Note4Students
From UPSC perspective, the following things are important :
Prelims level: Buffer stock limits
Mains level: Paper 3-PDS, food subsidy
At a time when the economy is going through the crisis, anything that could provide revenue to the government will be a real godsend. This article suggests two such areas to tap into. It also examines the effects of recently issued 3 ordinances related to agriculture.
Rs. 1,50,000 crore: Value of excessive grain stock
- There is one area which the government can tap to raise more than Rs 1,00,000 crore.
- As on June 1, FCI had unprecedented grain stocks of 97 million metric tonnes (MMT) in the Central Pool (see Figure).
- Even on July 1, when the procurement of rabi ends, FCI is likely to have grain stocks of about 91-92 MMT.
- This will be against a buffer stock norm of 41.12 MMT that are required for the Public Distribution system (PDS), and some strategic reserves.
- So, compared to this norm, on July 1, FCI will have “excess stocks” of at least 50 MMT.
- Even if one takes a conservative and lower ballpark figure of Rs 30,000/tonne as the combined economic cost of rice and wheat, the value of this “excessive stock”, beyond the buffer norm, is Rs 1,50,000 crore.
- This is unproductive capital locked-up in the Central pool of FCI.
- Unlock this by liquidating “excess stocks” through open market operations.
- It will not recover its full economic cost, as they are much higher than the prevailing market prices, but by not liquidating it.
- But FCI will keep incurring unnecessary interest costs of about Rs 8,000-10,000 crore per annum.
- This is simply not a good food policy.
How will amendment to ECA 1955 will help
- Amendment of the Essential Commodities Act, via the ordinance route, can instil confidence in the private sector for building large scale storage.
- Now, stocking limits will not be imposed on the private sector, except under exceptional circumstances.
- The government, however, delete the clause of “extraordinary price rise”.
- Removing it will lead to private sector building large and modern storage facilities (silos).
- It will propel investments in building more efficient food supply lines.
- The only condition could be to register large storage facilities under the Warehousing Development and Regulatory Authority (WDRA) to know how much stock is there with the private sector, and where.
How will amendment to APMC Act will help
- The ordinance on APMC creates multiple channels for farmers to sell their produce outside the APMC mandi system.
- It also helps towards an unrestricted all India market for agri-produce.
- Of course, it will be resisted by many states that are taking undue advantage of the APMC mandis’ virtual monopoly power.
- But if the central ordinance is implemented in its true spirit, it will be a game-changer.
How will the ordinance on contract farming will help
- It aims to encourage contract farming.
- The basic idea behind this is that farmers’ sowing decisions should be made in view of the expected prices of those crops at the time of harvest.
- It is forward looking and more aligned to the likely demand and supply situation.
- The current practice, where farmers’ sowing decisions are more influenced by last year’s price, often leads to the problem of boom and bust.
- Although honouring an assured price remains a challenge when actual market conditions differ widely at the time of the harvest.
Relook at food subsidy is needed
- In the Union budget of 2020-21, a sum of Rs 1,15,570 crore has been provisioned for food subsidy.
- This number is highly misleading as FCI has been asked to borrow from the National Small Savings Fund (NSSF).
- As on March 31, 2020, borrowings from the NSSF were Rs 2,54,600 crore, on which FCI pays an interest rate of 8.4 to 8.8 per cent per annum.
- So, the real food subsidy bill for 2020-21 amounts to Rs 3,70,170 crore.
- The Economic Survey has suggested- 1) reducing the coverage under PDS; 2) linking issue price to at least half of the procurement price; 3) move gradually towards cash transfers.
- These steps will save a minimum of Rs 50,000 crore annually.
Consider the question “There was a mention of reforms related to agri-sector in the recently announced stimulus package. Examine the issues with segments of agri-sector which necessitated these reforms.”
Conclusion
Liquidating the excess grain stock and rationalising the PDS could provide the government with much needed resources at a time when it needs it the most. Also, reforms in the related to agriculture could remove the stumbling blocks in the way towards the prosperity of farmers.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NPA
Mains level: Paper 3- Issue of bad loans
Steps taken by the government have averted the piling up of the bad loans, though for the time being only. When the moratorium period ends, we will see the spike in the bad loans. This article explains the same.
Why bad loans are expected to increase
- Consumer spending has collapsed over the last few months due to the pandemic.
- Though lately there have been some signs of revival, it will take a while before spending comes anywhere near the pre-covid level.
- This will mean that many businesses will start running out of cash pretty soon if they have not already.
- A company that starts running out of cash will not be in a position to repay its loans and, thus, will ultimately default.
How individuals will be affected
- A recent estimate by rating agency Crisil suggests that about 70% of 40,000 companies have cash to cover employee costs for only two quarters.
- This tells us that companies will fire employees, before, during, or even after defaulting on a loan.
- If companies do not resort to employee retrenchment, they will cut salaries and many already have.
- Past payments and future business with vendors and suppliers will be negatively impacted.
- In this situation, the problem at the company level will impact individuals too.
- When individuals start having a cash flow problem, it will lead to defaults on retail loans
But why we are not seeing the defaults happening already?
- A moratorium is a deferment of repayment to provide temporary relief to borrowers. The loan ultimately needs to be repaid.
- The Reserve Bank of India has let banks and non-banking financial companies (NBFCs) offer a moratorium on loans.
- Hence, until the end of August, borrowers have an option to not repay the loans, without it being considered as a default.
- Hence, any loan defaults will start only after August but they won’t be immediately categorized as a non-performing asset or a bad loan.
- Bad loans are largely those loans that have not been repaid for 90 days or more.
- Hence, defaulted loans will be categorized as bad loans only post-November.
- This will be revealed when banks publish their results for October to December 2020, in January-February 2021.
Conclusion
Even if 20% of loans that end up under a moratorium are defaulted on, the quantum of bad loans, especially those of public sector banks, will go up big time.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India-China relations and border dispute
While formulating our response to China’s aggressive policies in Ladakh, we should first understand their objectives. This article explains these objective and suggests the steps to deal with China’s policies.
Statements on Aksai Chin and Pakistan
- Statements over Aksai Chin and Pakistan-occupied Kashmir (PoK) by India have painted the image of India as a revanchist power in utter disregard of the country’s capabilities.
- These statements also gave the impression that India precludes any attempt at changing the status quo on either front.
- Though these statements were justifiable in terms of India’s legal rights to these territories, were ill-timed.
How these statements were perceived by China
- They were made when Beijing was feeling alarmed at the Indian government’s decision to separate Ladakh from Jammu and Kashmir.
- The move augmented its perception that it was a prelude to India’s attempt to change the status quo in Aksai Chin.
- India’s assertion of its claims on PoK that in China’s perception threatened the China-Pakistan Economic Corridor project.
China’s 4 strategic objectives
1. India and China are not equals
- China wants India to understand that it is not in the same league as China.
- China resorts to periodic assaults across the Line of Actual Control (LAC) if India tries to assume a position of equality.
2. Keep India away from interfering in Indo-Pacific
- China wants India not to actively oppose Chinese designs to dominate the Indo-Pacific region.
- Also, China wants Indias to refrain from aligning with the U.S. and its allies — Japan and Australia, in particular — in an attempt to contain China.
3. Keeping India preoccupied with problems
- China’s strategy also includes keeping India preoccupied with problems in its immediate neighbourhood.
- So with these problems, India cannot act as an alternative pole of power to China in the broader Asian region.
4. Supporting Pakistan to neutralise India
- As part of the last objective, China supports Pakistan economically and militarily, including the sharing of nuclear weapons designs.
- China uses Pakistan to neutralise India’s conventional power superiority vis-à-vis that country.
An understanding of these objectives is essential to fashioning a realistic Indian response to China’s aggressive policies in Ladakh and elsewhere along the LAC.
But, what about Pakistan?
- Pakistan is at best an irritant for India. (so, focus on China)
- Pakistan can be managed with the use of diplomatic tools, international opprobrium, and superior military force.
- In fact, the Pakistani challenge to India has become magnified because of its nexus with China.
What India should do?
- India’s main strategic goal should be the adoption of carefully calculated policies that neutralise China’s diplomatic and military clout in the Asia-Pacific region.
- While doing so, India should not appear as a surrogate for other powers.
- And India should also ensure that in making alliances it in not sacrificing the autonomy of decision-making in foreign policy.
Consider the question “Understanding of China’s objective is essential to formulate a realistic response to its aggressive policies in Ladakh.” Comment.
Conclusion
Understanding the greater threat posed by China vis-a-vis Pakistan should be the basis of India’s policy towards China.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Rajya Sabha and associated facts
Mains level: Significance of the Rajya Sabha
Another round of Rajya Sabha elections has been completed. There are several features that distinguish elections to the Council of States, or the Upper House of Parliament, from the general elections.
Do you know?
- Only two UTs elect members to the Rajya Sabha, not all.
- Polling is held only if the number of candidates exceeds the number of vacancies.
- Independent members can also be elected etc.
Read this newscard for all such interesting facts which can be directly asked in the prelims.
What is so peculiar about the Rajya Sabha polls?
- A third of MPs in the Rajya Sabha (which is a permanent House and is not subject to dissolution), from each State, retire once in two years and polls are held to fill up the vacancies.
- Only elected members of the State Legislative Assemblies can vote in a Rajya Sabha election.
- The legislators send a batch of new members to the Upper House every two years for a six-year term.
- In addition, vacancies that arise due to resignation, death or disqualification are filled up through by-polls after which those elected serve out the remainder of their predecessors’ term.
Composition of Rajya Sabha
- A bloc of MPs belonging to one or more parties can elect a member of their choice if they have the requisite numbers.
- This is to avoid the principle of majority, which would mean that only candidates put up by ruling parties in the respective States will be elected.
- The Delhi and Puducherry Assemblies elect members to the Rajya Sabha to represent the two UTs.
What is the election process?
- Polling for a Rajya Sabha election will be held only if the number of candidates exceeds the number of vacancies.
- Since the strength of each party in the Assembly is known, it is not difficult to estimate the number of seats a party would win in the Rajya Sabha poll.
- In many states, parties avoid a contest by fielding candidates only in respect to their strength. Where an extra candidate enters the fray, voting becomes necessary.
- Candidates fielded by political parties have to be proposed by at least 10 members of the Assembly or 10% of the party’s strength in the House, whichever is less.
- For independents, there should be 10 proposers, all of whom should be members of the Assembly.
Voting procedure
- Voting is by single transferable vote, as the election is held on the principle of proportional representation.
- A single transferable vote means electors can vote for any number of candidates in order of their preference.
- A candidate requires a specified number of first preference votes to win. Each first choice vote has a value of 100 in the first round.
- To qualify, a candidate needs one point more than the quotient obtained by dividing the total value of the number of seats for which elections are taking place plus one.
Example: If there are four seats and 180 MLAs voting, the qualifying number will be 180/5= 36 votes or value of 3,600.
Why do not the Rajya Sabha polls have a secret ballot?
- The Rajya Sabha polls have a system of the open ballot, but it is a limited form of openness.
- As a measure to check rampant cross-voting, which was taken to mean that the vote had been purchased by corrupt means.
- There is a system of each party MLA showing his or her marked ballots to the party’s authorised agent (called Whip), before they are put into the ballot box.
- Showing a marked ballot to anyone other than one’s own party’s authorised agent will render the vote invalid.
- Not showing the ballot to the authorised agent will also mean that the vote cannot be counted.
- And independent candidates are barred from showing their ballots to anyone.
Is there any NOTA option in voting?
- The ECI issued two circulars, on January 24, 2014, and November 12, 2015, giving Rajya Sabha members the option to press the NOTA button in the Upper House polls.
- However, in 2018, the Supreme Court struck down the provision, holding that the ‘none of the above’ option is only for general elections.
- It cannot be applied to indirect elections based on proportional representation.
Does cross-voting attract disqualification?
- The Supreme Court, while declining to interfere with the open ballot system, ruled that not voting for the party candidate will not attract disqualification under the anti-defection law.
- As voters, MLAs retain their freedom to vote for a candidate of their choice.
- However, the Court observed that since the party would know who voted against its own candidate, it is free to take disciplinary action against the legislator concerned.
Can a legislator vote without taking oath as a member of the Assembly?
- While taking oath as a member is for anyone to function as a legislator, the Supreme Court has ruled that a member can vote in a Rajya Sabha election even before taking oath as a legislator.
- It ruled that voting at the Rajya Sabha polls, being a non-legislative activity, can be performed without taking the oath.
- A person becomes a member as soon as the list of elected members is notified by the ECI, it said.
- Further, a member can also propose a candidate before taking the oath.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: RP Act
Mains level: Secrecy of ballot
- Secrecy of ballot is the cornerstone of free and fair elections. The choice of a voter should be free and the secret ballot system in a democracy ensures it, the Supreme Court has held in judgment.
- The judgment came on an appeal against the Allahabad High Court decision setting aside the voting of a no-confidence motion in a Zila panchayat in Uttar Pradesh in 2018.
Practice question for mains:
Q. Discuss how Secrecy of Ballot is the cornerstone of free and fair elections in India.
What is the Secret Ballot?
- The secret ballot, also known as Australian ballot, is a voting method in which a voter’s choices in an election or a referendum are anonymous.
- It aims for forestalling attempts to influence the voter by intimidation, blackmailing, and potential vote-buying.
- The system is one means of achieving the goal of political privacy.
What did the Supreme Court rule?
- The principle of secrecy of ballots is an important postulate of constitutional democracy, the court said.
- Justice Khanna, who wrote the judgment, referred to Section 94 of the Representation of People Act, which upholds the privilege of the voter to maintain confidentiality about her choice of vote.
- It is the policy of the law to protect the right of voters to the secrecy of the ballot.
- Even a remote or distinct possibility that a voter can be forced to disclose for whom she has voted would act as a positive constraint and a check on the freedom to exercise of the franchise.
Voter’s discretion is allowed
- A voter can also voluntarily waive the privilege of non-disclosure.
- The privilege ends when the voter decides to waive the privilege and instead volunteers to disclose as to whom she had voted.
- No one can prevent a voter from doing. Nor can a complaint be entertained from any, including the person who wants to keep the voter’s mouth sealed as to why she disclosed for whom she voted said the court.
Try this question from our AWE initiaitive:
On what grounds a people’s representative can be disqualified under the representation of people act, 1951? Also, mention the remedies available to such person against his disqualification. (15 marks)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: MGNREGA, Garib Kalyan Rojgar Abhiyaan
Mains level: Garib Kalyan Rojgar Abhiyaan
PM Modi has launched the Garib Kalyan Rojgar Abhiyaan, an employment scheme for migrant workers.
Practice question for mains:
Q. Discuss the silent success of MGNREGA in COVID-19 times.
Garib Kalyan Rojgar Abhiyaan
- It is a skill-based employment scheme aimed primarily at migrant workers who have returned to their villages to escape the COVID lockdown distress.
- With a 125-workday mandate to create public infrastructure, with the involvement of 11 central departments, the Rs 50,000-crore initiative will focus on job creation.
- It will be implemented in 116 districts in six states — UP, MP, Jharkhand, Odisha, Rajasthan and Bihar — that saw the maximum number of migrant workers returning over the last three months.
Works under the scheme
- The government has identified 25 work areas for employment in villages, for the development of various works.
- These 25 works or projects are related to meet the needs of the villages like rural housing for the poor, Plantations, provision of drinking water through Jal Jeevan mission, Panchayat Bhavans, community toilets, rural mandis, rural roads, other infrastructure like Cattle Sheds, Anganwadi Bhavans etc.
Must read:
[Burning Issue] Reorienting MGNREGA in times of COVID
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Ahom Kingdom
Mains level: Not Much
Recently, Assam CM ordered the arrest of a political commentator who had described Chaolung Sukapha as a “Chinese invader”.
Practice question for mains:
Q. Who are the Ahoms? Describe the role of Ahom Kingdom in cultural assimilation of modern-day Assam.
Who was Chaolung Sukapha?
- Sukapha was a 13th-century ruler who founded the Ahom kingdom that ruled Assam for six centuries. Contemporary scholars trace his roots to Burma.
- He reached Brahmaputra valley in Assam from upper Burma in the 13th century with around 9,000 followers.
- Sukapha is said to have left a place called Maulung ( in Yunnan, China ) in AD 1215 with eight nobles and 9,000 men, women and children — mostly men.
- In 1235, Sukapha and his people settled in Charaideo in upper Assam after wandering about for years, defeating those who protested his advance and temporarily staying at different locations.
- It was in Charaideo (in Assam) that Sukapha established his first small principality, sowing the seeds of further expansion of the Ahom kingdom.
Who are the Ahoms today?
- The founders of the Ahom kingdom had their own language and followed their own religion.
- Over the centuries, the Ahoms accepted the Hindu religion and the Assamese language, scholars say.
- The Ahoms embraced the language, religion and rituals of the communities living here — they did not impose theirs on those living here.
- Today, the Ahom community is estimated to number between 4 million and 5 million.
Why is Sukapha important in Assamese culture?
- Sukapha’s significance — especially in today’s Assam — lies in his successful efforts towards the assimilation of different communities and tribes.
- He developed very amicable relationships with the tribal communities living here — especially the Sutias, the Morans and the Kacharis.
- Intermarriage also increased assimilation processes. He is widely referred to as the architect of “Bor Asom” or “greater Assam”.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Extreme Helium (EHe) Stars
Mains level: NA
A study by the Indian Institute of Astrophysics (IIA) has detected the presence of singly ionized fluorine for the first time in the atmospheres of hot Extreme Helium Stars.
UPSC may ask a simple statement-based question considering the following points:
If there is the presence of hydrogen, their abundance in universe and how it is different from neutron stars etc.
What are EHe stars?
- An extreme helium star or EHe is a low-mass supergiant that is almost devoid of hydrogen, the most common chemical element of the universe.
- There are 21 of them detected so far in our galaxy.
- The origin and evolution of these Hydrogen deficient objects have been shrouded in mystery.
- Their severe chemical peculiarities challenge the theory of well-accepted stellar evolution as the observed chemical composition of these stars do not match with that predicted for low mass evolved stars.
Why is the study significant?
- Clues to the evolution of extreme helium stars require accurate determinations of their chemical composition, and the peculiarities, if any, become very important.
- Fluorine plays a very crucial role in this regard to determine the actual evolutionary sequence of these hydrogen deficient objects.
- The scientists explored the relationship of hot EHes with the cooler EHes, based on their fluorine abundance and spotted it in the former, thus establishing an evolutionary connection across a wide range of effective temperature.
- This makes a strong case that the main form of these objects involves a merger of a carbon-oxygen (CO) and a Helium (He) white dwarf.
- The detection of enhanced fluorine abundances in the atmospheres of hot EHes solves a decade-old mystery about their formation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Golden Langur
Mains level: NA
Primatologists have observed that the Gee’s golden langur (Trachypithecus geei) induce stillbirth of babies killed inside the womb of females, besides practising infanticide.
Try this question from CSP 2013:
Q. In which of the following States is lion-tailed macaque found in its natural habitat?
- Tamil Nadu
- Kerala
- Karnataka
- Andhra Pradesh
Select the correct answer using the codes given below.
a) 1, 2 and 3 only
b) 2 only
c) 1, 3 and 4 only
d) 1, 2, 3 and 4
Golden Langurs
IUCN status: Endangered
- It is an Old World monkey found in a small region of western Assam, and in the neighbouring foothills of the Black Mountains of Bhutan.
- Long considered sacred by many Himalayan people, the golden langur was first brought to the attention of the western world by the naturalist E. P. Gee in the 1950s.
- Their habitat lies in the region, south of the Brahmaputra River, on the east by the Manas River, on the west by the Sankosh River, all in Assam, India, and on the north by the Black Mountains of Bhutan
- Chakrashila WLS in Assam is India’s first wildlife sanctuary with golden langur as the primary species.
- They are listed in Appendix I of CITES and Schedule I of Wildlife Protection Act, 1972.
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