a climate finance taxonomy in the Union Budget 2024 has raised hopes for increased international climate finance, the lack of clear guidelines for accessing loss and damage funds remains a concern.
• To better address these challenges, India should advocate for more decentralized methods of fund disbursement from the Loss and Damage Fund (LDF) rather than relying on the centralized systems used for other climate funds.
• Moreover, adaptation and loss and damage issues are felt most acutely at the State level, as demonstrated by Kerala’s experience. The State government has borne the brunt of financial recovery efforts, notably through the Rebuild Kerala Development Programme launched after the August 2018 floods.
• This program, supported by loans from the World Bank and KfW Development Bank, was essential in reconstructing the State’s infrastructure, including severely damaged roads and bridges.
• However, the lack of a standardized approach for assessing disaster-related damages, particularly from slow-onset events, risks leaving significant needs unaddressed. This absence of a structured assessment process could obstruct India’s ability to access the Loss and Damage Fund (LDF) in the future.
• The current situation in Wayanad underscores the broader challenges India faces in managing and accessing climate finance for loss and damage.
• To improve its ability to tap into such funds, India must establish a clear domestic policy framework that emphasizes locally led adaptation and provides explicit guidelines for accessing loss and damage resources.

PM Modi’s visit to Singapore significant for India’s semiconductor push

GS 2: International Relations: India-Singapore

About the news

• Prime Minister Narendra Modi’s recent visit to Singapore, during the second leg of his South-East Asia tour, highlights India’s strategic push in the semiconductor sector.
• The visit, which also included Brunei Darussalam, was notable for the signing of a Memorandum of Understanding on an India-Singapore Semiconductor Ecosystem Partnership.
• This agreement underscores the critical importance of semiconductors in a wide array of technologies, from mobile phones to missiles, and reflects India’s urgent need to develop its semiconductor industry amidst global supply disruptions and geopolitical tensions.
• India’s efforts to build a robust semiconductor ecosystem have been significant. Launched in 2021, the India Semiconductor Mission includes a Rs 76,000 crore incentive scheme covering half of the capital expenditure for semiconductor plants.
• This initiative has already led to partnerships, such as the Tata Group’s collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation, and approvals for several semiconductor units. Despite these strides, India remains a late entrant in the high-tech semiconductor race dominated by a few global players.
• Singapore’s semiconductor industry, shaped by early strategic investments and visionary policies, provides valuable lessons. From the 1970s, Singapore attracted major semiconductor firms like Texas Instruments and National Semiconductors, building a comprehensive semiconductor value chain.
• Today, Singapore contributes about 10% of global semiconductor output and has become a hub for advanced manufacturing technologies. The country hosts nine of the top 15 semiconductor firms globally and has attracted significant investments, such as those by Taiwan’s United Microelectronics Corporation and GlobalFoundries.
• However, Singapore’s semiconductor sector faces challenges, including a focus on mature-node chips and rising production costs. The country has been moving some lower-cost operations to other Southeast Asian countries, and its limited land and labour resources pose constraints.
• However, for India, there are opportunities to collaborate with Singapore in areas like talent development and semiconductor industrial park management.
• India’s competitive land and labour costs could attract Singaporean companies looking to expand, and there is potential for joint ventures in semiconductor equipment and material manufacturing to strengthen India’s domestic industry.

Saturn’s majestic rings to ‘disappear’ briefly in March 2025

GS 3: Science and Technology: Solar System

About the news

• Saturn’s rings are among the most awe-inspiring sights in the Solar System, but in March 2025, they will appear to “disappear” — though this is only a temporary optical illusion.
• Saturn is tilted at an angle of 26.73 degrees and takes about 29.4 Earth years to complete one orbit around the Sun. As a result, the rings are tilted similarly and their visibility from Earth changes depending on Saturn’s position in its orbit.
• Every 13 to 15 years, Saturn’s rings align edge-on with Earth. This will occur in March 2025, making the rings appear as thin lines, reflecting minimal light and making them nearly invisible from our vantage point.
• This phenomenon is akin to viewing the edge of a thin sheet of paper from afar. As Saturn continues its orbit, the rings will gradually become visible again. This alignment last happened in 2009.
• However, Saturn’s rings won’t last forever. NASA confirmed in 2018 that Saturn is gradually losing its rings due to a phenomenon called “ring rain,” where the rings are being pulled towards the planet by its gravity and magnetic field.
• According to a NASA scientist, this process drains an amount of water from Saturn’s rings equivalent to filling an Olympic-sized swimming pool every half hour. At this rate, Saturn could lose its rings in about 300 million years or sooner.
• Data from NASA’s Cassini spacecraft showed that Saturn’s rings consist of billions of ice and rock chunks, ranging from tiny grains of dust to massive boulders.
• The current theory suggests that the rings formed around 100 million years ago from the debris of a collision between two icy moons. While other gas giants like Jupiter, Uranus, and Neptune may have had rings in the past, they now only have faint ringlets.
• Saturn’s rings, however, extend nearly five times the diameter of Earth and consist of seven major divisions with intricate structures.

Law Commission: Its role, members, & recommendations

GS 2: Polity and Governance: Law Commission

About the news

• The Law Commission of India is a non-statutory body established by the Union Ministry of Law and Justice to assist the government in reviewing laws, suggesting the repeal of outdated legislation, and making recommendations on various legal matters.
• Unlike statutory bodies, it is not created by a law of Parliament but is constituted through a gazette notification. The commission is typically headed by a retired Supreme Court or High Court judge, with other members including legal scholars and, occasionally, serving judges.
• Since Independence, there have been 22 Law Commissions, which have produced 289 reports. These reports, although not binding, have significantly influenced legislation in India, leading to the enactment of crucial laws like the Code of Criminal Procedure, 1973, and the Right of Children to Free and Compulsory Education Act, 2009.
• The 20th Law Commission’s recommendation to repeal over 1,500 obsolete central laws exemplifies the commission’s role in updating and streamlining legal frameworks.
• The 23rd Law Commission, whose constitution was notified on September 2, 2024, will have a three-year term, ending on August 31, 2027.
• It will be composed of a full-time chairperson, four full-time members including a member-secretary, up to five part-time members, and the secretaries of the Legal Affairs and Legislative departments as ex officio members.
• The chairperson and members of this commission will be appointed by the Appointments Committee of Cabinet chaired by the Prime Minister.
• The new commission’s terms of reference include identifying outdated laws for repeal, creating procedures for periodic law reviews, and proposing amendments to laws that no longer align with contemporary economic needs.
• It will also review laws in light of the Directive Principles of State Policy and the Preamble of the Constitution, with a focus on socio-economic legislation and judicial administration. The commission will assess laws affecting the poor and ensure they are responsive to current needs.
• The 22nd Law Commission, chaired by Justice Ritu Raj Awasthi, completed its tenure on August 31, 2024, and produced 11 reports. Notably, it recommended retaining Section 124A of the Indian Penal Code, which deals with sedition, while suggesting amendments for clarity.
• The commission also worked on reports regarding trade secrets and simultaneous elections, but these reports were not presented before its term ended.