Note4Students
From UPSC perspective, the following things are important :
Prelims level: IPCC
Mains level: Climate Change and the background for its negotiation
The Geneva-based Intergovernmental Panel on Climate Change (IPCC) will release the first part of its Sixth Assessment Report, the periodic status check that has now become the most widely accepted scientific view of the state of the Earth’s climate.
What is IPCC?
- The IPCC, an intergovernmental body was established in 1988 by the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP).
- It was later endorsed by the UN General Assembly. Membership is open to all members of the WMO and UN.
- The IPCC produces reports that contribute to the work of the UN Framework Convention on Climate Change (UNFCCC), the main international treaty on climate change.
- The objective of the UNFCCC is to “stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic (human-induced) interference with the climate system.”
- The IPCC’s Fifth Assessment Report was a critical scientific input into the UNFCCC’s Paris Agreement in 2015.
What are IPCC reports?
- IPCC reports cover the scientific, technical and socioeconomic information relevant to understanding the scientific basis of risk of human-induced climate change, its potential impacts and options for adaptation and mitigation.
- The IPCC does not carry out original research, nor does it monitor climate or related phenomena itself.
- Rather, it assesses published literature, including peer-reviewed and non-peer-reviewed sources.
- However, the IPCC can be said to stimulate research in climate science.
The Assessment Reports
- The five previous assessment reports that have come out since the IPCC was established in 1988 have formed the basis of international climate change negotiations, and the actions of the governments.
- Their value has been globally acknowledged, and the fourth assessment report, which came out in 2007, won the IPCC the Nobel Peace Prize.
- Each of these voluminous reports, the last couple of them running into thousands of pages, have built upon the previous ones with updated knowledge and understanding of the climate system.
- The reports have presented projections for temperature rise till 2100 under different scenarios and the kind of impacts that can be expected under each of these pathways.
Key projections of the 6th Report
Apart from incorporating the latest available scientific evidence, the Sixth Assessment Report is also attempting to provide more actionable information to help governments take policy decisions.
- REGIONAL FOCUS: It is expected that this report would likely state what the scenarios for sea-level rise in the Bay of Bengal region is, not just what the average sea-level rise across the world is likely to be.
- EXTREME EVENTS: There is expected to be bigger focus on extreme weather events, like the ones we have seen in the last few weeks.
- CITIES: Densely populated mega-cities are supposed to be among the most vulnerable to impacts of climate change. The report is expected to present specific scenarios the climate change impacts on cities and large urban populations, and also implications for key infrastructure.
- SYNERGIES: IPCC is expected to present a more integrated understanding of the situation, cross-link evidence and discuss trade-offs between different options or pathways, and also likely to cover social implications of climate change action by countries.
Why it matters?
- The IPCC assessment reports have been extremely influential in directing the dialogue and action on climate change.
- The First Assessment Report led to the setting up of the UNFCCC, the umbrella agreement under which international negotiations on climate change take place every year.
- The Second Assessment Report was the basis for the 1997 Kyoto Protocol that ran till last year, and the Fifth Assessment Report, which came out in 2014, guided the Paris Agreement.
- The global climate architecture is now governed by the Paris Agreement, which replaced the Kyoto Protocol from this year.
- There have been enough indications to suggest that global action was far below what was needed to keep the temperatures below 2°C, as mandated under the Paris Agreement.
- In the immediate future, the IPCC report could serve as the most important warning towards the rapidly closing window of opportunity.
Try this PYQ now:
Q.The United Nations Framework Convention on Climate Change (UNFCCC) is an international treaty drawn at:
(a) United Nations Conference on the Human Environment, Stockholm,1972
(b) UN Conference on Environment and Development, Rio de Janeiro, 1992
(c) World Summit on Sustainable Development, Johannesburg, 2002
(d) UN Climate Change Conference, Copenhagen, 2009
Post your answers here:
Back2Basics: UNFCCC
- The UNFCCC established an international environmental treaty to combat “dangerous human interference with the climate system”, in part by stabilizing greenhouse gas concentrations in the atmosphere.
- It was signed by 154 states at the UN Conference on Environment and Development (UNCED), informally known as the Earth Summit, held in Rio de Janeiro from 3 to 14 June 1992.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Quit India Movement
Mains level: Quit India Movement
The Prime Minister has greeted the nation on the eve of the anniversary of Quit India Movement Day.
Before proceeding, answer this PYQ:
Q. Quit India Movement was launched in response to:
(a) Cabinet Mission Plan
(b) Cripps Proposals
(c) Simon Commission Report
(d) Wavell Plan
Post your answers here:
About the day
- The Quit India Movement is also known as the Bharat Chhodo Andolan was launched by Mahatma Gandhi on August 8, 1942, at the Bombay session of the All India Congress Committee (AICC).
- The movement demanded an end to British rule in India.
- Since the protest was held in August, it also went on to be known as August Kranti or August Movement.
- The ‘Do or Die’ speech was etched in the hearts of Indians, and many faced the consequences of the movement.
- Every year, the day is celebrated by paying tribute to freedom fighters who laid their lives for the country.
Quit India Movement
- The movement began on August 8, 1942, with its foundations being laid back in 1939 when the Governor-general of India was Lord Lilingthow.
- In 1942, Staford Cripps was sent to India by the British Establishment to negotiate with the leaders of the All India Congress Committee for gaining their support in exchange for their freedom.
- July 1942- The Quit India Movement Resolution was passed at the Wardha Conference of All India Congress Committee.
Series of events
- Mahatma Gandhi delivered his speech at Mumbai’s Gowalia Tank Maidan, also called August Kranti Maidan, on 08th August 1942.
- Gandhi Ji was arrested and jailed at Pune’s Aga Khan Palace and his wife Kasturba Gandhi, Sarojini Naidu and secretary Mahadev Desai.
- Many other senior members of the Indian National Congress were also arrested, including Jawaharlal Nehru and Abul Kalam Azad, and were kept in the Yerwada Jail.
- The British Government banned the Congress Committee declaring it an unlawful association.
- Aruna Asaf Ali, popularly known as the ‘Grand Old Lady’ of the Independence Movement, hoisted the National Flag at Mumbai’s Gowalia Tank Maidan.
- This event was followed by an uproar among the people and the emergence of several young leaders such as Ram Manohar Lohia, JP Narayan, SM Joshi, and others who continued to fuel the fire of the movement throughout India during the period of World War II.
Causes of the Movement
- Involvement of India in World War II without prior consultation with the leaders: The Indian Nationalists were disgruntled with the Governor-General of India, Lord Linlithgow, as he brought India to the verge of World War II without consulting them.
- Failure of Cripps Mission: The British sent Stafford Cripps to India to gain the cooperation of India, which failed because the Cripps Mission offered India not complete freedom but the Dominion Status to India, along with the partition. After the failure of Cripps Mission, the Indian Nationalist Leaders knew that the Britishers were in no mood to amend the Constitution before the end of World War II.
- Shortage of essential commodities: There was widespread discontent due to the shortage of essential commodities and rising prices of salt, rice, etc., and commandeering of boats in Bengal and Orissa. There were fears that the Britishers would follow a scorched earth policy in Assam, Bengal, and Orissa in reaction to the advancement of the Japanese. The Economy also shattered as a result of World War II.
- Prevalence of anti-British sentiment: The sentiments were widely anti-British, and the masses were demanding complete independence from the British Government.
- Centralization of many small movements: The Ground for the movement was already prepared by various associated and affiliated bodies of the Congress, like Forward Bloc, All India Kisan Sabha, and others. They were leading the mass movements on a much more radical level for more than two decades. The also channelized many militant outbursts, which were happening at several places in the country.
Phases of Quit India Movement
The Quit India Movement can be viewed in three phases from its inception to end. The phases are as follows:
- First phase: The first phase or the inception of the movement had no violence. It began with civil disobedience, boycotts, strikes that the British Government quickly suppressed. Almost all members of the Congress Committee, including Gandhiji, were arrested and kept in Jail till 1945 without any trial.
- Second phase: In its second phase, the movement shifted to the countryside. The second phase of the movement took a violent and aggressive turn. Any building or offices which were the symbol of the colonial authority was attacked and distracted. Communication systems, railway stations & tracks, telegraph poles and wires were also targeted.
- Third and last phase: In the last phase of the movement, there was the formation of many independent national or parallel governments in the isolated pockets of the country, such as Ballia, Satara, Tamluk, etc.
Successes
- Women empowerment: Aruna Asif Ali hoisted the national flag on the Gowalia tank maidan; Usha Mehta, on the other hand, helped set up the underground radio station to spread awareness about the movement.
- Rise of future leaders : This movement also gave some future prominent leaders such as Biku Patnaik, Aruna Asif Ali, Ram Manohar Lohia, Sucheta Kriplani, J.P. Narayan, etc. These leaders were helping the movement through underground activities.
- Rise of nationalism: A greater sense of unity and brotherhood emerged due to the Quit India Movement. Many students dropped out of schools and colleges, people gave up their jobs and withdrew money from the banks.
Failure of the movement
The movement did not have the support of many organizations of the country itself.
- The Britishers were supported by the Princely States, British Indian Army, Indian Civil Services, Viceroy’s Council (which had Indians in the majority), All India Muslim League, Indian Imperial Police.
- The Hindu Mahasabha, Rashtriya Swayamsevak Sangh (RSS) & Muslim League also opposed the Quit India Movement.
- Many Congress members like C Rajagopalachari resigned from the provincial legislature as they did not favor Mahatma Gandhi’s idea.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Commsision for Women
Mains level: Read the attached story
The Central Government has nominated Smt. Rekha Sharma, as Chairperson of the National Commission for Women for another term of three years.
National Commission for Women
- The NCW is the statutory body generally concerned with advising the government on all policy matters affecting women.
- It was established on 31 January 1992 under the provisions of the Indian Constitution as defined in the 1990 National Commission for Women Act.
- The first head of the commission was Jayanti Patnaik.
Constitutional provision
- The Indian Constitution doesn’t contain any provision specifically made to favor women intrinsically.
- Article 15 (3), Article 14 and Article 21 protect and safeguard women. They are more gender-neutral.
Objectives
- The objective of the NCW is to represent the rights of women in India and to provide a voice for their issues and concerns.
- The subjects of their campaigns have included dowry, politics, religion, equal representation for women in jobs, and the exploitation of women for labor.
- They have also discussed police abuses against women.
Composition of National Commission for Women
The Commission shall consist of:
- A Chairperson, committed to the cause of women, to be nominated by the Central Government.
- five Members to be nominated by the Central Government from amongst persons of ability, integrity and standing who have had experience in law or legislation, trade unionism, management of an industry potential of women, women’s voluntary organizations (including women activist), administration, economic development, health, education or social welfare;
- Provided that at least one Member each shall be from amongst persons belonging to the Scheduled Castes and Scheduled Tribes respectively;
Powers of NCW
- Provide consultation on all major policy matters that affect women.
- Issuing summons for the examination of documents and the witnesses.
- It has the power to make any public record.
- Receiving evidence on affidavits
- Discovery and production of documents
- Summoning and enforcement
Functions of the NCW
- Presentation of reports: Table reports should be submitted to the Central Government every year. When the commission feels it’s appropriate. The reports upon the functioning and working of the safeguards.
- Investigation and Examination: There should be proper investigation and examination made under the Constitution and other laws. This is related to the protection of the rights of women.
- Review of laws: Constantly all laws are reviewed and scrutinized. And necessary amendments and alterations are made to meet the needs of the current world.
- Cases of Violation: Ensure there is no violation against women and taking due care of such cases.
- Suo Motu Notice: It takes care of complaints and also suo motu matters about the deprivation of rights of women. Implementation of laws favoring the welfare of women.
- Evaluation: Assessing the development and the progress of the women community under the Center and State level.
- Special studies and investigation: To understand the limitations in the system and curb it with strategic plans and mechanisms.
Powers of the NCW
- Not concrete powers: The NCW is only recommendatory and has no power to enforce its decisions. Often it takes action only if the issues are brought to light.
- Legal powers: Commission lacks constitutional status, and thus has no legal powers to summon police officers or witnesses.
- Less funding: NCW’s functions are dependent on the grants offered by the central government. Financial assistance provided to the Commission is very less to cater to its needs.
- Political interference: It does not have the power to choose its own members.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Major Dhyan Chand
Mains level: Promotion of sports in India
The PM has announced that the Rajiv Gandhi Khel Ratna Award will now be named after Major Dhyan Chand.
Despite being a trillion population, what ails India’s limted success (not failure) at the Olympics in your opinion?
Spark the debate!
Who was Dhyan Chand?
- Quite simply, he was the first superstar of hockey, considered a wizard or magician of the game.
- He was the chief protagonist as India won three consecutive Olympic hockey gold medals — Amsterdam 1928, Los Angeles 1932, and Berlin 1936.
- He is said to have wowed the watching public with his sublime skills, intricate dribbling and gluttonous scoring ability.
- During those tournaments, there was no team that could compete with India — and most of the matches saw huge victory margins.
- India beat hosts the Netherlands 3-0 in the 1928 final, the US were thrashed by a scarcely-believable margin of 24-1 in the 1932 gold medal match, while Germany went down 8-1 in the 1936 decider.
- In all, Dhyan Chand played 12 Olympic matches, scoring 33 goals.
Legends associated with Dhyan Chand
- It is said that once his sublime skill and close control of the ball aroused such suspicion that his stick was broken to see whether there was a magnet inside.
- During the 1936 Berlin Games, Adolf Hitler offered him German citizenship and the post of Colonel in his country’s Army, a proposition the Indian ace refused.
Why does the name evoke such emotion?
- Dhyan Chand played during India’s pre-independence years, when the local population was subjugated and made to feel inferior by the ruling British.
- Hence, seeing an Indian dominating the Europeans in a sport invented by them evoked a lot of pride in them.
- There has been a long-running campaign arguing that Dhyan Chand be posthumously awarded the Bharat Ratna, the country’s highest honour.
- Before Independence and for some years after that, hockey was the only sport in which India consistently excelled at the international and Olympic stage.
- In fact, starting from Amsterdam 1928, India won seven of the eight hockey gold medals at the Games.
- Apart from K D Jadhav’s wrestling bronze at Helsinki 1952, India had to wait until Atlanta 1996 and tennis player Leander Paes for an Olympic medal in a sport other than hockey.
Why is the renaming of the award significant?
- The eight gold medals in hockey have often been termed as the millstone around the necks of the subsequent generation of players.
- The modern game is an altogether different sport from the one played in Dhyan Chand’s era.
- The Europeans and Australians have become much more proficient over the decades, while the change of surface has put a premium on fitness, speed, stamina, and physical strength.
- India had not managed to get into the top four at the Olympics since the boycott-affected Moscow Games in 1980.
- The later generations may have felt out of touch with the golden years, about which one could only read in books or listen to in tales of the protagonists and those who witnessed the heroics.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Flag
Mains level: Honor of our national flag and national anthem
Ahead of Independence Day, the Centre has urged all citizens not to use a national flag made up of plastic and asked states and Union Territories to ensure strict compliance with the flag code.
Prevention of Insults to National Honour Act
- The law, enacted on December 23, 1971, penalizes the desecration of or insult to Indian national symbols, such as the National Flag, the Constitution, the National Anthem, and the Indian map, as well as contempt of the Constitution of India.
- Section 2 of the Act deals with insults to the Indian National Flag and the Constitution of India.
Do you know?
Article 51 ‘A’ contained in Part IV A i.e. Fundamental Duties asks:
To abide by the constitution and respect its ideals and institutions, the National Flag and the National Anthem in clause (a).
Other provisions
- Section 3.22 of The Flag Code of India, 2002 deals with laws, practices and conventions that apply to the display of the national flag.
- Section 3.58 says: On occasions of State/Military/Central Paramilitary Forces funerals, the flag shall be draped over the bier or coffin with the saffron towards the head of the bier or coffin.
- The Flag shall not be lowered into the grave or burnt in the pyre.
Try this
Q.The national motto of India, ‘Satyameva Jayate’ inscribed below the Emblem of India is taken from:
(a) Katha Upanishad
(b) Chandogya Upanishad
(c) Aitareya Upanishad
(d) Mundaka Upanishad
Answer this PYQ here:
Use of flag in funerals
- The flag can only be used during a funeral if it is accorded the status of a state funeral.
- Apart from police and armed forces, state funerals are held when people who are holding or have held the office of President, Vice-President, PM, Cabinet Minister, or state CM pass away.
- The status of a state funeral can be accorded in case of death of people not belonging to the armed forces, police or the above-mentioned categories by the state government.
- Then too, the national flag can be used.
Disposing of the national flag
- A/c to the Flag Code, such paper flags are not to be discarded or thrown on the ground after the event.
- Such flags are to be disposed of, in private, consistent with the dignity of the flag.
Back2Basics:
Story of our National Flag
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Dara Shikhoh and his legacy
Mains level: Secular polity in Medieval India
The final resting place of Mughal prince Dara Shikoh remains a mystery, with the Archaeological Survey of India saying it has not located the grave within the Humayun’s Tomb complex.
Dara Shikoh
- Dara Shikoh, who was Mughal emperor Shah Jahan’s son and expected heir, was killed on the orders of his brother Aurangzeb in 1659 after losing the war of succession.
- He was the eldest son and heir-apparent of the Mughal emperor Shah Jahan.
- Dara was designated with the title Padshahzada-i-Buzurg Martaba (Prince of High Rank) and was favored as a successor by his father and his older sister, Princess Jahanara Begum.
- In the war of succession which ensued after Shah Jahan’s illness in 1657, Dara was defeated by his younger brother Prince Muhiuddin (Aurangzeb).
- He was executed in 1659 on Aurangzeb’s orders in a bitter struggle for the imperial throne.
His legacy
- Dara was a liberal-minded unorthodox Muslim as opposed to the orthodox Aurangzeb.
- He authored the work The Confluence of the Two Seas, which argues for the harmony of Sufi philosophy in Islam and Vedanta philosophy in Hinduism.
- It was Dara Shikoh who was responsible for making the Upanishads available to the West as he had them translated.
- He had commissioned a translation of Yoga Vasistha.
- A great patron of the arts, he was also more inclined towards philosophy and mysticism rather than military pursuits.
- The course of the history of the Indian subcontinent, had Dara Shikoh prevailed over Aurangzeb, has been a matter of some conjecture among historians.
Q.Who among the following Mughal Emperors shifted emphasis from illustrated manuscripts to album and individual portrait?
(a) Humayun
(b) Akbar
(c) Jahangir
(d) Shah Jahan
Answer this PYQ here:
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CHAPEA Mission
Mains level: Not Much
NASA is seeking applications for its new mission called the Crew Health and Performance Exploration Analog (CHAPEA), which is related to Mars.
CHAPEA
- The mission is set to begin in 2022 and will give four successful applicants the chance to live and work in a 1,700 square-foot module that is created by a 3D printer and is called the Mars Dune Alpha.
- The simulated quarters include a kitchen, areas for medical, recreation, fitness, work, crop growth, a technical work area and two bathrooms.
- This habitat will simulate what it feels like to carry out missions on Mars including resource limitations, equipment failure, communication delays and any other environmental stressors.
- The crew will be expected to perform simulated spacewalks, scientific research and use virtual reality and robotic controls and exchange communications.
What is the purpose of this mission?
- The habitat in which the crew members will stay will be as Mars-realistic as possible.
- The results from this analog mission will provide scientific data that will help in validating the systems that will be used for actual missions to Mars and also help in solving problems for spaceflight research.
- CHAPEA is not the only analog mission, there are others including Aquarius/NEEMO, Concordia, Desert RATS, and HESTIA.
- Analog missions are required because not all experiments can be carried out in space because resources and money are limited.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Absorption Spectroscopy
Mains level: Not Much
Researchers from IIT Madras and IISER Kolkata have developed a method to detect minute quantities of chemicals in solution using Absorption Spectroscopy.
Note: These days there has been a rise in questions from biology (rather cell biology in particular).
Absorption Spectroscopy
- Absorption spectroscopy is a tool to detect the presence of elements in a medium.
- Light is shone on the sample, and after it passes through the sample is examined using a spectroscope.
- Dark lines are seen in the observed spectrum of the light passed through the substance, which correspond to the wavelengths of light absorbed by the intervening substance and are characteristic of the elements present in it.
- In usual methods, about a cubic centimeter of the sample is needed to do this experiment.
- In the method developed here, minute amounts of dissolved substances can be detected easily.
- Usually in absorption spectroscopy, the principle used is that light because of its wavelike nature, shows diffraction patterns, that is, dark and light fringes, when it scatters off any object.
Studying small objects
- A related concept called the Abbe criterion sets a natural limit on the size of the object being studied.
- According to this criterion, the size of the observed object has to be at least of the order of the wavelength of the light being shone on it.
- If one wants to perform absorption spectroscopy using visible light, namely, blue, green and red, the wavelengths [of these colours] are about 400 nm, 500 nm and 600 nm, respectively.
What has Indian researchers achieved?
- In the method used by the researchers here, tiny, nano-sized particles that can absorb light being shone on them and re-emit red, blue and green light were employed.
- The particles emit electric fields that are analogous to how a tiny magnet would give off magnetic lines of force – this is called a dipole, and the particle is like a tiny mobile phone’s antenna.
- This dipole generates an electromagnetic field depending upon the quantum properties of the erbium dopants in the glass.
- The absorption leaves a gap in the reflected light, which is what is observed and used to analyse the nature of the absorbing material.
Applications of this technology
- There are many potential applications.
- Small molecules almost ten-millionth of an mm in diameter can be detected while these pass the emission region of the glass particle.
- The future is to use it to measure individual molecules, see absorption spectroscopy of a single DNA or protein molecule.
Try this
Q.Which of the following statements are correct regarding the general difference between plant and animal cells?
- Plant cells have cellulose cell walls whilst animal cells do not.
- Plant cells do not have plasma membranes unlike animal cells which do.
- Mature plant cell has one large vacuole whilst an animal cell has many small vacuoles.
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer this PYQ here:
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Issue of retrospective taxation
Context
With the government proposing to repeal the ‘retrospective tax’ amendment introduced in the Union Budget 2012-13, a 14-year-story has come to an end.
Background of retrospective tax
- In 2007 Vodafone acquired Hutchison Essar, the telecom company, for $11 billion. But the deal did not take place in India.
- Yet, Vodafone was slapped with a huge income tax demand in India.
- The Supreme Court rule in favour of Vodafone and said that the Indian authorities could not tax a deal executed in Cayman Islands.
- This verdict led to the 2012 amendment in the Income Tax Act, to the effect that if an Indian asset was held by a foreign company and an acquirer bought this holding company, such a transaction was deemed to be taxable in India because the underlying asset was located in India.
- More importantly, this change was made retrospectively from 1962.
- Now, the government has introduced The Taxation Laws (Amendment) Bill, 2021 to undo this insidious provision from the Finance Bill, 2012.
- The government will not raise tax demands in any such case if the transaction occurred before 28 May 2012.
- The tax on the indirect sale of assets located in India still stays on the statute books, but it is fully visible to and understood by any parties looking to enter into such a transaction.
Why repeal of retrospective taxation is a good move?
- Resolution of case the cases: This will potentially help resolve 17 cases in which income tax demand had been raised, including two high profile cases—Cairn and Vodafone.
- Visibility and stability: The government is putting to rest the concept of retrospective taxation and is also creating visibility and stability for the future.
- Predictability: The most important aspect of any tax regime is its predictability and this decision helps bring that.
- Honouring the rule of law: It also reiterates India’s commitment to honour the rule of law and treaties.
- Build confidence: Apart from the various reform measures and incentives being offered, the sanctity of contracts is a key factor that any investing entity will look at when deciding on expanding business operations in India.
- The government’s move would help build confidence and provide a fillip to Atmanirbhar Bharat.
Conclusion
As the post-covid recovery picks up, focus needs to be on the future rather than keeping a sword of uncertainty for the past dangling on potential investors. Such a decision needs political capital and ownership, which comes through strongly in this case.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SAGAR
Mains level: Paper 3- Security and growth for all in maritime domain
Context
In an innovative departure from normal practice, Prime Minister Narendra Modi will preside (in virtual mode) over the UN Security Council, on Monday (August 9) when India holds the President’s chair for one month. The subject of debate is maritime security.
Issues with global maritime security
- FON issue: There is tension in the South China Sea over freedom of navigation (FON) rights in international waters and how China has laid claim to “territoriality” based on artificial structures (not natural islands).
- This formulation has not been accepted by the US that has exercised transit rights in these waters.
- Many ASEAN nations and Quad members such as Japan, Australia and India subscribe to the principle of FON and do not accept the Chinese interpretation of the “nine-dash-line”.
- Traditional challenges: Piracy and non-traditional challenges at sea such as gun-running and smuggling are old chestnuts.
- Maritime pollution: Accidents in the oceans have added to the anxiety about marine pollution and its downstream consequences for the health of the oceans.
- Global warming: A UN report has come up with grim statistics about the impact of global warming on the chemistry of oceans.
- This study notes that oceans have become more acidic as sea water absorbs more carbon dioxide.
- Furthermore, the upper layers of the open ocean have lost between 0.5 per cent and 3.3 per cent of their oxygen since 1970 as temperatures have risen.
Way forward for India at UNCS: Security and equitable growth
- The subject to be deliberated upon by the UNSC members is “Enhancing maritime security: A case for international cooperation”.
- This would be an extension of India’s advocacy of SAGAR (security and growth for all in the region) in relation to the Indian Ocean region (IOR).
- At the UNSC strategic and security issues such as the South China Sea and FON would find little consensus as China is a permanent member and would stall any meaningful debate.
- Focus on global goods: What may find support for a useful debate at the UNSC would be those areas that could be brought under the rubric of the “global good”.
- For instance, the welfare of seafarers who are the sinews of the global merchant marine, has received scant attention in this Covid-scarred period and the IMO (International Maritime Organisation) has been unable to effectively address such issues.
- Correlation with globalisation: India can also advocate for sustained focus on the maritime domain and the correlation with globalisation, the blue economy, the health of the ocean and the overall impact on human security.
Conclusion
Security and equitable growth for all by husbanding the global ocean for future generations is a laudable goal and encouraging the UNSC to prioritise this issue is a worthy cause.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: ASEAN
Mains level: Paper 3- Adoption of digital transformation
Context
COVID-19 has forced South Asia to take a quantum leap in digitalisation, which will help shape its future prosperity.
Spike in digitisation due to Covid
- In India, COVID-19 accelerated the launch of the National Digital Health Mission, enhancing the accessibility and the efficiency of health-care services by creating a unique health ID for every citizen.
- Pandemic accelerated South Asia’s embrace of e-commerce, boosted by digital payment systems.
- Bangladesh alone witnessed an increase of 70-80% in online sales in 2020, generating $708.46 million in revenues.
- Even smaller nations such as Nepal recording almost an 11% increase in broadband Internet users.
The dangers of a digital divide
- A wide digital divide persists in access and affordability, between and within the countries of South Asia.
- Despite having the world’s second-largest online market, 50% of India’s population are without Internet with 59% for Bangladesh and 65% for Pakistan.
- This divide could permanently put children out of school, place girls at risk of early marriage, and push poor children into child labour costing economies billions of dollars in future earnings.
- Businesses too have paid a heavy price for the gap in digital solutions, whereby many South Asian firms failing to embrace e-commerce or other cloud-based technologies to survive the financial chaos of the novel coronavirus pandemic.
Asian digitalisation
- Digital transformation is a global imperative with the adoption of advanced technologies.
- At the forefront of Asian digitalisation are countries such as Singapore, Japan, and South Korea recognised as global technological hubs.
- The digital boom in the Association of Southeast Asian Nations (ASEAN) economies is pushing a “common market” initiative, fostering regional economic integration and enhancing global competitiveness.
- South Asia has also made significant strides in the adoption of digital technologies such as the Digital Bangladesh Vision 2021.
How digitalisation can help South Asia?
- The region still has a long way to go.
- Jobs in e-commerce: E-commerce could drive the post-pandemic growth in South Asia, providing new business opportunities and access to larger markets.
- In India, e-commerce could create a million jobs by 2030 and be worth $200 billion by 2026.
- Growth driven by Fintech: Fintech could drive significant growth and reduce poverty by building financial inclusion.
- Increase in productivity: A timely, inclusive, and sustainable digital transformation can not only bolster productivity and growth but also serve as a panacea for some of the region’s socio-economic divides.
Steps need to be taken
- To reap the dividends of digital transformation, South Asia needs to address legal, regulatory and policy gaps as well as boost digital skills.
- Digital infrastructure: A robust digital infrastructure is a sine qua non and there exists a huge financing gap.
- India alone needs an annual investment of $35 billion to be in the top five global digital economy.
- Private-public partnership: Public-private partnership needs to be leveraged for the region’s digital infrastructure financing.
- Regulatory roadblocks need to be addressed as e-commerce regulations are weak in South Asia.
- Digital literacy: There would be no digital revolution without universal digital literacy.
- Governments and businesses need to come together to revamp the education system to meet the demand for digital skills and online platforms.
- Cybersecurity measures: The crossflow of data and personal information calls for stringent cybersecurity measures as many have experienced painful lessons in data privacy during the pandemic.
- Digital Single Market Proposal: By addressing issues such as regulatory barriers on currency flows inhibiting online payment to transport-related constraints for cross-border e-commerce activities, South Asia can emulate the European Union’s Digital Single Market Proposal.
- Collaboration: Concerted collaboration at all levels is needed to push South Asia out of stagnancy and towards a digital future of shared prosperity.
- Partnership for digital revolution: During the pandemic, South Asian nations joined hands to collectively battle the crises by contributing towards a COVID-19 emergency fund, exchanging data and information on health surveillance, sharing research findings, and developing an online learning platform for health workers.
- If the eight nations (Afghanistan, Bangladesh, Bhutan, India, Nepal, Maldives, Pakistan and Sri Lanka) can start walking the talk, partnership for a successful digital revolution is plausible.
Conclusion
A shared “digital vision” could place the region on the right track towards the Fourth Industrial Revolution.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Constitutional amendment and its types
Mains level: 127th Constitutional amendment and its features
The Government will bring the 127th Amendment Bill to Parliament to clarify “some provisions in the 102nd Constitutional amendment Bill” to restore the power of the states to identify backward classes — a demand made by a number of regional parties and even the ruling party’s own OBC leaders.
Try answering:
Q. Consider the following statements:
- An amendment to the Constitution of India can be initiated by an introduction of a bill in the Lok Sabha only.
- If such an amendment seeks to make changes in the federal character of the Constitution, the amendment also requires to be ratified by the legislature of all the States of India.
Which of the statements given above is/are correct? (CSP 2013)
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
127th Constitutional Amendment Bill
- The Constitutional 127th Amendment Bill will amend Articles 342 A — clauses 1 and 2 — and will introduce clause 342 A (3) specifically authorizing states to maintain their State List.
- There will be a consequential amendment in Articles 366(26C) and 338B (9). States will then be able to directly notify OBC and SEBCs without having to refer to the NCBC.
- There has been some confusion about what comprises a state and Central list, and this clause will clarify that.
Why need amendment?
- The Centre had earlier moved a review petition in the Supreme Court challenging the court’s interpretation of the 102nd amendment of the Constitution in the Maratha reservation judgment.
- The 102nd CA had scrapped the power of the states to identify and notify socially and educationally backward classes.
- The move is politically significant as the govt is banking heavily on OBC votes in key states that go to the polls next year.
About the 102nd CAA
- The 102nd CAA, 2018 has given constitutional status to the National Commission for Backward Classes (NCBC).
- With this, NCBC gets powers to examine the grievances in the implementation of the various welfare schemes meant for OBCs.
- The status of the Central list of OBCs has been elevated by giving constitutional status to the list.
- It has given powers to the Parliament to make changes in the Central OBC list.
Back2Basics: Constitutional Amendment
- Amending the Constitution of India is the process of making changes to the nation’s fundamental law or supreme law.
- The procedure of amendment in the constitution is laid down in Part XX (Article 368) of the Constitution of India.
- There is a limitation imposed on the amending power of the constitution of India.
- The most famous among them is the Basic structure doctrine as laid down by the Supreme Court in the case of Kesavananda Bharati v. State of Kerala (1973).
Procedure
- An amendment of the Constitution can be initiated only by the introduction of a Bill in either House of Parliament.
- The Bill must then be passed in each House by a majority of the total membership of that House and by a special majority of not less than two-thirds of the members present and voting.
- There is no provision for a joint sitting in case of disagreement between the two Houses.
- If the amendment seeks to make any change in any of the provisions mentioned in the provision to article 368, it must be ratified by the Legislatures of not less than one-half of the States.
- Although there is no prescribed time limit for ratification, it must be completed before the amending Bill is presented to the President for his assent.
Types:
- Simple majority of the Parliament: Creation of new states, Delimitation of constituencies etc.
- Special majority of the Parliament: for Fundamental rights and DPSPs
- Special majority of the Parliament and the ratification of at least half of the state legislatures: Election of the President and its manner, Supreme Court and high courts etc.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Calamity
Mains level: Disaster management
Under the existing Scheme of State Disaster Response Fund / National Response Fund of the Ministry of Home Affairs, there is no provision to declare any disaster including flood as a National Calamity.
How does the law define a disaster?
- A natural disaster includes earthquake, flood, landslide, cyclone, tsunami, urban flood, heatwave; a man-made disaster can be nuclear, biological and chemical.
- As per the Disaster Management Act, 2005, “disaster” means:
- A catastrophe, mishap, calamity or grave occurrence in any area, arising from natural or man-made causes, or
- It results in substantial loss of life or human suffering or damage to, and destruction of, property, or damage to, or degradation of, environment, and
- Damage is of such a nature or magnitude as to be beyond the coping capacity of the community of the affected area.
How can any of these be classified as a national disaster?
- There is no provision, executive or legal, to declare a natural calamity as a national calamity.
- The existing guidelines of the State Disaster Response Fund (SDRF)/ National Disaster Response Fund (NDRF), do not contemplate declaring a disaster as a National Calamity.
Has there ever been an attempt to define a national calamity?
- In 2001, the National Committee under the chairmanship of the then PM was mandated to look into the parameters that should define a national calamity.
- However, the committee did not suggest any fixed criterion.
How, then, does the government classify disasters/calamities?
- The 10th Finance Commission (1995-2000) examined a proposal that a disaster be termed “a national calamity of rarest severity” if it affects one-third of the population of a state.
- The panel did not define a “calamity of rare severity” but stated that a calamity of rare severity would necessarily have to be adjudged on a case-to-case basis taking into account.
What happens if a calamity is so declared?
- When a calamity is declared to be of “rare severity/severe nature”, support to the state government is provided at the national level.
- The Centre also considers additional assistance from the NDRF.
- A Calamity Relief Fund (CRF) is set up, with the corpus shared 3:1 between Centre and state.
- When resources in the CRF are inadequate, additional assistance is considered from the National Calamity Contingency Fund (NCCF), funded 100% by the Centre.
- Relief in repayment of loans or for grant of fresh loans to the persons affected on concessional terms, too, are considered once a calamity is declared “severe”.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Retractable Roof Polyhouse
Mains level: Not Much
The CSIR-CMERI has recently inaugurated a “naturally ventilated polyhouse facility” and laid the foundation stone of “retractable roof polyhouse”.
What is a Polyhouse?
- A polyhouse is a specially constructed structure like a building where specialized polythene sheet is used as a covering material under which crops can be grown in partially or fully controlled climatic conditions.
- It is covered with a transparent material as to permit the entry of natural light. Polyhouses are also helpful in reducing threats such as extreme heat and pest attacks in crops.
- This is especially important for crops growing in the open field with no protection from the weather, and therefore its yield, quality, and crop maturity timings are changed.
Retractable Roof Polyhouse
- The retractable roof system is a modular screen system for greenhouses that helps in saving costs and time along with providing stability, flexibility & durability for the greenhouse structure.
- Such polyhouse will have an automatic retractable roof which will be operated based on weather conditions and crop requirements from the conditional database using the software.
Advantages offered
- Ability to use the benefits of natural weather conditions
- Long life of the system and material used
- Easy assembly and installation
- Maximum insulation and complete protection from insecticides
- Easy maintenance & even easier repair work during operation
Why need such polyhouse?
- With rapidly rising temperatures due to mounting greenhouse gases in the atmosphere from human activities, crops are increasingly facing both threats — extreme heat and pest attacks — simultaneously.
- Crop losses in India due to insect pests are about 15 percent at present and this loss may increase as climate change lowers the plant defense system against insects and pests.
- Conventional greenhouses have a stationary roof to reduce the effect of weather anomalies and pests.
- However, there are still disadvantages due to roof covering which sometimes lead to excessive heat and insufficient light (early morning).
- Besides this, they are also prone to insufficient levels of carbon dioxide, transpiration, and water stress.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Abanindranath Tagore
Mains level: Not Much
Year-long celebrations marking 150 years of Abanindranath Tagore have been kicked off in Kolkata.
Abanindranath Tagore (1871-1951)
- Tagore CIE was the principal artist and creator of the “Indian Society of Oriental Art”.
- A nephew of Rabindranath Tagore and a decade younger to the poet, he helped shape modern Indian art and was the creator of the iconic ‘Bharat Mata’ painting.
- He was also the first major exponent of Swadeshi values in Indian art, thereby finding the influential Bengal school of art, which led to the development of modern Indian painting.
- He was also a noted writer, particularly for children.
- Tagore sought to modernize Mughal, Rajput styles to counter the influence of Western models of art, as taught in art schools under the British Raj.
- Along with other artists from the Bengal school of art, Tagore advocated in favor of a nationalistic Indian art derived from Indian art history, drawing inspiration from the Ajanta Caves.
Q. Which among the following event happened earliest? (CSP 2018)
(a) Swami Dayanand established Arya Samaj.
(b) Dinabandhu Mitra wrote Neeldarpan.
(c) Bankim Chandra Chattopadhyay wrote Anandmath.
(d) Satyendranath Tagore became the first India to succeed in the Indian Civil Services Examination.
Answer this PYQ in the comment box:
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SATYAM Programme
Mains level: Yoga as a therapy
The Ministry of Science & Technology (MoST) is implementing the Science and Technology of Yoga and Meditation (SATYAM) Programme to explore the effect of yoga and meditation as add on therapy to fight COVID-19.
SATYAM Programme
- The MoST is implementing SATYAM Programme since the year 2015-16 to promote scientific research in the field of yoga and meditation in order to understand its role in human wellbeing.
- Its main objective is encouraging scientists, clinicians and experienced practitioners of yoga and meditation, with a proven track record, to submit concept notes.
Themes covered:
- Investigations on the effect of Yoga and Meditation on physical and mental health and well being.
- Investigations on the effect of Yoga and Meditation on the body, brain, and mind in terms of basic processes and mechanisms.
Focus on COVID
It shall focus on three dimensions of COVID related illness:
- Mental Stress
- Respiratory
- Immune system
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Inner Line Permit
Mains level: Paper 2- Assam-Mizoram border dispute
Context
The violent stand-off between the Assam and Mizoram armed policemen at Vairengte in Mizoram, on July 26, took six lives and left over 50 injured is the culmination of a long-standing border dispute.
History of the boundary issue
- The ‘inner line’ boundary of the Lushai hills was ‘fixed’ in 1875 on the southern border of Assam’s Cachar district.
- In line with the colonial practice of ‘fixing’ borders, this boundary was however not ‘precise’ as it was drawn largely using natural markers such as rivers and hills.
- In post-independent India, the Mizoram government has accepted this boundary in preference over the subsequent revisions made by the colonial government.
- There was a change in boundary when the Inner Line Permit under the Bengal Eastern Frontier Regulation, 1873 was extended to the Lushai hills district in 1930 and 1933.
- The Mizoram government perceives that the boundary instituted by these revisions amounted to unilateral superimposition.
- These revisions are also seen to conspicuously fail to recognise the Mizo’s long-standing historical rights to use the un-demarcated southern border of Cachar as their hunting ground, for jhum cultivation, and as sites of their resource extraction including rubber and timber.
- However, considering that borders cannot be driven by perception but by institutionalised rules and laws, Assam’s government continues to refuse to accept Mizoram’s standpoint.
- The Assam government considers Mizo plantation and settlements in the Inner Line Reserve Forest areas as an ‘encroachment’.
People-centric Vs. State-centric approach in dispute
- At the heart of this dispute is the contending approaches of the Assam and Mizoram governments to ‘borders’, namely ‘state-centric and ‘people-centric approaches.
- The Assam government represent a continuum of the colonial ‘state-centric’ approach to borders which gives premium to legal, juridical and administrative recognition and protection of the border.
- The Mizoram government advocate a ‘people-centric approach seeks to give a premium to the historical and traditional rights of the local indigenous people.
- The Mizoram government also advocate the principle of uti possidetis juris (‘as you possess under law’, including customary law) on the other hand.
Way forward
- Historical context: Fixing the Assam-Mizoram border and resolve the dispute need to be sensitive to the historical context.
- Deep historical knowledge, sensitivity and an accommodative spirit need to inform dialogue and negotiation under the neutral supervision of the Centre.
- Inter-governmental forum: It is about time that the Centre sets up a permanent inter-governmental forum to involve important stakeholders in order to effectively manage border and territorial conflicts.
- Quick-fix solution should be avoided: Any quick-fix solution driven by temporal electoral considerations should be avoided if we were to resuscitate and sustain interdependent Assam-Mizoram borders and beyond.
Conclusion
The resolution should be sensitive to the possibility of fluid and overlapping sovereignty, where forest ‘commons’ are seen not simply as sites of revenue-extraction but as powerful symbols of identity and sustainable livelihood resources for the local people.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SOFI report
Mains level: Paper 2- Rising food insecurity
Context
The latest edition of the State of Food Security and Nutrition in the World (SOFI) report, released jointly by five UN organisations in July, reveals that the pandemic and failure on the part of state to combat its effects, has led to a significant increase in the prevalence of hunger and food insecurity in the country.
About the report
- Estimates on food insecurity presented in the SOFI report are based on two globally-accepted indicators of food insecurity:
- 1) The Prevalence of Undernourishment (PoU), which estimates the proportion of people suffering from chronic deficiency of calories.
- 2) A more recently developed an experience-based indicator called the Prevalence of Moderate and Severe Food Insecurity (PMSFI).
- The PoU estimates are based on estimates of per-capita supply of food and distributional parameters estimated using the national consumption surveys
- On the other hand, PMSFI estimates are based on data collected through surveys that attempt to capture people’s experiences of food insecurity (such as eating less, modifying diet to eat cheaper food etc).
- No assessment of food insecurity during a pandemic: The PMSFI estimates presented in the report are particularly important because, since the outbreak of the pandemic, the Indian government has not undertaken any official assessment of food insecurity in the country.
- Not only has the government not conducted its own consumption or food security surveys, it does not approve the publication of results based on the Gallup World Poll.
- As a result, estimates for India are not published in the SOFI reports.
- However, these can still be obtained indirectly because the data are presented for South Asia and for “South Asia (excluding India)”.
- Estimates for India can be obtained by comparing the two sets of data.
What the report says
- According to the data presented in the report, the prevalence of moderate to severe food insecurity in India rose by about 6.8 percentage points in 2018-20.
- Data show that there were about 43 crore of moderate to severe food-insecure people in India in 2019.
- As a result of the pandemic-related disruptions, this increased to 52 crore in one year.
- In terms of prevalence rates, moderate to severe food insecurity increased from about 31.6 per cent in 2019 to 38.4 per cent in 2021.
Causes of food insecurity in India
- Economic distress: The problems of hunger and food insecurity are grave in India because of widespread economic distress, high unemployment and high levels of inequality.
- Dependence on informal economy: A large proportion of the poor is dependent on the informal economy in which incomes are too low and uncertain.
- Unemployment: Unemployment rates have risen sharply over the last few years, shrinking public investment and the economic slowdown have compounded the distress among working classes and the peasantry.
- With low and uncertain incomes, families dependent on the informal economy do not have assured access to adequate and nutritious food.
Way forward
- Monitoring system: There is an urgent need for the government to establish systems for regular monitoring of the food security situation in the country.
- Universal access to food: It is ironic that the country with the largest stock of grain in the world — 120 million tonnes as of July 1, 2021 — accounts for a quarter of the world’s food-insecure population.
- Universalising access to the public distribution system is the need of the hour at least during the pandemic.
Conclusion
The increasing severity of food insecurity in India points to the urgent need for measures by the government to ensure the right to food of citizens of India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: 1991 reforms
Mains level: Paper 3- Changes brought about by 1991 reforms
Context
It has been 30 years since the spirit of liberalisation was unleashed in 1991 economic reforms. The private sector, which had been seen very differently up to 1990, was placed at the centre of the reform process. And this has continued and grown since then.
Challenges and opportunities for Indian industry after economic reforms
1) Entry of MNCs and centrality to consumers
- The first challenge was the entry of MNCs through the joint venture (JV) route.
- Centrality to consumers: The reforms gave centrality to the consumer who till 1991 did not have a choice.
- The Indian consumer was given choices and companies, both foreign and Indian, wanted to be their first choice.
- Growth in demand: The surge of new demand from the marketplace transformed the scenario, reflected in GDP growth rapidly moving up to 7 per cent per annum.
2) Increased competition
- For the first time, Indian companies faced real competition from other Indian as well as foreign companies.
- But, many corporates restructured themselves and transformed into competitive forces.
- The new reality of reduced customs duties and industrial licensing disappearing, removed the protection umbrella and Indian companies, by and large, who had been planning for this day, were ready to face this challenge.
3) Government-industry partnership
- Till June 1991, the government and industry were at a distance from each other.
- June 1991 changed all of that, the government’s dialogue with industry deepened, consultations were frequent.
- Feedback on what was happening on the ground was taken regularly.
- A government-industry partnership became a reality.
4) Boost to aspiration of industries
- The most significant change brought about by the reforms pertained to the level of “aspirations” of the industry.
- There was excitement and ambition to be world-class.
- Rise of IT industry: In this, the IT industry led by TCS, Infosys and Wipro played a major role.
- They showed that Indian engineers and managers were the best in the world.
- They exuded confidence which spread to others.
5) Boost to entrepreneurship
- Not just the big industry, but also, the small and medium sectors that became part of the new energy in industry.
- Component manufacturing and exports were new initiatives from ancillaries and suppliers of major manufacturers.
6) Infrastructure
- The public sector had a monopoly over infrastructure.
- This changed and the private sector was invited to participate, to get into public-private partnerships and end the government’s monopoly.
7) Birth of new private sector bank
- Banking had been nationalised in 1969.
- But the reforms of 1991 gave birth to a new private sector bank — HDFC Bank — which, after due diligence by the government and the Reserve Bank of India, opened its doors in 1994.
- This was a huge step forward in the reform process.
8) Improvement in corporate governance
- An industry-led initiative brought out the first-ever task force guidelines and report on corporate governance.
- This was followed by many other actions and policies.
Conclusion
There is still a long way to go, but the die that was cast in 1991 has led to a new tsunami of change.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Retrospective taxation
Mains level: Cairn Issue
The government took the first step towards doing away with the contentious retrospective tax law of 2012, which was used to raise large tax demands on foreign investors like Vodafone and Cairn Energy.
Retrospective Tax Law: A backgrounder
- The roots of this law date back to 2007, when Vodafone bought over a majority stake in the telecom operations of Hutch in India for $11.1 billion.
- While the deal involved the changing of hands of Indian operations of Hutch, the companies party to it were registered outside India and all the paperwork and financial transactions, too, were done outside the country.
- But the Indian government ruled that Vodafone was liable to pay capital gains tax to it as the deal involved the transfer of assets located in India.
- Importantly, there was no rule in the Indian statutes then that allowed such taxation.
- Vodafone challenged this claim and the case went to Supreme Court, which ruled in 2012 that there was no tax liability on Vodafone’s part to Indian authorities.
What was the law made then?
- In 2012, Parliament amended the Finance Act to enable the taxman to impose tax claims retrospectively for deals executed after 1962 which involved the transfer of shares in a foreign entity whose assets were located in India.
- The target, of course, was the Vodafone deal. Very soon, tax claims were also raised on Cairn Energy.
How did the Companies react?
- The changes to the Finance Act allowed India to reimpose its tax demand on Vodafone.
- Tax authorities had slapped a tax bill of Rs 7,990 crore on Vodafone, saying the company should have deducted the tax at source before making a payment to Hutchison.
- By 2016, reports say, the bill had risen to Rs 22,100 crore after adding interest and penalty.
- The demand on Cairn was for Rs 10,247 crore in back taxes over its move, beginning in 2006, to bring its Indian assets under a single holding company called Cairn India Ltd.
- A few years later, when Cairn India Ltd floated an IPO to divest about 30 per cent of its ownership of the company, mining conglomerate Vedanta picked up most of the shares.
- However, Cairn UK was not allowed to transfer its stakes as Indian officials held that the company had to first clear the tax liability.
Note: This story is of no use to aspirants. But one must understand how such cases create regression for the Indian economy in the long run.
A case in the Hague
- That prompted Cairn UK to move the Permanent Court of Arbitration to The Hague, Netherlands.
- It said that India had violated the terms of the India-UK Bilateral Investment Treaty by imposing a retrospective tax due on it.
- The treaty provides protection against arbitrary decisions by laying down that India would treat investment from the UK in a “fair and equitable” manner.
- Vodafone, too, had sought arbitration before the Permanent Court of Arbitration, citing the “fair and equitable” treatment clause in the India-Netherlands BIT.
India’s response
- In September last year, the Hague court ruled in favour of Vodafone, quashing India’s tax claim after holding that it violated the “equitable and fair treatment standard” under the bilateral investment treaty.
- India refused to pay the compensation, Cairn launched recovery proceedings across countries as part of which a French court ordered the freezing of some Indian assets in Paris.
- This move discourages foreign investors from coming to India and that the Centre should look to resolve the case at the earliest.
- The amendments now mooted are designed to do just that.
Taxation Laws (Amendment) Bill, 2021
- The Bill offers to drop tax claims against companies on deals before May 2012 that involve the indirect transfer of Indian assets would be “on fulfilment of specified conditions”.
Various conditions:
- The condition includes the withdrawal of pending litigation and the assurance that no claim for damages would be filed.
- As per the proposed changes, any tax demand made on transactions that took place before May 2012 shall be dropped, and any taxes already collected shall be repaid, albeit without interest.
- To be eligible, the concerned taxpayers would have to drop all pending cases against the government and promise not to make any demands for damages or costs.
Why is the amendment necessary?
- The retrospective taxation was termed “tax terrorism”.
- It is argued that such retrospective amendments militate against the principle of tax certainty and damage India’s reputation as an attractive destination.
- This could help restore India’s reputation as a fair and predictable regime apart from helping put an end to taxation.
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