Current based PRELIMS QUESTION 7 May 2020

1. Consider the following statement regarding the cryptocurrencies or virtual currencies.
1. Supreme Court frees trade in cryptocurrencies and annuls RBI curb because RBI ban on cryptocurrencies fail to test of proportionality of Article 19(1) (g).
2. Blockchain technology is a specific kind of Distributed ledger technology (DLT) which is used in cryptocurrency.
3. Cryptocurrencies use codes to encrypt transactions and stack them up in blocks, creating Blockchains.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 3 only
(c) 2 and 3 only
(d) 1, 2 and 3

  1. Answer-d
    Explanation
    Cryptocurrencies or Virtual currency
    Distributed ledger technology (DLT) and Block Chain technology:
    Distributed ledger technology (DLT) is a digital system for recording the transaction of assets in which the transactions and their details are recorded in multiple places at the same time.
    Unlike traditional databases, distributed ledgers have no central data store or administration functionality.
    Whether distributed ledger technologies, such as blockchain, will revolutionize how governments, institutions and industries work is an open question.
    Blockchain technology is a specific kind of DLT that came to prominence after Bitcoin, a cryptocurrency that used it, became popular.
    Cryptocurrencies such as Bitcoin use codes to encrypt transactions and stack them up in blocks, creating Blockchains. It is the use of codes that differentiates cryptocurrencies from other virtual currencies.
    What is the true potential of “Block-chain Technology”?
    While crypto-currencies have dominated discussions about the new block-chain technology, it is but just one application of it.
    In some ways, the present moment is analogous to the early days of the Internet, when internet was synonymous with e-mail. Significantly, in a block-chain platform called Ethereum, an application that enables people to rent out idle storage space on their laptop can be setup.

This means that someone who needs cloud storage can directly pay the renter, instead of paying cloud storage intermediaries like Amazon. This opens up a potentially monetisable resource that we didn’t even realise. Also, two domains that would gain immensely from blockchain applications and CCs are Artificial Intelligence (AI) and Internet of Things (IoT). Notably, IoT would require thousands of devices to rapidly and seamlessly transact without manual operator interference, which CCs would aid.
Also, enormous scope of block-chains for increased efficiency and cost-saving, is a serious threat to conventional “Finance and Digital space businesses”.
Proportionality test The Supreme Court has set aside a ban by the Reserve Bank of India (RBI) on banks and financial institutions from dealing with virtual currency holders and exchanges. The court held that the ban did not pass the “proportionality” test. The test of proportionality of any action by the government must pass the test of Article 19(1) (g), which states that all citizens of the country will have the right to practise any profession, or carry on any occupation or trade and business.
In a circular in 2018, the RBI had banned banks from dealing with virtual currency exchanges and individual holders on the grounds that these currencies had no underlying fiat and that it was necessary in the larger public interest to stop banks from providing any services related to these.

2. Consider the following statements regarding the National Anti-Profiteering Authority (NAA).
1. NAA has been constituted under Section-171 of the Central Goods and Services Tax Act, 2017.
2. NAA was set up to monitor and to oversee whether the reduction or benefit of input tax credit is reaching the recipient by way of appropriate reduction in prices.
Which of the statement(s) given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
2. Answer-c
Explanation
National Anti-Profiteering Authority (NAA)
NAA has been constituted under Section 171 of the Central Goods and Services Tax Act, 2017 to ensure that the reduction in rate of tax or the benefit of input tax credit is passed on to the recipient by way of commensurate reduction in prices. Further, the following steps have been taken by the NAA to ensure that customers get the full benefit of tax cuts:
i. Holding regular meetings with the Zonal Screening Committees and the Chief Commissioners of Central Tax to stress upon consumer awareness programmes;
ii. Launching a helpline to resolve the queries of citizens regarding registration of complaints against profiteering.
iii. Receiving complaints through email and NAA portal.
iv. Working with consumer welfare organizations in order to facilitate outreach activities.
Vision and Mission of NAA –
The National Anti-profiteering Authority (NAA) is the institutional mechanism under GST law to check the unfair profit-making activities by the trading community.
The Authority’s core function is to ensure that the benefits of the reduction is GST rates on goods and services made by GST Council and proportional change in the Input tax credit passed on to the ultimate consumers and recipient respectively by way of reduction in the prices by the suppliers.
Institutional Mechanism:
This institutional framework comprises the NAA, a Standing Committee, Screening Committees in every State and the Directorate General of Safeguards in the Central Board of Excise & Customs (CBEC).

3. Consider the following statements regarding the National Disaster Management Authority (NDMA).
1.It isneither constitutional nor statutory organisation
2. Prime Minister is ex-officio Chairman of NDMA.
3. All State Governments are mandated to set up State Disaster Management Authority.
Which of the statement(s) given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
3. Answer-A
Explanation
The Government of India (GOI), in recognition of the importance of Disaster Management as a national priority, set up a High-Powered Committee (HPC) in August 1999 and a National Committee after the Gujarat earthquake, for making recommendations on the preparation of Disaster Management plans and suggesting effective mitigation mechanisms.
The Tenth Five-Year Plan document also had, for the first time, a detailed chapter on Disaster Management.
The Twelfth Finance Commission was also mandated to review the financial arrangements for Disaster Management.
On 23 December 2005, the Government of India enacted the Disaster Management Act, which envisaged the creation of National Disaster Management Authority (NDMA), headed by the Prime Minister, and State Disaster Management Authorities (SDMAs) headed by respective Chief Ministers, to spearhead and implement a holistic and integrated approach to Disaster Management in India.
Vision
To build a safer and disaster resilient India by a holistic, pro-active, technology driven and sustainable development strategy that involves all stakeholders and fosters a culture of prevention, preparedness and mitigation.
Functions
NDMA, as the apex body, is mandated to lay down the policies, plans and guidelines for Disaster Management to ensure timely and effective response to disasters. Towards this, it has the following responsibilities:-
 Lay down policies on disaster management;
 Approve the National Plan;
 Approve plans prepared by the Ministries or Departments of the Government of India in accordance with the National Plan;
 Lay down guidelines to be followed by the State Authorities in drawing up the State Plan;
 Lay down guidelines to be followed by the different Ministries or Departments of the Government of India for the Purpose of integrating the measures for prevention of disaster or the mitigation of its effects in their development plans and projects;
 Coordinate the enforcement and implementation of the policy and plans for disaster management;
 Recommend provision of funds for the purpose of mitigation;
 Provide such support to other countries affected by major disasters as may be determined by the Central Government;
 Take such other measures for the prevention of disaster, or the mitigation, or preparedness and capacity building for dealing with threatening disaster situations or disasters as it may consider necessary;
 Lay down broad policies and guidelines for the functioning of the National Institute of Disaster Management.

4. Consider the following statements regarding the Airports Authority of India (AAI).
1. AAI was constituted under Airports Authority of India Act, 1994 and came into being on 1st April 1995 by merging erstwhile National Airports Authority and International Airports Authority of India.
2. Its function includes design, development, operation and maintenance of international and domestic airports and civil enclaves.
3. AAI is implemented the GPS-aided GEO augmented navigation (GAGAN) with the support of ISRO.
Which of the statement(s) given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
4. Answer-d
Explanation-
Airports Authority of India (AAI)
AAI was constituted by an Act of Parliament: Airports Authority of India Act, 1994 and came into being on 1st April 1995 by merging erstwhile National Airports Authority and International Airports Authority of India.
The GPS-aided GEO augmented navigation (GAGAN) is an implementation of a regional satellite-based augmentation system (SBAS) by the Indian government. It is implemented by Airport Authority of India with the support of ISRO. The goal is to provide navigation system for all phases of flight over the Indian airspace.
AAI manages 137 airports, which include 23 International Airports (including 3 International Civil Enclaves), 10 Customs Airports (including 4 Customs Civil Enclaves), 81 Domestic Airports and 23 Domestic Civil Enclaves at Defense airfields. AAI also provides Air Traffic Management Services (ATMS) over entire Indian Air Space and adjoining oceanic areas with ground installations at all Airports and 25 other locations to ensure safety of Aircraft operations.
The Airports at Ahmedabad, Amritsar, Calicut, Guwahati, Jaipur, Trivandrum, Kolkata & Chennai, which today are established as International Airports, are open to operations even by Foreign International Airlines. Besides, the International flights, National Flag Carriers operate from Coimbatore, Tiruchirappalli, Varanasi, and Gaya Airports. Not only this but also the Tourist Charters now touch Agra, Coimbatore, Jaipur, Lucknow, Patna Airports etc.
AAI has entered into a Joint Venture at Mumbai, Delhi, Hyderabad, Bangalore and Nagpur Airports to upgrade these Airports and emulate the world standards.
All major air-routes over Indian landmass are Radar covered (29 Radar installations at 11 locations) along with VOR/DVOR coverage (89 installations) co-located with Distance Measuring Equipment (90 installations). 52 runways are provided with ILS installations with Night Landing Facilities at most of these Airports and Automatic Message Switching System at 15 Airports.

5. Consider the following statements regarding the Virtual private network (VPN).
1. It gives online privacy and anonymity by creating a private network from a public internet connection.
2. It essentially creates a data tunnel between local network and an exit node in another location, which could be thousands of miles away.
Which of the following statements is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
5. Answer-c
Explanation-
Virtual private network
A virtual private network, or VPN, is an encrypted connection over the Internet from a device to a network. The encrypted connection helps ensure that sensitive data is safely transmitted. It prevents unauthorized people from eavesdropping on the traffic and allows the user to conduct work remotely. VPN technology is widely used in corporate environments.
A VPN extends a corporate network through encrypted connections made over the Internet. Because the traffic is encrypted between the device and the network, traffic remains private as it travels. An employee can work outside the office and still securely connect to the corporate network. Even smart phones and tablets can connect through a VPN.
What is secure remote access?
Secure remote access provides a safe, secure way to connect users and devices remotely to a corporate network. It includes VPN technology that uses strong ways to authenticate the user or device. VPN technology is available to check whether a device meets certain requirements, also called a device’s posture, before it is allowed to connect remotely.
Is VPN traffic encrypted?
Yes, traffic on the virtual network is sent securely by establishing an encrypted connection across the Internet known as a tunnel. VPN traffic from a device such as a computer, tablet, or Smartphone is encrypted as it travels through this tunnel. Offsite employees can then use the virtual network to access the corporate network.
Types of VPNs
Remote access
A remote access VPN securely connects a device outside the corporate office. These devices are known as endpoints and may be laptops, tablets, or smart phones. Advances in VPN technology have allowed security checks to be conducted on endpoints to make sure they meet a certain posture before connecting. Think of remote access as computer to network.
Site-to-site
A site-to-site VPN connects the corporate office to branch offices over the Internet. Site-to-site VPNs are used when distance makes it impractical to have direct network connections between these offices. Dedicated equipment is used to establish and maintain a connection. Think of site-to-site access as network to network.