Year: 2021

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Blockchain Technology: Prospects and Challenges

Cryptocurrencies regulation across the World

| Science Tech | Mains Paper 3: Awareness in various sc and tech fields
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Cryptocurrencies

Mains level: Need for Cryptocurrencies regulation

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 was listed for introduction in Parliament’s Winter Session.

About the Bill

  • The bill aims to create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India”.
  • It seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.

How are cryptocurrencies regulated in countries around the world?

The stance of countries and regulators has ranged from:

  1. A total ban on these financial assets Ex. China
  2. Allowing them to operate with some regulations
  3. Allowing virtual currency trading in the absence of any guidelines Ex. El Salvador
  • Governments and regulators remain divided on how to categorize it as a currency or asset — and how to control it from an operational point of view.
  • The evolution of the policy and regulatory response has been uncharacteristically discordant, with no apparent coordination in the responses of countries.

Among the countries that haven’t issued detailed regulations, there are those that have recognized and defined these currencies.

[A] CANADA

  • It defines virtual currency  under its Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, as:

(a) a digital representation of value that can be used for payment or investment purposes that is not a fiat currency and that can be readily exchanged for funds or for another virtual currency that can be readily exchanged for funds; or

(b) a private key of a cryptographic system that enables a person or entity to have access to a digital representation of value referred to in paragraph (a).

  • The Canada Revenue Authority (CRA) generally treats cryptocurrency as a commodity for purposes of the country’s Income Tax Act.

[B] ISRAEL

  • Israel in its Supervision of Financial Services Law includes virtual currencies in the definition of financial assets.
  • The Israeli securities regulator has ruled that cryptocurrency is a security subject, while the Israel Tax Authority defines cryptocurrency as an asset and demands 25% on capital gains.

[C] GERMANY

  • In Germany, the Financial Supervisory Authority qualifies virtual currencies as “units of account” and therefore, “financial instruments”.
  • It considers Bitcoin to be a crypto token given that it does not fulfill typical functions of a currency.
  • However, citizens and legal entities can buy or trade crypto assets as long as they do it through exchanges and custodians licensed with the German Federal Financial Supervisory Authority.

[D] UNITED KINGDOM

  • In the UK, Her Majesty’s Revenue & Customs, do not consider crypto assets to be currency or money.
  • It further notes that cryptocurrencies have a unique identity and cannot, therefore, be directly compared to any other form of investment activity or payment mechanism.

[E] UNITED STATES

  • In US different states have different definitions and regulations for cryptocurrencies.
  • While the federal government does not recognize cryptocurrencies as legal tender, definitions issued by the states recognize the decentralized nature of virtual currencies.

[F] THAILAND

  • In Thailand, digital asset businesses are required to apply for a license, monitor for unfair trading practices, and are considered “financial institutions” for anti-money laundering purposes.

Conclusion

  • While most of these countries do not recognize cryptocurrencies as legal tender, they do recognize the value these digital units represent.
  • Almost all countries consider their functions as either a medium of exchange, unit of account, or a store of value (any asset that would normally retain purchasing power into the future).
  • Like India, several other countries have moved to launch a digital currency backed by their central bank.

 

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Foreign Policy Watch: India-Australia

Australia’s controversial Religious Discrimination Bill

| International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Religiious intolerance accross the world

Australian PM Scott Morrison has introduced a contentious piece of anti-discrimination legislation called the “Religious Discrimination Bill” in their parliament.

What is the Bill about?

  • The bill aims to eliminate discrimination on the ground of religious beliefs or activities.
  • It will ensure Australians are protected from discrimination on the basis of religious belief or activity.
  • The timing of the introduction of this bill, ahead of the federal elections is being seen as an attempt by the Morrison government to target religious voters.

What does the Religious Discrimination Bill say?

  • The Act makes it unlawful to discriminate against a person on the grounds of religious belief or activity in a range of areas of life including work, education, access to premises, and the provision of goods, services, and accommodation.
  • Discrimination is unlawful if it occurs, for example, because of a religious belief or activity that the person holds or engages in.
  • It is also unlawful if it occurs because of the person’s association with someone else who holds or engages in a religious belief or activity, regardless of whether or not they themselves hold or engage in a religious belief or activity.

Contentious provisions

  • The bill also allows faith-based organizations such as religious schools to hire and enrol people from particular faiths.
  • The bill states that religious bodies can give preference, “in good faith, to persons who hold or engage in a particular religious belief or activity”.
  • It goes on to say that a religious body does not discriminate against a person under this Act by engaging, in good faith, in conduct that a person of the same religion as the religious body could reasonably consider.

Because of this clause, the bill has alarmed some LGBTQI groups and some legal experts who say that the bill will discriminate against gay teachers and students.

Criticisms

  • Some critics of the bill see it as a piece of legislation that is legalizing hate.
  • Some are questioning the government and asking for proof that people are discriminated against on the basis of religion in the country.
  • Further, there are also demands to protect gay students from discrimination.

 

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Parliament – Sessions, Procedures, Motions, Committees etc

What is Pre- Legislative Consultation Policy?

| Polity | Mains Paper 2: Parliament & State Legislatures
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Pre-Legislative Consultation Policy

Mains level: Stake-holders consultation in lawmaking process

The Union Government has listed 29 Bills (26 new and three pending) to be tabled in the winter session of Parliament.

What is Pre-Legislative Consultation Policy?

  • In 2014, the Pre-Legislative Consultation Policy was adopted, mandating a host of rules, including that whenever the Government makes any law, it must place a draft version of it in the public domain for at least 30 days.
  • This policy provides a forum for citizens and relevant stakeholders to interact with policymakers.
  • The policy also says that along with the draft, a note explaining the law in simple language and justifying the proposal, its financial implication, impact on the environment and fundamental rights, a study on the social and financial costs of the bill, etc. should be uploaded.
  • The respective departments should also upload the summary of all the feedback that they receive on the circulated draft.

Why in news?

  • Since the inception of the policy, 227 of the 301 bills introduced in Parliament have been presented without any prior consultation.
  • Of the 74 placed in the public domain for comment, at least 40 did not adhere to the 30-day deadline.

The inception of the PLCP

  • The PLCP was formulated based on the broad recommendations of the National Advisory Council in 2013 and the National Commission to Review the Working of the Constitution (2002).
  • It aimed to create an institutionalized space for public participation in lawmaking processes.

Empowerment through Pre legislative consultation policy

  • A Pre legislative consultation policy has numerous merits and can help nudge our country in the right direction.
  • Given how diverse this nation is, it is crucial that we have a means for citizens to get directly involved in the formulation of policy decisions, especially those that have a direct stake in the bill and its nature.
  • If we fail to do so we will risk falling behind the times. Countries like Britain and South Africa and even the state of Kerala already have already set up effective PLP processes.
  • If anything, Kerala’s effective model is proof of how effective this process can be at home.
  • Furthermore, this policy has the capacity to make historically marginalized groups feel more included and cared for.

Significance of the policy

  • This policy provides a forum for citizens and relevant stakeholders to interact with the policymakers in the executive during the initial stages of lawmaking.
  • Protests in the recent past over laws such as the farm laws, the RTI Amendment Act, the Transgender Persons (Protection of Rights) Act, etc. have all highlighted that there is discontent among relevant stakeholders and the public at large since they were not looped in while framing such laws.
  • Public consultations enhance transparency, increase accountability, and could result in the building of an informed Government where citizens are treated as partners and not as subjects.

Status of its implementation

  • During the 16th Lok Sabha (May 2014 to May 2019) 186 bills were introduced in Parliament, of which 142 saw no consultation prior to introduction.
  • From the 44 bills placed in the public domain for receipt of comments, 24 did not adhere to the 30-day deadline.
  • During the 17th Lok Sabha (June 2019 to present), 115 bills were introduced in Parliament, of which 85 saw no consultation prior to introduction.
  • From the 30 bills placed in the public domain for receipt of comment, 16 of them did not adhere to the 30-day deadline.
  • The tentative schedule for the winter session indicates that a total of 29 bills are listed for introduction and passing. Of these, 17 saw no prior consultation while from the 12 that were placed in the public domain, only six adhered to the 30-day deadline.

Why is implementation difficult?

  • Though it is required that the mandates of an approved policy be heeded by all Government departments, the absence of a statutory or constitutional right has watered down its effect.
  • The effective implementation of the policy requires subsequent amendments in executive procedural guidelines like the Manual of Parliamentary Procedures and Handbook on Writing Cabinet Notes.
  • However, during a subsequent amendment to the Manual of Parliamentary Procedures, the Ministry of Parliamentary Affairs ignored the Ministry of Law and Justice when it requested them to incorporate PLCP provisions in the manual.

Conclusion

  • Incorporation of pre-legislative consultation in the procedures of the Cabinet, Lok Sabha, Rajya Sabha etc. should be prioritized.
  • Similarly, it must be required of ministers while introducing the bill to place an addendum note on the details of the pre-legislative consultation.
  • Empowering citizens with a right to participate in pre-legislative consultations through a statutory and constitutional commitment could be a gamechanger.

 

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Indian Navy Updates

Trilateral Exercise ‘Dosti’

Prelims Only | Security Issues | Mains Paper 3: Various Security Forces, Agencies & Their Mandates
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Exercise Dosti

Mains level: Not Much

The 15th edition of the biennial trilateral coast guard exercise ‘Dosti’ involving India, the Maldives and Sri Lanka is underway in the Maldives.

Exercise Dosti

  • The aim of this exercise is to further fortify the friendship, enhance mutual operational capability, and exercise interoperability and to build cooperation.
  • Both the Maldives and Sri Lanka are of strategic importance to New Delhi and to its maritime security interests.
  • 2021 marks 30 years since these exercises were first launched.

Significance of the exercise

  • These exercises help during joint operations and missions undertaken by countries and also help enhance interoperability.
  • Although piracy is not a major issue in this part of the Indian ocean, these kinds of exercises also help coast guards with training for possibilities.
  • These exercises help develop a better understanding of the other nation’s coast guard operations and how to enhance coordination during different kinds of missions.

What it involves

  • The scope of these exercises are wide-ranging.
  • India, Sri Lanka and the Maldives have agreed to work on what they called the “four pillars” of security cooperation.
  • These involved the areas of marine security, human trafficking, counter-terrorism and cyber security.

 

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Women empowerment issues – Jobs,Reservation and education

A multi-pronged approach to end child marriage

op-ed snap | Governance | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Issue of child marriage

Context

Reports suggest that more child marriages have been noticed during the Covid pandemic.

Covid-19 and Girls

Socio-economic impacts of Covid-19 are gendered, evident in the form of educational inequality, sexual violence, and increased household burden.

  • Increased domestic violence: In India, the National Commission for Women reported 2.5 times to increase in domestic violence during the initial months of nationwide lockdown.
  • Abuse & Trafficking: Closure of schools and pandemic induced poverty has increased the vulnerability of children especially the girl child to abuse and trafficking
  • School dropout: UNESCO’s Global Education Monitoring Report (2021) throws light on increased educational inequalities for adolescent girls during the Covid-19 crisis. UNESCO estimates that around 11 million girls may not return to school.
  • School Closures pushed Children into Labour: In 2021, says UNESCO, 24 million children may not find their way back to schools after the pandemic. Any child who is not in school is a potential child laborer.
  • Child Marriages: India witnessed an increase in the number of child marriages since 2020. Girls are further at risk – married off early, these child brides are also often child laborers.
  • Reduced Education Budget: Despite knowing the impact of the Pandemic on the education system & thus on Children’s future, the Union budget has Rs 5,000 crore less to spend on education for children this year.
  • Digital gender gap: The digital gender gap deters girls’ remote education and access to information.

Child Marriage

  • It is defined as a marriage of a girl or boy before the age of 18 and refers to both formal marriages and informal unions in which children under the age of 18 live with a partner as if married.
  • UNICEF estimates suggest that each year, at least 1.5 million girls under 18 get married in India, which makes it home to the largest number of child brides in the world – accounting for a third of the global total.
  • A recent study by the Lancet shows that up to 2.5 million more girls (below the age of 18) around the world are at risk of marriage in the next 5 years because of the Covid-19 pandemic.

Prevalence of child marriage in India

  • Data from the fourth round of the National Family Health Survey (NFHS4) in 2015-16 shows that even before Covid, one in four girls in India was being married before 18.
  • Around 8 percent of women aged 15-19 years were mothers or pregnant at the time of the survey.
  • The first phase findings of NFHS5 (2019-20) show that the needle has not moved substantially on ending child marriage.

Why did Child Marriages have increased during Lockdowns?

  • Lack of Alert Mechanism: Earlier, when child marriages happened at wedding halls, temples, etc, there were people who would alert the relevant authorities or activists who would be able to reach on time to stop it.
    • But now, with marriages happening at homes, we may get fewer alerts and our going there could be treated as trespass.
  • Pandemic Induced Pressures: Economic pressures due to the pandemic have pushed poor parents to marry off girls early.
    • With no schools, the safety of children, particularly girls, was a major reason for the increase in violence against children and child marriages.

Causes for Child Marriages

  • Age Factor: Some parents consider the age period of 15-18 as unproductive, especially for girls, so they start finding a match for their child during this age period.
    • Further, the Right To Education Act makes education free and compulsory up to the age of 14 only.
  • Insecurity: Law and Order are still not able to provide a secure environment for the girls in adolescent age, so some parents get their girl child married at a young age.
  • Other Reasons:
    • Poverty,
    • Political and financial reasons,
    • Lack of education,
    • Patriarchy and gender inequalities, etc.

Consequences of child marriage

  • Violation of human rights: Child marriage violates girls’ human rights. It makes them almost invisible to policy.
  • Impact on education and health: It cuts short their education, harms their health, and limits their ability to fulfill themselves as productive individuals participating fully in society.
  • The low domestic status of teenage wives typically condemns them to long hours of domestic labor; poor nutrition and anemia; social isolation; domestic violence; early childbearing; and few decision-making powers within the home.
  • Malnutrition: Poor education, malnutrition, and early pregnancy lead to low birth weight of babies, perpetuating the intergenerational cycle of malnutrition.
  • The costs of child marriage include teenage pregnancy, population growth, child stunting, poor learning outcomes for children, and the loss of women’s participation in the workforce.

What should be the policy interventions to end child marriage?

  • CCTs: Conditional cash transfers (CCTs) have been the main policy instrument introduced by most states in the last two decades to end child marriage.
  • CCTs alone cannot change social norms. We need a comprehensive approach.
  • Legislative measures: Legislation is one part of the approach.
  • Karnataka amended the Prohibition of Child Marriage Act in 2017, declaring every child marriage, making it a cognizable offense.
  • Expansion of education: These include expansion of secondary education, access to safe and affordable public transport, and support for young women to apply their education to earn a livelihood.
  • Expansion of education goes beyond access. Girls must be able to attend school regularly, remain there, and achieve.
  • States can leverage their network of residential schools, girls’ hostels, and public transport, especially in underserved areas, to ensure that teenage girls do not get pushed out of education.
  • Teachers should hold regular gender equality conversations with high school girls and boys to shape progressive attitudes that will sustain them into adulthood.
  • Empowerment measures: Empowerment measures, too, are required to end child marriage, such as community engagement through programs like Mahila Samakhya.
  • Children’s village assemblies in the 2.5 lakh gram panchayats across India can provide a platform for children to voice their concerns.
  • Government actions driving social change: Field bureaucrats across multiple departments, including teachers, Anganwadi supervisors, panchayat, and revenue staff, all of whom interact with rural communities, should be notified as child marriage prohibition officers.
  •  Decentralizing birth and marriage registration: Most important of all, decentralizing birth and marriage registration to gram panchayats will protect women and girls with essential age and marriage documents, thus better enabling them to claim their rights.

Consider the question “What are the consequence of child marriage? Suggest the measures to deal with the issue.”

Conclusion

We need to adopt a comprehensive approach to deal with the problem of child marriage. The approach should include a focus on education and legal measures.

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Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

The growth and inclusion potential of India’s telecom sector

op-ed snap | Economics | Mains Paper 3: Awareness in various sc and tech fields,Inclusive Growth & Issues,Indian Economy
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Challenges facing the telecom sector

Context

Shortly after the Cabinet announced nine structural and procedural reforms in September to address the deep financial woes of telcos, Vodafone Idea and Bharti Airtel hiked their tariff.

About the package for telecom sector

  • The telecom relief package announced by the government in September supports proposals that have been repeatedly presented to the government by the regulator, industry associations and think tanks.
  • Risk of duopoly: With the risk of a duopoly looming large, the government was pushed to take up these long-pending decisions that included nine key changes.
  • Provisions in the package: Besides providing immediate relief on payment of licence fee and penalties due to the government, the package increased FDI limits, extended licence tenure to 30 years from 20, removed charges on spectrum-sharing and proposed timelines for spectrum auctions.
  • The package will undoubtedly have a positive short-term impact and perhaps safeguard competition in the future.

Reforms and  challenge of addressing the inequality

  • From socialist to market-oriented economy: In July this year, we celebrated three decades of India’s 1991 reforms, one that catapulted India from being a socialist economy with a heart but no trickle-down, to a market-oriented economy with a mind but also very little trickle-down.
  • Inequality has been a feature of both models.
  • The 2018 Oxfam report showed that 10 per cent of the richest Indians took home 77.4 per cent of wealth (compared to 73 per cent the year before).
  • Moreover, 58 per cent of India’s wealth was in the hands of 1 per cent of the country’s population.
  • Changes in the modes of distribution: In the pre-1991 period, the principal modes of redistribution were taxation and public sector operations.
  • In the post-1991 period, it has been a combination of taxation, technology, smartphones and the associated direct benefit transfers.

Role of telecom sector in addressing the challenge of achieving growth and inclusion

  • High growth dividend of telecom sector: Every 10 per cent increase in investment in telecom, for example, leads to a 3.2 per cent increase in GDP growth for India.
  • Not only is the growth dividend positive, it is large.
  • Mobile as a mean of financial integration: At the same time, the mobile phone has become a means for sophisticated financial integration, as shown by the expanding usage of pre-paid payment instruments and mobile banking.
  • The Jan-Dhan Yojana (JDY) attempts to include the marginalised and unbanked through technology.
  • As of October 2021, a total of 440 million bank accounts have been opened and more than 310 million RuPay cards have been issued under the latter, indicating the large unmet demand for banking services.
  • Making transfers predictable and targeted: The Jan-Dhan-Aadhaar-Mobile (JAM) trinity ties the Aadhaar number to an active bank account, making income transfers predictable and targeted.
  • There is already evidence that payments through Aadhaar-linked bank accounts have increased efficiency and reduced leakages.

Way forward

  • Predictable and less erratic telecom policy: The benefits of digitalisation could have been much larger and more widespread had telecom policy been more predictable and less erratic.
  • That Indian reforms more often than not happen on the back of a crisis is true for the telecom sector.
  • The principal motive of the New Telecom Policy of 1999 was to rescue the deeply indebted sector of its own reckless bidding by replacing the fixed licence fee system with a revenue-sharing regime.
  • In hindsight, it was the right thing to do since it threatened business continuity.
  • The move to auction spectrum “for all times to come” in 2008 was necessitated by the administrative bungling in spectrum assignment.
  • Quick adaptation: A question we pose is why did it take a crisis — a grave one at that — to push the needle on policy change?
  • It is a a reasonable expectation of policy to adapt quickly and not wait for a crisis to emerge.

Consider the question “Telecom sector could play an important role in achieving the growth with inclusion. In context of this, examine the challenges facing the sector and suggest the measures to deal with these challenges.”

Conclusion

The seemingly naïve question about the adaptation in policies may not be as credulous for the intensely dynamic digital markets. For there is no point shutting the stable door after the horse has bolted.

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Modern Indian History-Events and Personalities

[pib] Who was Lachit Borphukan?

Prelims Only | | Mains Paper 1: Arts & Culture
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Lachit Borphukan, Battle of Saraighat

Mains level: Not Much

The Prime Minister has paid tributes to Lachit Borphukan on Lachit Diwas.

Who was Lachit Borphukan?

  • The year was 1671 and the decisive Battle of Saraighat was fought on the raging waters of the Brahmaputra.
  • On one side was Mughal Emperor Aurangzeb’s army headed by Ram Singh of Amer (Jaipur) and on the other was the Ahom General Lachit Borphukan.
  • He was a commander in the Ahom kingdom, located in present-day Assam.
  • Ram Singh failed to make any advance against the Assamese army during the first phase of the war.
  • Lachit Borphukan emerged victorious in the war and the Mughals were forced to retreat from Guwahati.

Lachit Diwas

  • On 24 November each year, Lachit Divas is celebrated statewide in Assam to commemorate the heroism of Lachit Borphukan.
  • On this day, Borphukan has defeated the Mughal army on the banks of the Brahmaputra in the Battle of Saraighat in 1671.
  • The best passing out cadet of National Defence Academy has conferred the Lachit gold medal every year since 1999 commemorating his valour.

Try this PYQ:

Q.What was the immediate cause for Ahmad Shah Abdali to invade and fight the Third Battle of Panipat:

(a) He wanted to avenge the expulsion by Marathas of his viceroy Timur Shah from Lahore

(b) The frustrated governor of Jullundhar Adina Beg khan invited him to invade Punjab

(c) He wanted to punish Mughal administration for non-payment of the revenues of the Chahar Mahal (Gujrat Aurangabad, Sialkot and Pasrur)

(d) He wanted to annex all the fertile plains of Punjab upto borders of Delhi to his kingdom

Post your answers here.

 

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Start-up Ecosystem In India

Risks involved in over-valued unicorns

op-ed snap | Economics | Mains Paper 3: Indian Economy
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper-Unicorns in Indian economy and issues with their valuation

Context

The biggest-ever initial public offering (IPO) in India fell flat on its face on the first day of its listing in the stock exchange, with shares being traded at prices less than 27% of the IPO price.

Rise of unicorns in India and factors driving it

  • Unicorns in diverse sectors: There has been a unicorn gale in India in recent years, covering diverse sectors from fintech to cloud kitchen.
  • Growth in digital payment is reflected in the fintech sector that has contributed the most to the unicorn list.
  • Factors driving growth: An ecosystem which combines thriving digital payments, a growing smartphone user base and digital-first business models adopted by many start-ups has driven expectations of investors, resulting in large-scale fund flows into new business ventures.
  • Growing smartphone user: Expectations are high as the country has around 640 million Internet users, of which 550 million are smartphone users.
  • Growing digital payments: Digital payment has seen a growth of 30.19% as of March 31, 2021 and by the end of September 30, the unified payments interface (UPI) registered 3.5 billion transactions amounting to ₹6.54 trillion.

FinTech and EdTech leading unicorns

  • American investment firms Tiger Global and Sequoia Capital have been the major investors, providing very quick follow-up rounds of funds across all stages and sectors.
  • Fundamental financial performance of the business is not factored in these decisions which could lead to biased valuations.
  • Idea of disruptive technologies: The idea of disruptive technologies has become a buzzword for characterising start-ups.
  • The idea was that start-ups with limited resources can aim at technology disruption by inventing an entirely new way of getting something done.
  • The story is similar in educational technologies (EdTech) as well.
  • The novel coronavirus pandemic has been a blessing in disguise for EdTech firms, as it is this external environment that is pushing the industry, giving it an acceleration by four to five years.
  • Too many acquisitions with big ambitions to grow inorganically puts pressure on the balance sheet in the years to come as some of the new acquisitions are likely to fail.
  • Even, EdTech firms with reasonably good business models are highly overvalued due to abundant liquidity.
  • Cost of achieving behaviour change: Almost every second advertisement on primetime television is either of a digital payment firm or EdTech platform.
  • New firms in services will have to indulge in this process for a longer period than firms in other industries such as transportation as these firms have to bring about a particular kind of change that customers are significantly comfortable using the service.
  • Firms burn cash to give massive discounts to customers in the hope that people will get so habituated to these platforms that they will remain active even when the prices are hiked.
  • To some extent this worked in the context of mobile telephone services as Indians have got hooked to mobile phones and reoriented spending to buy more sophisticated smartphones and data.
  • But in other services this does not seem to work so easily.
  • The projection flaw: Data by the Centre for Monitoring Indian Economy (CMIE) points to this flaw of over-optimistic demand projections as there are just about 23 million households which earn more than ₹5 lakh per year i.e., less than ₹42,000 a month, which is about 7% of all Indian families.
  • It is only this class which can be coaxed to behavioural changes — i.e. people who can afford various kinds of goods and services.
  • If firms want to go beyond this 7% of households they have to offer bigger discounts, burning more cash, with the possibility that once the discounts are reduced, customers drop off.

Consider the question “India is witnessing the unicorn boom in the starts-ups. However, valuation of these unicorns has raised concerns. In light of this, examine the factors driving the rise of unicorns in India and why their valuation raises concerns?”

Conclusion

We are witnessing new unicorns emerging every month, which are products of inflated valuations to tap more funds to burn more cash. These valuations are solely on the basis of future earnings, with virtually no profits to show in the present.

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Right To Privacy

Draft Personal Data Protection Bill, 2021

| Polity | Mains Paper 2: Indian Constitution - historical underpinnings, evolution, features, amendments, significant provisions and basic structure
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Right to Privacy

Mains level: Personal Data Protection Bill

The Joint Parliamentary Committee (JPP) on the Personal Data Protection Bill of 2019 is said to have adopted the final draft. The Bill will be tabled in the Winter Session of Parliament.

What is Personal Data?

  • Data can be broadly classified into two types: personal and non-personal data.
  • Personal data pertains to characteristics, traits or attributes of identity, which can be used to identify an individual.
  • Non-personal data includes aggregated data through which individuals cannot be identified.
  • For example, while an individual’s own location would constitute personal data; information derived from multiple drivers’ location, which is often used to analyse traffic flow, is non-personal data.

What is Data Protection?

  • Data protection refers to policies and procedures seeking to minimise intrusion into the privacy of an individual caused by collection and usage of their personal data.

Why was a bill brought for Personal Data Protection?

  • In August 2017, the Supreme Court had held that Privacy is a fundamental right under Article 21 of the Constitution.
  • The Court also observed that privacy of personal data and facts is an essential aspect of the right to privacy.
  • In July 2017, a Committee of Experts, chaired by Justice BN Srikrishna, was set up to examine various issues related to data protection in India.
  • The committee submitted its report, along with a Draft Personal Data Protection Bill, 2018 to the Ministry of Electronics and Information Technology in July 2018.

How is personal data regulated currently?

  • Currently, the usage and transfer of personal data of citizens is regulated by the Information Technology (IT) Rules, 2011, under the IT Act, 2000.
  • The rules hold the companies using the data liable for compensating the individual, in case of any negligence in maintaining security standards while dealing with the data.

Issues with IT Rules, 2011

  • The IT rules were a novel attempt at data protection at the time they were introduced but the pace of development of digital economy has shown its shortcomings.
  • For instance, (i) the definition of sensitive personal data under the rules is narrow, and (ii) some of the provisions can be overridden by a contract.
  • Further, the IT Act applies only to companies, not to the government.

What does the Personal Data Protection Bill provide?

  • Collection and storage: The bill regulate personal data related to individuals, and the processing, collection and storage of such data.
  • Data Principal: Under the bill, a data principal is an individual whose personal data is being processed.
  • Data fiduciary: The entity or individual who decides the means and purposes of data processing is known as data fiduciary.
  • Data processing: The Bill governs the processing of personal data by both government and companies incorporated in India.
  • Data localization: It also governs foreign companies, if they deal with personal data of individuals in India.
  • General consent: The Bill provides the data principal with certain rights with respect to their personal data. Any processing of personal data can be done only on the basis of consent given by data principal.
  • Data Protection Authority: To ensure compliance with the provisions of the Bill, and provide for further regulations with respect to processing of personal data of individuals, the Bill sets up a DPA.

Issues with the PDP Bill

  • Exemptions to the govt: Section 35 of the bill permits the Central Government to exempt any agency of the Government from the provisions of the law.
  • No reasonable exemptions: There is no sufficient reason for government agencies to be exempted from basic provisions of the Bill.
  • Easy breach: Though this would be subject to procedures, safeguards, and oversight mechanisms to be prescribed by the Government.
  • Executive hegemony: There is no scope for oversight over the executive’s decision to issue such an order.
  • Arbitrary and intrusive: As demonstrated by the Pegasus case, the current frameworks for protecting citizens from arbitrary and intrusive State action lack robustness.

Why is the state given exemption?

  • Biggest needy of Data: The State is one of the biggest processors of data, and has a unique ability to impact the lives of individuals.
  • Welfare objectives: It has a monopoly over coercive powers as well have the obligation to provide welfare and services.

Issues with Exemption to State

  • Grounds of expediency: the use of this provision on grounds of expediency is an extremely low bar for the Government to meet.
  • Non requirement for exemption order: There is no requirement for an exemption order to be proportionate to meeting a particular State function.
  • No oversight on executive actions: There is no scope for oversight over the executive’s decision to issue such an order or any safeguards prescribed for this process.
  • State surveillance: Section 36(a) of the Bill provides for an exception where personal data is being processed against criminal investigation. This provision could therefore encourage vigilantism or enable privatized surveillance.

Best practices followed across the world

  • The European GDPR (General Data Protection Regulation) is commonly seen as the pinnacle of data protection regulation worldwide.
  • The EU law has in place a separate law that deals with the processing of personal data by law enforcement agencies.
  • UK’s Data Protection Act dedicates Part 3 that liberalises certain obligations while at the same time ensuring that data protection rights are also protected.

Way forward

  • Balancing privacy interests with those of public needs (such as that of State security) is a difficult task.
  • This should undergo rigorous consultations in Parliament taking into confidence all stakeholders.
  • Once debated in Parliament, one can only hope that adequate time and attention is given to finding a better balance between competing interests.

 

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Railway Reforms

Bharat Gaurav Scheme to promote Tourism

| Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Bharat Gaurav Scheme

Mains level: Not Much

To tap the huge potential of tourism, the Railways has announced the ‘Bharat Gaurav’ Scheme.

Bharat Gaurav Scheme

  • Under this Scheme, theme-based tourist circuit trains, on the lines of the Ramayana Express, can be run either by private or State-owned operators.
  • Till now, the Railways had passenger segments and goods segments.
  • Now, it will have a third segment for tourism under the Bharat Gaurav.
  • The scheme has been developed after extensive stakeholder discussions and a lot of State Governments, including Odisha, Rajasthan, Karnataka and Tamil Nadu, have shown interest.

Key features

  • Service providers, who can be an individual, company, society, trust, joint venture or consortium will be free to decide themes/circuits.
  • They will offer an all-inclusive package to tourists including rail travel, hotel accommodation and sightseeing arrangement, visit to historical/heritage sites, tour guides etc.
  • They have full flexibility to decide the package cost.
  • The service providers will also be able to design/furnish the interior of the coaches based on the theme and put branding or advertising inside and outside of the train.

 

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Panchayati Raj Institutions: Issues and Challenges

[pib] Mysuru Declaration on Service Delivery by Panchayats

PIB | Polity | Mains Paper 2: Indian Constitution - historical underpinnings, evolution, features, amendments, significant provisions and basic structure
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Myusur Declaration

Mains level: Not Much

The Participants from 16 States signed the Mysuru Declaration and resolved to roll out the Common Minimum Service delivery by Panchayats across the country from April 1, 2022.

Mysuru Declaration

  • The Mysuru declaration is aimed at recognising Citizen Centric Services as the “Heart of Governance”.
  • It provides key inputs on various aspects of service delivery that are either provided by the panchayats directly or services of other departments that are facilitated by panchayats.

Highlights of the Declaration

WE, the Representatives and Officials recognise the efforts to promote inclusive and accountable Local Self Governments in delivery of services, in consonance with the priorities and the aspirations of our citizens.

We accept responsibility for seizing this moment to strengthen our commitments to promote transparency, empower citizens, and harness the power of new technologies towards timely and quality delivery of services; enhancing citizen service experiences

We uphold the value of openness in our engagement with citizens to improve services, incorporating diverse views when designing and delivering services. We embrace principles of transparency and open government with a view towards achieving greater prosperity, well-being, and human dignity for sustainable development of local communities.

 

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

First ever All India Survey on Domestic Workers

DOMR | Governance | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections
Note4Students

From UPSC perspective, the following things are important :

Prelims level: All India Survey on Domestic Workers

Mains level: Not Much

Union Minister for Labour and Employment  has flagged off the first ever All All India Survey on Domestic workers being conducted by Labour Bureau.

All India Survey on Domestic Workers

  • The Survey  is aimed to estimate the number and proportion of domestic workers at National and State level.
  • It would help find percentage distribution of domestic workers with respect to Live-in/Live-out, formal/ Informal Employment, Migrant/Non-Migrant, their wages and other socio-economic characteristics.
  • The survey will also provide the Household Estimates of Live-in/Live-out domestic workers and average number of domestic workers engaged by different types of households.

Objectives of the Survey

  • Estimate the number/proportion of DWs at National and State level.
  • Household Estimates of Live-in/ Live-out DWs.
  • Average number of DWs engaged by different types of households.

Why need such Survey?

  • Domestic workers (DWs) constitute a significant portion of total employment in the informal sector.
  • However, there is a dearth of data on the magnitude and prevailing employment conditions of DW.
  • Hence with the view to have time series data on domestic workers, GoI has entrusted Labour Bureau to conduct an all-India survey on DWs.

Parameters of the Survey

The Domestic Worker Survey collects information on the following broad   parameters:

  • Household Characteristics such as HH size, Religion, Social Group, Usual Monthly Consumption Expenditure, Nature of Dwelling unit.
  • Demographic Characteristics such as Name, Age, Relation to Head, Marital Status, General Education Level, Usual Principal Activity Status, Subsidiary Activity Status and Status of DWs.
  • Information on Employer is also collected such as their preferences of DW regarding Gender and marital status, mode of payment of wages, number of days worked, mode of engagement, whether DW services were availed during ii COVID-19 pandemic, medical support given to DWs.

Scope of the Survey

  • All India States/UTs of India covered are 37 and Districts covered are742
  • Unit of Enumeration is Villages as per Census 2011 and Urban Blocks as per latest phase of UFS.
  • At the all-India level, a total number of 12766 First Stage Units (FSUs) i.e., 6190 villages and 6576 UFS blocks will be covered in the survey.
  • 1,50,000 Households i.e., the Ultimate Stage Units (USU) will be covered.

 

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Right To Privacy

Facial Recognition Technology

op-ed snap | Security Issues | Mains Paper 3: Border Area Security Challenges
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Right to privacy

Mains level: Paper 2- Issues with use of facial recognition technologies by the police

Context

According to police officials, more than six lakh CCTV cameras have already been deployed in the city, with the very real possibility that this number will continue to increase. These all-pervasive cameras will soon be connected in a real-time network managed by Hyderabad’s Command and Control Centre.

Facial Recognition

It is a biometric technology that uses distinctive features of the face to identify and distinguish an individual. Over a period of almost 6 decades, it has evolved in many ways- from looking at 3D contours of a face to recognizing skin patterns.

How does it work?

  • The facial recognition system works primarily by capturing the face & its features through the camera and then using various kinds of software to reconstruct those features.
  • The captured face along with its features is stored into a database, which can be integrated with any kind of software that may be used for security purposes, banking services, etc.
  • In the Automated Facial Recognition System (AFRS), the large database (containing photos and videos of peoples’ faces) is used to match and identify the person. The image of an unidentified person, taken from CCTV footage, is compared to the existing database using Artificial Intelligence technology, for pattern-finding and matching.

What are the uses?

  • Authentication: It is used for identification and authentication purposes with a success rate of almost 75%.
    • For instance, the NCRB’s Crime and Criminal Tracking Network & Systems (CCTNS) managing crime data for police, use automated facial recognition to identify criminals, missing people, and unidentified dead bodies, as well as for “crime prevention”.
    • The project is aimed at being compatible with other biometrics such as iris and fingerprints.
    • The integration of fingerprint databases, face recognition software and iris scans will massively boost the police department’s crime investigation capabilities.
  • Force Multiplier: In India, where there are just 144 constables per 1 lakh citizens, this can act as a force multiplier. It neither requires too much manpower nor regular up-gradation. Hence, this technology coupled with the present manpower in place can act as a game-changer.
  • Varied applications: It is increasingly being used for everything from unlocking mobile phones to validating the identity, from auto-tagging of digital photos to finding missing persons, and from targeted advertising to law enforcement.

Opposition to facial recognition technologies

  • How it works: Facial recognition technology identifies the distinctive features of a person’s face to create a biometric map, which an algorithm then matches to possible individuals.
  • The system searches across databases of millions of images scraped without knowledge or consent and often fails.
  • Severe scrutiny: The use of facial recognition technology is already under severe scrutiny around the world, with some jurisdictions, including Belgium and Luxembourg, have already banned its use.
  • Ban by EU: The European Union is in the process of finalizing and passing one of the most comprehensive bans on facial recognition technology yet, while in the United States, multiple cities- and state-level bans and moratoria have been imposed.
  • More than 200 organizations have called for a global ban on the use of biometric surveillance technologies that enable mass and discriminatory surveillance, while even Facebook announced that it would be shutting down its facial recognition program.

Issues with the use of facial recognition technologies in India

  • Violation of the right to privacy: The right to privacy was recognized as a fundamental right, included under the right to life and liberty by the Supreme Court of India in 2017.
  • Absence of legal framework: Without a law in place to regulate data collection and to act as an oversight mechanism, valid concerns about privacy and other rights violations continue to arise.
  • High Infrastructural Costs: Technologies like Artificial Intelligence and Big Data are costly to implement. The size of stored information is extremely large and requires huge network & data storage facilities, which are currently not available in India.
  • Image Collection: The sources from which images will be collected to create a repository/database need to be known.
  • The concern of Data Leakage: In today’s world of cybercrime, it is important to put appropriate safeguards in place in order to ensure the integrity of the repository/database, so that it doesn’t leak out the information and is not privatized or monetized.
  • Required Expertise: Experts are needed to verify and authenticate data collected before storing them who should be provided proper training to protect & avoid abuse and misuse of the collected data & database.
  • Reliability & Authenticity: As the data collected may be used in the court of law during the course of a criminal trial, the reliability and the admissibility of the data along with standards and procedures followed would be taken into consideration. Hence, the authenticity of the data is crucial.
  • Huge amounts of public money are being spent on these technologies with no evidence of their effectiveness, further squandering precious public funds.

The National Automated Facial Recognition System

  • To empower the Indian police with information technology, India approved the implementation of the National Automated Facial Recognition System (NAFRS).
  • On its implementation, it will function as a national-level search platform that will use facial recognition technology.
  • It will help to facilitate investigation of crime or for identifying a person of interest regardless of face mask, makeup, plastic surgery, beard, or hair extension.

Way Forward

  • Save the time of police: This is a compare and contrast tool meant for identification based on existing information. The process of identification can be accelerated by its use.
  • Proper Legal safeguards are a must: With proper safeguards, this technology is much needed for India. Having the biggest IT workforce in the world, state-of-the-art technology can act as a game-changer for India.
  • Need to learn from Global examples: Police departments in London are under pressure to put a complete end to the use of facial recognition systems following evidence of discrimination and inefficiency.
    • Hence, it is necessary to make use of such technology, but it cannot act as the silver bullet for all the police reforms that we need.

Conclusion

Government programs such as Safe City, Smart City, and the Nirbhaya Fund have been utilized to bankroll these projects — yet the human rights violations that occur as a result of their use far outweigh any purported benefit that these technologies claim to provide.

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Foreign Policy Watch: India-United States

Dynamism in India-U.S. ties

op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Parliamentary Friendship Groups

Mains level: Paper 2- Interactions between Members of Parliament in India and members of the U.S. Congress

Context

While there are regular interactions among officials at various levels and across sectors, as well as people-to-people engagement, there are no formal interactions between Members of Parliament in India and members of the U.S. Congress.

US Congressional Delegation (CODEL) visit to India

  •  CODEL travels across the world during the periods when Congress takes a break from legislative work.
  • Interactions during these travels are important in shaping relations with foreign countries.
  • In November, a congressional delegation (CODEL) travelled to the Indo-Pacific Command countries, including the Philippines, Taiwan and India.
  • In New Delhi, the six-member delegation interacted with Prime Minister Narendra Modi, External Affairs Minister S. Jaishankar, and representatives of the Dalai Lama.
  • The members of the delegation noted the “increasing convergence of strategic interests” between India and the U.S. and said they would like to “further enhance cooperation… to promote global peace and stability”.
  •  Mr. Modi appreciated the consistent support and constructive role of the U.S. Congress in deepening the India-U.S. comprehensive global strategic partnership.
  • Enhancing bilateral relationship on critical issues: Mr. Modi and CODEL exchanged views on enhancing the bilateral relationship and strengthening cooperation on contemporary global issues such as terrorism, climate change and reliable chains for critical technologies.
  • Demand for the presidential waiver for India: Two days after returning from his trip to India, CODEL member Senator Tommy Tuberville favoured India getting the presidential waiver under the Countering America’s Adversaries Through Sanctions Act.
  • Significance of CODEL visit: Members of the U.S. Congress play an important role in determining foreign policy, which at times is dictated by the demands of constituents.

Way forward

  •  Despite the robustness in India-U.S. relations, there is no institutional communication or interaction between MPs in India and members of the U.S. Congress.
  • Establishment of India-US Parliamentary Exchange: The joint statement at the end of the 2+2 Dialogue in 2019 stated: “The Ministers looked forward to the establishment of India-US Parliamentary Exchange to facilitate reciprocal visits by Parliamentarians of the two countries”.
  • Indian Parliamentary Group: India can take it forward through the Indian Parliamentary Group, which acts as a link between the Indian Parliament and the various Parliaments of the world.
  • At present, there are eight Parliamentary Friendship Groups of India’s including Japan, Russia, China and the European Union.
  • The U.S. is absent from this list.

Conclusion

The significance of the CODEL visit is not lost in the U.S. as members of the U.S. Congress play an important role in determining foreign policy, which at times is dictated by the demands of constituents.

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Fertilizer Sector reforms – NBS, bio-fertilizers, Neem coating, etc.

Reforming the fertilizer sector

op-ed snap | Economics | Mains Paper 3: Agriculture and related issues
Note4Students

From UPSC perspective, the following things are important :

Prelims level: NBS

Mains level: Paper 3- Reforms in fertiliser sector

Context

Since 1991, when economic reforms began in India, several attempts have been made to reform the fertilizer sector to keep a check on the rising fertilizer subsidy bill, promote the efficient use of fertilizers, achieve balanced use of N, P, and K (nitrogen, phosphorus, and potassium), and reduce water and air pollution caused by fertilizers like urea.

Several attempts have been made to reform the fertilizer sector to keep a check on the rising fertilizer subsidy bill.

Background

  • After years of unchanged prices, the budget of 1991 raised the issue prices of fertilizers by 40% on average. This rise was rolled down to 30% in a few months, with exemption to small and marginal farmers from the price increase.
  • Due to opposition, the increase in Urea price was further rolled back to 17% over the pre-reform price.
  • It resulted in a big shift in the composition of fertilizers used in the country in favor of urea and thus Nitrogen (N).
  • The government started Nutrient Based Subsidy in 2010 to address the growing imbalance in fertilizer use, which was skewed towards urea (N).
  • However, only non-nitrogenous fertilizers P and K (phosphorus and potassium) were included in NBS; urea was left out.

Need for reforms on three fronts

Reforms are needed to promote in three key areas:

1) The efficient use of fertilizers.

2) To achieve balanced use of N, P, and K (nitrogen, phosphorus, and potassium).

3) To reduce water and air pollution caused by fertilizers like urea.

Challenges in the fertilizer sector

A] Distortion in use due to price difference

  • The Union Budget of July 1991 raised the issue prices of fertilizers by 40% on average.
  • Due to opposition to increasing fertilizer prices, the increase in the price of urea was rolled back to 17% a year later over the pre-reform price.
  • The shift in the composition of fertilizer used: This change disturbed the relative prices of various fertilizers and resulted in a big shift in the composition of fertilizers used in the country in favor of urea and thus N.
  • Farmers tended to move towards balanced use, but policy and price changes reversed the favorable trend a couple of times in the last three decades.
  • In 2019-20, fertilizer use per hectare of cultivated area varied from 70 kg of NPK in Rajasthan to 250 kg in Telangana
  • Further, the composition of total plant nutrients in terms of the N, P, K ratio deviated considerably from the recommended or optimal NPK mix.
  • It was 33.7:8.0:1 in Punjab and 1.3:0.7:1 in Kerala.

2] Increasing fertilizer subsidy

  • Fertilizer subsidy has doubled in a short period of three years. For 2021-22, the Union Budget has estimated fertilizer subsidy at ₹79,530 crores (from ₹66,468 crores in 2017-18).
  • The subsidy is likely to reach a much higher level due to the recent upsurge in the prices of energy, the international prices of urea and other fertilizers, and India’s dependence on imports.
  • In order to minimize the impact of rising in prices on farmers, the bulk of the price rise is absorbed by the government through enhanced fertilizer subsidy.
  • This is likely to create serious fiscal challenges.
  • At current prices, farmers pay about ₹268 per bag of urea and the Government of India pays an average subsidy of about ₹930 per bag.
  • Thus, taxpayers bear 78% of the cost of urea and farmers pay only 22%. This is expected to increase and is not sustainable.

3] Import dependence

  • Total demand for urea: The total demand for urea in the country is about 34-35 million tonnes (mln t) whereas the domestic production is about 25 mln t.
  • The requirement of Diammonium Phosphate (DAP) is about 12 mln t and domestic production is just 5 mln t.
  • This leaves the gap of nearly 9-10 mln t for urea and 7 mln t for DAP, which is met through imports.
  • The use of Muriate of Potash is about 3 mln t.
  • This is entirely imported.
  • The international prices of fertilizers are volatile and almost directly proportional to energy prices.

Need to shift our focus to Bio-fertilizers

  • Bio-fertilizers are cheap, renewable, and eco-friendly, with great potential to supplement plant nutrients if applied properly. However, they are not a substitute for chemical fertilizers.
  • They improve the health of the soil. Since it provides nutrients to the soil in a small and steady manner, its immediate effects are not very visible.
  • Sales of biofertilizers in the country have not picked up because of a lack of knowledge and its slow impact on the productivity of the soil.
  • The use of biofertilizers is necessary to maintain soil health as more and more use of chemical fertilizers kills all the microorganisms available in the soil, which are so essential for maintaining soil health.
  • Supplementary use of biofertilizers with chemical fertilizers can help maintain soil fertility over a long period.
  • The overall strategy for increasing crop yields and sustaining them at a high level must include an integrated approach to the management of soil nutrients, along with other complementary measures.

Way forward

  • Self-reliance: we need to be self-reliant and not depend on the import of fertilizers.
  • In this way, we can escape the vagaries of high volatility in international prices.
  • In this direction, five urea plants at Gorakhpur, Sindri, Barauni, Talcher, and Ramagundam are being revived in the public sector.
  • Extend NBS model to urea: The government introduced the Nutrient Based Subsidy (NBS) in 2010 to address the growing imbalance in fertilizer use.
  • However, only non-nitrogenous fertilizers (P and K) moved to NBS; urea was left out.
  • We need to extend the NBS model to urea and allow for price rationalization of urea compared to non-nitrogenous fertilizers and prices of crops.
  • Develop alternative sources of nutrition for plants: Discussions with farmers and consumers reveal a strong desire to shift towards the use of non-chemical fertilizers as well as a demand for bringing parity in prices and subsidy given to chemical fertilizers with organic and biofertilizers.
  • This also provides the scope to use large biomass of crop that goes waste and enhance the value of livestock by-products.
  • We need to scale up and improve innovations to develop alternative fertilizers.
  • Improve fertilizer efficiency:  India should pay attention to improving fertilizer efficiency through need-based use rather than broadcasting fertilizer in the field.
  • The recently developed Nano urea by IFFCO shows promising results in reducing the usage of urea.

Consider the question “What are the challenges facing the fertiliser sector in India? How subsidies lead to distortion in the use of various types of fertilisers.”

Conclusion

These changes will go a long way in enhancing the productivity of agriculture, mitigating climate change, providing an alternative to chemical fertilizers and balancing the fiscal impact of fertilizer subsidy on the Union Budgets in the years to come.

Back2Basics: Nutrient Based Subsidy

  • Under the NBS regime – fertilizers are provided to the farmers at subsidized rates based on the nutrients (N, P, K & S) contained in these fertilizers.
  • Also, the fertilizers which are fortified with secondary and micronutrients such as molybdenum (Mo) and zinc are given additional subsidy.
  • The subsidy on Phosphatic and Potassic (P&K) fertilizers is announced by the Government on an annual basis for each nutrient on a per kg basis – which are determined taking into account the international and domestic prices of P&K fertilizers, exchange rate, inventory level in the country etc.
  • NBS policy intends to increase the consumption of P&K fertilizers so that optimum balance (N:P:K= 4:2:1) of NPK fertilization is achieved.

[pib] Nutrient Based Subsidy (NBS) for Phosphatic & Potassic (P&K) Fertilizers

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Banking Sector Reforms

Co-op Societies are not banks, RBI cautions

Prelims Only | Economics | Mains Paper 3: Inclusive Growth & Issues
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Cooperative Banks

Mains level: Cooperatives banking and its regulation

The Reserve Bank of India (RBI) has cautioned members of the public not to deal with cooperative societies undertaking banking business by adding ‘bank’ to their names.

What is the news?

  • It has also come to the notice of RBI that some co-operative societies are accepting deposits from non-members/nominal members/ associate members.
  • This is tantamount to conducting banking business in violation of the provisions.

Who can use ‘Bank’ title?

  • The Banking Regulation Act, 1949 was amended by the Banking Regulation (Amendment) Act, 2020, which came into force on September 29, 2020.
  • Accordingly, co-operative societies cannot use the words “bank”, “banker” or “banking” as part of their names, except as permitted under the provisions of BR Act, 1949 or by the RBI.

What is Cooperative Banking?

  • Cooperatives are people-centred enterprises owned, controlled and run by and for their members to realise their common economic, social, and cultural needs and aspirations.
  • Cooperative bank is an institution established on the cooperative basis and dealing in ordinary banking business.
  • Like other banks, the cooperative banks are founded by collecting funds through shares, accept deposits and grant loans.
  • They are regulated by the Reserve Bank of India (RBI) and governed by the
  1. Banking Regulations Act 1949
  2. Banking Laws (Co-operative Societies) Act, 1955

Features of Cooperative Banks

  • Cooperative banks are generally concerned with the rural credit and provide financial assistance for agricultural and rural activities.
  • Such banking in India is federal in structure. Primary credit societies are at the lowest rung.
  • Then, there are central cooperative banks at the district level and state cooperative banks at the state level.
  • Cooperative credit societies are mostly located in villages spread over the entire country.

History of Cooperative Banking in India:

  • The cooperative movement in India was started primarily for dealing with the problem of rural credit.
  • The history of Indian cooperative banking started with the passing of Cooperative Societies Act in 1904.
  • The objective of this Act was to establish cooperative credit societies “to encourage thrift, self-help and cooperation among agriculturists, artisans and persons of limited means.”
  • Many cooperative credit societies were set up under this Act.
  • The Cooperative Societies Act, 1912 recognised the need for establishing new organisations for supervision, auditing and supply of cooperative credit.

Structure of Cooperative Banking

  • The whole structure of cooperative credit institutions is shown in the chart given.
  • There are different types of cooperative credit institutions working in India.
  • These institutions can be classified into two broad categories- agricultural and non-agricultural.
  • Agricultural credit institutions dominate the entire cooperative credit structure.

Various facets of cooperatives in India

  • Cooperatives in India have grown exponentially.
  • In the banking sector, according to the RBI, their contribution to rural credit increased from 3.1 percent in 1951 to an impressive 27.3 percent in 2002.

Importance of Cooperative Banks:

  • The cooperative banking system has to play a critical role in promoting rural finance and is especially suited to Indian conditions.
  • Various advantages of cooperative credit institutions are given below:

(1) Alternative Credit Source:  The main objective of the cooperative credit movement is to provide an effective alternative to the traditional defective credit system of the village moneylender.

(2) Cheap Rural Credit: Cooperative credit system has cheapened the rural credit by charging comparatively low-interest rates, and has broken the money lender’s monopoly.

(3) Productive Borrowing:  The cultivators used to borrow for consumption and other unproductive purposes. But, now, they mostly borrow for productive purposes.

(4) Encouragement to Saving and Investment: Instead of hoarding money the rural people tend to deposit their savings in cooperative or other banking institutions.

(5) Improvement in Farming Methods: Cooperative credit is available for purchasing improved seeds, chemical fertilizers, modern implements, etc.

(6) Financial Inclusion: They have played a significant role in the financial inclusion of unbanked rural masses. They provide cheap credit to the masses in rural areas.

 

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Minimum Support Prices for Agricultural Produce

Farm distress and the demand for guaranteed MSP

| Economics | Mains Paper 3: Agriculture and related issues
Note4Students

From UPSC perspective, the following things are important :

Prelims level: MSP system

Mains level: Issues with MSP

Despite the announcement to repeal the three farm laws, farmers have decided to continue protesting for a legal mandate for Minimum Support Prices (MSP).

What is the Minimum Support Price (MSP) system?

  • MSP is a form of market intervention by the Govt. of India to insure agricultural producers against any sharp fall in farm prices.
  • MSP is price fixed by GoI to protect the producer – farmers – against excessive falls in price during bumper production years.

Who announces it?

  • The govt. announces MSPs for 22 mandated crops and fair and remunerative prices (FRP) for sugarcane.
  • MSP is announced at the beginning of the sowing season for certain crops on recommendations by Commission for Agricultural Costs and Prices (CACP).
  • It is announced by Cabinet Committee on Economic Affairs (CCEA) chaired by the PM of India.

Why MSP?

  • The major objectives are to support the farmers from distress sales and to procure food grains for public distribution.
  • They are a guaranteed price for their produce from the Government.
  • In case the market price for the commodity falls below the announced MSP due to bumper production and glut in the market, government agencies purchase the entire quantity offered by the farmers at the announced MSP.

Need for Guaranteed MSPs

  • No legal protection: While the government does announce MSPs every year, it is not required to do so by law. The compulsion to procure on MSP is political, not legal.
  • Discretion of procurement: But if there were to be a law backing the MSP regime, the government would lose its existing discretion in choosing not to procure.
  • Compulsion: A legal mandate for MSP would force the government to purchase all the products that any farmer wants to sell at the declared MSP.
  • State-wide procurement: It would also have to procure from all states, and all crops for which MSPs are announced.

Failures of MSPs

  • A legally mandated MSP regime is likely to be neither feasible nor sustainable in the long run since Demand-side constrains are never accounted while procuring.
  • Already grain stocks lying with the government are more than twice its buffer requirement, and sometimes end up rotting.
  • At a fundamental level, the problem is there are just too many people involved in Indian agriculture for it to be truly remunerative.
  • To a great extent, the solution to the economic distress of Indian farmers lies outside agriculture — in boosting India’s industrial and services sectors.

Possible way forward

  • It seems logical that instead of bypassing the market by using MSPs, the government should make efforts to enable farmers to participate in the market.
  • The way forward is to ramp up investment in the agriculture sector.
  • This means better irrigation facilities, easier access to credit, timely access to power, and ramping up warehouse capacity and extension services, including post-harvest marketing.
  • The approach has to be to raise the farmers’ bargaining ability and choices before them.

 

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Special Category Status and States

Andhra Pradesh government repealed laws on 3 capitals

States | Polity | Mains Paper 2: Indian Constitution - historical underpinnings, evolution, features, amendments, significant provisions and basic structure
Note4Students

From UPSC perspective, the following things are important :

Prelims level: States with multiple administrative capitals

Mains level: Need for more capital cities

The Andhra Pradesh Assembly unanimously passed a Bill to repeal two laws that were cleared last year to set up three different state capitals.

Three Capitals Act

  • The law was titled Andhra Pradesh Decentralisation and Inclusive Development of All Regions Act, 2020.
  • The incumbent govt had decided to reverse the previous government’s decision to have an ambitious world-class capital city at Amaravati, which is located between Vijayawada and Guntur.
  • Thus, it was decided that Amaravati was to be the Legislative capital, Visakhapatnam the Executive capital, and Kurnool the Judicial capital.

Why was it repealed?

  • Over a hundred petitions challenging the government’s move have been filed before the Andhra Pradesh High Court.
  • Farmers of Amaravati, who let the government acquire their lands, wanted them to stick to the previous plan and build a world-class capital city in the same location.

Will Andhra Pradesh have only one capital now?

  • It is not clear if the government will stick to Amaravati as the sole capital.
  • Throughout his address, the CM stressed the need for decentralization for the equitable development of all regions.

What are the other examples of multiple capital cities?

  • Among Indian states, Maharashtra has two capitals– Mumbai and Nagpur (which hold the winter session of the state assembly).
  • Himachal Pradesh has capitals at Shimla and Dharamshala (winter).
  • The former state of Jammu & Kashmir had Srinagar and Jammu (winter) as capitals.

Must read

Three capitals for Andhra Pradesh — its logic and the questions it raises

 

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International Space Agencies – Missions and Discoveries

Matosinhos Manifesto for accelerated use of space in Europe

IOCR | Science Tech | Mains Paper 3: Awareness in various sc and tech fields
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Matosinhos Manifesto

Mains level: Not Much

The European Space Agency (ESA) has approved a Matosinhos Manifesto to accelerate the use of space in Europe.

Matosinhos Manifesto

  • At the Intermediate Ministerial Meeting that was held in Matosinhos, Portugal.
  • The Council of Ministers unanimously adopted this resolution that lays down a vision for the continent in terms of maintaining and expanding its activities in space.
  • The large-scale nature and fast pace of the climate crisis and other challenges means that no European nation will be able to effectively address them alone.

The manifesto defines three “accelerators” to further advance Europe’s space ambitions:

  1. The first of these accelerators is for the ESA to start working towards the “Space for a Green Future”
  2. The second accelerator is called “Rapid and Resilient Crisis Response” to support governments to act decisively on crises facing Europe, from flooding and storms to wildfires
  3. The third accelerator mentioned in the resolution is “Protection of Space Assets”, whose objective is to safeguard ESA astronauts and assets from interference by space debris and space weather

A brief history of the ESA

  • The ESA is an intergovernmental organization that was formed in 1975 with the aim of developing Europe’s space capabilities.
  • The organization has 22 member states — Austria, Belgium, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland and the UK.
  • Slovenia, Latvia and Lithuania are Associate Members.

 

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Global State of Democracy Report, 2021

IOCR | Polity | Mains Paper 2: Indian Constitution - historical underpinnings, evolution, features, amendments, significant provisions and basic structure
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Global State of Democracy Report, 2021

Mains level: Decline of Democracy

The number of countries moving towards authoritarianism in 2020 was higher than that of countries going in the other direction, towards democracy, a/c to the Global State of Democracy (GSD) Report, 2021.

Note: The Global Democracy Index is released by the Economic Intelligence Unit (EIU). One may get confused over this two.

About GSD Report

  • The GSD report is released by the International Institute for Democracy and Electoral Assistance (International-IDEA).
  • The International-IDEA, is an inter-governmental organization supporting democracy, is chaired by Australia and includes India as a member-state.
  • The report aims to influence the global debate and analyses current trends and challenges to democracy, exacerbated by the Covid-19 pandemic.
  • It offers specific policy recommendations to spark new and innovative thinking for policymakers, governments and civil society organizations supporting democracy.

GSD framework

Highlights of the report

  • The US and three members of the European Union (EU) [Hungary, Poland and Slovenia] have also seen concerning democratic declines.
  • The pandemic has prolonged this existing negative trend into a five-year stretch, the longest such period since the start of the third wave of democratization in the 1970s.
  • Democratically elected Governments, including established democracies, are increasingly adopting authoritarian tactics.
  • This democratic backsliding has often enjoyed significant popular support.

India’s performance

  • The report highlighted the case of Brazil and India as “some of the most worrying examples of backsliding.
  • India is the backsliding democracy with the most democratic violations during the pandemic.
  • Violations include- Harassment, arrests and prosecution of human rights defenders, activists, journalists, students, academics and others critical of the government or its policies; internet obstructions etc.

Resilient democracies

  • The report pointed out that many democracies had proved to be resilient to the pandemic.
  • Despite pandemic restrictions on campaigning and media, the electoral component of democracy has shown remarkable resilience.
  • Countries around the world learned to hold elections in exceedingly difficult conditions and they rapidly activated special voting arrangements to allow citizens to continue exercising their democratic rights.

Democracy is good. I say this because other systems are worse.

–  Jawaharlal Nehru

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