Tackling of Money Laundering.

Why in News?

Recently, a report submitted by the Finance Minister in the Rajya Sabha states that Enforcement Case Information Reports (ECIRs) have been issued to initiate proceedings under the Prevention of money laundering act (PMLA) 2002.

What is Money laundering?

• Definition – It is defined under Section 3 of PMLA, as an action through which processes or activities connected to the proceeds of crime are concealed, possessed, acquired, or used and projected as untainted property or claiming to be untainted property.
• Origin – The term money laundering is said to have its origins from the mafia's ownership of Laundromats in the US in the 1920's and 1930's for their crimes and under-the-table dealings.
• Laundromats – A laundromat is an all-purpose financial vehicle.
• It may be set up by a bank or any other company engaged in providing financial services.
• However, it can also help clients launder the proceeds of crime, hide ownership of assets, embezzle funds from companies, evade taxes or currency restrictions and move money offshore.
• The term is said to have originated from the use of laundromats by organised crime syndicates in the U.S. as cover

 How is money laundered?

• Placement – It is the first stage where the launderer introduces money into the financial system which might be done by smurfing.

Smurfing is a process which involves breaking up large amounts of cash into smaller sums 

• Layering – Money is shifted to other locations through investments and transactions.
• Integration – The laundered money is brought into the financial system through real estate, business or asset formation etc.

What are the effects of money laundering?

• Affects the sovereignty – The Supreme Court in P. Chidambaram versus Enforcement Directorate (2019) held that money laundering affects the financial system and also the sovereignty and integrity of the nation.
• Promotes terrorism – Money laundering is a serious offence as it has a direct linkage with terror activities and is a major source of terror financing.
• Expands money supply – This might prove detrimental to monetary stability of the country ultimately impacting inflation.

• Affects trading – According to the Financial Action Task Force (FATF), money laundering severely affects both the domestic and international trade.

What are the steps taken by India?

• Double Taxation Avoidance Agreement (DTAA) – India has signed this with about 85 countries, which helps to check money laundering.
• These agreements promote the exchange of financial and tax-related information between tax authorities of participating countries.
• This facilitates the enforcement of tax regulations and helps prevent illegal activities like tax evasion and money laundering.
• PMLA, 2002 – The act was enacted to prevent money laundering and to confiscate the property involved or obtained.
• It was enacted in line with the UN Political Declaration and Global Programme of Action (adopted by the UN General Assembly in February 1990).

• The most significant part of the statute is that the burden of proof is on the accused.

The burden of proof in law refers to the responsibility of a party in a legal case to prove their claims.

• Under the act Enforcement Case Information Reports (ECIRs) will be been issued to initiate proceedings.

What are the Challenges in tackling money laundering?

• Increasing cases – The number of money laundering cases is seriously increasing, questioning the efficacy of the implementation of the law.
• Abuse of law – On many occasions, the law has been abused by authority which has been seen and referred to by the Supreme Court as well.
  • For Instance, In Vijay Madanlal Chaudhury versus Union of India (2022) the Court held that to initiate prosecution under Section 3 of the PMLA, registration as scheduled offence is a pre requisite but for initiating attachment of property under Section 5, there need not be a pre-registered criminal case.
• This view has been very often misused by authorities with politically motivated intentions.
• Less conviction rate – The number of convictions vis-a-vis total cases is far from satisfactory.
  • About 5,892 cases were taken up by the Enforcement Directorate (ED since 2015, only 15 convictions have yet been ordered by special courts.

What lies ahead?

• Authorities could follow the recommendations of the FATF and ensure that money laundering cases are handled with care and caution.
• The misuse of law could be checked, and genuine cases reported and investigated properly to enhance the rate of conviction.
• Instead of political motives, the law could be used to address the issues and concerns involved in a sincere manner.

Reference

The Hindu| Tackling Money laundering

Biofuels

Why in news?

The recent global shift towards renewable energy sources, Biofuels have emerged as a promising alternative to fossil fuels, leaving the questions about its efficiency in net energy consumption.

What are biofuels?

• Biofuels – Fuel produced from organic matter, or biomass which can be used as a replacement for fossil fuels like gasoline and diesel.
• They can be solid, liquid, or gaseous, with liquid biofuels like ethanol and biodiesel being the most common.
• They are considered renewable because the biomass used to produce them can be replenished.
• Types of Biofuels

• Ethanol – A liquid biofuel made by fermenting sugars from crops like corn and sugarcane.
• Biodiesel – Another liquid biofuel made from vegetable oils, animal fats, or recycled greases.
• Production process
  • Thermochemical methods like pyrolysis and gasification, producing fuel materials with low moisture content.
  • Biochemical method utilize microorganisms to break down high-moisture organic matter, generating biogas or bioethanol through processes of anaerobic digestion or fermentation.
  • Agrochemical method involves conversion of biomass using chemical processes i.e. transesterification to produce fuels like biodiesel from plant oils or animal fats.

How plant waste are turned into fuel?

• Enzymatic cellulose breakdown – Cellulase enzymes can break down plant waste into glucose, but slow reactions, instability, and cellulose variability hinder efficiency.
• Fermentation process – Yeast and bacteria ferment sugars to ethanol, but ethanol above 10% inhibits these microbes, demanding extra purification,
  • Moreover, different microbes leave some sugars unfermented.
• Process optimization – Co-fermentation and immobilized enzymes optimize sugar conversion, the full process includes biomass selection, pretreatment, saccharification, fermentation, distillation, and by-product recovery.
• Biochemical engineering – It now uses immobilized enzymes instead of live microbes, allowing continuous reactions without cell growth.
• This reduces sugar loss and improves biofuel efficiency.

What is the role of biomass in the carbon cycle?

• Carbon cycle – The carbon is managed via vital processes like photosynthesis, respiration, feeding, and consumption.
  •  Each year, about 250 gigatonnes (Gt) of dry organic material circulate through the biosphere, with 100 Gt of this being carbon.
• Role of photosynthesis – The carbon fixed during photosynthesis, which annually captures roughly 2 × 10²¹ Joules of solar energy across the planet, crucial in maintaining the natural carbon cycle.

Humans directly manage around 0.5 % of global biomass, mostly as food crops.

• Carbon released from energy – For over 10 % of the world’s energy needs, especially in developing regions, biomass remains the primary energy source, much of which is used directly for heating.
  • This in turn release carbon into the atmosphere
• Carbon cycle and sustainability – Biomass energy keeps the carbon cycle balanced, the carbon taken in during photosynthesis is  equal to what is released through respiration and decay.
• Climate impact – Biofuels recycle existing carbon, fossil fuels add new carbon which increases warming and threatening biodiversity.

What are the concerns of the biofuel usage?

• Food security – First Generation Biofuels raising concerns about food shortages, particularly for poorer populations.
• Production constraints – Ethanol production by microbes requires acidic conditions through either aerobic respiration or anaerobic respiration.

Aerobic Respiration uses oxygen to fully extract energy from glucose, releasing CO₂ and water for cellular work. Anaerobic Respiration is faster but less efficient, producing energy-rich byproducts like ethanol and lactic acid.

• High treatment costs – Second generation biofuels aim to convert waste biomass into fermentable sugars.
  • Extracting sugar from complex biofibers incurs high costs due to pretreatment processes.
• Biofuel environmental impact – Expansion of biofuel requires large quantity of biomass, which in turn changes land use patterns and fertilizer use.
• This excess usage release potent greenhouse gases like nitrous oxide and methane

Sugarcane ethanol reduces greenhouse gas emissions, but most biofuels do not.

• Societal impacts – The proposals to clear large swathes of Amazon rainforest for energy crop cultivation requires displacement of indigenous populations
• Ecological risks – Worsening of erratic weather and climate patterns due to large scale soil disturbance and deforestation.
• Monoculture farming reduces biodiversity and depletes scarce freshwater resources, posing long-term ecological risks.

Quick Facts

Reference

Indian express| Biofuels as an Alternative to Fossil Fuels

Control of Salt Intake

Why in News?

Recently, UK study has shown that salt warning labels on restaurant menus and packaged foods significantly reduced consumer salt intake.

• Need of salt – Sodium (salt) is essential for the body to function properly.
• It helps in maintaining fluid balance, transmitting nerve impulses, and proper muscle function.
• Prescribed intake limit – The World Health Organization recommends the daily sodium intake below 2 g which translates about 5 g one whole teaspoon of salt a day.
• Issues with excess intake – Excess sodium consumption is increased risk of blood pressure and cardiovascular diseases such as heart attacks and strokes.

Nearly 1.9 million deaths a year attributable to high sodium intake globally.

• Guidelines by WHO – It has asked countries to work towards reducing sodium consumption by 30 % by 2030.
• It suggests using little to no salt on the table and partially replacing table salt with low sodium salt substitutes.
• Low sodium salts – It referred to as K-salts are those replace the sodium in the table salt (sodium chloride) with potassium.
  • Other compounds such as magnesium also be used.

• Purpose – To reduce sodium intake, especially in people who have hypertension risk.
• They also increase potassium consumption, which is known to reduce blood pressure.

Potassium comes from foods such as beans, peas, nuts, vegetables such as spinach and cabbage, and fruits such as bananas and papaya.

• Measures to control intake – UK has 4 different types of warning labels
  • Red triangle,
  • Black triangle,
  • Red octagon and
  • Black octagon - all claiming to be high in salt.
• Labels of foods buy at a supermarket or on restaurant menus can be an effective way of cutting daily salt intake.
• India is also considering different types of front-of-pack labels to reduce consumption of ultra-processed foods with high salt, sugar and fat content.

Reference

The Indian Express| Low Sodium Salts

Neurovascular Coupling

Why in News?

Recently, a study found that the brain’s energy efficiency relies not just on responsive neurons, but also on a hidden vascular network.

• Concept – It is the process within the brain, precisely linking the activity of brain cells (neurons) to the local blood supply.
• Role - This intricate connection ensures that active brain regions receive the necessary resources to function efficiently.
• Process – When neurons fire, nearby blood vessels rapidly widen to deliver glucose and oxygen, ensuring the brain’s energy demands are met instantaneously.
• Messages travel ‘upstream’ from smaller vessels to larger vessels and the known chemical messengers moved too slowly to account for the brain rapid responses.
• Cells lining the brain’s blood vessels are linked by gap junctions, that let neighbouring cells exchange ions and small molecules.
• Gap junctions enable rapid, direct communication between cells in the blood vessel walls, bypassing the need for slower chemical messengers.
• Working in blood vessels
  • Arteries - It has strong gap junction connectivity involving with connexion proteins allowing for rapid signals.
  • Veins – It has weaker networks, suggesting less involvement in immediate neurovascular response.
  • Capillaries – It serves as the local sensors of brain activity.

Arteries transfer blood from the heart to the tissues. Veins transfers the blood from the different body parts into the heart. Capillaries help in the exchange of nutrients in the tissues and they also connect the veins and arteries.

• Significance of discovery – Gap junctions acted as a “scaling mechanism” that let blood delivery grow to match bursts of brain activity.
• It could help develop drugs to activate connexins as well as discover brain’s 20-plus connexin protein types combine into mosaic junctions that fine-tune messages from cell to cell.

Reference

The Hindu| Neurovascular Coupling

Agricultural Infrastructure Fund (AIF) Scheme

Why in News?

Recently, The Government has undertaken a mid-term evaluation of Agriculture Infrastructure Fund (AIF) scheme.

• Launch – It is a Central Sector scheme launched in 2020.
• Nodal ministry – Ministry of Agriculture & Farmers Welfare.
• Expanded in - August 28, 2024, to expand scope & inclusivity
• Objectives – To strengthen agricultural infrastructure nationwide and provide robust support to the farming community.
• To broaden the scope of eligible projects, introduce additional supportive measures, and foster a more comprehensive agrarian infrastructure ecosystem.

• Impact – Infrastructure Development - It has facilitated the development of infrastructure by establishing warehouses, cold storage facilities, and silos across the country.
• Storage Capacity - A total additional storage capacity of 500 Lakh Metric Tonnes (LMT) has been created under the scheme.
• Crop Preservation - It enhanced crop preservation to save large quantities of food grains and horticultural produce annually.  
• Progress – Agro Economic Research Centre (AERC), Pune evaluated the scheme’s progress and performance, gathered and the scheme's positive impact.
  • Increased farmers income
  • Increased agriculture storage capacity
  • Growth of post-harvest and value addition infrastructure for agriculture produce.
  • Generation of employment
  • Encouraging agriculture entrepreneurship.

References

1. PIB| Agricultural Infrastructure Fund
2. PIB| Evaluation of AIF

Related News – AIF Significance

National Critical Minerals mission

Why in News?

Recently, PM lauded several government flagship programmes, including the NCMC, highlighting their role in accelerating India’s growth and contributing to the vision of a Viksit Bharat.

Critical minerals are both primary and processed minerals that are essential inputs in the production process of an economy, and whose supplies are likely to be disrupted due to the risks of non-availability or unaffordable price spikes.

• Announced in – Union Budget 2024- 25.
• Vision – It envisions securing a long-term, sustainable supply of critical minerals.
• Strengthening India’s critical mineral value chains encompassing all stages from mineral exploration and mining to beneficiation, processing, and recovery from end-of-life products.
• Objectives – To secure India’s critical mineral supply chain by ensuring mineral availability from domestic and foreign sources.
• To strengthen the value chains by enhancing technological, regulatory, and financial ecosystems.
• To foster innovation, skill development, and global competitiveness in mineral exploration, mining, beneficiation, processing, and recycling.
• Components 

• Increasing domestic critical minerals production – Undertake 1200 exploration projects to expand exploration and mining activities.
• Acquisition of critical mineral assets abroad – It will extend support for mapping and detailed exploration of Critical Mineral Assets in resource-rich countries.
• The Government will earmark funds to support Critical Minerals Exploration Activities outside India.
• Recycling of critical minerals – An Incentive scheme for setting up minerals recycling shall be introduced by the Government.
• Trade and Markets – Eliminate import duties on critical minerals based on strategic requirements to facilitate the easier flow of these essential resources into the country.
• Scientific research & Technological Advancement – Establish a Centre of Excellence (CoE) on critical minerals, working on a Hub and Spoke Model with other institutions.
• Human resource development – Introduce specialised modules on critical minerals in existing mining, metallurgy and recycling technologies degree programmes.
• Developing effective funding and fiscal incentives – It will make efforts to create and implement a range of budgetary measures.

References

1. PIB| National Critical Minerals Mission.
2. National Critical Mineral Mission components.