Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India-U.S. relations and implications of the Presidential elections in the U.S.
The voting trend in the U.S. presidential election indicates significant support for the policies pursued by President Trump. This could impact the policies the next administration pursues.
Why U.S. election matters for the world
- The world still has need for American leadership.
- It remains the world’s largest net provider of global public goods.
- It is the lynchpin of the global multilateral system.
- If Joe Biden wins, it is possible that America will re-engage with dignity and restore mutual respect in its relations with allies and partners, beginning with the trans-Atlantic alliance.
- However, the Trump Americans, who are the new political base, will still shape American policy irrespective of who the president is.
‘America first’ is here to stay
- The American people believe that their education, employment and retirement have been impacted by the immigration, outsourcing and liberal trade policies of past administrations.
- Trump America does not want more migrants, it will not support the outsourcing of jobs at the cost of their own.
- It wants a fair deal on trade that does not allow cheaper imports to put small American businesses out of business.
- Even a Biden administration cannot return America back to the days of open borders and free trade.
- It might relax some categories of work-visas, but it cannot return to the time when outsourcing was the preferred option for American companies.
- It might re-engage with the World Trade Organisation but it cannot tear down the trade barriers that Trump has erected in the name of Make in America.
Foreign policy of next administration
- The Trump Americans do not wish to spend any more taxpayer dollars on foreign wars and they want their boys and girls to come home.
- They think America’s allies are not carrying their weight and are unfairly living off American contributions.
- They want their allies and partners to take greater responsibility for peace and security.
- Biden’s supporters hope that he can reverse the abdication of American global leadership and renew alliances, but as president he may find it difficult to go against the Trump Americans on issues like China, Iran and climate change, without endangering the Democratic Party’s long-term interests.
- And if Trump is re-elected as the president, it will only be because of his core voter base and it will strengthen his resolve.
Implications for the world
- Whether or not America withdraws from the world, American leadership, as we know it, might be over.
- America will become more transactional and less generous.
- Common values like democracy or multipolarity may be of lesser importance in America’s scheme of things.
- Whether it is Trump or Biden, the Sino-US relationship will remain complicated and rivalrous.
- Whether it is Trump or Biden, the Obama-era nuclear deal with Iran cannot be restored.
- Whether it is Trump or Biden, American troops will soon be gone from Afghanistan.
- There will be less willingness to consider emerging economies as deserving beneficiaries of concessional arrangements.
- A Biden presidency might also mean a more critical look at the record of not just authoritarian states but also democracies on issues like labour, environment and non-proliferation.
Implications for India
- President Trump has been good for India in terms of foreign policy, less so in terms of economic policy.
- But Delhi should equally be prepared for the Trump administration to ratchet up pressure on trade and to tighten rules on immigration.
- With Biden, India and the US might return to a more balanced re-engagement on trade and immigration, but should be prepared for a more accommodative policy on both Pakistan and China than Trump’s.
Conclusion
Whoever is the next occupant of the White House, the way Americans voted on November 3 will shape American policy and politics for years to come.
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: Productivity of economy
Mains level: Paper 3- Reforms, productivity and technology to fix the problems of economy
The article discusses the three fundamentals which need an examination to fix the issues faced by the economy.
Re-examining the fundamentals
- India has an incomes crisis: incomes of people in the lower half of the pyramid are too low.
- The solutions economists propose are: free up markets, improve productivity, and apply technology.
- These fundamentals of economics must be re-examined when applied to human work.
Three solutions and issues with them
1) Freeing up the markets
- It is suggested that markets should be freed up for agricultural products so that farmers can get higher prices; and freed up for labour to attract investments.
- Without adequate incomes, people cannot be a good market for businesses.
- In fact, it is the inadequate growth of incomes that has caused a slump in investments.
- Ironically, the purpose of freeing up markets for labour is to reduce the burden of wage costs on investors just when wages and the size of markets must be increased.
2) Increasing productivity
- Productivity is a ratio of an input in the denominator and an output in the numerator.
- The larger the output that is produced with a unit of input, the higher the productivity of the system.
- Improvement of ‘productivity’ is key to economic progress.
- Economists generally use labour productivity as a universal measure of the productivity of an economy.
- Humans are the only ‘appreciating assets’ an enterprise has. They can improve their own abilities.
- The values of machines and buildings depreciate over time, as any accountant knows.
- Whereas human beings develop when they are treated with respect, and are provided with environments to learn.
- For capital-scarce and human resource-abundant countries, such as many developing countries, the correct ratio of productivity is output per unit of capital.
- This must be the driver of business as well as national strategies.
- This was the strategy of ‘Japan Inc.’ to make Japan an industrial powerhouse.
- This was E.F. Schumacher’s insight also.
3) Use of technology
- Schumacher, best known for his seminal idea ‘small is beautiful’ understood where capitalism powered with technology would be heading.
- In his essay he wrote: “If we define the level of technology in terms of ‘equipment cost per work-place’, we can call the indigenous technology of a typical developing country (symbolically speaking) a £1-technology, while that of the modern West could be called a £1,000-technology.
- The current attempt of the ‘developing ‘countries, supported by foreign aid, to infiltrate the £1,000-technology into their economies inevitably kills off the £1-technolgy at an alarming rate.
- This results in destroying traditional workplaces at a much faster rate than modern workplaces can be created and producing the ‘dual economy’ with its attendant evils of mass unemployment and mass migration.
- Schumacher had warned there was a malaise brewing beneath the drive to ‘Westernise’ and ‘technologise’ economies.
Way forward: Social contract between society and workers
- Workers provide the economy with the products and services it needs.
- In return, society and the economy must create conditions whereby workers are treated with dignity and can earn adequate incomes.
- Good jobs require good contracts between workers and their employers.
- Therefore, the government should create a good society for all citizens, must regulate contracts between those who engage people to do work for their enterprises, even in the gig economy.
- Goverment should push innovation in socially more beneficial directions to augment rather than replace less skilled workers.
Conclusion
The power balance must shift. Small enterprises and workers must combine into larger associations, in new forms, using technology, to tilt reforms towards their needs and their rights.
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: GST provisions
Mains level: Paper 2- Declining financial heath of the States
The financial health of the States has been declining in the last several years. The article explains the reasons and its implications for the States.
Role of States in development
- State governments drive a majority of the country’s development programmes.
- Greater numbers of people depend on these programmes for their livelihood, development, welfare and security.
- States need resources to deliver these responsibilities and aspirations.
Factors responsible for declining discal capacity of the States
1) Declining devolution to State
- Finance Commissions recommend the share of States in the taxes raised by the Union government and recommendations are normally adhered to.
- The year 2014-15 commenced with a shock: actual devolution was 14% less than the Finance Commission’s projection.
- Between 2014-15 and 2019-20, the States got ₹7,97,549 crore less than what was projected by the Finance Commission.
2) Cess and surcharge
- Various cesses and surcharges levied by the Union government are retained fully by it, they do not go into the divisible pool.
- This allows the Centre to raise revenues, yet not share them with the States.
- Hence, the Union government imposes or increases cesses and surcharges instead of taxes wherever possible and, in some cases, even replaces taxes with cesses and surcharges.
- As a result, the States lose out on their share.
- Between 2014-15 and 2019-20, cesses and surcharges soared from 9.3% to 15% of the gross tax revenue of the Union government.
- This systematic rise ensures that the revenue that is fully retained by the Union government increases at the cost of the revenue that is shared with the States.
- This government has exploited this route to reduce the size of the divisible pool.
3) GST shortfall
- Shortfalls have been persistent and growing from the inception of GST.
- Compensations have been paid from the GST cess revenue.
- GST cesses are levied on luxury or sin goods on top of the GST.
- GST compensation will end with 2021-22. But cesses will continue.
- With the abnormal exception of this year, the years ahead will generate similar or more cess revenue.
- Hence, many States have been insisting outside and inside the GST Council that the Union government should borrow this year’s GST shortfall in full and release it to the States.
- The Union government will not have to pay a rupee of this debt or interest.
- The entire loan can be repaid out of the assured cess revenue that will continue to accrue beyond 2022.
- Of the nearly ₹3 lakh crore GST shortfall to the States, the Centre will only compensate ₹1.8 lakh crore.
- The States will not get the remaining ₹1.2 lakh crore this year.
- In fact, it flies against the need of the hour to revive the economy.
- Governments ought to spend money this year to stimulate demand.
4) Declining grants from the Centre
- Central grants are also likely to drop significantly this year.
- For instance,₹31,570 crore was allocated as annual grants to Karnataka.
- Actual grants may be down to ₹17,372 crore.
Implications for the States
- To overcome such extreme blows to their finances and discharge their welfare and development responsibilities, the States are now forced to resort to colossal borrowings.
- Repayment burden will overwhelm State budgets for several years.
- The fall in funds for development and welfare programmes will adversely impact the livelihoods of crores of Indians.
- The economic growth potential cannot be fully realised.
- Adverse consequences will be felt in per capita income, human resource development and poverty.
- This is a negative sum game.
5) Loss of financial autonomy due to GST
Consider the question “What are the reasons for the declining financial health of the States in India? What are the implications for the States? Suggest the ways to deal with the issue.”
Conclusion
States are at the forefront of development and generation of opportunities and growth. Strong States lead to a stronger India. The systematic weakening of States serves neither federalism nor national interest.
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: CBI
Mains level: Read the attached story
Kerala has decided to withdraw the general consent accorded to the Central Bureau of Investigation (CBI) to operate in the state voluntarily.
Try answering this:
Q. Why the CBI is called as “a caged parrot speaking in its master’s voice”? Critically comment.
General Consent
- Unlike the National Investigation Agency (NIA), which is governed by its own NIA Act and has jurisdiction across the country, the CBI is governed by the Delhi Special Police Establishment Act.
- This makes consent of a state government mandatory for conducting an investigation in that state.
- There are two kinds of consent: case-specific and general.
- Given that the CBI has jurisdiction only over central government departments and employees, it can investigate a case involving state government employees or a violent crime in a given state only after that state government gives its consent.
When is Consent needed?
- General consent is normally given to help the CBI seamlessly conduct its investigation into cases of corruption against central government employees in the concerned state. Almost all states have given such consent.
- Otherwise, the CBI would require consent in every case.
- For example, if it wanted to investigate a bribery charge against a Western Railway clerk in Mumbai, it would have to apply for consent with the Maharashtra government before registering a case against him.
What does withdrawal mean?
- It means the CBI will not be able to register any fresh case involving a central government official or a private person stationed in these two states without getting case-specific consent.
- Withdrawal of consent simply means that CBI officers will lose all powers of a police officer as soon as they enter the state unless the state government has allowed them.
Under what provision has general consent been withdrawn?
- Section 6 of the Act says nothing contained in Section 5 shall be deemed to enable any member of the Delhi Special Police Establishment to exercise powers and jurisdiction in any area in a State, not being a Union Territory or Railway, area, without the consent of the Government of that State.
- In exercise of the power conferred by Section 6 of the Delhi Special Police Establishment Act, 1946, the government can withdraw the general consent to exercise the powers and jurisdiction.
Does that mean that the CBI can no longer probe any case in the two states?
- The CBI would still have the power to investigate old cases registered when general consent existed.
- Also, cases registered anywhere else in the country, but involving people stationed in Andhra Pradesh and West Bengal would allow CBI’s jurisdiction to extend to these states.
- There is ambiguity on whether the agency can carry out a search in either of the two states in connection with an old case without the consent of the state government.
Why such a move by the States?
- If a state government believes that the ruling party’s ministers or members could be targeted by CBI on orders of the Centre, and that withdrawal of general consent would protect them.
- This is a debatable political assumption.
- CBI could still register cases in Delhi which would require some part of the offence being connected with Delhi and still arrest and prosecute ministers or MPs.
- The only people it will protect are small central government employees.
Legal Remedies for CBI
- The CBI can always get a search warrant from a local court in the state and conduct searches.
- In case the search requires a surprise element, there is CrPC Section 166, which allows a police officer of one jurisdiction to ask an officer of another to carry out searches on his behalf.
- And if the first officer feels that the searches by the latter may lead to loss of evidence, the section allows the first officer to conduct searches himself after giving notice to the latter.
Back2Basics: Central Bureau of Investigation (CBI)
- Origins of CBI can be traced back to the Special Police Establishment (SPE) set up in 1941 in order to cases of bribery and corruption in War & Supply Department of India during World War II.
- The need of a Central Government agency to investigate cases of bribery and corruption was felt even after the end of World War II.
- So, DSPE (Delhi Special Police Establishment) Act, 1946 was brought that gave legal power of investigating cases to CBI.
- CBI is not a statutory body as it is not established by an Act of the Parliament.
- CBI investigates cases related to economic crimes, special crimes, cases of corruption and other high-profile cases.
- CBI comes under the jurisdiction of the Ministry of Personnel, Public Grievances and Pensions.
- CBI is exempted from Right to Information (RTI) Act similar to the National Investigating Agency (NIA), National Intelligence Grid (Natgrid), etc.
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: Not Much
Mains level: Alimony
The Supreme Court has laid down uniform and comprehensive guidelines for family courts, magistrates and lower courts to follow while hearing the applications filed by women seeking maintenance from their estranged husbands’.
Debate: Alimony as a right of women or a feminist taboo
Why such a judgement?
- Usually, maintenance cases have to be settled in 60 days, but they take years, in reality, owing to legal loopholes.
- The top court said women deserted by husbands are left in dire straits, often reduced to destitution, for lack of means to sustain themselves and their children.
- Despite a plethora of maintenance laws, women were left empty-handed for years, struggling to make ends meet after a bad marriage.
What did the Court say?
- The Supreme Court has held that deserted wives and children are entitled to alimony/maintenance from the husbands from the date they apply for it in a court of law.
- To ensure that judicial orders for grant of maintenance are duly enforced by husbands, the court said a violation would lead to punishments such as civil detention and even attachment of the property of the latter.
- The plea of the husband that he does not possess any source of income ipso facto does not absolve him of his moral duty to maintain his wife, if he is able-bodied and has educational qualifications, the court declared.
- Both the applicant wife and the respondent-husband have to disclose their assets and liabilities in a maintenance case.
- Other factors such as “spiralling inflation rates and high costs of living” should be considered, but the wife should receive alimony which fit the standard of life she was used to in the matrimonial home.
Covering expenses
- The expenses of the children, including their education, basic needs and other vocational activities, should be factored in by courts while calculating the alimony.
- Education expenses of the children must be normally borne by the father. If the wife is working and earning sufficiently, the expenses may be shared proportionately between the parties.
Permanent alimony
- The court opined it would not be equitable to order a husband to pay his wife permanent alimony for the rest of her life, considering the fact that in contemporary society marriages do not last for a reasonable length of time.
- Anyway, the court said, the duration of marriage should be accounted for while determining the permanent alimony.
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: PMI
Mains level: Not Much
The services sector has PMI has signalled first expansion since February this year.
Try this PYQ:
Q.Which of the following brings out the ‘Consumer Price Index Number for Industrial Workers?
(a) The Reserve Bank of India
(b) The Department of Economic Affairs
(c) The Labour Bureau
(d) The Department of Personnel and Training
Purchasing Managers’ Index
- PMI is an indicator of business activity — both in the manufacturing and services sectors.
- It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month before.
- It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.
How is the PMI derived?
- The PMI is derived from a series of qualitative questions.
- Executives from a reasonably big sample, running into hundreds of firms, are asked whether key indicators such as output, new orders, business expectations and employment were stronger than the month before and are asked to rate them.
How does one read the PMI?
- A figure above 50 denotes expansion in business activity. Anything below 50 denotes contraction.
- Higher the difference from this mid-point greater the expansion or contraction. The rate of expansion can also be judged by comparing the PMI with that of the previous month data.
- If the figure is higher than the previous month’s then the economy is expanding at a faster rate. If it is lower than the previous month then it is growing at a lower rate.
What are its implications for the economy?
- The PMI is usually released at the start of the month, much before most of the official data on industrial output, manufacturing and GDP growth becomes available.
- It is, therefore, considered a good leading indicator of economic activity.
- Economists consider the manufacturing growth measured by the PMI as a good indicator of industrial output, for which official statistics are released later.
- Central banks of many countries also use the index to help make decisions on interest rates.
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: Char chapori
Mains level: Not Much
A proposed museum reflecting the “culture and heritage of the people living in char-chaporis” has stirred up a controversy in Assam.
Do you know?
Phumdis are a series of floating islands, exclusive to the Loktak Lake in Manipur. They cover a substantial part of the lake area and are heterogeneous masses of vegetation, soil and organic matter, in different stages of decay.
What are char-chaporis?
- A char is a floating island while chaporis are low-lying flood-prone riverbanks.
- They are used interchangeably as they keep changing shapes — a char can become a chapori, or vice versa, depending on the push and pull of the Brahmaputra.
- Prone to floods and erosion, these areas are marked by low development indices.
- While Bengali-origin Muslims primarily occupy these islands, other communities such as Misings, Deoris, Kocharis, Nepalis also live here.
- In the popular imagination, however, chars have become synonymous to the Bengali-speaking Muslims of dubious nationality.
Who are the Miyas?
- The ‘Miya’ community comprises descendants of Muslim migrants from East Bengal (now Bangladesh) to Assam.
- They came to be referred to as ‘Miyas’, often in a derogatory manner.
- The community migrated in several waves — starting with the British annexation of Assam in 1826, and continuing into Partition and the 1971 Bangladesh Liberation War.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now