Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Issues faced by MSMEs and dealing with them
The article highlights the importance of MSMEs for the economy and issues faced by the sector.
Context
- The economy may have recovered from the trough of April but is yet to show signs of a sustained recovery on an annual basis.
- The number of establishments registered with the Employees’ Provident Fund Organisation declined by more than 30,800 in October, compared to September.
Incentives for MSMEs
- The above-cited numbers are indicator of the vulnerability of the employment situation, but also as a performance indicator of micro, small and medium enterprises (MSMEs).
- The MSME sector is vital for employment generation, as also for an economic recovery to sustain.
- Under Atmanirbhar Rozgar Yojana the government will bear the entire provident fund contributions for two years of all new employees hired.
- However, similar announcements earlier failed to enthuse the MSME sector.
- Along with the employment incentive, the MSME sector has also been provided collateral free credit.
- But the offtake from the scheme has not been impressive, pointing to deeper issues.
Why the incentives failed
- Part of the reason these incentives failed lies in the very nature of the MSME sector and its heterogeneity, which is inherent in its definition as a residual sector once large enterprises are excluded.
- A 2015-16 survey of the National Statistical Office shows that almost 94% of these enterprises are tiny, with less than four workers.
- Only 31% are registered under various acts, but these face regulatory hurdles, some of them related to compliance with the goods and service tax (GST).
Problems faced by MSMEs
- In 2015-16 survey of the National Statistical Office two most important problems mentioned were a lack of demand and unpaid dues.
- On both, the situation after 2015-16 has worsened, with the economy slowing down and the government responsible for the largest unpaid dues.
- With the finances of state governments also strained due to pandemic, the fiscal situation has added to the problem of unpaid dues.
- The sector is also affected by the political economy of state intervention, which seems biased in favour of large corporations.
- Unlike the ₹1.5 trillion tax bonanza that large companies received as part of a pre-pandemic stimulus, there was no such bounty for the MSME sector.
- With most state governments relaxing labour regulations for large companies, even the low-wage advantage that this sector enjoyed has got diminished.
- Policy changes have not only reduced the compliance burden of labour laws, but have also helped large enterprises reduce wage costs.
- Consequently, the MSME sector has to now compete with a corporate sector that has easy access to capital, cheap and unregulated labour and a lower tax burden than before.
Way forward
- Apart from the fiscal stimulus, the sector requires a political-economy approach that prioritizes MSME interests.
- India needs to ease the regulatory burden of small units and aid their survival through fiscal support.
- Above all, they need a level-playing field vis-à-vis big businesses.
Consider the question “Despite several incentives by the government MSME sector fails to play the role expected of it. What are the issues faced by the sector and suggest the measure to deal with the issues.”
Conclusion
Given the important role played by the sector in the economy, issues faced by it must be addressed on ani urgent basis to revive the economy battered by the pandemic.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Challenges to democracy
Democracies across the world are facing several challenges. The article examines these challenges.
Threats to democracy
- Efforts by Donald Trump, to negate the result of the recently held presidential elections, indicates a new set of tactics, previously seen only in dictatorships.
- In the case of the U.S., one of the world’s oldest democracies, what we are witnessing is a deep divide.
- This division is evident in many other democratic nations today.
- This is true of many other democracies as well and must be viewed as a wake-up call.
- What is evident is that issues of identity, or threats to identity, are becoming an important issue in elections across democracies.
- Democracies already confront such problems, but it will become still more evident as time passes.
- Manipulation of grievances by using psychometric techniques (as done by Cambridge Analytica), and the use of ‘deep fakes’ made possible through Artificial Intelligence, further enhances the threat to current notions of democracy.
Troubles to democracy in Europe
- Europe will have to deal with the declining importance of America in global politics.
- An uncertain Brexit will further damage the prospects of both the United Kingdom and Europe.
- Russia, under Vladimir Putin, remains an enigma, for despite its military strength and strategic congruence with China, its future appears increasingly uncertain.
- France displays even greater fragility and French values appear to be undergoing major changes.
- The recent wave of terrorist attacks has been a major trigger, raising questions about long-held secular beliefs.
Return of terrorism
- Terrorism is resurfacing, and with renewed vigour.
- The al-Qaeda is again becoming prominent. The IS, which many thought had been vanquished has returned in full force.
- Recently IS has carried out spectacular attacks in France and in Austria which is a reminder of the transnational character of the threat it poses to democratic countries.
- They combine symbolism with spectacular violence.
- The intent is to shock the public at large, and produce a reaction across the entire Muslim world, reigniting the fading embers of a religio-cultural conflict.
Information manipulation
- Alongside the above issues, there is a growing concern across the globe about increasing efforts to manipulate information in order to perpetuate power.
- Manipulation of information — and also events — to achieve certain desired ends, is becoming the stock-in-trade of many a democratic regime as well.
- Many democratic nations today resort to manipulating data to support or prop up the government’s version of events. Informational autocracy is, hence, the latest danger that threatens democracies.
India’s challenges
1) Threat to democracy
- In some regions, especially where mid-term elections are scheduled, as in West Bengal, the atmosphere today is highly polarised.
- The ghosts of the Citizenship (Amendment) Act and the National Register of Citizens have by no means been laid to rest.
- Jammu and Kashmir (J&K) is witnessing a kind of surface calm, but beneath this, there are evident tensions.
- Aggravating this situation are Pakistan’s efforts to push in terrorists in ever larger numbers.
Uncertain external environment
- The downward spiral in its relations with China has not been arrested.
- 15 Asia-Pacific nations, including China, have signed on to the world’s biggest trade bloc, the Regional Comprehensive Economic Partnership (RCEP) — from which India has been excluded.
- The RCEP, which covers almost a third of the world’s economy, is perceived as the springboard for future economic recovery across the region.
- India’s absence from RCEP represents a cardinal failure of India’s bargaining strategy.
- India’s isolation is evident from the fact that even a weak Pakistan is pursuing a policy of provocation— the latest provocation being the holding of Assembly elections in Gilgit-Baltistan.
- India is again being steadily marginalised in Afghanistan, where the control of the Taliban is increasing, with all other players accomodating Taliban.
Consider the question “What are the various challenges faced by the democracies across the world and India is no exception to it. In the context of this, examine the issues facing democracy in India.”
Conclusion
Though democracies across the world are facing several issues, resilience inherent in them will help them clear the chaos created by these issues.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: RCEP
Mains level: Paper 3- Economic liberalisation and its impact on Indian economy
The article counters the argument made by External Affairs Minister S. Jaishankar about the impact of economic liberalisation on India’s economy.
Impact of liberalism on India
- India’s External Affairs Minister S. Jaishankar recently disapproved of free trade and globalisation.
- About FTA’s he said that “the effect of past trade agreements has been to de-industrialise some sectors.”
- These observations were made days after countries of the Asia-Pacific region signed the Regional Comprehensive Economic Partnership (RCEP) agreement.
- He said that , “in the name of openness, we have allowed subsidi[s]ed products and unfair production advantages from abroad to prevail”
Flaws in the argument
- There are several flaws in Mr. Jaishankar’s arguments.
1) India cannot be the part of global value chain
- India is now truly at the margins of the regional and global economy.
- With trade multilateralism at the World Trade Organisation (WTO) remaining sluggish, FTAs are the gateways for international trade.
- By not being part of any major FTA, India cannot be part of the global value chains.
- India’s competitors such as the East Asian nations, by virtue of they being part of mega-FTAs, are in an advantageous position to be part of global value chains and attract foreign investment.
2) Indian economy has bee relatively closed economy
- India is surely a much more open economy than it was three decades ago, globally, India continues to remain relatively closed when compared to other major economies.
- According to the WTO, India’s applied most favoured nation import tariffs are 13.8%, which is the highest for any major economy.
- Likewise, according to the United Nations Conference on Trade and Development, on the import restrictiveness index, India figures in the ‘very restrictive’ category.
- From 1995-2019, India has initiated anti-dumping measures 972 times (the highest in the world) trying to protect domestic industry.
3) Economic survey accepts the benefits of FTAs
- The External Affairs Minister is contradicting government’s economic survey presented earlier this year.
- The survey concluded that India has benefitted overall from FTAs signed so far.
- Blaming FTAs for deindustrialisation means ignoring real problem of the Indian industry — which is the lack of competitiveness and absence of structural reforms.
4) India has been a major beneficiary of economic globalisation
- It cannot be ignored that India has been one of the major beneficiaries of economic globalisation — a fact attested by the International Monetary Fund (IMF).
- Post-1991, the Indian economy grew at a faster pace, ushering in an era of economic prosperity.
- According to the economist Arvind Panagariya, poverty in rural and urban India, which stood at close to 40% in 2004-05, almost halved to about 20% by 2011-12.
- This was due to India clocking an average economic growth rate of almost 8%.
Conclusion
Desire to make India a global destination for foreign investment is a pipe dream because it is naive to expect foreign investors to be gung-ho about investing in India if trade protectionism is the government’s official policy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Population Register
Mains level: NPR, NRC issues
The office of the Registrar General of India (RGI) has said the schedule or the questionnaire of the National Population Register (NPR) is being finalised.
The National Population Register (NPR)
- The NPR is a database containing a list of all usual residents of the country. Its objective is to have a comprehensive identity database of people residing in the country.
- It is generated through house-to-house enumeration during the “house-listing” phase of the census, which is held once in 10 years.
- The last census was in 2011, and the next will be done in 2021 (and will be conducted through a mobile phone application).
- A usual resident for the purposes of NPR is a person who has resided in a place for six months or more and intends to reside there for another six months or more
How it is different from the Census?
- The census involves a detailed questionnaire and there were 29 items to be filled up in the 2011 census.
- They aimed at eliciting the particulars of every person, including age, sex, marital status, occupation, birthplace, mother tongue, religion, whether they belonged to any SC or ST etc.
- On the other hand, NPR collects basic demographic data and biometric particulars.
- Once the basic details of the head of the family are taken by the enumerator, an acknowledgement slip will be issued. This slip may be required for enrolment in NPR, whenever that process begins.
- The details will be recorded in every local (village or ward), sub-district (tehsil or taluk), district and state level.
- Once the details are recorded, there will be a population register at each of these levels. Together, they constitute the National Population Register.
What is the legal basis for the NPR?
- While the census is legally backed by the Census Act, 1948, the NPR is a mechanism outlined in a set of rules framed under the Citizenship Act, 1955.
- Section 14A was inserted in the Citizenship Act, 1955, in 2004, providing for the compulsory registration of every citizen of India and the issue of a “national identity card” to him or her.
- It also said the Central government may maintain a “National Register of Indian Citizens”.
- The Registrar General India shall act as the “National Registration Authority” (and will function as the Registrar General of Citizen Registration).
- Incidentally, the Registrar General is also the country’s Census Commissioner.
Attempt this question
Q.Enumerate the major points of the ‘Assam accord (1985)’. How is it associated with the present issue of the National Register of Citizens?
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Cord Blood Banking
Mains level: Stem Cells Therapy
Community Cord Blood Banking, a stem cell banking initiative, has recently helped save the life of a girl child making it India’s first dual cord blood transplant through an unrelated donor.
Must read:
What is Cord Blood Banking?
- Community Banking is a new sharing economy model of stem cell banking that was pioneered by LifeCell in India.
- Parents who choose to store their child’s cord blood in a community bank will have access, in the event of medical need, to all of the other cord blood units in the bank.
- A community bank is like a public cord blood bank in that the members are supporting each other, but it is also like a private bank because the members pay for this service and outsiders cannot participate.
- It can fill an unmet health need in a country like India, where there is no national network of public banks and the population has unique genetics that are not covered by banks elsewhere in the world.
- It is different from “hybrid” banking where both public and family banks share a laboratory, because in hybrid banks the pubic and family sides operate separately.
- In a community bank the public and family functions are blended.
Benefits of cord blood
- It gives protection to a baby against all conditions treatable using stem cells (own & donor).
- It gives protection to the baby’s siblings, parents and grandparents (maternal & paternal) by providing unrelated donor stem cells.
Back2Basics: Stem Cell Therapy
- It is a type of treatment option that uses a patient’s own stem cells to repair damaged tissue and repair injuries.
- It is used to treat more than 80 disorders including neuromuscular and degenerative disorders. Eg. Bone-marrow transplant is used in Leukemia (blood cancer), sickle-cell anemia, immunodeficiency disorders.
- Stem cells are usually taken from one of the two areas in the patient’s body: bone marrow or adipose (fat) tissue in their upper thigh/abdomen.
- Because it is common to remove stem cells from areas of stored body fat, some refer to stem cell therapy as “Adipose Stem Cell Therapy” in some cases.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not Much
Mains level: Road safety issues
The Delhi government has told the Delhi High Court that a personal vehicle on a public road cannot be said to be a private zone — rather, it is a public space.
Do you know?
India sees the largest number of road fatalities in the world. More than 1.5 lakh people lost their lives in road crashes in the country in 2018, according to government data.
Why such an argument?
- The argument was given to defend its decision of making it compulsory for people to wear masks when they are travelling.
Supreme Court’s definition of ‘public space’
- The Supreme Court in one of its ruling has said defined a “public place” to mean any place to which the public has access, whether as a matter of right or not — and includes all places visited by the general public, and also includes any open space.
- The keywords are “any place to which public have access”, which phrase is further qualified by the phrase “whether as a matter of right or not”, the court noted.
- When a private vehicle is passing through a public road it cannot be accepted that the public has no access.
- It is true that the public may not have access to a private vehicle as a matter of right but definitely, public has the opportunity to approach the private vehicle while it is on the public road, said the court.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Location of Luxembourg
Mains level: Not Much
Prime Minister has pitched for strengthening ties to further ramp up economic engagement between India and Luxembourg.
Mark the location of Luxembourg. Since it is a landlocked country, there can be a question asking its bordering states.
Luxembourg
- Luxembourg is a small European country, landlocked by Belgium, France and Germany.
- It’s mostly rural, with dense Ardennes forest and nature parks in the north, rocky gorges of the Mullerthal region in the east and the Moselle river valley in the southeast.
- Its capital, Luxembourg City, is famed for its fortified medieval old town perched on sheer cliffs
Why Luxembourg?
- Luxembourg is one of the most important financial centres globally.
- Several Indian companies have raised capital by issuing Global Depositary Receipts at the Luxembourg Stock Exchange.
- Luxembourg-based investment funds hold substantial banking and asset management market share in portfolio investments in India.
- It is also the third-largest source of Foreign Portfolio Investments (FPI) in India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: PM-FME Scheme
Mains level: Food processing industry and the required reforms
Union Minister for Food Processing Industries has inaugurated the capacity building component of the Pradhan Mantri Formalization of Micro food processing Enterprises scheme (PM-FME Scheme).
The event also sought the launch of the GIS One District One Product (ODOP) Digital Map of India.
Practice question for mains:
Q.What is the PM FME Scheme? Discuss its potential to neutralize various challenges faced by India’s unorganized food industries
PM-FME Scheme
- Launched under the Aatmanirbhar Bharat Abhiyan, the PM-FME Scheme is a centrally sponsored scheme.
- It aims to enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector.
- It seeks to provide support to Farmer Producer Organizations, Self Help Groups, and Producers Cooperatives along their entire value chain.
- Under the PM-FME scheme, capacity building is an important component.
- The scheme envisages imparting training to food processing entrepreneurs, various groups, viz., SHGs / FPOs / Co-operatives, workers, and other stakeholders associated with the implementation of the scheme.
Features of the scheme
- The Scheme adopts One District One Product (ODODP) approach to reap the benefit of scale in terms of procurement of inputs, availing common services and marketing of products.
- The States would identify food product for a district keeping in view the existing clusters and availability of raw material.
- The ODOP product could be a perishable produce based product or cereal-based products or a food product widely produced in a district and their allied sectors.
- An illustrative list of such products includes mango, potato, litchi, tomato, tapioca, kinnu, bhujia, petha, papad, pickle, millet-based products, fisheries, poultry, meat as well as animal feed among others.
- The Scheme also place focus on waste to wealth products, minor forest products and Aspirational Districts.
About ODOP Digital Map
- The GIS ODOP digital map of India provides details of ODOP products of all the states to facilitate the stakeholders.
- The digital map also has indicators for tribal, SC, ST, and aspirational districts.
- It will enable stakeholders to make concerted efforts for its value chain development.
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