Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Issues faced by steel industry
The steel industry forms the backbone of the economy. This article highlights the difficulties of the industry magnified the pandemic. Ans suggest ways to revive demand.
BAT could help
- Introduction of a Border Adjustment Tax, known as BAT could help India’s steel industry.
- Many countries use BAT to protect local steel manufacturers.
- With economic pain unleashed by the pandemic and threat posed by Chinese state-subsidised steel imports, India hardly affords not to BAT.
- BAT would create a level playing field.
Why Indian steel industry is non-competitive
- Indian steel manufacturers bear multiple local taxes – electricity and cross-subsidy duties, clean energy cess and royalties on ore and there are more.
- These taxes make up 12% of the price of steel.
- In rival markets, these levies either do not exist or are comparatively lower.
- So Indian steel is non-competitive even before it leaves our plants.
Impact of Covid
- Impact of Covid on India’s biggest steel mills, which make up 65% of the country’s annual output of about 110 MT, was calamitous.
- During the pandemic, the mills’ massive blast furnaces continued to burn.
- Closure and reopening of furnaces can take up to 12 weeks; the process is complex, and maintenance costs are high.
- So, the furnaces were burning during the lockdown.
- India’s mills have continued to bear high fixed costs: firing furnaces but without making much steel.
- Because of this, smaller mills, which account for about a third of national output, lack the strengths to survive a trough, and many have capitulated.
Significance of Steel Industry
- Steel is front and centre in India’s recovery.
- The industry rests on mutual support – investment is made by entrepreneurs, the government offers supportive policies.
- Government will lend weight to India’s competitive and comparative advantages, especially in manufacturing, in a post covid-19 economic order.
- Indian steel’s guiding light is a steel ministry vision of 300MT of capacity by 2030, currently at about 138 MT.
- The pandemic will put pressure on this target.
Short term hurdles faced by Steel industry
- Government capital expenditure is diverted to public health.
- Real estate builders have an interest in large scale construction.
- Car manufacturing will not see upturn until the second half of the year.
- The pandemic has also hurt demand for capital utilisation, weighing heavily on capex.
How the demand can be improved
- Steel needs more infrastructure projects. Also, the fillip would be for the government to pay on time. Expedite the work.
- An initiative to consign old cars to the scrap heap would significantly lift demand for steel to build replacement cars.
- Improving the logistics chain would help transport finished goods and materials more quickly and less expensively.
- Make steel the material of choice in the construction of flyovers, roads bridges and crash barriers, improving their safety, durability and, as a result, their life-cycle cost.
- Indian mills possess world-class infrastructure and capacities and have integrated backwards by acquiring mining rights, partly to mitigate costs. As mentioned, one is high taxes on input materials such as energy.
Consider the question “Examine the issues Indian steel industry faces. Suggest the ways to make it more competitive.”
Conclusion
A revived economy means a revived steel industry. The government should provide the wider and deeper support to the government to bring this vital sector back on the track and make help achieve global competitiveness.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: FRBM Act
Mains level: Paper 2- Issue of devolution to state under the recommendations of 14th finance commission.
Faultlines in the Centre-State fiscal relations have widened due to Covid. This article examines how States are not getting what they should as per the 14th Finance Commission report.
Centre-state tussle
- The tussle for the rights of States has been focused on Article 356.
- Partial behaviour by the Governors, regional party governments were politically destabilised.
- Little was done to implement the report of Justice R.S. Sarkaria Commission on Centre-State relations.
- The new faultline in the Centre-State relation could be over the way report of 14th Finance Commission is being implemented.
- This began well before COVID-19, but the pandemic and its economic disruption have brought things to an edge.
Issues over the implementation of 14th Finance Commission report
- The 14th Finance Commission report in 2015 promised devolution of more finances to the States.
- As part of the process, States would have new responsibilities, especially in the social sector.
- The Goods and Services Tax (GST) regime was also justified as a grand bargain that would eventually leave all States better off.
- In reality, tax devolution to States has been consistently below 14th Finance Commission projections.
- One reason for this has been the economic slowdown, and lower-than-expected GST collections.
- The shortfall in GST collection for 2018-2019 was 22% when compared to projections.
- Payments to the States have been delayed as well.
- There is a ₹6.84 lakh crore gap between what the 14th Finance Commission promised to States and what they have received.
- States undertook programmes and projects spending 46% more than the Central Government; today the figure is 64%.
- Despite spending less than the states the Centre’s fiscal deficit exceeds the consolidated State deficit by 14%.
Need to revisit the FRBM provisions
- Due to pandemic, the fiscal deficit for States, collectively, is inevitably going to breach the projection of 2.04%.
- As per provisions of the Fiscal Responsibility and Budget Management (FRBM) Act, the GSDP can actually accommodate a fiscal deficit of 3%.
- Now, post-pandemic, this limit will be crossed.
- The FRBM has an “escape clause” that allows for a one-time relaxation of the fiscal deficit threshold upto 0.5% in a time of exigency.
- The escape clause has been utilised by the Centre but it has proven woefully insufficient in addressing the current crisis.
- Fiscal policymakers and technocrats agree that the rigidity of the FRBM has to be revisited.
- It should allow for greater flexibility and consultation as to when and how the “escape clause” can be applied.
- The Centre has gone in for subjective interpretation, imposing conditions that are outside the scope of the FRBM.
Consider the question “Fiscal tensions have emerged as a new front in the Centre-State relations. Suggest the steps the Centre should take to address it.”
Conclusion
Centre government needs to be more considerate of the financial woes of the State and try to deliver on the recommendations of the 14th Finance Commission report.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Fiscal Council and why it won't be the solution
Why there is a need for Fiscal Council?
- With a complex polity and manifold development challenges, India need institutional mechanisms for prudent fiscal practices.
- An independent fiscal council can bring about much needed transparency and accountability in fiscal processes across the federal polity.
- International experience suggests that a fiscal council improves the quality of debate on public finance, and that, in turn, helps build public opinion favourable to fiscal discipline.
- In a globalised world of enormous capital flows, market volatility across the world and especially in emerging markets, in response to monetary policy changes in major economies, and geopolitical tensions that ebb and flow, causing currencies and commodity prices to swing, countries like India need macroeconomic management as an active function round the year.
- Also, it is supposed to report to the parliament regarding the practicability of government forecasts in the budget. This will make executive more responsible in budget preparation.
- For the last eight years the projections of the government has fallen short by a consistent 10 percent, leading to fund cuts in the middle of the year. Thus, an independent Fiscal council would evaluate budget proposals and forecasts using objective criteria.
- This would also boost confidence in global credit rating agencies about government’s fiscal commitment.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Quorum, Parliamentary committees
Mains level: Not Much
The opposition parties in the Rajya Sabha has contradicted the holding the virtual meetings of standing committees to ensure quorum during deliberations.
Try this question from CSP 2018:
Q.With reference to the Parliament of India which of the following Parliamentary Committees scrutinizes and reports to the House whether the powers to make regulations, rules, sub rules, bylaws, etc. conferred by the Constitution or delegated by the Parliament is being properly exercised by the Executive within the scope of such delegation?
(a) Committee on Government Assurances
(b) Committee on Subordinate Legislation
(c) Rules Committee
(d) Business Advisory Committee
What is Quorum?
- A quorum is the minimum number of members of a deliberative assembly necessary to conduct the business of that group.
- The requirement for a quorum is protection against totally unrepresentative action in the name of the body by an unduly small number of persons.
- Article 100 (3) of the Constitution of India stipulates that at least 10% of the total number of members of the House must be present to constitute the quorum to constitute a meeting of either House of Parliament.
- Article 189 (3) and (4) provides for similar provisions for State Legislatures.
- For example, if the House has a total membership of 500, at least 50 members must be present for the House to proceed with its business.
What did RS Secretariat say over the requirement of quorum?
- Parliamentarian these days are unable to travel to Delhi for obvious COVID reasons.
- The Rajya Sabha secretariat has said that quorum was essential only when the committees are making decisions or adopting reports and not during routine deliberations.
Back2Basics: What are Standing Committees?
- Standing Committee is a committee consisting of Members of Parliament.
- It is a permanent and regular committee which is constituted from time to time according to the provisions of an Act of Parliament or Rules of Procedure and Conduct of Business.
- The work done by the Indian Parliament is not only voluminous but also of a complex nature, hence a good deal of its work is carried out in these Parliamentary Committees.
- Standing Committees are of the following kinds :
- Financial Standing Committees (FSC)
- Department Related Standing Committees (DRSC)
- Others Standing Committees (OSC)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Carbon enrichment of the Universe
Mains level: Formation of the universe and the Big Bang
A recent study has provided new insights on the origins of the carbon in our galaxy.
Try this question from CSP 2016:
Q.Consider the following:
- Photosynthesis
- Respiration
- Decay of organic matter
- Volcanic action
Which of the above add carbon dioxide to the carbon cycle on earth?
(a) 1 and 4 only
(b) 2 and 3 only
(c) 2, 3 and 4 only
(d) 1, 2, 3 and 4
Why study Carbon?
- Carbon is essential for life: It is the simple building block of all the complex organic molecules that organisms need.
- It is known that all the carbon in the Milky Way came from dying stars that ejected the element into their surroundings.
- What has remained debated, however, is what kind of stars made the major contribution.
- The study shows the analysis of white dwarfs — the dense remnants of a star after its death.
How does carbon come from stars?
- Most stars — except the most massive ones — are doomed to turn into white dwarfs.
- When the massive ones die, they go with a spectacular bang known as the supernova.
- Both low-mass and massive stars eject their ashes into the surroundings before they end their lives.
- And these ashes contain many different chemical elements, including carbon.
How is it synthesized?
- Both in low-mass stars and in massive stars carbon is synthesized in their deep and hot interiors through the triple-alpha reaction that is the fusion of three helium nuclei.
- In low-mass stars, the newly synthesized carbon is transported to the surface [from the interiors] via gigantic bubbles of gas and from there injected into the cosmos through stellar winds.
- Massive stars enrich the interstellar medium with carbon mostly before the supernova explosion, when they also experience powerful stellar winds.
Findings of the news research
- It was earlier debated that whether the carbon in the Milky Way originated from low-mass stars before they became white dwarfs or from the winds of massive stars before they exploded as supernovae.
- The new research suggests that white dwarfs may shed more light on carbon’s origin in the Milky Way.
- The researchers measured the masses of the white dwarfs, derived their masses at birth, and from there calculated the “initial-final mass relation”.
- The IFMR is a key astrophysical measure that integrates information of the entire life cycles of stars.
- They found that the relationship bucked a trend — that the more massive the star at birth, the more massive the white dwarf left at its death.
- So far, stars born roughly 1.5 billion years ago in our galaxy were thought to have produced white dwarfs about 60-65% the mass of our Sun.
What explains this?
- From an analysis of the initial-final mass relation around the little kink, the researchers drew their conclusions about the size range for the stars that contributed carbon to the Milky Way.
- Stars more massive than 2 solar masses, too, contributed to the galactic enrichment of carbon.
- Stars less massive than 1.65 solar masses did not. In other words 1.65-Msun [1.65 times the mass of the Sun] represents the minimum mass for a star to spread its carbon-rich ashes upon death.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: ASEEM Portal
Mains level: Atmanirbhar Bharat
Union Ministry of Skill Development and Entrepreneurship has launched Aatmanirbhar Skilled Employee-Employer Mapping (ASEEM) portal to help skilled people find sustainable livelihood opportunities.
There are various web/portals/apps with peculiar names such as YUKTI, DISHA, SWAYAM etc. Their core purpose is similar with slight differences. Pen them down on a separate sheet.
ASEEM Portal
- ASEEM refers to all the data, trends and analytics which describe the workforce market and map demand of skilled workforce to supply.
- It is developed and managed by National Skill Development Corporation (NSDC) in collaboration with Bengaluru-based Company named Betterplace.
- It is an AI-based portal which will map details of workers based on regions and local industry demands and will bridge the demand-supply gap of skilled workforce across sectors.
- It will provide employers with a platform to assess the availability of a skilled workforce and formulate their hiring plans.
- It will also provide real-time granular information by identifying relevant skilling requirements and employment prospects.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Tribes mentioned in the newscard
Mains level: NA
The Gujarat government will constitute a commission to identify the members of Rabari, Bharvad and Charan communities who are eligible to get the benefits of Schedule Tribe (ST) status.
Try this question from CSP 2017:
Q.Every year, a monthlong ecologically important campaign/festival is held during which certain communities/ tribes plant saplings of fruit-bearing trees. Which of the following are such communities/ tribes?
(a) Bhutia and Lepcha
(b) Gond and Korku
(c) lrula and Toda
(d) Sahariya and Agariya
About the Tribes
(1) Rabari
- The Rabari, also called the Rewari are an indigenous tribal caste of nomadic cattle and camel herders and shepherds that live throughout northwest India, primarily in the states of Gujarat, Punjab and Rajasthan.
- The word “Rabari” translates as “outsiders”, a fair description of their primary occupation and status within Indian society.
- They speak ‘Bhopa’ which is a mixture of Gujarati, Kachchi, Marwari words and Pharasi (Persian) and use Gujarati script.
- The Rabari are known for their distinctive art, particularly the mirrored and whitewashed mud sculpture-work that adorns their homes and villages.
- Rabari women are responsible for this artwork and also traditionally spin the wool from their sheep and goats, and give it to local weavers to make their woollen skirts, veils, blankets and turbans.
(2) Bharvad
- The Bharwad are tribals primarily engaged in herding livestock.
- The Bharwad name may derive from the Gujarati word badawad, constructed from bada (sheep) and wada (a compound or enclosure).
- The Bharwads have numerous subgroups known as ataks or guls (clans) whose main purpose is to determine eligibility for marriage.
- Constrained exogamy is practised between clans.
(3) Charan
- The Charan, also called Gadhvi, is a small tribe in Gujarat and the name Charan is derived from the word ‘Char’ which means grazing.
- Members of the caste are considered to be divine by a large section of society.
- Women of the caste are adored as mother goddesses by other major communities of this region.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Bhashan Char Island and its location
Mains level: Rohingya Crisis
Bangladesh has announced that it will not move the Rohingyas settled on the Bhashan char island amid Corona pandemic.
Try this question from CSP 2018:
Q.Which one of the following pairs of islands is separated from each other by the ‘Ten Degree Channel’?
(a) Andaman and Nicobar
(b) Nicobar and Sumatra
(c) Maldives and Lakshadweep
(d) Sumatra and Java
Bhashan Char Island
- Bhasan Char also known as Char Piya, is an island in Hatiya, Bangladesh.
- The island was formed with Himalayan silt in 2006 spanning 40 square kilometres.
- It is underwater from June to September annually because of the monsoon, and it has no flood fences.
- In June 2015, the Bangladeshi government suggested resettling Rohingya refugees on the island under its Ashrayan Project.
- The proposal was characterized by the UN Refugee Agency as “logistically challenging”.
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