Note4Students
From UPSC perspective, the following things are important :
Prelims level: T+1, T+2 settlement
Mains level: NA
The Capital markets regulator Securities and Exchange Board of India (SEBI) has introduced T+1 settlement cycle for completion of share transactions on optional basis in a move to enhance market liquidity.
What is T+1 Settlement System?
- T+1 means that settlements will have to be cleared within one day of the actual transactions taking place.
- Currently, trades on the Indian stock exchanges are settled in two working days after the transaction is done (T+2).
- In April 2002, stock exchanges had introduced a T+3 rolling settlement cycle. This was shortened to T+2 from April 1, 2003.
What has Sebi allowed?
- SEBI has allowed stock exchanges to start the T+1 system as an option in place of T+2.
- If it opts for the T+1 settlement cycle for a scrip, the stock exchange will have to mandatorily continue with it for a minimum 6 months.
- Thereafter, if it intends to switch back to T+2, it will do so by giving one month’s advance notice to the market.
- Any subsequent switch (from T+1 to T+2 or vice versa) will be subject to a minimum period.
- A stock exchange may choose to offer the T+1 settlement cycle on any of the scrips, after giving at least one month’s advance notice to all stakeholders, including the public at large.
Why T+1 settlement?
- Reduced settlement time: A shortened cycle not only reduces settlement time but also reduces and frees up the capital required to collateralize that risk.
- Quick settlement: T+1 also reduces the number of outstanding unsettled trades at any instant, and thus decreases the unsettled exposure to Clearing Corporation by 50%.
- Speedy recovery of assets: The narrower the settlement cycle, the narrower the time window for a counterparty insolvency/bankruptcy to impact the settlement of a trade.
- Risk reduction: Systemic risk depends on the number of outstanding trades and concentration of risk at critical institutions such as clearing corporations, and becomes critical when the magnitude of outstanding transactions increases.
How does T+2 work?
- If an investor sells shares, settlement of the trade takes place in two working days (T+2).
- The broker who handles the trade will get the money, but will credit the amount in the investor’s account only.
- In effect, the investor will get the money only after three days.
- In T+1, settlement of the trade takes place in one working day and the investor will get the money on the following day.
- The move to T+1 will not require large operational or technical changes by market participants, nor will it cause fragmentation and risk to the core clearance and settlement ecosystem.
Why are foreign investors opposing it?
- Foreign investors operating from different geographies would face time zones, information flow process, and foreign exchange problems.
- Foreign investors will also find it difficult to hedge their net India exposure in dollar terms at the end of the day under the T+1 system.
- In 2020, SEBI had deferred the plan to halve the trade settlement cycle to one day (T+1) following opposition from foreign investors.
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Back2Basics: SEBI
- The SEBI is the regulatory body for securities and commodity market in India under the jurisdiction of Ministry of Finance Government of India.
- It was established on 12 April 1988 and given Statutory Powers on 30 January 1992 through the SEBI Act, 1992.
Jurisdiction of SEBI
- SEBI has to be responsive to the needs of three groups, which constitute the market:
- Issuers of securities
- Investors
- Market intermediaries
SEBI has three powers rolled into one body: quasi-legislative, quasi-judicial and quasi-executive.
- It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders in its judicial capacity.
- Though this makes it very powerful, there is an appeal process to create accountability.
- There is a Securities Appellate Tribunal which is a three-member tribunal and is currently headed by Justice Tarun Agarwala, former Chief Justice of the Meghalaya High Court.
- A second appeal lies directly to the Supreme Court.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Ease of Doing Business Report
Mains level: Read the attached story
The World Bank Group has scrapped its flagship publication, the ‘Doing Business’ report.
Doing Business Report
- This report publishes the influential annual ranking of countries on the Ease of Doing Business (EDB) index.
- It ranks countries by the simplicity of rules framed for setting up and conducting businesses.
Utility of the index
The World Bank’s decision has wide ramifications, as the index serves varied purposes.
- Many countries showcase improved ranking to signal market-friendly policies to attract foreign investments. National leaders often set EDB rank targets.
- This helps them measure domestic policies against global “best practices” and browbeat domestic critics.
- India, for instance, wanted its administration to ensure that India breaks into the top 50 ranks of the EDB index.
- Some countries seem to use their political heft to improve their rank, polish their international image and sway public opinion (as appears to be China’s case).
Issues with the credibility of the report
- The Group acted on its commissioned study to examine the ethical issues flagged in preparing the 2018 and 2020 editions of the EDB index.
- It is accused of having exerted pressure on the internal team working on the Doing Business report to falsely boost China’s rank by doctoring the underlying data.
- Similarly, tensions were also reportedly brought to bear in the case of Saudi Arabia’s rank, among others.
EDB index rank vs economic outcomes
- There is a disconnect between the stellar rise in EDB index rank and economic outcomes.
- The theory underlying the EDB index could be suspect, the measurement and data could be faulty, or both.
- For example, China’s phenomenal economic success, especially its agricultural performance (after the reforms in 1978), is perhaps the most unmistakable evidence demonstrating that lack of clarity of property rights may not be the binding constraint in a market economy.
- What matters is economic incentives.
- Measuring regulatory functions underlying the index could be tricky and subjective and possibly politically motivated as well, as the controversies surrounding the index seem to suggest.
EODB in India: At what cost
Ans. Weakening labour regulations
- Closer home, India has weaponised the mandate to improve the rank in the EDB index to whittle down labour laws and their enforcement and bring them close to the free-market ideal of ‘hire and fire’.
- Most States have emulated Maharashtra’s lead of administrative fiat, which renders labour laws toothless by dismantling official labour inspection systems and allowing employers to file self-regulation reports.
- The government has farmed out critical safety regulations such as annual inspection and certification of industrial boilers to ‘third party’ private agencies.
- The Labour Department’s inspection is now not mandated; it is optional only by prior intimation to employers.
Implications of such moves
- Such abdication of the government’s responsibility towards workers has reportedly affected industrial relations.
- The workers’ strike at Wistron’s iPhone assembly factory in Karnataka last year is an example.
- Further, severe industrial accidents are rising, damaging life and productive industrial assets.
Why did World Bank scrap the index?
- Investigations into “data irregularities” in preparing the EDB index, as brought out by the independent agency, seems to confirm many shortcomings repeatedly brought to light for years now.
- The index appears motivated to support the free-market ideal.
- It is dressed up under scientific garb and is underpinned by seemingly objective methods and data collection.
- Strong leaders (and motivated officials) seem to have used their position to manipulate the index to suit their political and ideological ends.
Conclusion
- India claimed the success of its Make in India initiative by relying on its ranking on the EDB index without tangible evidence.
- Handing over law enforcement to employers by self-reporting compliance seems to have increased industrial unrest and accidents.
- It perhaps calls for honest soul-searching as to what havoc a questionable benchmark can wreak.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Front of Pack Labelling System
Seven years, four committees and two draft regulations later, India still does not have a clear labelling system to warn consumers about harmful levels of fat, salt and sugar in processed foods.
Context
- According to the Food Safety and Standards (Packaging and Labelling) Regulations, 2011, every pre-packed processed food product sold in the country must be labelled with nutritional information.
- To ensure that consumers are able to easily see and interpret the nutritional information on food packets, an expert committee was established by the Food Safety and Standards Authority of India (FSSAI).
- The committee, set up following an order of the Delhi High Court which was hearing a public interest petition seeking a ban on the sale of junk food in and around schools.
Why label nutritional information?
- This helps the consumer know everything about the food they buy and make an informed decision about what and how much to eat.
- Such information is particularly crucial because the packaged food contain ultra-processed foods that are high in fat, salt or sugar and low in fibre and other essential micronutrients.
- On the one hand, these foods cause malnutrition.
- On the other hand they are linked strongly with obesity and diet-related non-communicable diseases, such as Type-2 diabetes, hypertension, heart ailments and certain cancers, like that of the colon.
- All these increase the risk of premature death.
Issues with labelling in India
- Most products provide information in English understanding which can be daunting for a vast number of people in India.
What is FoP labelling?
- The front-of-pack (FoP) labelling system has long been listed as one of the global best practices to nudge consumers into healthy food choices.
- It works just the way cigarette packets are labelled with images to discourage consumption.
- Countries such as Chile, Brazil and Israel have laws to push the packaged food industry to adopt FoP labelling.
- They have used FoP labelling as a measure to fight obesity and NCDs.
FoP labelling in India
- The system is yet to be implemented in India even seven years after it was first proposed by FSSAI.
- The fact is, makers of packaged foods are also a powerful lot, with strong business acumen.
- While companies in other countries have acceded to the FoP labelling laws, they are unwilling to do so in India — a country experiencing a dietary shift.
Why must we have FoP labels?
- Countries are working to find ways to nudge consumers into healthy food choices and to contain the growing crisis of obesity and diet-related non-communicable diseases (NCDs).
- It is a crisis that increasingly impacts children and also exacerbates novel coronavirus disease (COVID-19) symptoms. Front-of-pack (FoP) labelling is definitely an effective tool in this effort.
India definitely needs ‘warning labels’ on front-of-pack, but this must be a symbol-based label with no text and numbers. This is because:
(1) Junk foods have high levels of unhealthy nutrients
- There is strong evidence that sugar, salt and fat in junk foods are addictive, like nicotine in tobacco.
- FoP ‘warning’ labels have helped reduce cigarette consumption. It is time we adopted the same for junk foods.
(2) Warning labels are easy to notice and understand
- They do not confuse consumers with mixed messages.
- Their distinct shape, colour and size make them noticeable in the otherwise cluttered and colourful packaging.
- With one label for one nutrient, it becomes easier to know if a product is high in more than one nutrient.
(3) Warning labels are the global best practice now
- At least seven countries have adopted warning labels in the past five years. These include Chile, Peru, Mexico, Israel and Uruguay.
- Low- and middle-income mothers have shown profound changes in attitudes towards food purchases as they now understand the nutritional content of packaged foods.
- Even children can read the labels and take an informed decision. This has also forced food companies to reduce the amount of sugar and sodium in foods and beverages.
(4) They are best suited for India
- Warning labels are best suited for India as they do not include numbers unlike many other FoP labels.
- In fact, warning labels that are symbol-based, like that of Israel, can transcend the barriers of literacy and language in India.
(5) FSSAI has experience of successfully implementing symbol-based FoP labels
- Its “green filled circle in green outlined square” logo to depict vegetarian food has been hugely successful in informing consumers.
- In recent years, FSSAI also has made similar laws to depict fortification (+F logo) and organic food (a green-coloured tick for Jaivik Bharat logo).
Way forward
- FoP labels must include information on nutrients that make food injurious to health.
- This should be distinct from the details on the back-of-pack. FoP labels should aim to inform the consumer, while the back-of-pack label serves the purpose of scientific compliance and enforcement.
- FoP labels should have information on ‘total sugar’ and not ‘added sugar’. There is no analytical laboratory method to differentiate ‘added sugar’ from total sugar and quantify it.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Global Innovation Index
Mains level: Innovation ecosystem in India
India has climbed 2 spots and has been ranked 46th by the World Intellectual Property Organization in the Global Innovation Index 2021 rankings.
Global Innovation Index
- The Global Innovation Index (GII) is an annual ranking of countries by their capacity for, and success in, innovation.
- It is published by Cornell University, INSEAD, and the World Intellectual Property Organization, in partnership with other organizations and institutions.
- It is based on both subjective and objective data derived from several sources, including the International Telecommunication Union, the World Bank and the World Economic Forum.
- The index was started in 2007 by INSEAD and World Business, a British magazine. It was created by Prof. Soumitra Dutta.
Components of GII
- The GII is computed by taking a simple average of the scores in two sub-indices, the Innovation Input Index and Innovation Output Index, which are composed of five and two pillars respectively.
India’s performance
- India has been on a rising trajectory, over the past several years in the Global Innovation Index (GII), from a rank of 81 in 2015 to 46 in 2021.
- India attributed its improved performance due to the pivotal role played by the Department of Atomic Energy, the Department of Science and Technology, the Department of Biotechnology and the Department of Space.
Global scenario
- Switzerland topped the league table, followed by Sweden, the US and the UK.
- Among Asian economies, South Korea jumped to the fifth position, up from 10 last year.
- China was in the 12th position.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Vishnuonyx neptuni
Mains level: NA
Between 12.5 million and 14 million years ago, members of a genus of otters called Vishnuonyx lived in the major rivers of southern Asia.
Vishnuonyx neptuni
- Vishnuonyx were mid-sized predators that weighed, on average, 10-15 kg.
- Before this, the genus was known only in Asia and Africa (recent findings show that Vishnuonyx reached East Africa about 12 million years ago, according to the release).
- Vishnuonyx depended on water and could not travel long distances over land.
Why in news?
- German researchers have discovered the fossil of a previously unknown species, which they have named Vishnuonyx neptuni, meaning ‘Neptune’s Vishnu’.
- Fossils of these now extinct otters were first discovered in sediments found in the foothills of the Himalayas.
- Now, a newly found fossil indicates it had travelled as far as Germany. ‘
- The dispersal of Vishnuonyx otters from the Indian subcontinent to Africa and Europe about 13 million years ago. ‘
- This is the first discovery of any member of the Vishnuonyx genus in Europe; it is also its most northern and western record till date.
How did it travel as far as Europe?
- According to the researchers, its travels over 6,000 km were probably made possible by the geography of 12 million years ago, when the Alps were recently formed.
- These Alps and the Iranian Elbrus Mountains were separated by a large ocean basin, which would have made it easier for the otters to cross it.
- Researchers believe ‘Neptune’s Vishnu’ first reached southern Germany, followed by Ancient Guenz and eventually, the Hammerschmiede.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Sea cucumber
Mains level: Illicit trade of exotic species
In a swift operation, the Indian Coast Guard (ICG) at Mandapam, Tamil Nadu seized two tonnes of sea cucumber, a banned marine species.
Sea Cucumbers
- Sea cucumbers are part of a larger animal group called echinoderms, which also contains starfish and sea urchins.
- Their body shape is similar to a cucumber, but they have small tentacle-like tube feet that are used for locomotion and feeding.
- One way that sea cucumbers can confuse or harm predators is by propelling their own toxic internal organs from their bodies in the direction of an attacker.
- The organs grow back, and it may save them from being eaten.
- They are found in virtually all marine environments throughout the world, from shallow to deep-sea environments.
- They are benthic, meaning they live on the ocean floor. However, their larvae are planktonic, meaning they float in the ocean with the currents.
Conservation status
- Sea cucumber in India is treated as an endangered species listed under schedule I of Wildlife Protection Act of 1972.
- It is primarily smuggled from Tamil Nadu to Sri Lanka in fishing vessels from Ramanathapuram and Tuticorin districts.
(IUCN status is not available for this species)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2-SEL
Context
While the National Education Policy (2020) notes numeracy and literacy as its central aims, Social and Emotional Learning should be an equally important goal as it supports skills such as communication, collaboration, critical thinking and creativity.
What is social and emotional learning (SEL)?
- SEL is the process of learning to recognise and manage emotions and navigate social situations effectively.
- SEL is foundational for human development, building healthy relationships, having self and social awareness, solving problems, making responsible decisions, and academic learning.
- Neurobiologically, various brain regions such as the prefrontal and frontal cortices, amygdala, and superior temporal sulcus are involved in the cognitive mechanisms of SEL.
- Brain systems that are responsible for basic human behaviour, such as getting hungry, may be reused for complex mechanisms involved in SEL.
- Despite its importance to life, SEL is often added as a chapter in a larger curriculum rather than being integrated in it.
- The pandemic has brought unprecedented challenges for SEL as school closures reduced opportunities for students to deepen social relationships and learn collaboratively in shared physical spaces.
- Even with parental involvement, the challenge of an inadequate support system for SEL remains.
Way forward
- Perhaps we can contextually adapt best practices from existing models.
- A starting point would be to consider insights from the Indian SEL framework:
- One, the application of SEL practices should be based on students’ socioeconomic backgrounds.
- Two, SEL strategies of caretakers and educators must align with one another.
- Three, long-term success requires SEL to be based on scientific evidence.
Conclusion
As a sustainable development goal outlines, policymakers now have to ensure that future changes prioritise “inclusive and equitable quality education and promote lifelong learning opportunities for all.” Importantly, the onus lies on all of us to make individual contributions that will drive systemic change.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: BIT
Mains level: Paper 3- Using BITs to hold TNCs accountable
Context
Given the enormous power that transnational corporations (TNCs) wield, questions about their accountability have arisen often. There have been many instances where the misconduct of TNCs has come to light such as the corruption scandal involving Siemens in Germany.
Holding TNCs accountable: Background
- The effort was made at the UN to develop a multilateral code of conduct on TNCs.
- However, due to differences between developed and developing countries, it was abandoned in 1992.
- Role of BITs: Aim was to use international law to institutionalise the forces of economic globalisation, leading to the spread of BITs.
- Asymmetry in BITs: These treaties promised protection to foreign investors under international law by bestowing rights on them and imposing obligations on states.
- This structural asymmetry in BITs, which confer rights on foreign investors but impose no obligations, relegated the demand for investor accountability.
- In 2014, the UN Human Rights Council established an open-ended working group with the mandate to elaborate on an international legally binding instrument on TNCs and other businesses concerning human rights.
- Since then, efforts are being made towards developing a treaty and finding ways to make foreign corporations accountable.
- The latest UN report is a step in that direction.
UN report on human rights-compatible international investment agreements
- The UN working group on ‘human rights, transnational corporations (TNCs) and other businesses’ has published a new report on human rights-compatible international investment agreements.
- It urges states to ensure that their bilateral investment treaties (BITs) are compatible with international human rights obligations.
- It emphasises investor obligations at the international level i.e., the accountability of TNCs in international law.
Using BITs to hold TNCs accountable
- BITs can be harnessed to hold TNCs accountable under international law.
- The issue of fixing accountability of foreign investors came up in an international law case, Urbaser v. Argentina (2016).
- Subjecting corporates to international law: In this case, the tribunal held that corporations can be subjects of international law and are under a duty not to engage in activities that harm or destroy human rights.
- The case played an important role in bringing human rights norms to the fore in BIT disputes.
- It also opened up the possibility of using BITs to hold TNCs accountable provided the treaty imposes positive obligations on foreign investors.
- Recalibrating BITs: In the last few years, states have started recalibrating their BITs by inserting provisions on investor accountability.
- Issues with BITs: However, these employ soft law language and are hortatory.
- They do not impose positive and binding obligations on foreign investors.
- They fall short of creating a framework to hold TNCs accountable under international law.
Takeaways for India
- The recent UN report has important takeaways for India’s ongoing reforms in BITs.
- Best endeavour clauses not enough: India’s new Model BIT of 2016 contains provisions on investor obligations.
- However, these exist as best endeavour clauses. They do not impose a binding obligation on the TNC.
- Impose positive binding obligations: India should impose positive and binding obligations on foreign investors, not just for protecting human rights but also for imperative issues such as promoting public health.
- The Nigeria-Morocco BIT, which imposes binding obligations on foreign investors such as conducting an environmental impact assessment of their investment, is a good example.
Consider the question ” Ensuring that the bilateral investment treaties (BITs) are compatible with international human rights obligations in the need of the hour. In light of this, assess the progress made globally on this issue and suggest way forward for India in framing its BITs.”
Conclusion
Reforms would help in harnessing BITs to ensure the answerability of foreign investors and creating a binding international legal framework to hold TNCs to account.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NCLAT, NCLT
Mains level: Read the attached story
While hearing a challenge to the Tribunal Reforms Act, 2021, the Supreme Court came down heavily on the government of India for vacancies not being filled on time. This could severely impact the ease of doing business in India, said the court.
Background
- The government has lauded the role of the Insolvency and Bankruptcy Code, 2016 (IBC), for improving India’s ranking on the “Ease of Doing Business” index over the last couple of years.
- However, the SC’s observation is spot-on as vacancies in the tribunals have slowed down insolvency resolution due to the huge pendency of cases.
- When the SC made its observations, the NCLT had only 30 members against a total strength of 63.
About NCLAT and NCLT
- National Company Law Appellate Tribunal (NCLAT) was constituted under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of National Company Law Tribunal(s) (NCLT) in 2016.
- NCLAT is also the Appellate Tribunal to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of India (CCI).
- It is also the Appellate Tribunal to hear and dispose of appeals against the orders of the National Financial Reporting Authority.
Difference between NCLT AND NCLAT
|
NCLT
|
NCLAT
|
| · NCLT is established as per Section 408 of companies act, 2013 |
· NCLAT is established as per Section 410 of companies act, 2013 |
| · It holds primary jurisdiction on cases of insolvency and bankruptcy |
· It holds appellate jurisdictions over the cases judged by NCLT |
| · NCLT accepts and analyzes the evidence from creditors and debtors |
· NCLAT accepts and analyzes the decision made by NCLT |
| · NCLT collects facts and evidences |
· NCLAT analyzes facts and evidences |
CJI’s reservations over Pendency
- The NCLAT had a sanctioned strength of a chairperson plus 11 members but its functioning strength was of eight members.
- Both the NCLT and NCLAT have been without chairpersons for several months respectively.
- These vacancies are concerning because as of May 31, 13,170 insolvency petitions were pending before benches of the NCLT.
- Of these, 2,785 petitions have been filed by financial creditors and 5,973 by operational creditors.
Note: The IBC created an institution called an information utility to be the repository of information on debts and defaults in India. The sole utility in India at present is the National E-Governance Services Ltd. (NeSL).
Basis of these cases
- The financial creditors are facing criticism for taking haircuts as high as 90 per cent against their claims.
- A longer approval period would entail greater value erosion of a corporate debtor which would be an unattractive proposition for any prospective resolution applicant.
- This uncertainty can be cured by a faster approval process by the NCLTs by the creation of more benches and filling up of current vacancies.
Why is the Supreme Court fuming over vacancies?
(a) Covid impact
- The Indian economy is recovering from the adverse effects of the Covid-19 pandemic.
- During the downturn, financial institutions and banks have suffered higher defaults than usual, impacting the robustness of the system.
- Lending has decreased during this time and can only be encouraged now by shoring up the mechanism under the IBC to inspire confidence in creditors.
(b) Non-compliance by the govt
- The SC had granted time to the government till September 13 to take substantial steps in this regard, which was partially complied with by appointing 18 members.
- The government, however, failed to avoid embarrassment as the CJI expressed his anger at the appointment process which had ignored candidates recommended by the selection committee.
(c) Burden of pendency
- There is a real risk of the court taking matters into its own hands by making appointments itself, or by taking harsher steps like transferring jurisdiction under the IBC to high courts.
- One hopes that the situation is resolved quickly to make strict time-bound insolvency resolutions a reality.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Indianization of Judiciary
Chief Justice of India NV Ramana has asserted the need for the “Indianisation of our legal system”, pointing out that the colonial system being followed currently may not be best suited to the complexities of India.
Prospects of Indianization by CJI
- CJI meant that the need to adapt to the practical realities of our society and localize our justice delivery systems.
- For example, parties from a rural place fighting a family dispute are usually made to feel out of place in the court.
- They do not understand the arguments or pleadings which are mostly in English, a language alien to them.
- These days judgments have become lengthy, which further complicates the position of litigants.
- For the parties to understand the implications of a judgment, they are forced to spend more money.
- For whom do the court’s function, the CJI asked. For the litigants, who are the “justice seekers”. They are the ultimate beneficiaries.
What did CJI say?
- CJI has said the ordinary Indian feels out of place in our courts where proceedings are lengthy, expensive and in English.
- Besides, judgments are either too long or technical or manage to be both.
- It is time for courts to wake up from their colonial stupor and face the practical realities of Indian society.
- Rules and procedures of justice delivery should be made simple.
- The ordinary, poor and rural Indian should not be scared of judges or the courts.
Reasons for Indianization
- Multiple barriers continue to thwart the citizen’s way to the courts.
- The working and the style of courts do not sit well with the complexities of India.
- The systems, practices and rules of courts are foreign and sourced from our colonial days. They do not take care of the practical realities of India.
Major suggestions by CJI:
(A) Simplification
- The simplification of justice delivery should be our pressing concern.
- It is crucial to make justice delivery more transparent, accessible and effective.
- Procedural barriers often undermine access to justice.
- The Chief Justice said both judges and lawyers have to create an environment which is comforting for the litigants and other stakeholders.
(B) Alternate dispute mechanisms
- The CJI said alternate dispute mechanisms like mediation and conciliation would go a long way in reducing pendency, unnecessary litigation and save resources.
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From UPSC perspective, the following things are important :
Prelims level: FRS
Mains level: Right to Privacy Issues
India has seen a rapid deployment of Facial Recognition Systems (FRS) in recent years, both by the Centre and State governments, without putting in place any law to regulate their use.
Facial Recognition System
- A FRS is a technology capable of matching a human face from a digital image or a video frame against a database of faces.
- It is typically employed to authenticate users through ID verification services, works by pinpointing and measuring facial features from a given image.
Why in news?
- There is a growing unabated use of this potentially invasive technology without any safeguards.
- This poses a huge threat to the fundamental rights to privacy and freedom of speech and expression of the citizens.
FRS in India
- Currently, 18 FRSs are in active utilisation by the Centre and State governments for the purpose of surveillance, security and authentication of identity.
- 49 more systems are in the process of being installed by different government agencies.
- Delhi Police was the first law enforcement agency in the country to start using the technology in 2018.
- Only Telangana is ahead of Delhi at present with four facial recognition systems in active utilization for surveillance and authentication of identity.
Judicial scrutiny of the move
- States say that they are authorized by the Delhi High Court in terms of the decision in the case of ‘Sadhan Haldar vs NCT of Delhi’.
- In that particular case, the High Court had authorized the Delhi police to obtain facial recognition technology for the purpose of tracking and reuniting missing children.
- FRS may be used in the investigation in the interest of safety and security of the general public.
A potential mis-use?
Ans. Can’t say!
- Activists pointed out that Delhi Police was now using the FRS, which was meant for tracking missing children, for wider security and surveillance and investigation purpose.
- There is a “function creep” happening with Police gradually using the technology beyond its intended purpose.
- For example, the use of FRS to identify accused who took part in the farmers’ tractor rally violence in January this year.
Need of the hour
Ans. Bring accountability
- Surveillance of any kind happens in secret and the people generally don’t know that they are being watched.
- The idea behind is to bring light to the fact that these technology systems are being used without any laws in place to regulate them.
- Police and state authorities should use such technologies for specific and special purposes with proper authorization.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Allternative fibres to plastic
Mains level: Phasing out single use plastics
Researchers from the Department of Material Engineering, Indian Institute of Science, Bengaluru (IISc) have found a way to make a substitute for single-use plastic that can, in principle help mitigate the problem of accumulating plastic waste in the environment.
What is the new material?
- IISc has developed polymers using non-edible oil and cellulose extracted from agricultural stubble.
- These polymers can be moulded into sheets having properties suitable for making bags, cutlery or containers.
- The material so made is bio-degradable, leak-proof and non-toxic.
Key features
- In order to obtain sheets with properties like flexibility suitable for making different articles, the researchers played with the proportions of cellulose to non-edible oil.
- The more cellulose they added, and less non-edible oil, the stiffer was the material, so that it was more suitable to making tumblers and cutlery.
- The greater the proportion of oil, the more flexible was the material and it could be moulded into sheets for making bags.
Why needed?
Ans. Plastic waste menace in India
- According to a report by Central Pollution Control Board of India, for the year 2018-2019, 3.3 million metric tonnes of plastic waste are generated by Indians.
- The bad news is that this may well be an under-estimation of the problem.
- Another alarming statistic is that of all the plastic waste produced in the world, 79% enters the environment.
- Only 9% of all plastic waste is recycled.
- Accumulation of plastic waste is detrimental to the environment and when this waste finds its way into the sea, there can be major harm to aquatic ecosystems, too.
Agricultural stubble
- While plastic waste causes one type of pollution, agricultural stubble burning is responsible for air pollution in several States.
- In Delhi, for example, the air quality index dips to indicate “severe” or “hazardous” level of pollution every winter, and this is due in part to the burning of agricultural stubble in the surrounding regions.
Try this PYQ from CSP 2020:
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 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
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Planet Nine, Dwarf Planets
Mains level: NA
A new study’s “treasure map” suggests that a planet several times more massive than Earth could be hiding in our solar system, camouflaged by the bright strip of stars that make up the Milky Way.
Do not wonder. This too was a PYQ:
Q.Which planet was downgraded to dwarf planet status?
(a) Pluto
(b) Mars
(c) Earth
(d) Venus
Post your answers here!
Planet 9
- Planet Nine is a hypothetical planet in the outer region of the Solar System.
- Its gravitational effects could explain the unlikely clustering of orbits for a group of extreme trans-Neptunian objects (ETNOs), bodies beyond Neptune that orbit the Sun at distances averaging more than 250 times that of the Earth.
- Based on earlier considerations, this hypothetical super-Earth-sized planet would have had a predicted mass of five to ten times that of the Earth, and an elongated orbit 400 to 800 times as far from the Sun as the Earth.
Curiosity for the ninth Planet
- In August 2006, the International Astronomical Union broke several hearts when it announced that it had reclassified Pluto as a dwarf planet. ‘
- The decision was based on Pluto’s size and the fact that it resides within a zone of other similarly-sized objects.
Is everyone convinced that Planet Nine exists?
- Researchers from across the globe have carried out several studies on Planet Nine and there are several theories about it, including one that stated Planet Nine could in fact be a black hole.
- Another research has argued that the unknown object causing anomalous orbits of the trans-Neptunian objects could be a primordial black hole.
- Yet another study noted that a trans-Neptunian object called 2015 BP519 had an unusual trajectory because it was affected by Planet Nine’s strong gravity.
Back2Basics: Dwarf Planet
- A dwarf planet is a small planetary-mass object that is in direct orbit of the Sun – something smaller than any of the eight classical planets, but still a world in its own right.
- As of today, there are officially five dwarf planets in our Solar System.
- The most famous is Pluto, downgraded from the status of a planet in 2006.
- The other four, in order of size, are Eris, Makemake, Haumea and Ceres. The sixth claimant for a dwarf planet is Hygiea, which so far has been taken to be an asteroid.
- These four criteria are – that the body orbits around the Sun, it is not a moon, has not cleared the neighborhood around its orbit, and has enough mass for its gravity to pull it into a roughly spherical shape.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Humboldt Penguins
Mains level: In-situ conservation
Last week, Mumbai’s Byculla Zoo announced the addition of two new Humboldt penguin chicks this year.
Humboldt Penguins
- Humboldt penguins are medium-sized species among at least 17 species.
- The exact number of distinct species is debated, but it is generally agreed that there are between 17 and 19 species.
- The largest, the Emperor penguin, stands at over 4 ft tall while the Little penguin has a maximum height of 1 ft. Humboldt penguins have an average height of just over 2 ft.
- The Humboldt penguin (Spheniscus Humboldt) belongs to a genus that is commonly known as the ‘banded’ group.’
Relation with the Humboldt Oceanic Current
- Humboldt penguins are endemic to the Pacific coasts of Chile and Peru.
- They are so named because their habitat is located near the Humboldt Current, a large oceanic upwelling characterized by cold waters.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Dengue
Mains level: NA
The Union Health Ministry has flagged the emerging challenge in 11 States across India of serotype 2 dengue, which it said is associated with “more cases and more complications” than other forms of the disease.
Try this PYQ from CSP 2015:
Q. Consider the following statements:
- In tropical regions, Zika virus disease is transmitted by the same mosquito that transmits dengue.
- Sexual transmission of Zika virus disease is possible.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Post your answers here!
What is Dengue?
- Dengue is a mosquito-borne viral infection, found in tropical and sub-tropical climates worldwide, mostly in urban and semi-urban areas.
- It is transmitted by female mosquitoes mainly of the species Aedes aegypti and, to a lesser extent, Ae. albopictus.
- These mosquitoes are also vectors of chikungunya, yellow fever and Zika viruses.
- Dengue is widespread throughout the tropics, with local variations in risk influenced by rainfall, temperature, relative humidity and unplanned rapid urbanization.
Its transmission
- The virus is transmitted to humans through the bites of infected female mosquitoes, primarily the Aedes aegypti
- Other species within the Aedes genus can also act as vectors, but their contribution is secondary to Aedes aegypti.
- Mosquitoes can become infected from people who are viremic with dengue.
Various serotypes
- Dengue is caused by a virus of the Flaviviridae family and there are four distinct, but closely related, serotypes of the virus that cause dengue (DENV-1, DENV-2, DENV-3 and DENV-4).
- Recovery from infection is believed to provide lifelong immunity against that serotype.
- However, cross-immunity to the other serotypes after recovery is only partial and temporary.
- Subsequent infections (secondary infection) by other serotypes increase the risk of developing severe dengue.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Delhi-Mumbai Expressway
Mains level: NA
The Minister for Road Transport and Highways Union Minister Nitin Gadkari concluded the review of the work progress on the Delhi-Mumbai Expressway.
Delhi-Mumbai Expressway
- The ambitious infra project started in the year 2018 is being constructed at a cost of Rs 98,000 crore and is scheduled for completion by March 2023.
- States: Delhi, Haryana, Rajasthan, Madhya Pradesh, Gujarat and Maharashtra
- Once ready, the expressway will feature a spur to Noida International Airport and Jawaharlal Nehru Port to Mumbai through a spur in the financial capital.
- It will reduce travel time between certain cities to 12-12.5 hours from 24 hours.
- The project is expected to improve connectivity to economic hubs of India like Jaipur, Ajmer, Kishangarh, Chittorgarh, Kota, Udaipur, Ujjain, Bhopal, Indore, Vadodara, Ahmedabad, and Surat.
Key features of the expressway
- The expressway which is eight-lane access-controlled can be expanded to a 12-lane expressway depending on the traffic volume
- It will boast wayside amenities such as resorts, food courts, restaurants, fuel stations, logistics parks, facilities for truckers
- For accident victims, it will offer a helicopter ambulance service as well as a heliport, which will use drone services for business
- Along the highway, over two million trees and shrubs are planned to be planted
- The highway project is Asia’s first and the world’s second to include animal overpasses in order to facilitate unrestricted wildlife movement
- Besides, it will also involve two iconic eight-lane tunnels
- The project will result in annual savings of more than 320 million litres of fuel as well as reduce Carbon dioxide emissions by 850 million kg
- Over 12 lakh tonnes of steel will be consumed in the project’s construction, which is equivalent to constructing 50 Howrah bridges
- For the project, 80 lakh tonnes of cement will be consumed, which is around 2 percent of the country’s annual cement production capacity
- The ambitious Delhi-Mumbai Expressway project has also created job opportunities for thousands of trained civil engineers apart from generating over 50 lakh man-days of work
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: LFPR
Mains level: Paper 3- Rising unemployment
Context
India’s unemployment rate in August was 8.3 per cent. This was higher than the 7 per cent recorded in July. The month-to-month variations notwithstanding, these are all very high unemployment rates.
Why inflation gets more attention in India than unemployment?
- Periodic Labour Force Survey (PLFS) results showed the historically high unemployment rate of 6.1 per cent for 2017-18 (July to June). It was at a 45-year high.
- New norm at 7-8 per cent: Till then, India was used to recording an unemployment rate of around 3 per cent.
- Today, an unemployment rate of 7-8 per cent seems to be the norm and such levels do not seem to matter.
- The unemployment rate is not the most important labour market indicator for a country like India.
- Why inflation gets preference: Between inflation and unemployment, the two economic indicators conjoined theoretically by the Phillips curve, it is inflation that wields political power.
- Inflation hurts almost the entire population.
- Equally importantly, high inflation rates can upset financial markets that in turn exert pressure on regulators to keep inflation in control.
- Unemployment directly impacts only the unemployed, who don’t count much.
- Worse still, society perceives being unemployed as an individual shortcoming, and not an outcome of a macroeconomic malaise.
What does low labour force participation rate (LFPR) indicate about the labour market in India?
- The unemployment rate is a measure of the economy’s inability to provide jobs only for those who seek work.
- But, in India, very often people do not look for jobs in the belief that none are available which is reflected in a low labour force participation rate (LFPR).
- India’s LFPR is at around 40 per cent when the global rate is close to 60 per cent.
- It is important that this belief in the futility of a job hunt is overcome by an explosive creation of new good quality formal jobs.
Why employment rate is a useful indicator for India
- A useful labour market metric for a country like India is the employment rate.
- This measures the proportion of the population over 14 years of age that is employed.
- The definition of employment needs to be changed, at present, engaging in some economic activity for just one hour in any of the past seven days is counted as employment.
- India’s record in providing employment to its people has been abysmally poor.
- CMIE’s definition of employment indicates that in 2016-17, only 42.8 per cent of the working-age population was employed.
- In the year of the pandemic, it fell to 36.5 per cent.
Reverse migration in employment from manufacturing to low productivity employment
- People are moving away from factories as manufacturing jobs shrink, to farms that provide shelter largely in the form of disguised unemployment.
- It cannot be the desire of a nation to move people away from high productivity, better quality jobs in manufacturing to low productivity employment in agriculture or as gardeners or security guards in the household sector.
- Employment opportunities need to expand in areas where labour is deployed to deliver higher productivity for enterprise and higher returns to labour.
Way forward
- Increase investment: A large part of the solution to this lack of adequate jobs is in increasing investments.
- Focus on demand size: For this, the investment climate needs to be business-friendly and government interventions must shift away from supply-side support to spurring demand.
Conclusion
The government needs to come up with policies for generating employment opportunities and stemming the reverse migration from manufacturing jobs to low productivity employment.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Monetization Pipeline
Mains level: Issues with Asset Monetization in India
The government of India recently announced an asset monetization plan, wherein existing public assets worth Rs 6 trillion would be monetized by leasing them out to private operators for fixed terms.
The plan has generated a lot of print so it is worth discussing its pros and cons.
About NMP
- The identified assets are primarily concentrated in roads, railways, power, oil and gas, and telecoms.
- The lease proceeds are expected to be used for new infrastructure investment which, in turn, will contribute to the government’s ambitious Rs 111 trillion infrastructure investment plan.
Important issues raised by the plan
[I] How much should the government expect to raise from the plan?
Revenue Potential
- In deciding the amount to bid for leasing rights, bidders compute the present discounted value of the annual cash flow from the asset for the duration of the lease.
- The biggest uncertainty in this calculation surrounds the cash flow on these public assets.
- Rates of return estimates on public capital in the US have been estimated to be upwards of 15 per cent.
- However, this is India with its myriad uncertainties regarding pricing, bill collection, asset quality, regulatory framework as well as policy reversals.
- Hence there is significant uncertainty regarding the revenue potential of the plan.
[II] Is the plan likely to increase the efficiency of the economy?
a. Efficiency of the economy
- The NITI Aayog believes that the private sector is better at managing and operating the identified public assets than the public sector.
- There is certainly scope for efficiency gains. However, there are significant efficiency impediments too.
- One set of efficiency issues surrounds usage fees. A second factor related to efficiency is the effect of the plan on competition.
b. Stressed sectors
- The identified assets belong to core sectors of the economy spanning transport, energy and communication.
- Sectors like telecoms and ports have already seen rising concentration of ownership in recent years.
- An acceleration and extension of this trend to other segments of the infrastructure landscape would be seriously worrying.
- While some of this could well be rationalized through the stipulation of rules for the allocation of leasing rights, the plan is silent on this.
c. Financing of the lease bids
- If bidders finance their bids using domestic savings, there is a clear opportunity cost of the plan since these savings would otherwise have been invested in alternative projects.
- Moreover, the bidding for scarce domestic savings by prospective investors will also raise domestic interest rates which will put downward pressure on domestic private investment.
- It would also be worth reminding ourselves that the last round of PPP-based infrastructure funding routed through banks ended up with a heap of NPAs in public sector bank balance sheets.
Biggest flaw of the NMP
- No clear objective: The biggest drawback of the plan is that it fails to articulate the reasons for public sector inefficiency in asset management.
- No focus on management: If it is personnel-related, then privatizing management may be the right answer. If the inefficiency is related to constraints on pricing and bill collection, then the roots of the problem are unlikely to be addressed by leasing out their management to private operators.
- No clear assessment of underperforming sectors: The plan document also fails to outline whether the identified brownfield assets are the public sector’s highest cash flow assets or the relatively under-performing ones.
Better alternatives for the govt
- The way around this is to welcome foreign investors to bid for the assets.
- But this will require serious political will since entrenching foreign influence on Indian public assets will generate controversy.
- On this aspect too, the announced plan is low on details.
Way forward
- If the private sector is indeed more efficient in running infrastructure assets, the most efficient strategy would be to lease out the worst-performing assets rather than the best performing ones.
- The NITI Aayog would do the policy landscape a big service by following up the proposal with a white paper that addresses some of these efficiency-related issues.
- Without that, the monetization plan, while intriguing, is incomplete.
Conclusion
- A monetization plan envisages the private sector paying an upfront fee to the government which the government uses for new infrastructure investment.
- As much as private bidders finance themselves by borrowing, this amounts to the private sector borrowing and handing over the funds to the government to invest in infrastructure.
- This could enhance efficiency in infrastructure investment only if the government faces higher interest rates in capital markets than the private sector.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: WTO, Agreement on Agriculture
Mains level: Read the attached story
The Agreement on Agriculture at the WTO is riddled with deep imbalances, which favour the developed countries and have tilted the rules against many developing countries, a Union Minister has said.
Agreement on Agriculture
- The AoA is an international treaty of the World Trade Organization.
- It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO on January 1, 1995.
Three pillars of AoA
The Agreement on Agriculture consists of three pillars—domestic support, market access, and export subsidies.
(1) Domestic support
- AoA divides domestic support into two categories: trade-distorting and non-trade-distorting (or minimally trade-distorting).
- It the classification of subsidies by “boxes” depending on consequences of production and trade:
- Amber (most directly linked to production levels)
- Blue (production-limiting programs that still distort trade)
- Green (minimal distortion)
(2) Market access
- Market access refers to the reduction of tariff (or non-tariff) barriers to trade by WTO members.
- The 1995 AoA consists of tariff reductions of:
- 36% average reduction – developed countries – with a minimum of 15% per-tariff line reduction in next six years.
- 24% average reduction – developing countries – with a minimum of 10% per-tariff line reduction in next ten years.
- Least developed countries (LDCs) were exempt from tariff reductions, but they either had to convert non-tariff barriers to tariffs—a process called tariffication—or “bind” their tariffs, creating a ceiling that could not be increased in future.
(3) Export subsidies
- The AoA required developed countries to reduce export subsidies by at least 36% (by value) or by 21% (by volume) over six years.
- For developing countries, the agreement required cuts were 24% (by value) and 14% (by volume) over ten years.
Criticism of AoA
- AoA has been criticized for reducing tariff protections for small farmers, a key source of income in developing countries, while simultaneously allowing rich countries to continue subsidizing agriculture at home.
- In 2017 India and China jointly submitted a proposal to the WTO calling for the elimination – by developed countries – of the most trade-distorting form of farm subsidies,
- They are known in WTO parlance as Aggregate Measurement of Support (AMS) or ‘Amber Box’ support as a prerequisite for consideration of other reforms in domestic support negotiations.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Taxing of fuels
Mains level: Limitations of GST
The Goods and Services Tax (GST) Council has decided to keep petroleum products out of the GST regime.
Present taxation of Fuels
- Currently, taxes on petroleum products are levied by both the Centre and the states.
- While the Centre levies excise duty, states levy value added tax (VAT).
- For instance, VAT on petroleum products is as high as 40% in Maharashtra, contributing over ₹25,000 crore annually.
- By being able to levy VAT on these products, the state governments have control over their revenues.
Impact of inclusion of fuel under GST
- If petroleum products are included under the GST, there will be a uniform price of fuel across the country.
- However, petroleum products coming under GST not necessarily means that taxes or prices will come down.
- If the GST council decides to opt for a lower slab, taxes may come down.
- At present, India has four primary GST rates – 5 percent, 12 percent, 18 percent and 28 percent.
- Levying a standard rate of GST on petrol would mean that the prices increase dramatically in Andaman and Nicobar, but on the flip side, they would fall in Maharashtra if the cumulative rate is lower than the current rate.
Key takeaways from States VAT
- Among the states, Rajasthan levies the highest tax across the country keeping VAT on petrol at 36 percent, followed by Telangana at 35.2 percent.
- Other states with more than 30 per cent VAT on petrol include Karnataka, Kerala, Assam, Andhra Pradesh, Delhi and Madhya Pradesh.
- On diesel, the highest VAT rates are charged by states like Odisha, Telangana, Rajasthan and Chhattisgarh.
- So far, five states, West Bengal, Rajasthan, Meghalaya, Assam and Nagaland have cut taxes on fuel this year.
Back2Basics: Petroleum Pricing Mechanism
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