Note4Students
From UPSC perspective, the following things are important :
Prelims level: ISDS
Mains level: Paper 3- Termination of BITs and its implications for India
The article examine the termination of agreement for the development of East Container Terminal by Sri Lanka in the context of unilateral termination of bilateral investment treaties by India.
Context
- Recently, Sri Lanka terminated 2019 agreement with India and Japan that aimed to jointly develop the strategic East Container Terminal (ECT) at the Colombo port.
- Apart from analysing the diplomatic fallout of this problematic decision for India-Sri Lanka ties, the issue also needs to be looked at through the prism of the India-Sri Lanka bilateral investment treaty (BIT).
India-Sri Lanka BIT and its termination
- In 1997, India and Sri Lanka signed a BIT to promote and protect foreign investment in each other’s territories.
- It empowers individual foreign investors to directly sue the host state before an international tribunal if the investor believes that the host state has breached its treaty obligations.
- This is known as investor-state dispute settlement (ISDS).
- Article 3(2) of this treaty provides that investments and returns of investors of each country shall, at all times, be accorded fair and equitable treatment (FET) in the other country’s territory.
- The normative content of the FET provision has been fleshed out by scores of ISDS tribunals in the last two decades.
- The tribunals have persistently held that an important component of the FET provision is that the host state should protect the legitimate expectations of foreign investors.
- In a case known as International Thunderbird Gaming Corporation v Mexico, it was held that the concept of legitimate expectations relates to a situation where the host state’s conduct creates reasonable and justifiable expectations on the part of an investor (or investment) to act in reliance on said conduct, such that a failure to honour those expectations could cause the investor (or investment) to suffer damages.
- Sri Lanka, by signing the agreement to jointly develop the ECT at the Colombo port, created such expectations on the part of Indian investors.
- However, the twist in the tale is that India unilaterally terminated the India-Sri Lanka BIT on March 22, 2017.
- This termination was part of the mass repudiation of BITs that India undertook in 2017 as a result of several ISDS claims being brought against it.
- In cases of such unilateral termination, survival clauses in BITs assume significance because they ensure that foreign investment continues to receive protection during the survival period.
- But, in the case of the investment in developing the ECT at the Colombo port, this survival clause will be inconsequential, since the agreement was signed in 2019, i.e., after India unilaterally terminated the BIT.
Important lessons
- As a consequence of the onslaught of ISDS claims in the last few years, India has developed a protectionist approach towards BITs.
- However, an important attribute that perhaps has not received much attention is that BITs are reciprocal.
- BITs do not empower merely foreign investors to sue India, but also authorise Indian investors to make use of BITs to safeguard their investment in turbulent foreign markets.
- Accordingly, given India’s emergence as an exporter, and not just an importer of capital, the government should revisit its stand on BITs.
Consider the question “Examine the implications of unilateral termination of bilateral investment treaties(BITs) by India.”
Conlcusion
India needs to adopt a balanced approach towards BITs with an effective ISDS provision. This will facilitate Indian investors in defending their investment under international law should a country, like Sri Lanka, renege on an agreement.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Vivad se Vishwas scheme
Mains level: Paper 3- Measures adopted for increasing transparency and compliance in taxation.
Article explains the measures adopted in the Budget 2021-22 for increasing compliance and transparency.
Maintaining the status quo
- COVID-19 has upset fiscal maths around the world.
- It is in this context that the Union budget assumed significance this year.
- The expectations of tax breaks were rife on the presumption that this could boost economic activity.
- Whereas others called for a tax on stock market gains.
- Unyielding to such requests, the budget was based on a pragmatic approach to maintain the status quo.
Why higher tax rates would not help much
- Nearly 60 per cent of corporate taxes are paid by the 0.06 per cent of the companies belonging to the top income bracket.
- On the other hand, among individual taxpayers, only 0.17 per cent report taxable incomes above Rs 25 lakh.
- Therefore, higher taxes would either yield little revenue or adversely affect economic activity.
Need to shift focus to compliance and greater transparency
- For increasing compliance and transparency, significant proposals have been made:
- 1) Limited the window for reopening the case to 3 years.
- 2) The introduction of the requirement for an assessment officer to provide facts on the basis of which he/she re-assesses.
- 3) The faceless Income Tax Appellate Tribunal (ITAT).
- By making the process of assessment faceless the major causes for litigation are addressed.
- The limited window of re-opening cases for small taxpayers and due consideration of risk management strategy and the CAG’s observations in carrying out such assessments marks an improvement in the process.
Dispute resolution mechanism with better interface
- The Vivad se Vishwas scheme was launched in 2020 to address piling litigation and it is reported that collections under this scheme have been Rs 85,000 crore for 1,10,000 taxpayers.
- This is a small fraction as compared to the Rs 4.34 lakh crore in corporate taxes and Rs 4.49 lakh crore in income taxes that are locked in dispute.
- Therefore, a dispute resolution mechanism that allows for better interface between the taxpayer and the department may, in fact, be relatively beneficial.
Consider the question “Examine the reasons for small tax base in India. Examine the measures adopted in the Budget 2021-22 for increasing compliance and transparency.”
Conclusion
The budget estimates suggest that corporate tax and income tax collections are expected to increase by 22 per cent. With an expected growth rate of 14 per cent in nominal GDP, the remaining gains in taxes are presumably expected from higher compliance or realisation of taxes due. Whether this will pan out remains to be seen.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- How governments are dealing with the dominance of social media
The article discusses the issue of growing influence of social media companies and response of the governments.
Issues with the growing influence of social media companies
- In the US the last two general elections in 2016 and 2020 have seen strong charges of political manipulation by social media companies.
- But influence of social media companies is not limited ot elections, it envelops a range of domestic and international issues.
- These issuesincludes: the concentration of economic power, individual rights against the state as well as the corporation, disinformation, the rise of digital geopolitics, and global digital governance.
How governments are responding
- Democratic forces need to consult each other and collaborate in developing new norms for managing the digital world.
- In the US, both the left and right are demanding that digital behemoths like Amazon, Google, Facebook and Twitter are brought under greater control if not broken up.
- Last December, the European Commission proposed new rules to promote competition and fairness in digital markets.
- The EU is likely to approve a Digital Markets Act next year.
- Australia has decreed that Google must work out an arrangement with Australian newspapers to pay for the use of their content.
- The current digital giants, however, are not easily amenable to political attack.
- They are bigger than the biggest we have known.
3 Issues with business practices of social media companies
- Governments are now questioning the sharp business practices of the tech giants especially labour rights, taxes and politics.
- While the tech giants have created a lot of new wealth, some of them have sharply squeezed the labour.
- In California, trade unions are battling against the success of Uber and Lyft to turn employees into “contract workers” to deny them multiple benefits.
- Digital giants have been aggressive tax evaders.
- On the political front recently,Twitter and Facebook shut down President Donald Trump’s accounts.
- European leaders raised important questions about social media’s actions against Trump.
Way forward
- Answer to deal with social media on political front lies in laying down a clear set of obligations and responsibilities for the digital giants.
- This move will help in building digital sovereignty.
- The world’s democracies must get together to discuss global digital governance.
Consider the question “What are the challenges posed by the growing influence of social media companies in the democratic countries?”
Conclusion
As governments push back against big tech, a new challenge presents itself — reining in the growing power of the state in the digital age. The answer lies in democracies modernising their laws to protect freedoms in the era of technological transformation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Geospatial data
Mains level: Benefits of the liberalized scheme
In sweeping changes to the country’s mapping policy, the government has announced liberalisation of norms governing the acquisition and production of geospatial data.
Q.What do you mean by Geo-Spatial Data? What are its economic and strategic significance?
What is the news?
- The Ministry of Science and Technology has released new guidelines for the Geo-spatial sector in India.
- It deregulated the existing protocol and liberalizes the sector to a more competitive field.
What is a Geo-Spatial Data?
- Geospatial data is data about objects, events, or phenomena that have a location on the surface of the earth.
- The location may be static in the short-term, like the location of a road, an earthquake event, malnutrition among children, or dynamic like a moving vehicle or pedestrian, the spread of an infectious disease.
- Geospatial data combines location information, attribute information, and often also temporal information or the time at which the location and attributes exist.
- Geo-spatial data usually involves information of public interest such as roads, localities, rail lines, water bodies, and public amenities.
- The past decade has seen an increase in the use of geospatial data in daily life with various apps such as food delivery apps like Swiggy or Zomato, e-commerce like Amazon or even weather apps.
What is the present policy on geospatial data?
- There are strict restrictions on the collection, storage, use, sale, dissemination of geo-spatial data and mapping under the current regime.
- The policy had not been renewed in decades and has been driven by internal as well as external security concerns.
- Private companies need to navigate a system of permissions from different departments of the government as well as the defence and Home Ministries, to be able to collect, create or disseminate geospatial data.
Why has the government deregulated geospatial data?
- This system of acquiring licenses or permission, and the red tape involved, can take months, delaying projects, especially those that are in mission mode – for both Indian companies as well as government agencies.
- The deregulation eliminates the requirement of permissions as well as scrutiny, even for security concerns.
- Indian companies now can self-attest, conforming to government guidelines without actually having to be monitored by a government agency- these guidelines, therefore, place a great deal of trust in Indian entities.
- There is also a huge lack of data in the country which impedes planning for infrastructure, development and businesses which are data-based.
- The mapping of the entire country that too with high accuracy, by the Indian government alone could take decades.
- The government, therefore, felt an urgent need to incentivise the geospatial sector for Indian companies and increased investment from private players in the sector.
- Large amounts of geospatial data are also available on global platforms, which makes the regulation of data that is freely available in other countries, untenable.
What next?
- While for decades, geospatial data has been a priority for strategic reasons and for internal and external security concerns.
- This priority has seen a shift in the past 15 years – geospatial data has now become imperative for the government in planning for infrastructure, development, social development as well as the economy.
- More and more sectors such as agriculture, environment protection, power, water, transportation, communication, health (tracking of diseases, patients, hospitals etc) are relying heavily on this data.
- There has also been a global push for open access to geospatial as it affects the lives of ordinary citizens.
Expected impacts
- By liberalizing the system, the government will ensure more players in the field, the competitiveness of Indian companies in the global market, and more accurate data available to both the government to formulate plans and administer, but also for individual Indians.
- Startups and businesses can now also use this data in setting up their concerns, especially in the sector of e-commerce or geospatial based apps – which in turn will increase employment in these sectors.
- Indian companies will be able to develop indigenous apps, for example, an Indian version of Google maps.
- There is also likely to be an increase in public-private partnerships with the opening of this sector with data collection companies working with the Indian government on various sectoral projects.
- The government also expects an increase in investment in the geospatial sector by companies, and also an increase in export of data to foreign companies and countries, which in turn will boost the economy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Impact of fuel prices on inflation
Mains level: Global oil price dynamics
Diesel and petrol prices have hit record highs across the country.
Govt explanation
- The government reasons that global crude oil prices have risen by more than 50 per cent to over $63.3 per barrel since October, forcing oil retailers to increase pump prices.
- That, however, is only partly true.
- Indian consumers are already paying much higher than what they were paying last January, even though crude prices are yet to reach levels of early last year.
Note: Petrol and diesel do not come under the purview of goods and services tax (GST).
Fuel price dynamics in India
- Retail petrol and diesel prices are in theory decontrolled — or linked to global crude oil prices.
- It means that if crude prices fall retails prices should come down too, and vice versa.
- But this does not happen in practice, largely because oil price decontrol is a one-way street in India.
- When global crude oil prices fall and prices slide, the government slaps fresh taxes and levies to ensure that it rakes in extra revenues.
- The consumer should have ideally benefited by way of lower pump prices, is forced to either shell out what she’s already paying or spend even more for every litre of fuel.
- The main beneficiary in this subversion of price decontrol is the government.
Why crude oil prices are rising now?
- Prices collapsed in April 2020 after the pandemic spread around the world, and demand fell away.
- But as economies have reduced travel restrictions and factory output has picked up, global demand has improved, and prices have been recovering.
- The controlled production of crude amid rising demand has been another key factor in boosting oil prices, with Saudi Arabia voluntarily cutting its daily output.
What is the impact of taxes on retail prices of auto fuels?
- The central government hiked the central excise duty on petrol to Rs 32.98 per litre during the course of last year from Rs 19.98 per litre at the beginning of 2020.
- It increased the excise duty on diesel to Rs 31.83 per litre from Rs 15.83 over the same period to boost revenues as economic activity fell due to the pandemic.
- A number of states have also hiked sales tax on petrol and diesel to shore up their revenues.
How much tax do we pay now?
Currently, state and central taxes amount to around 180 per cent of the base price of petrol and 141 per cent of the base price of diesel in Delhi.
How will these hikes impact inflation?
- Experts note that the impact of rising fuel inflation has been counterbalanced by declining food inflation, but that consumers with greater expenditure on travel are feeling the pinch of higher prices.
- Rising fuel inflation may pinch consumers who have to travel further for work and have access to affordable cereals etc.
- The urban population would be more impacted by rising fuel prices than the rural population — however, a weak monsoon may lead to rural India being hit as farmers are forced to rely more on diesel-powered irrigation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Dickinsonia, Bhimbetka
Mains level: Geological time scale
Bhimbetka, which has yielded a fossil of Dickinsonia dating back about 550 million years, is the first time the particular fossilized organism has been recorded in India.
Why does this fossil matter?
- It dates back to an era regarded as the precursor to the explosion of life on earth during the Cambrian period.
- Thus it puts India firmly on the map for studies of the Ediacaran era along with Australia and Russia.
Here’s what makes the discovery a global milestone:
(a) Ediacaran Period
- The finding gives lead about the earliest living species during a period of the earth’s history known as the Ediacaran, named after the Ediacara Hills in South Australia.
- This is the period in Earth’s history when Dickinsonia and several multicellular organisms existed.
- It was approximately 635 million years ago (Ma) and 541 Ma, with the living creatures of the era, called vendobionts.
Now take this opportunity to revise the Geological time scale from your NCERTs. Try differentiating between different era, periods and epoch.
(b) India’s Proximity to Australia
- Studies of the rock characteristics in and around Bhimbetka show that they share several characteristics with rocks in Australia.
- Dickinsonia fossils from India were found by the scientists to be identical to the Rawnsley Quartzite in South Australia.
- This provides evidence of their age and the proximity of the two landmasses in Gondwanaland in that era.
- The evidence however did not support reconstructions adjusted for the polar wander phenomenon [which involves motion of continents over geologic time and its impacts].
Use of Zircon dating
- The age of fossil rock is determined using Zircon isotopes.
- Zircon dating of the youngest Maihar sandstone in Madhya Pradesh puts its age at 548 Ma.
- The lower Bhander group in the Son and Chambal valleys yielded an isotope-derived age for limestones ranging from 978 Ma to 1073 Ma, situating it in the older Tonian period.
- The Ediacaran period was the precursor to the Cambrian (about 541 Ma to 485.4 Ma) when the earth witnessed an explosion of life forms and much of which makes up modern animal life today.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Sandes
Mains level: Secured instant messaging
The National Informatics Centre (NIC) has launched an instant messaging platform called Sandes on the lines of WhatsApp. Open initially only to government officers, it has now been released for the common public as well.
Features of Sandes Platform
- The instant messaging app, called Sandes, has an interface similar to many other apps currently available in the market.
- Like WhatsApp, the new NIC platform can be used for all kinds of communications by anyone with a mobile number or email id.
- Although there is no option to transfer the chat history between two platforms, the chats on government instant messaging systems or GIMS can be backed up to a users’ email.
- It also offers features such as group making, broadcast message, message forwarding and emojis.
- Further, as an additional safety feature, it allows a user to mark a message as confidential, which will allow the recipient to be made aware the message should not be shared with others.
Why need such instant messaging platform?
- Following the nationwide lockdown, the government felt the need to build a platform to ensure secure communication between its employees as they worked from home.
- The idea for a secure communication network dedicated exclusively to government employees has been in the works for the past four years.
- In August 2020, the NIC released the first version of the app, which said that the app could be used by both central and state government officials for intra and inter-organisation communication.
- The app was initially launched for Android users and then the service was extended to iOS users.
Limitations of the app
- The limitation, however, is that the app does not allow the user to change their email id or registered phone number.
- The user will have to re-register as a new user in case they wish to change their registered email id or phone number on the app.
Do you remember?
[Burning Issue] WhatsApp Snooping
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: MapmyIndia, Various tools of ISRO
Mains level: Geospatial data and its utilization
The ISRO has joined hands with MapmyIndia to combine their geospatial expertise and build holistic solutions by leveraging their geoportals.
Note various geo-spatial solutions of ISRO mentioned in the newscard.
What is the Project?
- It combines the power of MapmyIndia’s digital maps and technologies with ISRO’s catalogue of satellite imagery and earth observation data.
- Indian users would not be dependent on foreign organisations for maps, navigation and geospatial services, and leverage made-in-India solutions instead.
Various components
The collaboration will enable them to jointly identify and build holistic geospatial solutions utilising the ISRO’s earth observation datasets such as-
- IRNSS (Indian Regional Navigation Satellite System) called NavIC (Navigation with Indian Constellation, is India’s own navigation system, developed by ISRO.
- Bhuvan is the national geo-portal developed and hosted by ISRO comprising geospatial data, services and tools for analysis.
- VEDAS (Visualization of Earth observation Data and Archival System) is an online geo-processing platform using an optical, microwave, thermal and hyperspectral EO data covering applications particularly meant for academia, research and problem solving, according to ISRO.
- MOSDAC (Meteorological and Oceanographic Satellite Data Archival Centre)is a data repository for all the meteorological missions of ISRO and deals with weather-related information, oceanography and tropical water cycles.
About MapmyIndia
- MapmyIndia is an Indian technology company that builds digital map data, telematics services, location-based SaaS (Software as a service) and GIS AI services.
- The company was founded in 1992 and is headquartered at New Delhi with regional offices in Mumbai and Bengaluru and smaller offices across India.
- Its map covers all 7.5 lakh villages, 7500+ cities at street and building-level, connected by all 63 lakh kilometres of road network pan India and within cities, in total providing maps for an unparalleled 3+ crore places across India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Giant Leatherback Turtle
Mains level: Not Much
Proposals for tourism and port development in the Andaman and Nicobar (A&N) Islands has left conservationists worried over the fate of some of the most important nesting populations of the Giant Leatherback turtle.
What is the news?
- There is concern that at least three key nesting beaches — two on Little Andaman Island and one on Great Nicobar Island — are under threat due to mega “development” plans announced in recent months.
- These include NITI Aayog’s ambitious tourism vision for Little Andaman and the proposal for a mega-shipment port at Galathea Bay on Great Nicobar Island.
Giant Leatherback Turtle
IUCN status: Vulnerable
- The largest of the seven species of sea turtles on the planet and also the most long-ranging, Leatherbacks are found in all oceans except the Arctic and the Antarctic.
- Within the Indian Ocean, they nest only in Indonesia, Sri Lanka and the A&N Islands.
- They are also listed in Schedule I of India’s Wildlife Protection Act, 1972, according it the highest legal protection.
- The population in A&N Islands is among the most important colonies of the Leatherback globally.
About Galathea Bay
- The Galathea Bay is adjacent to Galathea National Park in Great Nicobar Island.
- It was earlier proposed as a wildlife sanctuary in 1997 for the protection of turtles and was also the site of a long-term monitoring programme.
- The monitoring was stopped after the tsunami devastation of 2004, but it provided the first systematic evidence of numbers and importance of these beaches.
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