Note4Students
From UPSC perspective, the following things are important :
Prelims level: Non-Proliferation Treaty (NPT), IAEA
Mains level: India's nunclear energy programme
Other than the imported Russian-built reactor-based project in Tamil Nadu, which is grandfathered under an earlier 1998 agreement, progress of greenfield projects since the Indo-US nuclear deal has been tardy.
Indo-US Nuclear Deal
- The deal was signed in 2008 jointly by then Indian PM Dr. Manmohan Singh and then US President George Bush.
- India agreed to separate its civil and military nuclear facilities and to place all its civil nuclear facilities under International Atomic Energy Agency (IAEA) safeguards.
- In exchange, the United States agreed to work toward full civil nuclear cooperation with India.
- The implementation of this waiver made India the only known country with nuclear weapons which is not a party to the Non-Proliferation Treaty (NPT) but still allowed to carry out global nuclear commerce.
Q. In India, why are some nuclear reactors kept under “IAEA Safeguards” while others are not? (CSP 2020)
(a) Some use Uranium and others use thorium.
(b) Some use imported uranium and others use domestic supplies.
(c) Some are operated by foreign enterprises and others are operated by domestic enterprises.
(d) Some are State-owned and others are privately-owned.
Answer this PYQ in the comment box:
Implementation not in spirit
- The US has been discussing the sale of nuclear reactors to India since the 2008 pact, two subsequent agreements were signed only in 2016 and 2019.
- A “project proposal” to set up six reactors in collaboration with Westinghouse Electric Company (WEC) has been announced, but work is yet to begin.
- WEC, alongside Wilmington-based GE Hitachi Nuclear, has been negotiating to build reactors in India since the nuclear deal was inked.
- The project, however, came under a cloud after WEC filed for bankruptcy in mid-2017 following cost overruns on reactors coming up in the US.
- The GE Hitachi project has barely made any progress.
Back2Basics: Non-Proliferation Treaty (NPT)
- NPT, is an international treaty whose objective is:
- to prevent the spread of nuclear weapons and weapons technology,
- to promote cooperation in the peaceful uses of nuclear energy, and
- to further the goal of achieving nuclear disarmament and general and complete disarmament
- Between 1965 and 1968, the treaty was negotiated by a Committee on Disarmament, an UN-sponsored organization based in Geneva, Switzerland.
- The treaty defines nuclear-weapon states as those that have built and tested a nuclear explosive device before 1 January 1967; these are the United States, Russia, the United Kingdom, France, and China.
- Four UN member states have never accepted the NPT, three of which possess or are thought to possess nuclear weapons: India, Israel, and Pakistan.
- In addition, South Sudan, founded in 2011, has not joined.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Horizontal quota
Mains level: Debate over 50% cap of reservations
The Bihar government recently announced 33% horizontal reservation for women in State engineering and medical colleges.
What are vertical and horizontal reservations?
- Reservation for Scheduled Castes, Scheduled Tribes, and Other Backward Classes is referred to the as vertical reservation.
- It applies separately for each of the groups specified under the law.
- Horizontal reservation refers to the equal opportunity provided to other categories of beneficiaries such as women, veterans, the transgender community, and individuals with disabilities, cutting through the vertical categories.
How are the two categories of quotas applied together?
- The horizontal quota is applied separately to each vertical category, and not across the board.
- For example, if women have 50% horizontal quota, then half of the selected candidates will have to necessarily be women in each vertical quota category.
- This means half of all selected SC candidates will have to be women, half of the unreserved or general category will have to be women, and so on.
- The interlocking of the two types of reservation throws up a host of questions on how certain groups are to be identified.
- For example, would an SC woman be put in the category of women or SC? Since quotas are fixed in percentages, what percentage of quota would be attributed to each?
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Agalega Island
Mains level: Indian ocean power competition
Mauritius has denied a report that it has allowed India to build a military base on the remote island of Agalega.
Agalega Island
- Agaléga are two outer islands of Mauritius located in the Indian Ocean, about 1,000 kilometers north of Mauritius island.
- The islands have a total area of 2,600 ha (6,400 acres).
- There is an MoU between the governments of Mauritius and India to develop the Agaléga islands and resolve infrastructural problems faced by Agaleans.
Why in news?
- India asserts that these new facilities are part of its Security and Growth for All in the Region (SAGAR) policy, which aims to increase maritime cooperation between countries in the region.
- Mauritius, for its part, has indicated that its coastguard personnel will use the new facilities.
- But it is clear that the Indian investment of $250m in developing an airfield, port, and communications hub on this remote island is not aimed at helping Mauritius develop its capacity to police its territorial waters.
Significance of this area
- The Agalega area is currently a blind spot for the Indian Navy and by building a military facility in it, New Delhi hopes to expand its maritime domain awareness.
- In times of conflict, knowing the location of enemy ships and submarines, without being detected in the process, creates a significant advantage.
- China’s naval forays into this region are the true motivator for its expanding naval presence.
- In peacetime, effective maritime domain awareness helps establish international partnerships with like-minded militaries and also acts as a deterrent to both state and non-state adversaries, by signaling reach.
Conclusion
- The Indian Ocean is now increasingly contested.
- Whether or not China is deterred by India’s surveillance efforts, Agaléga is now a pawn in this new era of major power competition across the Indian Ocean and indeed the wider Indo-Pacific region.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 33
Mains level: Paper 2- Issue of strike by government employees
Context
Recently, the Minister of Defence introduced the Essential Defence Services Bill, 2021.
About the Essential Defence Services Bill, 2021
- The Bill seeks to provide for the maintenance of essential defence services so as “to secure the security of nation and the life and property of the public at large”.
- Prohibit strike by ordinance factory staff: It prevents staff of the government-owned ordnance factories from going on strike.
- Power to declare essential service: The Bill seeks to empower the government to declare services mentioned in it as “essential defence services” and prohibit strikes and lockouts in any industrial establishment or unit engaged in such services.
No fundamental right to strike
- There is no fundamental right to strike under Article 19(1)(a) of the Constitution.
- Under Article 33 of the Constitution, Parliament, by law, can restrict or abrogate the rights of the members of the armed forces or the forces charged with the maintenance of public order.
- Thus, for the armed forces and the police, where discipline is the most important prerequisite, even the fundamental right to form an association can be restricted under Article 19(4) in the interest of public order and other considerations.
Supreme Court judgements on the issue
- Many states prohibit strikes: This is not for the first time that strikes by government employees are being made explicitly illegal by the government, many states have similar provisions.
- The Supreme Court in Delhi Police v. Union of India (1986) upheld the restrictions to form association by the members of the non-gazetted police force.
- While the right to freedom of association is fundamental, recognition of such association is not a fundamental right.
- Parliament can by law regulate the working of such associations by imposing conditions and restrictions on their functions, the court held.
- In T.K. Rangarajan v. Government of Tamil Nadu (2003), the Supreme Court held that the employees have no fundamental right to resort to strike.
Conclusion
Strikes cannot be justified on any equitable ground. Strike as a weapon is mostly misused which results in chaos
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 370
Mains level: Paper 2- J and K after 2 years of repeal of Article 370
Context
Two years ago, India bid farewell to Articles 370 and 35 (A), marking the start of a new era in the politics of Jammu and Kashmir.
Assessing the impact of changes on five parameters
1) National unity
- Articles 370 and 35 (A) created an unnatural and unhealthy divide in our nation.
- For every law passed, every rule made, we had to ascertain whether it applied to J&K or not.
- Today, such distinctions are history, J&K has been fully integrated with the other states and Union Territories.
2) Democracy at the grass-root level
- A healthy culture of grassroots-level participation was absent.
- Panchayat polls held: One of the critical deliverables for J&K was to hold panchayat polls, which were finally held in 2020.
- This one step will go a long way in shaping the development paradigm in Jammu and Kashmir.
- Political activity has also picked up across Jammu and Kashmir.
- The Centre’s emphasis on a proper delimitation followed by full-fledged elections is in line with the commitments made to the people of Jammu and Kashmir.
3) Peace
- The third parameter is that of peace.
- The memories of 2008, 2010 and 2016 are still fresh in the minds of the people of Jammu and Kashmir.
- An effort was made to reignite such sparks of tension after the decisions on Article 370 and 35 (A) but the Valley as well as Jammu have remained peaceful.
4) People’s aspirations
- Jammu and Kashmir did not have RTI laws and its SC, ST and OBC communities were not able to get the benefits of reservation
- The fact that the most marginalised groups can now get reservation benefits is a major leap forward in fulfilling the aspirations of the people of J&K.
5) Economic growth
- The Valley is today abuzz with news of action against corruption in key departments and financial bodies in the state.
- Money being sent for public good was being misused by vested interest groups.
- The economic upliftment in the Valley began with the Prime Minister’s Package of 2015.
- This set the stage for extensive spending on physical and social infrastructure.
- With the going of 370 and 35 (A) there is great hope that tourism will pick up in the Valley.
- Incentives given to different sectors of the economy — be it saffron farmers or those who fish trout — combined with a largely peaceful environment is empowering many lives.
- With corruption and leakages drastically reduced, resources are reaching the intended beneficiaries.
Conclusion
The situation in Jammu and Kashmir was never easy. As we enter the Amrut Mahotsav, it is for us to see the new realities in J&K. The people of the state have got the wings to fly and, in the years to come, J&K will make even greater contributions to India’s growth and development.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GVA
Mains level: Paper 3- Issues in GST
Context
After four years, the promise of the Goods and Services Tax (GST) remains substantially unrealised.
Why tax base of GST is not expanding
- The GST is strongly co-related to overall GDP.
- Revenue collection of the GST is dependent on the nominal growth rate of Gross Value Added (GVA) in the economy.
- Since inception, GVA per quarter has been between ₹40-lakh crore to ₹47-lakh crore and GST revenue has not been higher than ₹2.7-lakh crore to ₹3.1-lakh crore.
- The Tax to Gross value addition is only about 5% to 6.5% though GVA growth was much higher.
- Issues: A very large segment is covered by exemption, composition schemes, evasion and lower tax rate.
Five Issues with the GST structure
1) Dominance of the Centre
- The political architecture of GST is asymmetrically loaded in favour of the Centre.
- No body to adjudicate: There is no particular body is tasked to adjudicate if there is a dispute between States and between the Centre and the States.
- Centre’s domination: In the voting, the central government has one-third vote and States have two-thirds of total votes.
- All states have equal voting rights regardless of size and stake.
- With the support of a dozen small States whose total GST collection is not more than 5% of the total central government can dominate the decision making process in GST Council.
- Small states dictate the terms: With equal value for each States’ voting, larger and mid-sized States feel shortchanged.
2) Flaw in tax structure
- Nearly 45% to 50% of commodity value is outside the purview of the GST, such as petrol and petroleum products.
- Certain states not getting revenue as origin state: States which export or have inter-State transfers or mineral and fossil fuel extractions are not getting revenue as the origin States and need a compensation mechanism.
- The pre-existing threshold level of VAT has been tweaked too often which has led to an evaporation of tax base incentivising, enabling evasion and mis-reporting.
- Most trading and retail establishments, (however small) are out of the fold of the GST.
- At the retail level, irrespective of whether Input Tax Credit (ITC) is required or not, the burden can be passed off to the consumer.
- As a result, the loss could be as high as one third.
3) Exemptions
- Exemptions from registration and taxation of the GST have further eroded the GST tax base compared to the tax base of the pre-existing VAT.
- Ground for evasion: Exemptions are purely distortionary and also provide a good chance to remain under the radar, thereby directly increasing evasion or misclassification.
- Theoretically, exemptions at the final stages reduce tax realisation.
- Multiple rates: As multiple rates are charged at different stages, it goes against the lessons of GST history.
- This tax works well with a single uniform tax rate for all commodities and services at all stages, inputs and outputs alike.
- While most countries have a single rate, India stands out and is among the five countries to have four rates/slabs.
4) Exclusion
- Against the interest of States: Petroleum products remaining outside the purview of GST has helped the Centre to increase cesses and decrease central excise, in what would otherwise have been shareable with the States.
- Now, States will be keen on including petrol and diesel under the GST as their share of tax goes up in the process, even if there is a special rate fixed for it.
- Equity requires that petrol and diesel be brought under the GST.
- Cascading of taxes: Apart from the complexity it creates in record keeping and ‘granting ITC’, in the present form it also leads to a cascading which the GST avowedly tried to avoid.
5) Lack of compliance
- Compliance with GST return (GSTR-1) filing stipulation and the resultant tax information is not up to date.
- Fraudulent claims of Input Tax Credit (ITC) because of a lack of timely reconciliation are quite high though it has come down by two thirds.
- Tax evasion, estimated by a National Institute of Public Finance and Policy’s paper, is at least 5% in minor States and plus 3% in the major States.
Conclusion
Policy gaps along with compliance gaps do need to be addressed. Without proper tax information, infrastructure and base, the States would go in for selective tax enforcement. In the long run, voluntary compliance will suffer and equity in taxation will be violated.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Recusal of Judges
Mains level: Inter-state river disputes
The Chief Justice of India (CJI) N V Ramana (who hails from AP) recused himself from hearing Andhra Pradesh’s plea after it said “no” to the Supreme Court’s suggestion to go for mediation over a dispute with Telangana over the Krishna River dispute.
Q. Can you list down some basic principles of judicial conduct?
Independence, Impartiality, Integrity, Propriety, Competence and diligence and Equality are some of them as listed under the Bangalore Principles of Judicial Conduct.
What is the Recusal of Judges?
- Recusal is the removal of oneself as a judge or policymaker in a particular matter, especially because of a conflict of interest.
- Recusal usually takes place when a judge has a conflict of interest or has a prior association with the parties in the case.
- For example, if the case pertains to a company in which the judge holds stakes, the apprehension would seem reasonable.
- Similarly, if the judge has, in the past, appeared for one of the parties involved in a case, the call for recusal may seem right.
- A recusal inevitably leads to delay. The case goes back to the Chief Justice, who has to constitute a fresh Bench.
Rules on Recusals
- There are no written rules on the recusal of judges from hearing cases listed before them in constitutional courts.
- It is left to the discretion of a judge.
- The reasons for recusal are not disclosed in an order of the court. Some judges orally convey to the lawyers involved in the case their reasons for recusal, many do not. Some explain the reasons in their order.
- The decision rests on the conscience of the judge. At times, parties involved raise apprehensions about a possible conflict of interest.
Issues with recusal
- Recusal is also regarded as the abdication of duty. Maintaining institutional civilities is distinct from the fiercely independent role of the judge as an adjudicator.
- In his separate opinion in the NJAC judgment in 2015, Justice Kurian Joseph highlighted the need for judges to give reasons for recusal as a measure to build transparency.
- It is the constitutional duty, as reflected in one’s oath, to be transparent and accountable, and hence, a judge is required to indicate reasons for his recusal from a particular case.
Back2Basics:
Krishna Water Dispute
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: MPLAD Scheme
Mains level: Not Much
Virtually, 50% of funds allotted for ongoing MPLADS projects have lapsed.
What is the MPLAD scheme?
- The Members of Parliament Local Area Development Scheme (MPLADS) is a program first launched during the Narasimha Rao Government in 1993.
- It was aimed towards providing funds for developmental works recommended by individual MPs.
Funds available
- The MPs then were entitled to recommend works to the tune of Rs 1 crore annually between 1994-95 and 1997-98, after which the annual entitlement was enhanced to Rs 2 crore.
- The UPA government in 2011-12 raised the annual entitlement to Rs 5 crore per MP.
Implementation
- To implement their plans in an area, MPs have to recommend them to the District Authority of the respective Nodal District.
- The District Authorities then identify Implementing Agencies that execute the projects.
- The respective District Authority is supposed to oversee the implementation and has to submit monthly reports, audit reports, and work completion reports to the Nodal District Authority.
- The MPLADS funds can be merged with other schemes such as MGNREGA and Khelo India.
Guidelines for MPLADS implementation
- The document ‘Guidelines on MPLADS’ was published by the Ministry of Statistics and Programme Implementation in June 2016 in this regard.
- It stated the objective of the scheme to enable MPs to recommend works of developmental nature with emphasis on the creation of durable community assets based on the locally felt needs in their Constituencies.
- Right from the inception of the Scheme, durable assets of national priorities viz. drinking water, primary education, public health, sanitation, and roads, etc. should be created.
- It recommended MPs to works costing at least 15 percent of their entitlement for the year for areas inhabited by Scheduled Caste population and 7.5 percent for areas inhabited by ST population.
- It lays down a number of development works including construction of railway halt stations, providing financial assistance to recognized bodies, cooperative societies, installing CCTV cameras etc.
Answer this PYQ in the comment box:
Q. With reference to the funds under the Members of Parliament Local Area Development Scheme (MPLADS), which of the following statements are correct? (CSP 2020)
- MPLADS funds must be used to create durable assets like physical infrastructure for health, education, etc.
- A specified portion of each MP’s fund must benefit SC/ST populations.
- MPLADS funds are sanctioned on a yearly basis and the unused funds cannot be carried forward to the next year.
- The district authority must inspect at least 10% of all works under implementation every year.
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 3 and 4 only
(c) 1, 2 and 3 only
(d) 1, 2 and 4 only
“Post your answers here”
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: AQC and its jurisdiction
Mains level: Air pollution
The Lok Sabha has passed the Bill to formalize the Commission for Air Quality Management For National Capital Region and Adjoining Areas.
Highlights of the AQC Bill
- The AQC would be a ‘permanent’ body to address pollution in the National Capital Region Delhi and address sources of pollution in Delhi, Punjab, Rajasthan, Haryana and Uttar Pradesh.
- The all-powerful body assumed several powers to coordinate action among States, levy fines — ranging up to ₹1 crore or five years of prison — to address air pollution.
Key features
- Over-riding powers: While the Central Pollution Control Board (CPCB) and its state branches have the powers to implement provisions of the Environment Protection Act for air, water and land pollution.
- In case of dispute or a clash of jurisdictions, the AQC’s writ would prevail specific to matters concerning air pollution.
- Chair: The body has a full-time chairperson and a range of members consisting of both representatives from several Ministries as well as independent experts and will have the final say on evolving policy and issuing directions.
- Curb on stubble burning: the Commission may impose and collect environment compensation causing pollution by stubble burning.
- No penalties to farmers: The Centre, facing flak earlier this year from farmers protesting the farm laws, had committed to removing a clause in the Air Commission Bill that would penalize farmers for burning stubble, an important contributor to noxious air quality.
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From UPSC perspective, the following things are important :
Prelims level: INS Vikrant
Mains level: Indigenization of defense production
The much-awaited sea trials of India’s maiden indigenous aircraft carrier (IAC-1), built by the public sector Cochin Shipyard Ltd (CSL) have begun.
Indigenous Aircraft Carrier 1
- IAC is the first aircraft carrier designed and built in India.
- It has been designed by the Indian Navy’s Directorate of Naval Design (DND), and is being built at Cochin Shipyard Limited (CSL), a public sector shipyard under the Ministry of Shipping.
- The IAC-1, the biggest warship made indigenously, has an overall length of 263 m and a breadth of 63 m.
- It is capable of carrying 30 assorted aircraft including combat jets and helicopters.
- Propelled by four gas turbines, it can attain a top speed of 30 knots (about 55 kmph).
- The vessel will have a complement of 1,500 personnel.
Significance of IAC 1
- An aircraft carrier is one of the most potent marine assets for a nation, which enhances a Navy’s capability to travel far from its home shores to carry out air domination operations.
- Many experts consider having an aircraft carrier as essential to be considered a ‘blue water’ navy — one that has the capacity to project a nation’s strength and power across the high seas.
- An aircraft carrier generally leads as the capital ship of a carrier strike/battle group.
- As the carrier is a valuable and sometimes vulnerable target, it is usually escorted in the group by destroyers, missile cruisers, frigates, submarines, and supply ships.
Why does it matter that this is a Made-in-India warship?
- Only five or six nations currently have the capability of manufacturing an aircraft carrier — India joins this elite club now.
- According to the Navy, over 76 per cent of the material and equipment on board IAC-1 is indigenous.
- India’s earlier aircraft carriers were either built by the British or the Russians.
- The INS Vikramaditya, currently the Navy’s only aircraft carrier that was commissioned in 2013, started out as the Soviet-Russian Admiral Gorshkov.
- The country’s two earlier carriers, INS Vikrant and INS Viraat, were originally the British-built HMS Hercules and HMS Hermes before being commissioned into the Navy in 1961 and 1987 respectively.
Why will this warship be named INS Vikrant?
- INS Vikrant, a Majestic-class 19,500-tonne warship, was the name of India’s much-loved first aircraft carrier, a source of immense national pride over several decades of service before it was decommissioned in 1997.
- India acquired the Vikrant from the United Kingdom in 1961, and the carrier played a stellar role in the 1971 war with Pakistan that led to the birth of Bangladesh.
Now that India has the capability, will it build more carriers?
- Since 2015, the Navy has been seeking approval to build a third aircraft carrier for the country, which, if approved, will become India’s second Indigenous Aircraft Carrier (IAC-2).
- This proposed carrier, to be named INS Vishal, is intended to be a giant 65,000-tonne vessel, much bigger than IAC-1 and the INS Vikramaditya.
- The Navy has been trying to convince the government of the “operational necessity” of having a third carrier.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Fast Track Special Courts
Mains level: Resolving judicial pendency
The Union Cabinet has approved the continuation of 1023 Fast Track Special Court (FTSCs) including 389 exclusive POCSO Courts for two more years.
Fast Track Special Courts
- Fast Track Special Courts are dedicated courts expected to ensure swift dispensation of justice.
- They have a better clearance rate as compared to the regular courts and hold speedy trials.
- Besides providing quick justice to the hapless victims, it strengthens the deterrence framework for sexual offenders.
- Central Share is to be funded from Nirbhaya Fund. The Scheme was launched on 02.10.2019.
- To bring more stringent provisions and expeditious trial and disposal of such cases, the Central Government enacted “The Criminal Law (Amendment) Act, 2018”.
- It made provision of stringent punishment including the death penalty for perpetrators of rape.
- This led to the establishment of the Fast Track Special Courts (FTSCs).
Note: Article 247 gives power to Parliament to establish certain additional courts for the better administration of laws made by it or of any existing laws with respect to a matter enumerated in the Union List.
Benefits offered by fast track courts
- Further the commitment of the Nation to champion the cause of safety and security of women and girl child.
- Reduce the number of pending cases of Rape & POCSO Act.
- Provide speedy access to justice to the victims of sexual crimes and act as a deterrent for sexual offenders.
- Fastracking of these cases will declog the judicial system of the burden of case pendency.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: K-shaped recovery
Mains level: Paper 3- Vaccination and policy measures for fast recovery of economy
Context
Increasing pace of vaccination and normalising of monetary policy hold key to economic rebound.
K-shaped recovery and its impact
- Growth indicators so far suggest resilience in the short term — a shallow dent in May’s economic activity followed by a recovery in June, back to April’s levels.
- K-shaped recovery: The external, investment and industrial sectors have been relatively resilient, with consumption and services bearing the brunt.
- Notwithstanding signs of some fatigue in ultra-high frequency indicators in July, damage from the second wave seems largely limited to April-June 2021.
- However, K-shaped recovery means light cracks on the top conceal much larger structural faultlines below.
- Rising poverty: The Pew Research Centre estimates that the pandemic has led to India’s poor rising by 75 million while the middle and upper-middle class has shrunk by 39 million.
- MSMEs and informal workforce worst hit: A recent survey by the ILO finds that the worst-hit — MSMEs and their informal workforce — have struggled to access the government’s pandemic support programmes.
- These more structural scars may become blurred in the GDP data in coming quarters but will almost certainly affect the medium-term growth story.
Way forward in the near term
1) Policy
- Achieving two objectives: When inflation is under control, then flush liquidity and ultra-accommodative monetary policy will help achieve two objectives—
- 1) Ensuring easy financial conditions.
- 2) Help control borrowing costs of the government’s expansive borrowing programme.
- Inflation risk: The above strategy is not costless, it effectively uses the central bank’s credibility in controlling inflation as “collateral”.
- So when inflation flares up and remains sticky, this arithmetic becomes increasingly complicated.
- The RBI’s consistent message recently has been to view the current inflation surge as a “temporary hump”.
- Much as the current monetary policy stance maintains that the economy is ill-equipped to handle policy normalisation, it is a matter of when rather than if.
- As growth strengthens and the RBI’s inflation-targeting credibility comes under greater scrutiny, a policy pivot would become increasingly likely.
2) Vaccination
- The “ultimate unlocking” of the economy remains contingent on a critical mass getting vaccinated, which on materialising should trigger a revival in consumer and business sentiment.
- The uptick in the pace of vaccination over the last few days and higher seroprevalence reported in some states are welcome news.
Conclusion
Even with widespread vaccinations, future pandemic waves may well be unavoidable. Fiscal, monetary and administrative policies cannot remain in a suspended emergency.
Back2Basics: K-shaped recovery
- A K-shaped recovery occurs when, following a recession, different parts of the economy recover at different rates, times, or magnitudes.
- This is in contrast to an even, uniform recovery across sectors, industries, or groups of people.
- A K-shaped recovery leads to changes in the structure of the economy or the broader society as economic outcomes and relations are fundamentally changed before and after the recession.
- This type of recovery is called K-shaped because the path of different parts of the economy when charted together may diverge, resembling the two arms of the Roman letter “K.”
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Capital account
Mains level: Paper 3- Making rupee a global reserve currency
Context
India will celebrate 100 years of Independence in 2047. This article makes the case that prosperity is possible and best accomplished by the goal of making the rupee a global reserve currency by India@100.
What is the purpose of having forex reserves?
- Official foreign exchange reserves of about $12 trillion across 150 countries are currently stored in eight currencies: 55 per cent in US dollars, 30 per cent in euros, and 15 per cent in six other currencies.
- Protection in case of volatility: This concentration is inevitable given exploding trade, rising capital flows, and the less acknowledged motivation of protecting your reserves from your currency’s volatility.
- A reserve currency has to serve as a medium of exchange, a store of value, and a unit of account.
Steps India would require to take
- Full capital account convertibility: To fulfil the ambition of becoming the reserve currency, the first step is full capital account convertibility, as suggested by the Tarapore Committee in 1997.
- Advocate rupee invoicing: Dollar investors in the last decade not experiencing the usual big bite out of rupee returns is useful for advocating trading partners to start rupee invoicing.
- Offshore corporate rupee borrowing: Raising corporate rupee borrowing offshore and onshore will also help.
- Digital currency: We need to accelerate our CBDC (central bank digital bank currency) plans.
- Take payment networks to a global level: We need to take our UPI payment technology to the world, the dollar gets heft from global networks like Visa, MasterCard and Swift.
- Raise tax to GDP ratio: Fiscal policy must raise our tax to GDP ratio, raise the share of direct taxes in total taxes, and keep our public debt to GDP ratio under 100 per cent.
- Monetary policy: Monetary policy must control inflation while moderating central bank balance sheet size.
- Economic policy: Economic policy must raise the productivity to reach goals in formalisation, urbanisation, financialisation (100 per cent credit to GDP ratio), industrialisation (less than 15 per cent farm employment), internationalisation (higher share of global trade) and skilling.
- Institutional reforms: These goals must be complemented by reinforcing institutions that signal rule of law; cooperative federalism, press freedom, civil service effectiveness, and judicial independence.
How it will help India?
- Becoming a global reserve currency is helpful because it indirectly aligns fiscal, monetary, and economic policy.
- Low-interest rate: The main advantage is the “exorbitant privilege” of lower real interest rates.
- Edge over China: The 2 per cent renminbi share in global reserves — despite a 25 per cent increase last year — doesn’t reflect their status as the world’s second-largest economy and biggest trading nation.
- China’s astounding economic success seems to be making China overconfident.
- Chinese overconfidence creates an opportunity for India.
Conclusion
Prosperity for all Indians by India at100 — a precondition for a country where the mind is without fear and the head is held high — needs bold reforms in the next 25 years. These reforms are best measured by the wholesome and achievable goal of the rupee becoming a global reserve currency by 2047. The journey is the reward.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: IEA
Mains level: Paper 3- Ensuring smooth energy transition in India
Context
With an ever-growing list of countries announcing net-zero emissions targets, the global energy system is set to undergo a transformation in the coming decades. But India needs to ensure that this transition is smooth and people-centric.
Transition in India
- According to an IEA analysis, 90 per cent of new electricity generation capacity around the world now comes from renewables.
- In India, that energy transformation is well underway.
- India is among the world’s top five countries in terms of renewable power capacity.
- Ambitious target of 450 gigawatts: Its ambitious target to increase India’s renewable energy capacity to 450 gigawatts (GW) by 2030 would help move it closer to achieving the country’s broader climate goals and commitments made under the Paris Agreement.
- Clean energy leadership by India: India is also showing global clean energy leadership through initiatives such as the International Solar Alliance, which has more than 70 member countries.
- Transition in rural area: The energy transition in rural India can be driven by dedicated policies to promote renewables, incentivise investment in decentralised low-carbon power sources like rooftop solar, and train and build the capacity of clean energy entrepreneurs.
- Incorporating energy efficiency in the Affordable Housing Mission: In the short term, stimulus spending in the labour-intensive construction sector could accelerate progress on the Affordable Housing Mission.
- Incorporating energy efficiency and green construction methods into these projects could ensure millions of homes enjoy thermal comfort, and help make energy efficiency a core part of building designs.
Factors to consider in transition to clean energy
- Ensure equity: It must be ensured that the opportunities of India’s transition are shared fairly throughout society — and workers and communities are not left to face the challenges alone.
- Make it people-centric: To achieve the trifecta of jobs, growth and sustainability, India must strive to put people at the centre of its energy transformation.
- Provisions for coal-dependent regions: New jobs would need to be found over time for the coal miners affected by the changes, as well as for people who work in the fossil fuel power plants that will close down.
- Policymakers must earmark special “transition funds” to help coal-dependent regions, some of which are among India’s poorest.
- Increase investment by rationalising energy subsidies: Energy subsidies must be rationalised and directed towards those who need them most.
- Fiscal resources freed up through subsidy reform should then be invested in clean energy solutions, especially in underdeveloped regions and marginalised communities.
- Support rural livelihood: A just transition should focus on how clean energy can support rural livelihoods and increase communities’ resilience in the aftermath of the pandemic shock.
- Ensure women’s participation in the green workforce: While India’s energy transition will create many new jobs, the limited participation of women in the growing green workforce must be addressed.
- A 2019 study by CEEW and the IEA suggests that women account for nearly 32 per cent of the renewables workforce globally but only around 11 per cent of the rooftop solar workforce in India.
- Engage youth: Engaging the youth is critical to ensure that the energy transition is sustainable, inclusive and enduring.
- Young entrepreneurs in India have already shown their impact by expanding the footprint of renewables and disrupting traditional energy models.
- Some of these key themes are being explored by the 30 members of the Global Commission on People-Centred Clean Energy Transitions, which the IEA launched in January.
Conclusion
A people-centric approach, backed by good policy design, will not only help India build a clean and inclusive energy future, but could also provide a model for other countries and communities worldwide.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Net Zero
Mains level: Global rush for carbon neutrality
Independent charitable organization Oxfam has said that ‘net zero’ carbon targets that many countries have announced maybe a “dangerous distraction” from the priority of cutting carbon emissions.
What does Net-Zero mean?
- Net-zero, which is also referred to as carbon-neutrality, does not mean that a country would bring down its emissions to zero.
- That would be gross-zero, which means reaching a state where there are no emissions at all, a scenario hard to comprehend.
- Therefore, net-zero is a state in which a country’s emissions are compensated by absorption and removal of greenhouse gases from the atmosphere.
Achieving net-zero targets
- One way by which carbon can be absorbed is by creating carbon sinks.
- Until recently, the Amazon rainforests in South America, which are the largest tropical forests in the world, were carbon sinks.
- But eastern parts of these forests have started emitting CO2 instead of absorbing carbon emissions as a result of significant deforestation.
What’s the difference between gross zero and net zero?
- Given the impact that carbon emissions have on our planet, you might wonder why we aren’t aiming for zero, or gross zero, rather than net-zero.
- Gross zero would mean stopping all emissions, which isn’t realistically attainable across all sectors of our lives and industry. Even with best efforts to reduce them, there will still be some emissions.
- Net-zero looks at emissions overall, allowing for the removal of any unavoidable emissions, such as those from aviation or manufacturing.
- Removing greenhouse gases could be via nature, as trees take carbon dioxide from the atmosphere, or through new technology or changing industrial processes.
What is carbon negativity?
- It is even possible for a country to have negative emissions if the absorption and removal exceed the actual emissions.
- Bhutan has negative emissions because it absorbs more than it emits.
Which countries have recently announced net-zero targets?
- In 2019, the New Zealand government passed the Zero Carbon Act, which committed the country to zero carbon emissions by 2050 or sooner.
- In the same year, the UK’s parliament passed legislation requiring the government to reduce the UK’s net emissions of greenhouse gases by 100 per cent relative to 1990 levels by the year 2050.
- More recently, US announced that the country will cut its greenhouse gas emissions by at least 50 per cent below 2005 levels by 2030.
- The European Union too, has a similar plan, called “Fit for 55”, the European Commission has asked all of its 27 member countries to cut emissions by 55 per cent below 1990 levels by 2030.
- Last year, China also announced that it would become net-zero by the year 2060 and that it would not allow its emissions to peak beyond what they are in 2030.
What does the Oxfam report say?
- “Land-hungry ‘net zero’ schemes could force an 80 per cent rise in global food prices and more hunger while allowing rich nations and corporates to continue “dirty business-as-usual”.
- The report says that if the challenge of change is tackled only by way of planting more trees, then about 1.6 billion hectares of new forests would be required to remove the world’s excess carbon by 2050.
- Currently, countries’ plans to cut emissions will only lead to a one percent reduction by the year 2030.
- Oxfam estimates that it could rise by 80 percent by the year 2050.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Pardoning powers
Mains level: Read the attached story
The Supreme Court has held that the Governor of a State can pardon prisoners, including death row ones, even before they have served a minimum of 14 years of a prison sentence.
SC Judgement: Section 433-A CrPC
- The Governor’s power to pardon overrides a provision in the Code of Criminal Procedure — Section 433A.
- This article mandates that a prisoner’s sentence can be remitted only after 14 years of jail.
- Such power is in the exercise of the power of the sovereign, though the Governor is bound to act on the aid and advice of the State Government, the apex court observed.
- Section 433-A of the Code cannot and does not in any way affect the constitutional power conferred on the President/Governor to grant pardon under Articles 72 or 161 of the Constitution.
What does one mean by Pardon?
- A pardon is a government/executive decision to allow a person to be absolved of guilt for an alleged crime or other legal offense as if the act never occurred.
Why need Pardon?
- Pardons can be granted when individuals are deemed to have demonstrated that they have “paid their debt to society”, or are otherwise considered to be deserving of them.
- Pardons are sometimes offered to persons who were either wrongfully convicted or who claim that they were wrongfully convicted.
- Pardons are sometimes seen as a mechanism for combating corruption, allowing a particular authority to circumvent a flawed judicial process to free someone that is seen as wrongly convicted.
Pardoning powers in India
- Under the Constitution of India (Article 72), the President of India can grant a pardon or reduce the sentence of a convicted person, particularly in cases involving capital punishment.
- A similar and parallel power vests in the governors of each state under Article 161.
[I] President
- Article 72 says that the president shall have the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted of any offense.
- The pardoning powers of the Indian President are elucidated in Art 72 of the Indian Constitution. There are five different types of pardoning that are mandated by law.
- Pardon: means completely absolving the person of the crime and letting him go free. The pardoned criminal will be like a normal citizen.
- Commutation: means changing the type of punishment given to the guilty into a less harsh one, for example, a death penalty commuted to a life sentence.
- Reprieve: means a delay allowed in the execution of a sentence, usually a death sentence, for a guilty person to allow him some time to apply for Presidential Pardon or some other legal remedy to prove his innocence or successful rehabilitation.
- Respite: means reducing the quantum or degree of the punishment to a criminal in view of some special circumstances, like pregnancy, mental condition etc.
- Remission: means changing the quantum of the punishment without changing its nature, for example reducing twenty-year rigorous imprisonment to ten years.
Cases as specified by art. 72
- in all cases where the punishment or sentence is by a court-martial;
- in all cases where the punishment or sentence is for an offence against any law relating to a matter to which the executive power of the Union extends;
- in all cases where the sentence is a sentence of death.
[II] Governor
- Similarly, as per article 161: Governor of a State has the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted of any offence against any law.
- It must be relating to a matter to which the executive power of the state extends.
- President can grant pardon to a person awarded a death sentence. But a governor of a state does not enjoy this power.
Nature of the Pardoning Power
- Not absolute: The question is whether this power to grant pardon is absolute or this power of pardon shall be exercised by the President on the advice of Council of Ministers.
- Aid and advice: The pardoning power of the president is not absolute. It is governed by the advice of the Council of Ministers.
- Constitution is silent on this: This has not been discussed by the constitution but is the practical truth. Further, it does not provide for any mechanism to question the legality of decisions of President or governors exercising mercy jurisdiction.
- Judicial review applicable: But the SC in Epuru Sudhakar case has given a small window for judicial review of the pardon powers of President and governors for the purpose of ruling out any arbitrariness.
Some traditions
- It is important to note that India has a unitary legal system and there is no separate body of state law.
- All crimes are crimes against the Union of India.
- Therefore, a convention has developed that the governor’s powers are exercised for only minor offenses.
- While requests for pardons and reprieves for major offenses and offenses committed in the UTs are deferred to the President.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Poverty estimates
Mains level: Pauperization in India
In the absence of Consumption Expenditure Survey (CES) data, the Periodic Labour Force Survey shows a rise in the absolute number of the poor in India.
About Consumption Expenditure Survey (CES)
- A CES is conducted by the National Sample Survey Office (NSO) every five years.
- But the CES of 2017-18 (already conducted a year late) was not made public by the Government of India.
- Now, we hear that a new CES is likely to be conducted in 2021-22, the data from which will probably not be available before end-2022.
- India has not released its CES data since 2011-12.
Key highlights
- Unemployment had reached a 45-year high in 2017-18, as revealed by NSO’s Periodic Labour Force Survey (PLFS).
- While the PLFS’s questions on consumption expenditure are not as detailed as those of the CES, they are sufficient for us to estimate changes in consumption on a consistent basis across time.
- It enables any careful researcher to estimate the incidence of poverty (i.e. the share in the total population of those below the poverty line), as well as the total number of persons below poverty.
There is unemployment induced poverty
- There is a clear trajectory of the incidence of poverty falling from 1973 to 2012.
- In fact, since India began collecting data on poverty, the incidence of poverty has always fallen, consistently.
- It was 54.9% in 1973-4; 44.5% in 1983-84; 36% in 1993-94 and 27.5% in 2004-05.
- This was in accordance with the Lakdawala poverty line (which was lower than the Tendulkar poverty line), named after a distinguished economist, then a member of the Planning Commission.
Methodology of Poverty Line
- In 2011, it was decided in the Planning Commission, that the national poverty line will be raised in accordance with the recommendations of an expert group chaired by the late Suresh Tendulkar.
- That is the poverty line we use in estimating poverty in the table.
- As it happens, this poverty line was comparable at the time to the international poverty line (estimated by the World Bank), of $1.09 (now raised to $1.90 to account for inflation) person per day.
- The PLFS also estimates the incidence of poverty. It also collects the household monthly per capita consumption expenditure data based on the Mixed Recall Period methodology.
Stunning rise in Poverty
- It is stunning fact that for the first time in India’s history of estimating poverty, there is a rise in the incidence of poverty since 2011-12.
- The important point is that this is consistent with the NSO’s CES data for 2017-18 that was leaked data.
- The leaked data showed that rural consumption between 2012 and 2018 had fallen by 8%, while urban consumption had risen by barely 2%.
- Since the majority of India’s population (certainly over 65%) is rural, poverty in India is also predominantly rural.
- Remarkably, by 2019-20, poverty had increased significantly in both the rural and urban areas, but much more so in rural areas (from 25% to 30%).
Why is it intriguing?
- It is important here to recall two facts: between 1973 and 1993, the absolute number of poor had remained constant (at about 320 million poor), despite a significant increase in India’s total population.
- Between 1993 and 2004, the absolute number of poor fell by a marginal number (18 million) from 320 million to 302 million, during a period when the GDP growth rate had picked up after the economic reforms.
- It is for the first time in India’s history since the CES began that we have seen an increase in the absolute numbers of the poor, between 2012-13 and 2019-20.
- The second fact is that for the first time ever, between 2004-05 and 2011-12, the number of the poor fell, and that too by a staggering 133 million, or by over 19 million per year.
Fuss over GDP growth
- This was accounted for by what has come to be called India’s ‘dream run’ of growth: over 2004 and 2014, the GDP growth rate had averaged 8% per annum — a 10-year run that was not sustained thereafter.
- By contrast, not only has the incidence of poverty increased since then, but the absolute increase in poverty is totally unprecedented.
Reasons behind this Pauperization
The reasons for increased poverty since 2013 are not far to seek:
- GST: While the economy maintained some growth momentum till 2015, the monumental blunder of demonetization was followed by a poorly planned and hurriedly introduced GST.
- Fall in investments: None of the engines of growth was firing after that. Private investment fell from 31% inherited by the new government, to 28% of GDP by 2019-20.
- Fall in exports: Exports, which had never fallen in absolute dollar terms for a quarter-century since 1991, actually fell below the 2013-14 level ($315 billion) for five years.
- Unemployment: Joblessness increased to a 45-year high by 2017-18 (by the usual status), and youth (15-29 years of age) saw unemployment triple from 6% to 18% between 2012 and 2018.
- Fall in wages: Real wages did not increase for casual or regular workers over the same period, hardly surprising when job seekers were increasing but jobs were not at anywhere close to that rate.
- Pandemic: Poverty is expected to rise further during the COVID-19 pandemic after the economy has contracted.
Hence, consumer expenditure fell, and poverty increased.
Back2Basics:
Poverty Lines in India: Estimations and Committees
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Tribunals Reforms Bill
Mains level: Not Much
The Lok Sabha has hastily passed the Tribunals Reforms Bill, 2021 without any debate.
Highlights of the Tribunals Reforms Bill, 2021
The Bill seeks to dissolve certain existing appellate bodies and transfer their functions (such as adjudication of appeals) to other existing judicial bodies:
Transfer of functions of key appellate bodies as proposed under the Bill:
|
|
Acts
|
Appellate Body
|
Proposed Entity
|
| The Cinematograph Act, 1952 |
Appellate Tribunal |
High Court |
| The Trade Marks Act, 1999 |
Appellate Board |
High Court |
| The Copyright Act, 1957 |
Appellate Board |
Commercial Court or the Commercial Division of a High Court* |
| The Customs Act, 1962 |
Authority for Advance Rulings |
High Court |
| The Patents Act, 1970 |
Appellate Board |
High Court |
| The Airports Authority of India Act, 1994 |
Airport Appellate Tribunal |
- Central government, for disputes arising from the disposal of properties left on airport premises by unauthorised occupants.
- High Court, for appeals against orders of an eviction officer.
|
| The Control of National Highways (Land and Traffic) Act, 2002 |
Airport Appellate Tribunal |
Civil Court# |
| The Geographical Indications of Goods (Registration and Protection) Act, 1999 |
Appellate Board |
High Court |
Amendments to the Finance Act, 2017:
- The Finance Act, 2017 merged tribunals based on domain.
- It also empowered the central government to notify rules on: (i) composition of search-cum-selection committees, (ii) qualifications of tribunal members, and (iii) their terms and conditions of service (such as their removal and salaries).
- The Bill removes these provisions from the Finance Act, 2017.
- Provisions on the composition of selection committees and term of office have been included in the Bill. Qualification of members and other terms and conditions of service will be notified by the central government.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Sabki Yojna Sabka Vikas
Mains level: Not Much
The Government has launched ‘Sabki Yojna Sabka Vikas’ campaign for inclusive and holistic preparation of the Gram Panchayat Development Plan (GPDP).
Sabki Yojna Sabka Vikas
- Under Article 243 G of the Constitution, Panchayats have been mandated for the preparation and implementation of plans for economic development and social justice.
- Thus, Panchayats have a significant role to play in the effective and efficient implementation of flagship schemes/programs on subjects of national importance for transforming rural India.
- The objectives of the campaign broadly include strengthening of elected representatives and Self-Help Groups, evidence-based assessment of progress made.
- The campaign aimed to help Gram Panchayats (GPs) in preparation of convergent and holistic GPDP through the identification of sectoral infrastructural gaps in respective areas.
Back2Basics: Gram Panchayat Development Plan (GPDP)
- The Gram Panchayats are constitutionally mandated for the preparation of GPDP for economic development and social justice utilizing resources available with them.
- The GPDP should be comprehensive and based on a participatory process involving the community particularly Gram Sabha.
- It will be in convergence with schemes of all related Central Ministries / Line Departments related to 29 subjects listed in the Eleventh Schedule of the Constitution.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Code of conduct for Lok Sabha Members
Mains level: Paper 2- Disruption of legislatures and ways to deal with it
Context
Last week, a newspaper reported that the government is considering curtailing the monsoon session of Parliament on account of disruptions.
Reasons for disruptions
- In 2001, a day-long conference was held in the Central Hall of Parliament to discuss discipline and decorum in legislatures.
- The inputs of participants of conference helped identify four reasons behind the disorderly conduct by MPs.
- Inadequate time: The first was dissatisfaction in MPs because of inadequate time for airing their grievances.
- Unresponsive attitude: The second was an unresponsive attitude of the government and the retaliatory posture of the treasury benches.
- Adherence to norm: The third was political parties not adhering to parliamentary norms and disciplining their members.
- Lack of action: The absence of prompt action against disrupting MPs under the legislature’s rules.
Suggestions
- Enforcement of a code of conduct for MPs and MLAs: The Lok Sabha has had a simple code of conduct for its MPs since 1952.
- Newer forms of protest led to the updating of these rules in 1989.
- Accordingly, members should not shout slogans, display placards, tear away documents in protest, play cassettes or tape recorders in the House.
- A new rule empowers the Lok Sabha Speaker to suspend MPs obstructing the Houses’ business automatically.
- But these suggestions have not been enforced so far.
- Increase in working days: As recommended by the 2001 conference, there should be an increase in the working days of Parliament.
- The conference had also resolved that Parliament should meet for 110 days every year and larger state legislative assemblies for 90 days.
- Successive governments have shied away from increasing the working days of Parliament.
- Our legislature should meet throughout the year, like parliaments of most developed democracies.
- The concept of opposition days: In the United Kingdom, where Parliament meets over 100 days a year, opposition parties get 20 days on which they decide the agenda for discussion in Parliament.
- The main opposition party gets 17 days and the remaining three days are given to the second-largest opposition party.
- Canada also has a similar concept of opposition days.
- This can also be done in India.
Conclusion
More strengthening of our Parliament is the solution to prevent disruption of its proceedings. It is the only mechanism to ensure that disrupting its proceedings or allowing them to be disrupted ceases to be a viable option.
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