Daily News Analysis 11 July 2023

Table of Contents


  1. AI’s disruptive economic impact, an India check

Facts for Prelims

  1. Quantum Computing
  2. New Wheat Variety (PBW RS1)
  3. Total Expense Ratio (TER)

AI’s disruptive economic impact, an India check


Artificial Intelligence (AI) has made remarkable progress, with generative AI and large language models capturing global attention. Positive and negative impacts on productivity, employment, and society have emerged.

Positive effects of AI adoption:

  1. AI adoption improves productivity and consumer satisfaction.
  2. A study involving customer support agents showed a 14% increase in productivity and enhanced employee retention.
  3. AI helps employees be faster, smarter, and more productive, as reported by LinkedIn survey respondents.
  4. Restructuring business processes and increased investments can maximize AI\’s productivity potential.
  5. Global GDP is predicted to increase by 14% or $15.7 trillion by 2030 due to AI advancements, according to PwC.
  6. Generative AI alone could raise global GDP by 7% or almost $7 trillion in a decade, as highlighted by Goldman Sachs Research.
  7. European and U.S. economic experts expect substantial increases in per capita income and consider a ban on generative AI chatbots detrimental to innovation.

Adverse impact on employment:

  1. AI technologies can lead to labor replacement, affecting blue-collar workers and those with lower education levels.
  2. Research indicates that robot adoption reduces labor share, employment, and wages.
  3. Automation contributes to wage inequality and may deepen the technological divide among firms.
  4. AI could potentially displace middle-class, white-collar jobs, leading to a winner-takes-all scenario.
  5. While some suggest AI may create more jobs than it displaces, the exact impact on the labor market remains uncertain.

Opportunities for India:

  1. India should focus on education and training in AI to leverage opportunities and mitigate any negative employment effects.
  2. Online education can facilitate easier access to AI training.
  3. India should prepare for the demographic dividend and embrace new opportunities arising from AI.


While AI brings opportunities for increased productivity and economic growth, concerns about job displacement and inequality persist. Governments need to regulate AI while fostering education and training to navigate the AI-driven future effectively.

Quantum Computing


In a paper published recently, researchers at Microsoft announced that they had figured out a way to create an elusive kind of particle that could potentially revolutionize quantum computing.

About Quantum Computing:

Quantum computing is an area of computer science that utilizes the principles of quantum theory, which explains the behavior of energy and material at the atomic and subatomic levels. It offers the potential for solving complex problems and challenges by sifting through vast possibilities.

How does it work?

  1. Quantum computers use qubits instead of classical bits.
  2. Unlike classical bits that represent either 0 or 1, a qubit can exist in a superposition of both 0 and 1 simultaneously until measured.
  3. Multiple qubits can be entangled, meaning they are quantum mechanically linked to each other.
  4. Qubits can be created using atoms, ions, electrons, or artificial atoms through nanoengineering.

What is Superposition and Entanglement?


  1. Superposition is a feature of quantum physics that allows a qubit to be in a combination of all possible configurations.
  2. Groups of qubits in superposition enable the creation of complex, multidimensional computational spaces.
  3. This enables the representation of complex problems in new ways.


  1. Entanglement involves pairing qubits so that they exist in a single state.
  2. Changes to one entangled qubit directly affect the other qubit in a predictable manner.
  3. Quantum algorithms leverage this relationship to solve complex problems.

Advantages of Quantum Computing:

  1. Quantum computing offers exponentially higher processing speeds compared to conventional computers.
  2. It achieves this while consuming much less energy.
  3. Doubling the number of bits in a classical computer doubles its processing power, whereas adding qubits to a quantum computer results in an exponential increase in computing power and ability.

New Wheat Variety (PBW RS1)


Recently, the Ludhiana-based institution has developed a new variety of wheat called PBW RS1.

About PBW RS1:

High Amylose Starch Content:

  1. PBW RS1 contains a high amount of amylose starch.
  2. Amylose is a type of starch that is resistant to digestion in the body.

Resistant Starch and Slow Glucose Release:

  1. Resistant starch (RS) found in PBW RS1 does not cause a rapid rise in glucose levels.
  2. Instead, it ensures that glucose is released into the bloodstream more slowly.
  3. This slower release can be beneficial for managing blood sugar levels.

Reduced Risk of Type 2 Diabetes and Cardiovascular Diseases:

  1. The high amylose and resistant starch content in PBW RS1 have been associated with a reduced risk of type 2 diabetes.
  2. It can also help lower the risk of cardiovascular diseases.

Lower Glycemic Index:

  1. Foods made from the whole grain flour of PBW RS1 have a lower glycemic index.
  2. Glycemic index is a rating system that indicates how quickly a food affects blood sugar levels when consumed alone.

What is Type 2 Diabetes?

  1. Type 2 diabetes is a condition where the body does not use insulin effectively and is unable to maintain normal blood sugar levels.
  2. It typically develops over many years and is often diagnosed in adults, although it is increasingly affecting children, teens, and young adults.

What is Glycemic Index?

  1. Glycemic index is a rating system used for foods that contain carbohydrates.
  2. It indicates how quickly a particular food can raise blood sugar (glucose) levels when consumed on its own.

Total Expense Ratio (TER)


The SEBI Board meeting held recently decided to issue a fresh consultation on the issue of total expense ratio (TER) for mutual funds.

About Total Expense Ratio (TER):

What is TER?

  1. Total Expense Ratio (TER) is a measure of the total costs associated with managing and operating an investment fund, such as a mutual fund.
  2. It includes management fees and additional expenses related to trading, legal matters, auditing, and other operational costs.
  3. TER is expressed as a percentage of the fund\’s total assets.

Importance of TER:

  1. Investors use TER to compare the costs of different investment funds and assess their value in relation to returns.
  2. High TERs can significantly reduce investment returns over time, making it important to consider expenses when making investment choices.

Calculation of TER:

  1. TER is calculated by dividing the total cost of the fund by its total assets and then multiplying by 100.
  2. The resulting percentage represents the expenses incurred by the fund in relation to its size.

Expenses Associated with Operating a Fund:

  1. Management fees: These fees cover salaries of fund managers and research expenses, and they are typically the largest component of the TER.
  2. Brokerages and taxes: Costs associated with buying and selling securities for the fund.
  3. Fees paid to trustees, registrars, transfer agents, and custodians: Expenses related to various administrative functions.
  4. Legal and accountancy fees: Costs for legal and accounting services.
  5. Sales and marketing expenses: Costs related to promoting and distributing the fund.
  6. Other operational expenses: These can include rent, electricity, communication, and other costs proportional to the fund\’s assets.
Scroll to Top