Note4Students
From UPSC perspective, the following things are important :
Prelims level: TRIPS
Mains level: Paper 3- Issues with free trade
Issues with free trade are making themselves more evident in the aftermath of the Covid pandemic. The article analyses the growing influence of the capital and how it is benefiting the few.
Issues with free trade
- Debates about free trade revolves around value of economic growth vs. the values of justice.
- The Economist (October 5) says “Investor-state dispute-settlement (ISDS) clauses of international trade and investment agreements give foreign investors the right to resort to a secretive tribunal to seek compensation when they are in disagreement with a host government.
- They threaten governments who want to pass laws that seem self-evidently in their country’s and even the world’s interests.
- The interests of remote financial investors are considered superior to the rights of local people represented by their own democratically elected governments.
- TRIPS (the Agreement on Trade-Related Aspects of International Property Rights) is another egregious example.
- Lobbies of multinational pharma companies want to protect their investors with intellectual monopolies under TRIPS, denying affordable medicines to the world’s poorer people.
- New business models are throwing more workers into short-term contractual arrangements to make it easier for investors to do business.
How it is relevant in India
- The Environmental Impact Assessment (EIA) notification 2020 make it easier for investors to take over lands for projects by debilitating the assessment process which requires that communities be heard.
- The new labour codes passed by Parliament to simplify regulations have also weakened the rights of workers to be represented by unions.
- In India, terms of trade have been stacked against small farmers to keep prices low for consumers.
- Terms are also against small enterprises in financial markets, and also when they supply to large buyers in global supply chains.
- The terms of trade are unfair for all workers who are on the supply side of labour markets vis-à-vis those who pay them.
- Small people do not have clout in any market. Those with more money set the terms of trade.
Governance crisis
- Capitalism runs on the principle of property rights: Those who own more must have a greater say in the governance of the enterprise.
- Money is speaking too much in fixing the rules of the game: It influences elections; it controls the media; it powers lobbies for reforms at international and national levels.
Conclusion
The way the rules of the economy and trade are made must change to create a more just and resilient world. Voices of the poorest people and their associations must be heard more loudly than the opinions of the rich and their lobbies.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: APMC Act
Mains level: Paper 3- Agri bills and their implications for the farmers.
Agri-bill passed by the Parliament resulted in the protest from farmers from several states. The bills have also been challenged on the legal footing as well. This article explains how the bills will benefit the farmers and also examines the legal basis used for their passage.
States trying to nullify the agri bills passed by Parliament
- Parliament has passed three bills on agriculture reform. This has evoked protests, largely in Punjab and Haryana.
- Taking recourse to Article 254 of the Constitution, the Punjab government has passed its own bills to nullify some provisions of the central acts.
- Similar action by the Chhattisgarh and Rajasthan governments seems to be on the anvil.
Legal justification for Parliament passing the laws related to agriculture
- The Constitution has placed agriculture on the state list.
- Various petitions have also been filed in the Supreme Court claiming that the central laws infringe upon the jurisdiction of state governments.
- However, it is the Centre which decides and announces support prices for major crops for the entire country.
- It also decides issues such as bank loan waivers.
- International agreements and multilateral trade in agricultural products also fall in the Union government’s domain.
- Agricultural and dairy products, in fact, had a prominent role in India not joining the Regional Comprehensive Economic Partnership (RCEP).
- Entry 33 in the concurrent list limits the power of states in agriculture, by empowering both governments to legislate on production, trade and supply of a range of agricultural foodstuffs and raw material.
Use of Article 254 to bypass Central law
- The Punjab bill has set in motion the process of states taking refuge under Article 254 to pass their own pieces of legislation.
- All state bills that seek to nullify central acts have to be approved by the President after they have received the consent of the governor of the state.
Way forward
- Reformist chief ministers and astute policy planners should grab this opportunity and encourage investment in private infrastructure to create supply chains and give the farmer the benefit of demand-led prices.
- They should also take appropriate action to create institutional mechanisms, such as farmer producer organisations or aggregators, to ensure greater farmer participation.
Conclusion
It would be in the interests of the farming community and state governments to give the much-delayed reform measures a fair chance by giving them access to competitive purchases, affording better prices.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Schemes for DisComs
Mains level: Paper 3- Financial issues faced by the DisComs
The article analyses the factors responsible for financial difficulties faced by the DisComs and suggests the ways to deal with the issues.
Important role of the DisComs
- Distribution Companies (DisComs) are the utilities that typically buy power from generators and retail these to consumers.
- For all of India’s global leadership for growth of renewable energy, or ambitions of smart energy, the buck stops with the DisComs.
- The days of scarcity of power are over.
- The physical supply situation has mostly improved.
- But the financial picture has not brightened much.
Analysing the data on liabilities of the DisComs
- ₹90,000 crore (later upgraded to ₹1,25,000 crore) was earmarked for DisComs in ₹20-lakh crore package announced in the wake of Covid-19’s economic shock.
- The Power Finance Corporation (PFC)’s Report on Utility Workings for 2018-19 showed dues to generators were ₹2,27,000 crore, and this is well before COVID-19.
- It also showed similar Other Current Liabilities.
- DisComs have delayed their payments upstream (not just to generators but others as well) — in essence, treating payables like an informal loan.
But why do DisComs not pay on time?
- Ideally, DisComs should not incur losses as they enjoy a regulated rate of return.
- While AT&C losses can explain part of any gap. Major reasons are as discussed below:
1) Regulatory issue and cash-flow gap due to it
- The first problem starts at the regulatory level where even if DisComs performed as targeted, across India, they would face a considerable cash flow gap.
- This cash flow gap was ₹60,000-plus crore in FY18-19 compared to their then annual cost structure of ₹7.23-lakh crore.
2) Payabeles issue: Due from consumers, state and regulatory gap
- These dues are of three types.
- First, regulators themselves have failed to fix cost-reflective tariffs thus creating Regulatory Assets,which are to be recovered through future tariff hikes.
- Second, about a seventh of DisCom cost structures is meant to be covered through explicit subsidies by State governments.
- Third, consumers owed DisComs over ₹1.8 lakh crore in FY 2018-19, booked as trade receivables.
- State governments are the biggest defaulters, responsible for an estimated a third of trade receivables, besides not paying subsidies in full or on time.
3) Challenge of renewable energy
- The rise of renewable energy means that premium customers will leave the system partly first by reducing their daytime usage.
- And as battery technologies mature, their dependence on DisComs may wane entirely.
- Even without batteries, regulations permitting, they may want to find third party suppliers under competitive models.
Impact of Covid pandemic
- COVID-19 has completely shattered incoming cash flows to utilities.
- The revenue implications were far worse since the lockdown disproportionately impacted revenues from so-termed paying customers, commercial and industrial segments.
- Reduced demand for electricity did not save as much because a large fraction of DisCom cost structures are locked in through Power Purchase Agreements (PPAs) that obligate capital cost payments, leaving only fuel savings with lower offtake.
Way forward
- We will probably need a much larger liquidity infusion than has been announced thus far, but it also must go hand-in-hand with credible plans to pay down growing debt.
- We need a complete overhaul of the regulation of electricity companies and their deliverables.
- We need to apply common sense metrics of lifeline electricity supply instead of the political doleout of free electricity even for those who may not deserve such support.
- For the rest, regulators must allow cost-covering tariffs.
Consider the question “Examine the factor responsible for making the DisComs financial unviable? Sugget the pathways to deal with the issues faced by the DisComs”
Conclusion
The financial problems of DisComs have been brewing for many yearsHowever, if business as usual was not even good enough before COVID-19, it will not be workable for the current national needs of quality, affordable, and sustainable power.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not Much
Mains level: India-Myanmar relations
The Foreign Secretary and Chief of the Army Staff have recently visited Myanmar reflected India’s multidimensional interests in the country.
Try this question:
Q.Myanmar is the key in linking South Asia to Southeast Asia and the eastern periphery becomes the focal point for New Delhi’s regional outreach. Analyse.
India-Myanmar relations
- There are two lines of thinking that drive India’s Myanmar policy: engagement with key political actors and balancing neighbours.
- For Myanmar, the visit would be viewed as India’s support for its efforts in strengthening democratization amidst criticisms by rights groups over the credibility of its upcoming election.
Non-interference in internal politics
- The political logic that has shaped India’s Myanmar policy since the 1990s has been to support democratization driven from within the country.
- This has allowed Delhi to engage with the military that played a key role in Myanmar’s political transition and is still an important political actor.
- A key factor behind the military regime’s decision to open the country when it initiated reforms was, in part, to reduce dependence on China.
India as an alternative
- By engaging Myanmar, Delhi provides alternative options to Naypyidaw.
- This driver in India’s Myanmar policy has perhaps gained greater salience in the rapidly changing regional geopolitics.
Recent initiatives
- Like in other neighbouring countries, India suffers from an image of being unable to get its act together in making its presence felt on the ground.
- The inauguration of the liaison office of the Embassy of India in Naypyidaw (the capital) may seem a routine diplomatic activity.
- However, establishing a permanent presence in the capital where only a few countries have set up such offices does matter.
- Interestingly, China was the first country to establish a liaison office in Naypyidaw in 2017.
- India has also proposed to build a petroleum refinery in Myanmar that would involve an investment of $6 billion.
Strategic calculus
- This is an indication of Myanmar’s growing significance in India’s strategic calculus.
- It also shows India’s evolving competitive dynamic with China in the sector at a time when tensions between the two have intensified.
- Another area of cooperation that has expanded involves the border areas.
- Furthermore, the recent announcement that India was transferring a Kilo-class submarine to Myanmar demonstrates the depth of their cooperation in the maritime domain.
The balancing act
- For Delhi, the balancing act between Bangladesh and Myanmar remains one of the keys to its overall approach to the Rohingya issue.
- Delhi has reiterated its support for “ensuring the safe, sustainable and speedy return of displaced persons” to Myanmar.
- By positioning as playing an active role in facilitating the return of Rohingya refugees, India has made it clear that it supports Myanmar’s efforts and also understands Bangladesh’s burden.
- For Delhi, engaging rather than criticizing is the most practical approach to finding a solution.
Conclusion
- For India, Myanmar is key in linking South Asia to Southeast Asia and the eastern periphery becomes the focal point for New Delhi’s regional outreach.
- Delhi’s political engagement and diplomatic balancing seem to have worked so far in its ties with Myanmar.
- Whether it has leveraged these advantages on the ground to the full is open to debate.
- The aforementioned initiatives could be the beginning of change on the ground by establishing India’s presence in sectors where it ought to be more pronounced.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not Much
Mains level: Abrogation of Art. 370
People, as well as investors outside Jammu and Kashmir, can now purchase land in the Union Territory (UT) as the Centre has notified new land laws for the region.
What is the new criterion?
- Under the newly introduced J&K Development Act, the term “permanent resident of the State” as a criterion has been “omitted”, paving the way for investors outside J&K to invest in the UT.
- Under the ‘transfer of land for the purpose of promotion of healthcare or education’, the government may now allow the transfer of land.
- According to amendments made to “The Jammu & Kashmir Land Revenue Act, Samvat, 1996”, only agriculturists of J&K can purchase agricultural land.
- No sale, gift, exchange, or mortgage of the land shall be valid in favour of a person who is not an agriculturist.
- No land used for agriculture purposes shall be used for any non-agricultural purposes except with the permission of the district collector.
- Under a new provision, an Army officer not below the rank of Corps Commander can declare an area as “Strategic Area” within a local area, only for direct operational and training requirements.
Note: These laws do not apply to the UT of Ladakh. The Centre is likely to notify separate land laws for the UT of Ladakh soon.
Criticisms of the move
- Political parties have opposed the move citing the sale of the state.
- With these new laws in place, tokenism of the domicile certificate has been done away with, as purchasing non-agricultural land has been made easier.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: UAPA
Mains level: UAPA
The Centre has designated 18 key operatives and leaders of extremists groups as individual terrorists under the recently-amended Unlawful Activities Prevention Act (UAPA).
Try this question for mains:
Q.“Anti-terror laws should not be used as a tool to silence the critics of the government.” Discuss in context to the recent amendments to the Unlawful Activities Prevention Act (UAPA).
About UAPA
- The UAPA is aimed at effective prevention of unlawful activities associations in India.
- Its main objective was to make powers available for dealing with activities directed against the integrity and sovereignty of India
- It is an upgrade on the Terrorist and Disruptive Activities (Prevention) Act TADA, which was allowed to lapse in 1995 and the Prevention of Terrorism Act (POTA) was repealed in 2004.
- It was originally passed in 1967 under the then Congress government led by former Prime Minister Indira Gandhi.
- Till 2004, “unlawful” activities referred to actions related to secession and cession of territory. Following the 2004 amendment, “terrorist act” was added to the list of offences.
Recent amendments
- The Centre had amended UAPA, 1967, in August 2019 to include the provision of designating an individual as a terrorist.
- Before this amendment, only organisations could be designated as terrorist outfits.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Artemis, SOPHIA, VIPER
Mains level: Study of water on moon
The Moon has water at places where none had been detected before and has potentially more water than previously believed in regions where it was already understood to exist.
Try this MCQ:
Q.NASA’s VIPER mission sometimes seen in news is related to the study of-
a)Moon
b)Venus
c)Sun
d)None of these
Water on the moon
- In two separate studies in Nature Astronomy, scientists have reported findings with potentially huge implications for sustaining humans on the Moon in the future.
- One study reports the detection of water on the Moon’s sunlit surface for the first time.
- The other estimates that the Moon’s dark, shadowy regions, which potentially contain ice, are more widespread than thought.
Why is the discovery of water important?
- Apart from being a marker of potential life, water is a precious resource in deep space.
- For astronauts landing on the Moon, water is necessary not only to sustain life but also for purposes such as generating rocket fuel.
- NASA’s Artemis programme plans to send the first woman and the next man to the Moon in 2024 and hopes to establish a “sustainable human presence” there by the end of the decade.
What was known about water on the Moon?
- Previous Moon studies, including by the ISRO Chandrayaan-1 mission, have provided evidence for the existence of water.
- In 2009, the Moon Mineralogy Mapper (M3) instrument aboard Chandrayaan-1 found water molecules in the Polar Regions.
What is different in the new discovery?
- This time, it is confirmed H20 molecules, discovered in Clavius Crater in the Moon’s southern hemisphere.
- And it is the first time water has been detected on the sunlit side, showing it is not restricted to the shadowy regions.
- SOFIA, which is a modified Boeing 747SP jetliner that flies at altitudes up to 45,000 feet, has an infrared camera that picked up the wavelength unique to water molecules.
- The data showed water in concentrations of 100-412 parts per million trapped in 1 cubic metre of soil.
How could the water have formed?
- Space rocks carrying small amounts of water could have bombarded the Moon.
- Alternatively, the Sun’s solar wind could have carried hydrogen, which then reacted with minerals in the lunar soil to create hydroxyl, which later transformed into water.
- The sunlit surface retaining the water presents a puzzle since the Moon does not have a thick atmosphere.
- One possibility is that the water gets trapped into tiny bead-like structures that were created in the soil by impacts from space rocks.
- Alternatively, the water could be hidden between grains of lunar soil and sheltered from the sunlight, NASA said.
So, how widespread is water on the Moon?
- On the sunlit side, it is not yet known whether the water SOFIA found is easily accessible.
- On the other hand, the hidden, shadowy pockets on the lunar surface called “cold traps” are spread across a combined 40,000 sq km, the other study has reported.
- The cold traps have gone without sunlight for potentially billions of years. If they do contain ice, it means water is going to be more accessible than previously assumed.
What next?
- SOFIA will look for water in additional sunlit locations to learn more about how the water is produced, stored, and moved across the Moon.
- Meanwhile, NASA’s Volatiles Investigating Polar Exploration Rover (VIPER) will carry out a mission to create the first water resource maps of the Moon.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GST
Mains level: Changes in taxation after GST regime
Officials have indicated that the government is considering bringing natural gas under the ambit of the GST regime.
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
Why such demands?
- Global energy MNCs have called on the government to bring natural gas under the GST regime.
- Currently petrol, diesel, aviation turbine fuel, natural gas and crude oil fall outside India’s Goods and Services Tax (GST) regime.
Why is it important to bring natural gas under the GST regime?
- Bringing natural gas under the GST would lead to a reduction in the cascading impact of taxes on industries such as power and steel, which used natural gas as an input.
- This would do away with the central excise duty and different value-added taxes imposed by states.
- This would lead to an increase in the adoption of natural gas in line with the government’s stated goal to increase the share of natural gas in the country’s energy basket from 6.3% to 15%.
Back2Basics: GST
- GST launched in India on 1 July 2017 is a comprehensive indirect tax for the entire country.
- It is charged at the time of supply and depends on the destination of consumption.
- For instance, if a good is manufactured in state A but consumed in state B, then the revenue generated through GST collection is credited to the state of consumption (state B) and not to the state of production (state A).
Must read:
https://www.civilsdaily.com/goods-and-services-tax-2/
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