Note4Students
From UPSC perspective, the following things are important :
Prelims level: Quad countries
Mains level: Paper 2- Non-alignment and Quad
The article analyses the basics of India’s foreign policy and its implications for the Quad.
Context
- There is confusion on what the Quad is and its future in India’s international relations.
- Sustaining that confusion is the proposition that India is abandoning non-alignment in favour of a military alliance with the US in order to counter the China threat.
4 Question on Quad’s future and India’s role
1) What is the nature of alliance?
- Alliances involve written commitments to come to the defence of the other against a third party.
- Working of alliance varies according to the distribution of power within the members of an alliance and the changing nature of the external threat.
- Alliances come in multiple shapes and forms — they could be bilateral or multilateral, formal or informal and for the long-term or near term.
- Alliances feature in India’s ancient strategic wisdom and contemporary domestic politics in India.
- Yet, when it comes to India’s foreign policy, alliances are seen as a taboo.
- Part of the problem is that India’s image of alliances is frozen in the moment when India became independent.
- After the Second World War, a newly independent India did not want to be tied down by alliances of the Cold War.
- That notion is seen as central to Indian worldview.
2) Does India forge alliances?
- Contrary to conventional wisdom, India has experimented with alliances of different kinds.
- During the First World War, some nationalists aligned with Imperial Germany to set up the first Indian government-in-exile in Kabul.
- In the Second World War, Subhas Chandra Bose joined forces with Imperial Japan to set up a provisional government.
- Policy of non-alignment among the great powers also did not rule out alliances in a different context.
- For example, when Bhutan, Nepal and Sikkim turned to Delhi for protection amidst Maoist China’s advance into Tibet during 1949-50, Nehru signed security treaties with them.
- India turned to the US for military support to cope with the Chinese aggression in 1962.
- Indira Gandhi signed a security cooperation agreement with the Soviet Union in 1971 to cope with the crisis in East Pakistan.
- Then, as now, there was much anxiety in Delhi about India abandoning non-alignment.
- India does do alliances but the question is when, under what conditions and on what terms.
3) Is the US offering India an alliance against China?
- The current political discourse in Washington is hostile to alliance-making.
- President Donald Trump does not miss an opportunity to trash US alliances.
- In any case, formal commitments do not always translate into reality during times of war.
- Even within the long-standing US military alliances with Japan and the Philippines, there is much legal quibbling over what exactly is the US’s obligation against, say, Chinese aggression.
- In case of the Quad, it is quite clear that Washington is not offering a military alliance, nor is Delhi asking for one.
- Because it knows India has to fight its own wars.
- Both countries, however, are interested in building issue-based coalitions in pursuit of shared interests.
4) Instrumental nature of alliance
- Agreements for security cooperation are made in a specific context and against a particular threat.
- When those circumstances change, security treaties are not worth the paper they are written.
- Consider India’s security treaties with Nepal, Bangladesh and Russia.
- The 1950 Treaty was designed to protect Nepal against the Chinese threat.
- Now, Nepali communists have long argued that the Treaty is a symbol of Indian hegemony.
- India’s 1972 security treaty with Bangladesh did not survive the 1975 assassination of the nation’s founder, Mujibur Rahman.
- India’s own enthusiasm for the 1971 treaty with Moscow waned within a decade.
- Today Beijing is Moscow’s strongest international partner, a reality that has a bearing on India’s strategic partnership with Russia.
What India can learn from China about alliances
- Mao aligned with the Soviet Union after in 1949 and fought the Korean War against the US during 1950-53.
- He broke from Russia in the early 1960s and moved closer to the US in the 1970s.
- Mao, who denounced US alliances in Asia, was happy to justify them if they were directed at Russia.
- He also welcomed Washington’s alliance with Tokyo as a useful means to prevent the return of Japanese nationalism and militarism.
- Having benefited from the partnership with the US, China is trying to push America out of Asia and establish its own regional primacy.
- Delhi could learn from Beijing in not letting the theological debates about alliances cloud its judgements about the extraordinary economic and security challenges India confronts today.
Conclusion
The infructuous obsession with non-alignment diverts Delhi’s policy attention away from the urgent task of rapidly expanding India’s national capabilities in partnership with like-minded partners.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: List 2 and List 3 of the Constitution
Mains level: Paper 2- Legal challenges Agri Acts 2020 could face
Farm Acts passed by the Parliament could face the legal hurdle in the court when challenged on its constitutional basis. This article explains the issue.
Background
- Recently, Parliament passed three acts related to agriculture. These Acts are-
- 1) The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020.
- 2) The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020.
- 3) The Essential Commodities (Amendment) Act, 2020.
- This has led to the question: Does the Union government have the authority to legislate on what are rightfully the affairs of States?
Why agriculture is considered as States’ prerogative
- Agriculture is a State subject in the Constitution, listed as Entry 14 in the State List (List II).
- Entry 26 in the State List refers to “trade and commerce within the State”.
- Entry 27 in the State List refers to “production, supply and distribution of goods”.
- Entry 28 refers to “markets and fairs”.
- For these reasons, intra-State marketing in agriculture was always considered a legislative prerogative of States.
What was the legal basis used by the Parliament to pass the Farm Acts
- The central government invoked Entry 33 in the Concurrent List (List III).
- Entry 26 and 27 in List II are listed as “subject to the provisions of Entry 33 of List III”.
Entry 33 in List III: Trade and commerce in, and the production, supply and distribution of, — (a) the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products; (b) foodstuffs, including edible oilseeds and oils; (c) cattle fodder, including oilcakes and other concentrates; (d) raw cotton, whether ginned or unginned, and cotton seed; and (e) raw jute.
Historical background of “Entry 33” of Concurrent List
- Entry 33, in its present form, was inserted in List III through the Constitution (Third Amendment) Act, 1954 after heated constitutional debates.
- The contention of the dissent was the following:
- As per Article 369 in the original version of the Constitution, the responsibility of agricultural trade and commerce within a State was temporarily entrusted to the Union government for a period of five years beginning from 1950.
- The 1954 Amendment attempted to change this into a permanent feature in the Constitution.
- According to dissident “if matters enumerated in Article 369 in were placed in List III, State autonomy would be rendered illusory and State powers and rights would be progressively pulverised…”.
- While another dissident argued that “passage of the Bill would transform the Indian Constitution into a “unitary Constitution” instead of a “federal Constitution” and reduce “all the States’ powers into municipal powers”.
- Notwithstanding the strong dissenting voices, the Bill was passed.
Let’s look into the related Supreme Court Judgments
- In many of its judgments after 1954, the Supreme Court of India has upheld the legislative powers of States in intra-State agricultural marketing.
- Most notable was the ruling of the five-judge Constitution Bench in I.T.C. Limited vs. Agricultural Produce Market Committee (APMC) and Others, 2002.
- The Tobacco Board Act, 1975 had brought the development of the tobacco industry under the Centre.
- However, Bihar’s APMC Act continued to list tobacco as an agricultural produce.
- In this case, the question was if the APMC in Monghyr could charge a levy on ITC for the purchase of unprocessed tobacco leaves from growers.
- An earlier judgment had held that the State APMC Act will be repugnant to the Central Act, and hence was ultra vires.
- But the Constitution Bench upheld the validity of the State APMC Act, and ruled that market fees can be charged from ITC under the State APMC Act.
Consider the question “Examine the validity of legal basis used by the Parliament to pass the Farm Acts. Why it could face the legal challenge?”
Conclusion
It was unwise on the part of the Centre to use Entry 33 in List III to push the Farm Bills. Such adventurism weakens the spirit of federal cooperation that India needs in this hour of crisis. Second, agriculture is exclusively a State subject.
Back2Basics: Read more about 3 Agricultural Acts passed by the Parliament here-
[Burning Issue] Agricultural Reform Bills, 2020
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Asset Reconstruction Company
Mains level: https://indianexpress.com/article/opinion/columns/insolvency-law-ibc-corporate-debt-resolution-bankruptcy-code-nirmala-sitharaman-6704399/
The article argues for the greater role to Asset Reconstruction Companies by allowing them to invest in the equity [shares] of the distressed companies.
Context
- In a recently released paper “Indian Banks: A time to reform” Viral Acharya and Raghuram Rajan argued for a greater role for Asset Reconstruction Companies.
- They argue that when there are fewer bids in a bankruptcy auction, the value on loans is better realised if read an asset reconstruction company takes over the borrower and places the firm under new management.
Current limits on the role of ARC
- The RBI limited the role of ARC to participation in resolutions under the Insolvency and Bankruptcy Code, 2016 (IBC) only by partnering with an equity investor, which is the resolution applicant.
- If the application succeeds, the equity investor would acquire the shares, while the ARC trust would acquire the debt.
Background of the ARCs
- Some stakeholders are asking for extending the role of ARCs by allowing direct invest in the equity of distressed companies through IBC resolution just like private equity funds.
- The RBI doesn’t appear to favour such an extended role for ARCs.
- This is due to the uninspiring performance of the Asset Reconstruction Companies in the past.
- At the time of the Asian Financial Crisis, India’s non-performing assets stood at a whopping 14.4 per cent.
- It was in this context that the Narasimham Committee (1998) recommended setting up an ARC specifically for purchasing NPAs from banks and financial institutions.
- Subsequently, the SARFAESI Act, 2002 created the legal framework for establishing multiple private ARCs.
- This policy achieved only modest success.
- The maximum average recovery by ARCs as a percentage of total bank claims stood at 21.5 per cent in 2010.
- Since then, it has steadily declined and reached 2.3 per cent in 2018.
- This low recovery could be the result of collateral disposal rather than genuine business turnarounds [i.e. operating the business and turning it profitable].
Need for extending the role of ARCs
- In 2002, India lacked an effective bankruptcy system.
- There was no market for corporate control of distressed firms.
- ARCs were originally designed for this peculiar institutional ecosystem.
- They were required to hand over the distressed business back to the original promoter once they had generated enough value to repay the debt.
- Consequently, ARCs had little incentive to turn around distressed businesses.
- This situation completely changed in 2016 as the IBC seeks to maximise the value of distressed businesses through a market for corporate control.
- ARCs should be able to fully participate in this market and attempt successful turnarounds by acquiring strategic control over distressed businesses.
- In a solvent company, shareholders have stronger incentives than creditors to maximise enterprise value.
- This is because an increase in enterprise value automatically increases the value of its equity.
- In contrast, creditors do not benefit from increases in enterprise value beyond their individual claims.
- If ARCs could hold more equity instead of debt in the resolved company, they would also have a stronger incentive to take strategic control to ensure successful turnaround.
Way forward
- The law should enable ARCs to invest in a distressed company’s equity, whether by infusing fresh capital or by converting debt into equity.
- Effectively, an ARC should act more like a private equity fund, as Acharya and Rajan suggested.
- This in turn would make the market for corporate control under IBC deeper and more liquid, improving ex-ante recovery rates for banks.
Consider the question “What are Asset Reconstruction Companies? How allowing the ARCs to invest in equity of distressed companies under IBC help successful turnaround of the distressed business?”
Conclusion
- If only ARCs are allowed to directly participate in IBC resolutions by infusing equity, they could emerge as the most efficient vehicle for turning around distressed Indian businesses.
Back2Basics: Difference between debt and equity
- Debt market and equity market are two broad categories of investment available in the general investment milieu.
- Equity markets trade in shares or stocks of the company listed on the stock exchanges.
- A stock in a company indicates a unit in the ownership of the company.
- As shareholders, you become part owners of the company.
- The largest shareholder, with 50% or more shares, becomes the owner of the company.
- Equity markets are riskier than debt markets.
- Debt is a form of borrowed capital.
- The central or state governments raise money from the market by issuing government securities or bonds.
- In effect, the government is borrowing money from you and will pay interest to you at regular intervals.
- The principal amount is returned on maturity.
- In the same way, a company raises money from the market by selling debt market securities such as corporate bonds.
- The debt market is made up of bonds issued by government authorities and companies.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
The Goods and Services Tax (GST) Council has failed to iron out differences between some States and the Centre over the plan to get States to borrow from the market to meet the shortfall in compensation cess collections this year.
Try this question from CSP 2018:
Q.Consider the following items:
- Cereal grains hulled
- Chicken eggs cooked
- Fish processed and canned
- Newspapers containing advertising material
Which of the above items is/are exempt under GST (Goods and Services Tax)?
(a) 1 only
(b) 2 and 3 only
(c) 1, 2 and 4 only
(d) 1, 2, 3 and 4
About GST Council
- The GST Council is a federal body that aims to bring together states and the Centre on a common platform for the nationwide rollout of the indirect tax reform.
- It is an apex member committee to modify, reconcile or to procure any law or regulation based on the context of goods and services tax in India.
- The GST Council dictates tax rate, tax exemption, the due date of forms, tax laws, and tax deadlines, keeping in mind special rates and provisions for some states.
- The predominant responsibility of the GST Council is to ensure to have one uniform tax rate for goods and services across the nation.
How is the GST Council structured?
- The GST is governed by the GST Council. Article 279 (1) of the amended Indian Constitution states that the GST Council has to be constituted by the President within 60 days of the commencement of the Article 279A.
- According to the article, the GST Council will be a joint forum for the Centre and the States. It consists of the following members:
- The Union Finance Minister will be the Chairperson
- As a member, the Union Minister of State will be in charge of Revenue of Finance
- The Minister in charge of finance or taxation or any other Minister nominated by each State government, as members.
Terms of reference
- Article 279A (4) specifies that the Council will make recommendations to the Union and the States on the important issues related to GST, such as the goods and services will be subject or exempted from the Goods and Services Tax.
- They lay down GST laws, principles that govern the following:
- Place of Supply
- Threshold limits
- GST rates on goods and services
- Special rates for raising additional resources during a natural calamity or disaster
- Special GST rates for certain States
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Hepatitis
Mains level: Not Much
Americans Harvey J Alter and Charles M Rice, and British scientist Michael Houghton were awarded the Nobel Prize for Medicine or Physiology on Monday for the discovery of the hepatitis C virus.
Try this PYQ:
Q.Which one of the following statements is not correct? (CSP 2019)
(a) Hepatitis B virus is transmitted much like HIV.
(b) Hepatitis B. unlike Hepatitis C, does not have a vaccine.
(c) Globally, the number of people infected with Hepatitis B and C viruses arc several times more than those infected with HIV.
(d) Some of those infected with Hepatitis B and C viruses do not show the symptoms for many years.
Hepatitis C Virus
- Hepatitis C virus (HCV) is a bloodborne virus and causes liver diseases. It refers to an inflammatory condition of the liver.
- The novel virus caused several deaths in the 1960s and 1970s — but remained unknown until its discovery in the late 1980s.
What are other Hepatitis Viruses?
- Before the discovery of the Hepatitis C virus, two other viruses were known to cause hepatitis in patients.
- The Hepatitis A virus was known to spread mainly through contaminated food and water and caused a relatively milder form of liver inflammation.
- Hepatitis B, discovered in the 1960s, was known to transmit mainly through infected blood and caused a more serious form of the disease.
- Incidentally, the discovery of the Hepatitis B virus too was rewarded with a Nobel Prize in Medicine, given to Baruch Blumberg in 1976. There are vaccines available for this disease now.
How Hepatitis C came to observation?
- The discovery and identification of the Hepatitis B virus facilitated the development of a diagnostic test to detect its presence in blood.
- Thereafter, only blood sanitized from this virus would be given to patients, but it was observed that even this sanitized blood was able to prevent only 20% of the blood-borne hepatitis cases.
- It was then that the search for the new virus began.
How is Hepatitis C treated?
- Presently there is no vaccine available for HCV. However, it can be treated with antiviral medication.
- Hepatitis A and B are preventable by vaccine.
Back2Basics:
In news: Nobel Prize
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Tax Sheltering
Mains level: Not Much
This newscard is an excerpt from an original article published in TH.
We can expect a statement based question comparing Tax Shelters and Tax Heavens.
What is a Tax Shelter?
- A tax shelter is a financial vehicle that an individual can use to help them lower their tax obligation and, thus, keep more of their money.
- It is a legal way for individuals to “stash” their money and avoid getting it taxed.
- A tax shelter is entirely different from a tax haven because the latter exists outside the country and its legality can, at times, be questionable.
- A tax shelter, on the other hand, is entirely legal and keeps all monies within an individual’s home country.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Ketogenic Diet
Mains level: Not Much
Ketogenic or Keto Diet is popularly followed as a weight loss diet across the world.
Try this PYQ:
Q.Regular intake of fresh fruits and vegetables is recommended in the diet since they are a good source of antioxidants. How do antioxidants help a person maintain health and promote longevity? (CSP 2014)
(a) They activate the enzymes necessary for vitamin synthesis in the body and help prevent vitamin deficiency.
(b) They prevent excessive oxidation of carbohydrates, fats and proteins in the body and help avoid unnecessary wastage of energy.
(c) They neutralize the free radicals produced in the body during metabolism.
(d) They activate certain genes in the cells of the body and help delay the ageing process.
What is Ketogenic Diet?
- The Keto Diet is one of the most popular weight-loss diets the world over.
- It consists of a high-fat, moderate-protein and low-carb diet.
- It helps in weight loss by achieving ketosis — a metabolic state where the liver burns body fat and provides fuel for the body, as there is limited access to glucose.
What constitutes a keto diet?
- A classic keto generally requires that 90 per cent of a person’s calories come from fat, 6 per cent from protein and 4 per cent from carbs.
- But there are many versions doing the rounds since this one was designed for children suffering from epilepsy to gain control over their seizures.
How does it impact the body?
- If we starve the body of carbohydrate, after burning out the glucose, the liver starts breaking down fats for energy.
- Ketosis is common in all kinds of fasting, but in a keto diet, when one is feeding it by giving a lot of fats from outside without carbs, it can become mildly toxic.
- It may lead to many nutrient deficiencies such as carbohydrates, proteins, vitamins (especially vitamin A, D, E, & K) and minerals like calcium, phosphorus, sodium.
- Extreme carbohydrate restriction can lead to hunger, fatigue, low mood, irritability, constipation, headaches, and brain fog, which may last days to weeks
What impact does it have on our kidneys?
- Even the moderate increase in protein needs to be carefully monitored, especially in those who are already suffering from chronic kidney disease, as it could lead to kidney failure.
- One should get a thorough assessment and make sure they have normal kidney function before choosing this diet.
- This diet could lead to increased stress on the kidneys and result in kidney stones, as they are made to work overtime.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Various social reformers
Mains level: NA
PM has paid rich tributes to revolutionary freedom fighter Shyamji Krishna Varma on his birth anniversary.
Try this PYQ:
Q. The Ghadr (Ghadar) was a –
(a) Revolutionary association of Indians with headquarters at San Francisco.
(b) Nationalist organization operating from Singapore
(c) Militant organization with headquarters at Berlin
(d) Communist movement for India’s freedom with head-quarters at Tashkent
About Shyamji Krishna Varma
- SK Varma (1857–1930) was an Indian revolutionary fighter, a patriot, lawyer and journalist who founded the Indian Home Rule Society, India House and The Indian Sociologist in London.
- He was a noted scholar in Sanskrit and other Indian languages.
- He pursued a brief legal career in India and served as the Divan of a number of Indian princely states in India.
- He had, however, differences with Crown authority, was dismissed following a supposed conspiracy of local British officials at Junagadh and chose to return to England.
- An admirer of Dayanand Saraswati’s approach of cultural nationalism, and of Herbert Spencer, Krishna Varma believed in Spencer’s dictum: “Resistance to aggression is not simply justified, but imperative”.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Coalition of Epidemic Preparedness for Innovation (CEPI)
Mains level: Not Much
Translational Health Science And Technology Institute (THSTI), an autonomous institute of the Department of Biotechnology, has now been recognized by Coalition of Epidemic Preparedness for Innovation (CEPI) as one of the Global Network of Laboratories for centralized assessment of COVID 19 Vaccines.
Note: CEPI is neither a WHO subsidiary nor a UN body .
Coalition of Epidemic Preparedness for Innovation (CEPI)
- The CEPI is a foundation that takes donations to finance independent research projects to develop vaccines against emerging infectious diseases (EID).
- It is focused on the WHO’s “blueprint priority diseases.
- These diseases include the Middle East respiratory syndrome-related coronavirus (MERS-CoV), the SARS coronavirus 2 the Nipah virus, the Lassa fever virus, and the Rift Valley fever virus, as well as the Chikungunya virus and the hypothetical, unknown pathogen “Disease X”.
- CEPI investment also requires “equitable access” to the vaccines during outbreaks.
- CEPI was conceived in 2015 and formally launched in 2017 at the World Economic Forum (WEF) in Davos, Switzerland.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now