Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Preventing targeting of Muslim women online
Context
The auctioning of Muslim women first on Sulli Deals and now through Bulli Bai is shocking and it is our collective responsibility to make sure it never happens again.
How to prevent such incidents from happening?
- Even a good system of blocking this app from mainstream online platforms is a short-term technical solution.
- We have on our hands a problem of a few active bad actors and many passive ones.
- Systems to identify and remove content on Social media: For over a decade, Facebook, Twitter, WhatsApp, and YouTube have been at the center of controversy.
- Over time, they have developed elaborate systems through which harmful content can be identified and removed.
- What is key is that this content is usually legible to a wide range of people.
How GitHub is different?
- GitHub’s content is code.
- GitHub is a specialist platform that is not accessible or legible to everyone.
- It is, however, working towards more sophisticated content moderation.
- There is great value in a platform that shares code.
Challenges in finding and punishing perpetrators
- US laws: The United States of America’s laws require companies not to share private information unless the request is made through an onerous process.
- Delay in sharing information: This is a pre-internet process for law enforcement requests from other countries.
- After the internet made American platforms intermediaries of communication worldwide, the number of requests for information from these companies escalated dramatically.
- The system does not have the resources to cope with the increased demand and there is a delay before requests can be processed.
- This is why it is a waste of time calling for GitHub to hand over the names of the authors of the code.
Suggestion
- Automated detection system: To address non-consensual sexual media, platforms maintain a shared database of reported videos and images which they remove the instant they are re-published or shared.
- At least in the short term, GitHub needs to work with the group being targeted towards an automated detection system that will restrain this new disturbing trend in targeting Muslim women.
Conclusion
Our focus in the short term should be on finding a way to make sure that any recurring versions of this code are blocked proactively by GitHub.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NFTs
Mains level: Paper 3- Taxing the transactions in cryptocurrencies
Context
In the Union Budget speech, Finance Minister Nirmala Sitharaman announced a 30% flat tax rate levied on any gains made from the transfer of virtual assets including cryptocurrencies and Non-Fungible Tokens (NFTs).
What is cryptocurrency?
- Cryptocurrency (crypto) consists of a digital denomination designed to work as a medium of exchange through a distributed computer network (a blockchain) that is not reliant on any central authority such as a government or a bank for its upholding and maintenance.
- Legal status: The announcement of the tax by the Finance Minister now leads to the assumption that crypto is legal in India.
- Foreseeable are changes that would, down the road, legitimize and formally legalize the activities of crypto start-ups and enable them to access the necessary support system which might not have been available previously.
What are the implications of taxing cryptocurrencies in India?
- While critics are right in observing that the 30% flat tax rate is a harsh rate, this is a premium and price well-worth paying in exchange for what is effectively a ruling-out of prospects for a total ban on crypto by the central government.
- Scope for innovation: The high tax rate would inevitably hamper the willingness of investors to convert cryptocurrencies into national fiat, this may, in turn, open up more doors for technologically savvy and innovation-minded investors.
- The extremely high tax rate and the fact that the losses cannot be offset would invariably propel investors to turn to alternative means of storing and undertaking transactions in cryptocurrencies, without foregoing the significant losses involved as they “switch” back into the rupee.
- An inadvertent upside of this, then, is the prospective conversion and reallocation of crypto-funds from one form to another.
- Such transformations would involve DeFi (Decentralised Finance) activities such as staking, lending, and providing liquidity, among others.
Scope for DeFi in India
- DeFi (or “decentralized finance”) is “an umbrella term for financial services on public blockchains.
- With DeFi, one can do most of the things that banks support — earn interest, borrow, lend, buy insurance, trade derivatives, trade assets, and more — but it is faster and does not require paperwork or a third party.
- DeFi is global, peer-to-peer (meaning directly between two people, and not routed through a centralised system), pseudonymous, and open to all.
- The processes highlighted above would drive innovation in the field of Indian DeFi.
Concerns
- Low participation due to high rate: The community of small and medium-sized enterprises (SMEs) and lower-end high net-worth individuals are going to find it most difficult to access the ecosystem given the substantial barriers posed by the tax rates.
- Lack of clarity: Additionally, when it comes to India’s crypto policy at large, there is a fundamental lack of clarity in aspects other than taxation.
- There appears to be a push to treat crypto as purely an asset class than a currency.
- The consolation offered by the Government in the form of the Reserve Bank of India’s CBDC, or Central Bank Digital Currency, will definitely help in pushing for the adoption of digital currencies, but, equally, defeats the fundamental purpose of cryptocurrency, which is decentralization.
Suggestion
- Reduce the tax rate: There is a need to reduce tax rates in the future, though this must be weighed against considerations concerning government revenue and the need to curb speculative bubbles surfacing in relation to the currency.
- Incorporation of insights: The second reform constitutes the incorporation of insights from seasoned partners from international communities, the key should rest with engaging these individuals for their insights and advice on the best practices associated with cryptocurrency policymaking.
Consider the question “What is DeFi (decentralised finance)? What are the implications levying high tax on the cryptocurrencies?”
Conclusion
Systemic reforms are by no means easy, but they are critical as an amplifier of the successes that India has already accrued in the field and as an accelerator of India’s advancement in the sphere of crypto finance and blockchain social policymaking.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Federal structure
Mains level: Paper 2: Federal judiciary
Context
The article examines the need to strengthen the federal nature of our judiciary.
Federalism in India
- India is a union of States.
- Part of basic structure: The Supreme Court of India has held that the federalist nature of our country is part and parcel of the basic structure of the Constitution.
- A midpoint between unitarism and confederalism: Federalism is a midpoint between unitarism which has a supreme center, to which the States are subordinate, and confederalism wherein the States are supreme and are merely coordinated by a weak center.
- Role of judiciary: An integral requirement of a federal state is that there be a robust federal judicial system that interprets this constitution, and therefore adjudicates upon the rights of the federal units and the central unit, and between the citizen and these units.
Nature of judiciary in India: Federal judiciary
- The federal judicial system comprises the Supreme Court and the High Court in the sense that it is only these two courts that can adjudicate the rights of federal units.
- The Indian Federation though a dual polity has no dual judiciary at all.
- Single integrated judiciary: The High Courts and the Supreme Court form one single integrated judiciary having jurisdiction and providing remedies in all cases arising under the constitutional law, the civil law, or the criminal law.
Equality of power of High Court judges and Supreme Court judges
- The Indian Constitution envisaged the equality of power of High Court judges and Supreme Court judges, with a High Court judge not being a subordinate of a Supreme Court judge.
- Superior only in the appellate sense: The Supreme Court has, on many occasions, reiterated the position that the Supreme Court is superior to the High Court only in the appellate sense.
- A delicate balance is required to be maintained between the Supreme Court and the High Courts in order for the constitutional structure to work.
- This balance existed from Independence onwards, until the 1990s. Since then, however, it has been tilting in favor of the central court.
Erosion of standing of High Court
- In recent years, three specific trends have greatly eroded the standing of the High Court, leading to an imbalance in the federal structure of the judiciary.
- 1] Collegium system: The Supreme Court of India today, by playing the role of a collegium, effectively wields the power to appoint a person as a judge to a High Court or to transfer him or her to another High Court, or to appoint (or delay the appointment) of a sufficiently senior High Court judge as chief justice or as a judge of the Supreme Court
- The practical impact of this in the power dynamic between a High Court judge and a Supreme Court judge leaves little to be said or imagined.
- 2] Parallel judicial systems: Successive governments have passed laws that create parallel judicial systems of courts and tribunals which provide for direct appeals to the Supreme Court, bypassing the High Courts.
- These laws lead to the creation of parallel hierarchies of courts and tribunals, whether it be the Competition Commission, or the company law tribunals, or the consumer courts
- In all these cases, the High Courts are bypassed.
- Laws have been drafted such that the High Court has no role to play and the Supreme Court directly acts as an appellate court
- 3] Interventionist Supreme Court: The Supreme Court has been liberal in entertaining cases pertaining to trifling matters.
- This has inevitably led to the balance tipping in favor of the centralization of the judiciary.
- An aggressively interventionist Supreme Court leads many to approach it directly as a panacea for all ills befalling the nation.
- We see the Supreme Court interfering in matters which are clearly of local importance, having no constitutional ramifications.
Impact on the federal structure
- The greater the degree of centralization of the judiciary, the weaker the federal structure.
- In the United States, empirical research shows that the U.S. Supreme Court is far more likely to strike down a state statute as unconstitutional than a federal statute.
- Courts face much weaker constraints when they strike down state legislation, especially state laws that are disapproved of by national political majorities.
- In Nigeria, a similar federal country, research has shown that the Supreme Court favours the jurisdiction of the central government over the State units.
Conclusions
- Federalism is a midpoint between unitarism which has a supreme centre, to which the States are subordinate, and confederalism wherein the States are supreme, and are merely coordinated by a weak centre.
- An integral requirement of a federal state is that there be a robust federal judicial system which interprets the constitution
- The federal judicial system comprises the Supreme Court and the High Court in the sense that it is only these two courts which can adjudicate the above rights.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Tribunals, NCLT
Mains level: Issues with appointments in Tribunals
The Supreme Court has warned that even after the judicial intervention, the government made abrupt efforts to fill vacancies in tribunals some time back and nothing after that.
What is the case?
- The apex court said that it is getting requests for extension of time for NCLT (Nation Company Law Tribunal) matters, etc.
- Some knee-jerk appointments took place and nothing after that.
- The govt earlier had introduced Tribunal Reforms Bill in 2021, which abolishes nine appellate tribunals and revives provisions of an ordinance struck down by the Supreme Court.
What are Tribunals?
- Tribunals are specialist judicial bodies that decide disputes in a particular area of law.
- They are institutions established for discharging judicial or quasi-judicial duties.
- The objective may be to reduce the caseload of the judiciary or to bring in subject expertise for technical matters.
Do you know?
The Income Tax Appellate Tribunal was established as the first Tribunal in India back in 1941.
Creation of Tribunals
In 1976, Articles 323A and 323B were inserted in the Constitution of India through the 42nd Amendment.
- Article 323A: This empowered Parliament to constitute administrative Tribunals (both at central and state level) for adjudication of matters related to recruitment and conditions of service of public servants.
- Article 323B: This specified certain subjects (such as taxation and land reforms) for which Parliament or state legislatures may constitute tribunals by enacting a law.
- In 2010, the Supreme Court clarified that the subject matters under Article 323B are not exclusive, and legislatures are empowered to create tribunals on any subject matters under their purview as specified in the Seventh Schedule.
SC stance on Tribunals
- The Supreme Court has ruled that tribunals, being quasi-judicial bodies, should have the same level of independence from the executive as the judiciary.
- Key factors include the mode of selection of members, the composition of tribunals, and the terms and tenure of service.
- In order to ensure that tribunals are independent of the executive, the Supreme Court had recommended that all administrative matters be managed by the law ministry rather than the ministry associated with the subject area.
- Later, the Court recommended the creation of an independent National Tribunals Commission for the administration of tribunals.
- These recommendations have not been implemented.
Issues with tribunals
- Pendency: Whereas the reasoning for setting up some tribunals was to reduce the pendency of cases in courts, several tribunals are facing the issue of a large caseload and pendency.
- No appointment: With over 240 vacancies in key tribunals where thousands of cases were pending, not a single appointment had been made by the government in any of these tribunals till date.
Back2Basics: National Company Law Tribunal
- The NCLT is a quasi-judicial body that adjudicates issues relating to Indian companies.
- The tribunal was established under the Companies Act 2013 in 2016 and is based on the recommendation of the V. Balakrishna Eradi Committee.
- All proceedings under the Companies Act, including proceedings relating to arbitration, compromise, arrangements, reconstructions and the winding up of companies shall be disposed off by the NCLT.
- The NCLT bench is chaired by a Judicial member who is supposed to be a retired or a serving High Court Judge and a Technical member who must be from the Indian Corporate Law Service, ICLS Cadre.
- It is the adjudicating authority for the insolvency resolution process of companies and limited liability partnerships under the Insolvency and Bankruptcy Code, 2016.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SEED Scheme, DNTs, Criminal Tribes Act
Mains level: Welfare of the Denotified and Nomadic Tribes
The Minister of Social Justice and Empowerment has launched the Scheme for Economic Empowerment of De-notified, Nomadic, and Semi Nomadic Communities (SEED).
Who are the DNTs?
- The term ‘De-notified Tribes’ stands for all those communities which were once notified under the Criminal Tribes Acts, enforced by the British Raj between l87l and I947.
- These Acts were repealed after Independence in l952, and these communities were “De-Notified”.
- The DNTs (of whom most are the medieval period Banjaras) are the most neglected, marginalized, and economically and socially deprived communities.
- Most of them have been living a life of destitution for generations and still continue to do so with an uncertain and gloomy future.
SEED Scheme
- Under the scheme, the government seeks to provide free coaching to students for civil services examinations, competitive exams for admission to professional courses; health insurance; livelihood support and housing.
- It has been formulated for families having income from all sources of Rs.2.50 lakh or less per annum and not availing any such benefits from similar Scheme of Centre Government or the State Government.
- The Scheme will be implemented through a portal, developed by the Department of Social Justice & Empowerment.
- Post verification, the funds will be transferred directly to the beneficiaries in their account.
- The other implementing agencies are Ministry of Rural Development, National Rural Livelihood Mission (NRLM) and National Health Authority (NHA).
Components of the scheme
The Scheme will have the following four components:
[I] Free Coaching
- A component of free Coaching for DNT Students has been envisioned for the educational empowerment of these communities.
- The objective of this component is to enable them to appear in competitive examinations/ admission to professional courses like medicine, engineering, MBA, etc for obtaining an appropriate job in the Public/Private Sector.
- The selection of the candidates for each course will be based on system generated merit list through the portal.
- Approximately, 6250 students will be provided free coaching under this component in five years. The total funds spent in the five years will be Rs.50 crore.
[II] Health Insurance
- Members of these communities are likely to have little or no access to medical facilities and other benefits available under the mainstream health policies.
- The primary objective of the scheme is to provide financial assistance to National Health Authority (NHA) in association with State Health Agencies (SHAs).
- These agencies will provide a health insurance cover of Rs.5 lakhs per family per year for families as per norms of “Ayushman Bharat Pradhan Mantri Jan Arogya Yojana.
[III] Livelihood Initiatives
- The decline of traditional occupations of DNT/NT/SNT communities has exacerbated their poverty.
- A focus to support livelihood generation for these communities is required.
- The primary objective of the scheme is to provide financial assistance to National Rural Livelihood Mission (NRLM).
- It would enhance productivity growth in key livelihood sectors for employment generation through investments in institutional support, technical assistance.
[IV] Financial support for Housing
- Considering the shortage of houses for DNTs, it has been proposed to earmark a separate outlay for PMAY to support specific importance in providing houses only for DNTs living in rural areas.
- It is for those who have not taken benefit of the Pradhan Mantri Awas Yojana as SC, ST, OBC and are living below the poverty line.
- The admissible support is Rs 1.20 lakhs in plains and 1.30 lakhs in hilly areas (per unit assistance).
Why need such a scheme?
- DNTs escaped the attention of our developmental framework and thus are deprived of the support unlike Scheduled Castes and Scheduled Tribes.
- Historically, these communities never had access to private land or homeownership.
- These tribes used forests and grazing lands for their livelihood and residential use and had “strong ecological connections.
- Many of them are dependent upon various types of natural resources and carve out intricate ecological niches for their survival.
- The changes in ecology and environment seriously affect their livelihood options.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: New India Literacy Programme
Mains level: Basic literacy and numeracy amongs adults
The Union Government approved a new scheme “New India Literacy Programme (नव भारत साक्षरता कार्यक्रम) for the period FYs 2022-2027 to cover all the aspects of Adult Education to align with National Education Policy 2020.
New India Literacy Programme
- The scheme will cover non-literates of the age of 15 years and above in all states/UTs in the country.
- The target for Foundational Literacy and Numeracy for FYs 2022-27 is 5 (five) crore learners @ 1.00 crore per year by using “Online Teaching, Learning and Assessment System (OTLAS)”.
- A learner may register him/herself with essential information like name, date of birth, gender, Aadhaar number, mobile number, etc.
- The scheme will be implemented through volunteerism through online mode.
- The training, orientation, workshops of volunteers, maybe organized through face-to-face mode.
- All material and resources shall be provided digitally for easy access to registered volunteers.
Objectives of the scheme
The objectives of the scheme are:
- To impart foundational literacy and numeracy
- To cover other components which are necessary for a citizen of the 21st century such as critical life skills (including financial literacy, digital literacy, commercial skills, health care and awareness, child care and education, and family welfare)
- Vocational skills development (with a view towards obtaining local employment)
- Basic education (including preparatory, middle, and secondary stage equivalency)
- Continuing education (including engaging holistic adult education courses in arts, sciences, technology, culture, sports, recreation, etc.)
Salient features of the scheme
- The school will be a Unit for implementation of the scheme
- Schools to be used for conducting a survey of beneficiaries and Voluntary Teachers (VTs)
- Foundational Literacy and Numeracy will be imparted through Critical Life Skills to all non-literates in the age group of 15 years and above
- Performance Grading Index (PGI) for State/UT at the district level
- CSR/Philanthropic Support may be received by hosting ICT support, providing volunteer support
Need for this scheme
- As per Census 2011, the absolute number of non-literates of the country in 15 years and above age group is 25.76 crore (Male 9.08 crore, Female 16.68 crore).
- Even after the Saakshar Bharat program was implemented during 2009-10 to 2017-18, it is estimated that currently around 18.12 crore adults are still non-literate in India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: OROP Policy
The Supreme Court has said that the Centre’s hyperbole on the One Rank One Pension (OROP) policy presented a much “rosier picture” than what is actually given to the pensioners of the armed forces.
What is OROP Policy?
- OROP means the same pension, for the same rank, for the same length of service, irrespective of the date of retirement.
- The concept was provoked by the then decision by Indira Gandhi-led government, in 1973, two years after the historic victory in the 1971 Bangladesh war.
How did the issue escalate?
- The Rank pay was a scheme implemented by the Rajiv Gandhi-led govt in 1986, in the wake of the 4th Central Pay Commission.
- It reduced the basic pay of seven armed officers’ ranks of 2nd Lieutenant, Lieutenant, Captain, Majors, Lt. Colonel, Colonels, Brigadiers, and their equivalent by fixed amounts designated as rank pay.
How was it reviewed?
- In 2008, Manmohan Singh led Government in the wake of the Sixth Central Pay Commission (6CPC), which discarded the concept of rank-pay.
- Instead, it introduced Grade pay, and Pay bands, which instead of addressing the rank, pay, and pension asymmetries caused by ‘rank pay’ dispensation, reinforced existing asymmetries.
Issues with this pension policy
- The causes that inform the OROP protest movement are not pension alone, as armed forces veterans have often tried to make clear, and the parliamentary committee recorded.
- The issues, veterans emphasize, are of justice, equity, honor, and national security.
- The failure to address the issue of pay-pension equity, and the underlying issue of honor, is not only an important cause for the OROP protest movement but its escalation.
Present status
- PM Modi-led government has accepted the OROP.
- It has already released Rs. 5500 crores to serve the purpose, but still, there are some grievances from the veterans’ side.
- It refined Pensions for all pensioners retiring in the same rank as the average of the minimum and maximum pensions in 2013.
- The veterans noted governments’ proposal as one rank many pensions since the review of 5 years would lead to differences in pension between senior and a junior.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: REC, RPO
Mains level: Renewable Energy in India
Telangana CM in harsh words has criticized the Prime Minister over Renewable Purchase Obligations (RPO).
Why such a gesture by Telangana CM?
- Telangana has been particularly vocal about the “increasing burden” forced upon states by the Centre on account of the clean energy cess imposed on coal and the RPOs (Renewable Purchase Obligation).
What are RPOs?
- Renewable Energy Certificates (REC) is a policy instrument to catalyze the development of renewable energy.
- It is a market-based mechanism that will help the states meet their regulatory requirements (such as RPOs) by overcoming the geographical constraints on existing renewable potential in different states.
- Under RPO, power distribution companies purchase a certain percentage of their requirements from renewable energy sources.
REC Mechanism
- REC mechanism is a market-based instrument to promote renewable energy and facilitate compliance of renewable purchase obligations (RPO).
- It is aimed at addressing the mismatch between availability of RE resources in state and the requirement of the obligated entities to meet the RPO.
- 1 REC is treated as equivalent to 1 MWh.
How many types of RECs are there?
There are two categories of RECs, viz., solar RECs and non-solar RECs.
- Solar RECs are issued to eligible entities for the generation of electricity based on solar as a renewable energy source.
- Non-solar RECs are issued to eligible entities for the generation of electricity based on renewable energy sources other than solar.
Issues highlighted by Telangana
- Mandatory purchase: The CM has raised the issue of mandatory purchase of renewables reducing the Plant Load Factor (PLF) for existing thermal power projects.
- Only solar RPO: The CM questioned the mandate to procure a certain percentage of power from solar energy noting that Telangana had hydropower projects producing over 2,500 MW of power from rivers.
- Not all states have ample renewables: States have thus far not been able to meet RPO targets, with over a dozen states and UTs achieving less than 60% of RPOs.
- Penalty for non-compliance: There is a (small) penalty for not meeting RPO obligations. The Centre has proposed to increase penalties on states for non-compliance with RPOs in the draft electricity amendment bill.
Clarification from the centre
- States were free to hold their own bids and buy green energy from any developer instead of procuring power based on bids by the SECI.
- They can choose to have their own bids.
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From UPSC perspective, the following things are important :
Prelims level: Eat Right Movement
Mains level: Food habits and prevalence of NCDs
Four police stations of New Delhi district have been certified as ‘Eat Right Campus’ by the Food Safety and Standards Authority of India (FSSAI).
Eat Right Campus
- Eat Right India is a flagship mission of FSSAI, which aims at ensuring that the citizens of the country get safe and nutritious food.
- The ‘Eat Right Campus’ initiative led by FSSAI aims to promote safe, healthy and sustainable food in campuses such as schools, universities, colleges, workplaces, hospitals, tea estates etc. across the country.
- The objective is to improve the health of people and the planet and promote social and economic development of the nation.
- The initiative is not mandatory to adopt.
Evaluation Criteria
- Benchmarks have been created on four different parameters based on which campuses are evaluated and certified as ‘Eat Right Campus’.
- These parameters include
- Food safety measures, steps to ensure the provision of healthy, Environmentally sustainable food, and Building awareness to make the right food choices.
- These practices include mandatory steps such as licensing and registration of food service providers in the campus and compliance to food safety and hygiene standards as per Schedule 4 of the Food Safety and Standards (FSS) Act, 2006.
Benefits of Eat Right Campus
- It can provide immense benefits to the campus and the individuals on the campus not only in terms of health but also economics.
- Safe, healthy, and sustainable food on the campus would reduce the incidence of food-borne illnesses, deficiency diseases, and non-communicable diseases among the people on the campus.
- This means less absenteeism and loss of working hours and greater wellbeing, motivation, and productivity of people.
- This would also reduce the burden of healthcare costs for the workplace, institution, hospital, jail, or tea estate.
Back2Basics: Food Safety and Standards Authority of India (FSSAI)
- The FSSAI is an autonomous body established under the Ministry of Health & Family Welfare, Government of India.
- It has been established under the Food Safety and Standards Act, 2006 which is a consolidating statute related to food safety and regulation in India.
- It is responsible for protecting and promoting public health through the regulation and supervision of food safety.
- It is headed by a non-executive Chairperson, appointed by the Central Government, either holding or has held the position of not below the rank of Secretary to the Government of India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Tarapur Massacre of 1932
Mains level: NA
Bihar CM has announced that February 15 would be celebrated as “Shahid Diwas” in memory of the 34 freedom fighters who were killed by police in Tarapur town of Bihar’s Munger district 90 years ago.
Why such move?
- The Tarapur massacre was the biggest carried out by the British police after the one in Jallianwala Bagh in Amritsar in 1919.
- The freedom fighters had never got their due, the CM said.
- PM Modi too had referred to the Tarapur massacre in his Mann ki Baat radio address of January 2021.
Tarapur Massacre: Course of events
- On February 15, 1932, a group of young freedom fighters planned to hoist an Indian national flag at Thana Bhavan in Tarapur.
- Police were aware of the plan, and several officers were present at the spot. Around 2 pm, even as the police carried out a brutal lathicharge, Gopal Singh succeeded in raising the flag at Thana Bhavan.
- A 4,000-strong crowd pelted the police with stones, injuring an officer of the civil administration.
- The police responded by opening indiscriminate fire on the crowd.
- After about 75 rounds were fired, 34 bodies were found at the spot, even though there were claims of an even larger number of deaths.
Trigger for protest
- The hanging of Bhagat Singh, Sukhdev, and Rajguru in Lahore on March 23, 1931, sent a wave of grief and anger around the country.
- Following the collapse of the Gandhi-Irwin Pact, the Mahatma was arrested in early 1932.
- The Congress was declared an illegal organization, and Nehru, Patel, and Rajendra Prasad were also thrown in jail.
- In Munger, freedom fighters Srikrishna Singh, Nemdhari Singh, Nirapad Mukherjee, Pandit Dasrath Jha, Basukinath Rai, Dinanath Sahay, and Jaymangal Shastri were arrested.
- A call given by the Congress leader Sardar Shardul Singh Kavishwar to raise the tricolour over government buildings resonated in Tarapur.
Back2Basics:
Explained: Jallianwala Bagh Massacre
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SECC
Mains level: Paper 2- Importance of caste data
Context
Last month, the Supreme Court upheld the 27% quota for Other Backward Classes (OBC) in the All-India Quota seats for the National Eligibility-cum-Entrance Test and reiterated that reservations for backward classes were not an exception but an extension of the principle of equality under Article 15(1) of the Constitution.
Multiple dimensions of reservation
- The judgment highlighted how open competitive exams give the illusion of providing equal opportunity in ignorance of the widespread inequalities in educational facilities, the freedom to pursue such education, and societal prejudices.
- Psychological and social effects: The Court pointed out how such disparities are not limited to the issue of access to good education or financial constraints alone, but also to the psychological and social effects of inherited cultural capital (communication skills, books, accent, academic accomplishments, social networks, etc.), which ensures the unconscious training of upper-caste children for high-grade performance.
- The Constituent Assembly held a similar philosophy while introducing constitutional provisions which enable the government to make special provisions for the uplift of the “lower castes”.
Importance of justifiable data
- The politicisation of issue: Political parties often promise reservation for communities on being brought to power without any credible data collection exercises to justify the decision.
- It can be said that the faith of our citizens cannot be restored until credible exercises of data collection are undertaken regarding caste.
- Lack of data on OBC: Even though data concerning the Scheduled Castes and Scheduled Tribes have been included in the Census, there is no similar data on OBCs.
- Proper assessment: In the Indra Sawhney case, the Supreme Court held that the States must conclude the “backwardness” of a particular class of people only after proper assessment and objective evaluation.
- It held that such a conclusion must be subject to periodic review by a permanent body of experts.
- The National Commission for Backward Classes Act, 1993, provides under Section 11 that the Central government may every 10 years revise lists with a view to exclude those classes which have ceased to be backward and include new backward classes.
- This exercise has not been done to date.
- Impartial data and subsequent research might save the bona fide attempts of the uplift of the most backward classes from the shadow of caste and class politics and be informative to people on both sides of the spectrum – for and against reservation.
- Calls for caste data in Census: Last year, many calls were made for the inclusion of caste data (including that of the OBCs) in the 2021 Census, and the matter reached the Supreme Court.
- However, the government took the stand that the 2011 SECC was “flawed” and is “not usable”.
Conclusion
Caste data will enable independent research not only into the question of who does and does not need affirmative action but also into the effectiveness of this measure.
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From UPSC perspective, the following things are important :
Prelims level: Sagaing region
Mains level: Paper 2- India-Myanmar relations
Context
One year ago, the military in Myanmar attempted to grab power from the elected civilian government in a dramatic coup. Meanwhile, the deposed civilian lawmakers who were elected in free-and-fair elections in November 2020 put together their own government known as the National Unity Government (NUG).
The current situation in Myanmar
- The coup faced popular resistance from the first day, with mass protests bringing the country to a halt.
- According to the Assistance Association for Political Prisoners, as of January 28, 1,499 civilians have been killed in Myanmar since the coup.
- Dozens of civilian militias, called People’s Defence Forces (PDF), now armed with more sophisticated weapons, mushroomed in nearly every region and state.
- Today, the military is having to fight on multiple fronts, as even powerful ethnic armed groups in the north, northwest, and east have joined forces with the PDFs.
India’s approach towards situation in Myanmar
- Balanced approach: Since the coup, India has taken a balanced diplomatic approach on Myanmar, calling for restraint, restoration of democracy, and release of political prisoners, but also maintaining its lines of communication with the military.
- Avoiding sanctions: India has also firmly stayed away from imposing sanctions on the junta.
Why does India need to recalibrate its approach?
- The last 12 months have made it clear that the military is incapable of providing the kind of political, economic, and social stability that India needs in Myanmar to advance its interests, including development projects.
- Public faith in the military as a state institution is at its lowest.
- Northeastern border issue: For New Delhi, India’s Northeastern border with Myanmar remains on top of the bilateral agenda.
- However, even on this, the military has damaged whatever semblance of stability was left.
- Sagaing region, which borders three Northeast Indian states, has seen the highest number of clashes so far.
- Chin state, bordering Mizoram and Manipur, has seen dramatic military offensives in civilian areas, which have forced thousands to flee into India.
- The Myanmar military has roped in Manipuri insurgents as mercenaries to attack anti-junta forces, in exchange for safe haven.
Way forward
- New Delhi must reconsider its partnerships in Myanmar and invest in those entities that can not only provide a stable political environment overall but also effectively secure its security interests along the border.
- The NUG enjoys much more mass popularity than the military, which means it is in a position to restore calm.
- China has strong links with ethnic armed groups in northern Myanmar, but not with the new PDFs.
- So, if India really wants to offset Chinese influence in Myanmar, it needs to take this opportunity to forge new friendships.
Conclusion
It is time India rapidly expanded its links with these entities, instead of playing by the old rules.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 332
Mains level: Paper 2- Reservation for STs in Jammu and Kashmir
Context
The Jammu and Kashmir Delimitation Commission has recently shared its interim report. One of the salient features of the report is the proposed reservation of nine seats for Scheduled Tribes (ST).
Reservation for STs in Legislative Assembly
- It is for the first time that seats have been reserved for the ST community in the Legislative Assembly of J&K.
- The commission has also proposed reserving seven seats for Scheduled Castes (SCs).
- In the erstwhile Legislative Assembly, there were also seven seats reserved for SCs, but there was no such reservation for STs.
- This denial of constitutionally guaranteed reservation under Article 332 post-1991 when four communities (the Gujjars, Bakerwals, Gaddis and Sippis) were granted ST status is a pointer to the harsh reality that discrimination has largely been deliberate.
Issue of reservation for STs in J&K
- No role of Article 370: Nothing in Article 370 has prevented the provision of political reservation to STs or extension of the Forest Rights Act (FRA), 2006 to J&K.
- The presence of Article 370 has often been given as a reason for the absence of reservation for the tribals in J&K though this is untrue.
- Reservation for SCs: SCs in J&K had reservations even before the dilution of Article 370, and it was provided under the J&K Constitution.
- This lack of political will stemmed from an unwillingness to share power with groups ethnically and culturally different from both Dogras and the Kashmiris, the two predominant power groups in J&K.
What has changed now?
- The dilution of Article 370 on August 5, 2019, and the subsequent Jammu and Kashmir Reorganisation Act, 2019 changed political dynamics in the region.
- As far as tribals are concerned, it promised them political reservation under Article 332 and led to the extension of the Forest Rights Act, 2006.
- Essentially, it has changed the nature of tribal politics in J&K as well, which had largely centered around these two major objectives.
Way forward
- Economic and social empowerment: The focus of tribal politics has to shift toward the economic and social empowerment of tribal communities.
- Implementation of the Forest Rights Act has to be a major issue as it has the potential to significantly empower these communities.
- The political mobilization of STs began many years ago, and the interim report has thrown up new challenges before STs than merely empowering them.
- Awareness: It will not change after reservation unless there is an awareness and conscious attempt by the leadership to prioritize tribal interests over party politics.
- Political relevance: The tendency to limit tribal politics to Rajouri and Poonch (which the interim report has also done) is the extension of past practice though the reality is that more than 68% of the ST population lives outside these districts.
- Political relevance is a major challenge that tribal politics in J&K faces.
- Community leaders, especially tribal youth, need to understand the significance of the tribal vote.
- Tribal politics also have to address the political, social, and economic empowerment of marginal tribes such as the Bakerwals, Gaddis and Sippis.
- Women empowerment: Women have to play a major role in tribal politics, and their participation and leadership have to be made feasible and suitably promoted.
- They have proven their leadership in the District Development Council (DDC) elections, and it needs to be strengthened further.
Conclusion
The focus of tribal politics has to shift toward the economic and social empowerment of tribal communities, with a special focus on the effective implementation of welfare schemes and policies for STs in J&K.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Mob lynching and the dysfunctions created
Bills passed against mob lynching in some states have not been implemented since lynching is not defined as a crime under the Indian Penal Code (IPC).
Why are the bills pending?
- Most bills have been reserved by the Governor for consideration of the President.
- The President has to go with the advice given by the Council of Ministers, in the case of such legislations, represented by the MHA.
- The Union Home Ministry examines the State legislations on three grounds-
- Repugnancy with Central laws
- Deviation from national or central policy and
- Legal and constitutional validity
What is Mob Lynching?
- Lynching is a premeditated extrajudicial killing by a group.
- It is most often used to characterize informal public executions by a mob in order to punish an alleged transgressor, or to intimidate a group.
- Recent incident can be recalled from Pakistan where a Sri Lankan national was set ablaze over blasphemy charges.
Dealing with lynching in India
- In 2017, the National Crime Records Bureau (NCRB) collected data on mob lynching, hate crimes and cow vigilantism but it was not published and discontinued.
- This is because, there is “no separate” definition for lynching under the IPC.
- However, lynching incidents could be dealt with under Sections 300 and 302 of the IPC, pertaining to murder.
- In 2018, the Supreme Court asked Parliament to make lynching a separate offense.
- Since then, the government is working to overhaul the IPC framed in 1860 and the Code of Criminal Procedure (CrPC) to consider mob-lynching.
Why anti-lynching law is necessary?
- Fills the void: It fills a void in our criminal jurisprudence.
- Lawlessness: The Indian Penal Code has provisions for unlawful assembly, rioting, and murder but nothing that takes cognizance of a group of people coming together to kill (a lynch mob).
- Rise in Lynching incidents: There has been a rise in lynching incidents in recent years.
Reason for the rise in lynchings
- Impunity: The lynch mobs are confident of getting away with it. So far, the state has done little to shake that confidence.
- Communalism: In the case of cow-linked lynchings, a lot depends on whether the incumbent in power considers it compatible with its political interests to crack down on such attacks.
- Fake news: Another factor that gave rise to lynchings is the spread of fake news through social media platforms which incite a sudden wave of antagonism.
- Alienation: With modernity, there is a growth of individualism and erosion of associational life. The sense of fraternity has been fading away due to this.
- Unemployment: High Unemployment rates leave millions of youth unengaged.
Effect of lynching
(1) State
- Violation of FR: It is against the values upheld in the constitution of India. Every individual have certain fundamental rights any violence would be a curtailment of this right.
- Law and order crisis: Lynchings have led to degrading regard to law and order.
(2) Economy
- Reputation damage: Many International agencies warned India against mob lynching incidents. This impacts both foreign and domestic investment thereby adversely affecting sovereign ratings.
- Impact on migration patterns: It directly hampers internal migration which in turn affects economy.
- Damage of public property: Large resources deployed to tackle such menaces induces extra burden on state-exchequer.
(3) Society
- Fear of radicalization: Radical and extremist organizations such as ISIS etc could take leverage of the atmosphere created by such incidents.
- Communal disharmony: This impact solidarity of society and idea of Unity in diversity. This create an atmosphere of majority v/s minority.
- Intolerance: It could aggravate caste, class and communal hatred. Such acts shows loss of tolerance in society and people are being swayed by emotions, prejudices etc.
Way forward
- States should be more vigilant and proactive in flagging rumors using social media and other platforms.
- Some states are doing it, others need to emulate these examples.
- The more proactive the administration is in this regard, the stronger a deterrent it will be.
- There is also a need for a special court for the trial of mob violence.
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From UPSC perspective, the following things are important :
Prelims level: Public Order
Mains level: Hijab Row
The Karnataka High Court is hearing a challenge to the constitutionality of the state government’s ban on students wearing a hijab in educational institutions. The judges heard an argument on whether the state can justify the ban on the ground that it violates ‘public order’.
What is Public Order?
- Public order is one of the three grounds on which the state can restrict freedom of religion.
- It is also one of the grounds to restrict free speech and other fundamental rights.
- Article 25 of the Constitution guarantees to all people’s right to freedom and conscience and the right freely to profess, practise and propagate religion subject to public order, morality and health.
Who can check it?
- Public order is normally equated with public peace and safety.
- What affects public order is contextual and is determined by the state.
- According to List 2 of the Seventh Schedule of the Constitution, the power to legislate on aspects of public order rests with the states.
How does it relate to the hijab ban?
- According to the government order issued under the Karnataka Education Act, 1983, “public order” is one of the reasons for not allowing students to wear a headscarf in educational institutions along with “unity” and “integrity”.
- The petitioners have asked the state to show how the mere wearing of a hijab by students could constitute a public order issue.
- Another argument made is that the government cannot delegate the power to college committees the function of determining whether the hijab was detrimental to public order.
- The government order states that while individual college committees are free to determine the uniform, in the absence of such rules the government order banning the headscarf would apply.
- Only the government can make an assessment of public order.
How has the state responded?
- The government order makes no mention of “public order” and that the petitioners reading of the order could be an error in translation.
- The order, in Kannada, uses the words “sarvajanika suvyavasthe”.
- Incidentally, the official Kannada translation of the Constitution uses “sarvajanika suvyavasthe” for “public order” in all nine instances.
How has public order been interpreted by courts?
- Courts have broadly interpreted it to mean something that affects the community at large and not a few individuals.
- In Ram Manohar Lohia vs State of Bihar (1965), the Supreme Court held that in the case of ‘public order’, the community or the public at large have to be affected by a particular action.
- One has to imagine three concentric circles:
- the largest representing ‘law and order’
- the next representing ‘public order’ and
- the smallest representing ‘security of State’
Arguments against the K’taka Order
- In the Karnataka case, the petitioners have argued:
- Public order is not every breach of law and order.
- Public order is an aggravated form of disturbance that is much higher than a law and order issue.
Conclusion
- Thus it is evident that wordplay is given more cognisance over the interpretation of constitution.
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From UPSC perspective, the following things are important :
Prelims level: OIC
Mains level: India's relations with OIC members
India has hit out at the Organisation of Islamic Cooperation (OIC), saying it was “hijacked by vested interests” over its remark on Karnataka Hijab Row.
What is OIC?
- The OIC — formerly Organisation of the Islamic Conference — is the world’s second-largest inter-governmental organization after the UN, with a membership of 57 states.
- The OIC’s stated objective is “to safeguard and protect the interests of the Muslim world in the spirit of promoting international peace and harmony among various people of the world”.
- OIC has reserved membership for Muslim-majority countries. Russia, Thailand, and a couple of other small countries have Observer status.
India and OIC
- At the 45th session of the Foreign Ministers’ Summit in 2018, Bangladesh suggested that India, where more than 10% of the world’s Muslims live, should be given Observer status.
- In 1969, India was dis-invited from the Conference of Islamic Countries in Rabat, Morocco at Pakistan’s behest.
- Then Agriculture Minister Fakhruddin Ali Ahmed was dis-invited upon arrival in Morocco after Pakistan President Yahya Khan lobbied against Indian participation.
Recent developments
- In 2019, India made its maiden appearance at the OIC Foreign Ministers’ meeting in Abu Dhabi, as a “guest of honor”.
- This first-time invitation was seen as a diplomatic victory for New Delhi, especially at a time of heightened tensions with Pakistan following the Pulwama attack.
- Pakistan had opposed the invitation to Swaraj and it boycotted the plenary after the UAE turned down its demand to rescind the invitation.
What is the OIC’s stand on Kashmir?
- It has been generally supportive of Pakistan’s stand on Kashmir and has issued statements criticizing India.
- Last year, after India revoked Article 370 in Kashmir, Pakistan lobbied with the OIC for their condemnation of the move.
- To Pakistan’s surprise, Saudi Arabia and the UAE — both top leaders among the Muslim countries — issued nuanced statements, and were not as harshly critical of New Delhi as Islamabad had hoped.
- Since then, Islamabad has tried to rouse sentiments among the Islamic countries, but only a handful of them — Turkey and Malaysia — publicly criticized India.
How has India been responding?
- India has consistently underlined that J&K is an integral part of India and is a matter strictly internal to India.
- The strength with which India has made this assertion has varied slightly at times, but never the core message.
- It has maintained its “consistent and well known” stand that the OIC had no locus standi.
- This time, India went a step ahead and said the grouping continues to allow itself to be used by a certain country “which has a record on religious tolerance, radicalism, and persecution of minorities”.
OIC members and India
- Individually, India has good relations with almost all member nations. Ties with the UAE and Saudi Arabia, especially, have looked up significantly in recent years.
- The OIC includes two of India’s close neighbors, Bangladesh and Maldives.
- Indian diplomats say both countries privately admit they do not want to complicate their bilateral ties with India on Kashmir but play along with OIC.
Way ahead
- India now sees the duality of the OIC as untenable, since many of these countries have good bilateral ties and convey to India to ignore OIC statements.
- But these countries sign off on the joint statements which are largely drafted by Pakistan.
- India feels it important to challenge the double-speak since Pakistan’s campaign and currency on the Kashmir issue has hardly any takers in the international community.
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From UPSC perspective, the following things are important :
Prelims level: PMFBY, Beed Model of Crop Insurance
Mains level: Issues with PMFBY
Maharashtra may follow several other big states and opt-out Pradhan Mantri Fasal Bima Yojana (PMFBY), the government’s much-highlighted crop insurance scheme.
Why do many states want to opt-out?
- The major reasons are denial and delay of claims along with a huge subsidy burden on state governments.
- The farmers are facing a problem with timely claim settlement.
- Maharashtra is studying the Beed Model for insurance settlement.
Who else has stepped out?
- Andhra Pradesh, Jharkhand, Telangana, Bihar, Gujarat (PM’s home state), Punjab and West Bengal — all predominantly agriculture states — have already opted out of the scheme.
- Some of these states have their own insurance schemes.
What is PMFBY?
- The PMFBY was launched in February 2016. It is being administered by Ministry of Agriculture.
- It provides a comprehensive insurance cover against failure of the crop thus helping in stabilising the income of the farmers.
- It is implemented by empanelled general insurance companies.
- The scheme is compulsory for loanee farmers availing Crop Loan /KCC account for notified crops and voluntary for other others.
Its functioning
- PMFBY insures farmers against all non-preventable natural risks from pre-sowing to post-harvest.
- Farmers have to pay a maximum of 2 per cent of the total premium of the insured amount for kharif crops, 1.5 per cent for rabi food crops and oilseeds as well as 5 per cent for commercial / horticultural crops.
- The balance premium is shared by the Union and state governments on a 50:50 basis and on a 90:10 basis in the case of northeastern states.
Farmers covered
- All farmers growing notified crops in a notified area during the season who have insurable interest in the crop are eligible.
- To address the demand of farmers, the scheme has been made voluntary for all farmers from Kharif 2020.
- Earlier to Kharif 2020, the enrolment under the scheme was compulsory for following categories of farmers:
- Farmers in the notified area who possess a Crop Loan account/KCC account (called as Loanee Farmers) to whom credit limit is sanctioned/renewed for the notified crop during the crop season. and
- Such other farmers whom the Government may decide to include from time to time.
Risks covered under the scheme
- Comprehensive risk insurance is provided to cover yield losses due to non-preventable risks, such as Natural Fire and Lightning, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado.
- Risks due to Flood, Inundation and Landslide, Drought, Dry spells, Pests/ Diseases also will be covered.
- In post-harvest losses, coverage will be available up to a maximum period of 14 days from harvesting for those crops which are kept in “cut & spread” condition to dry in the field.
- For certain localized problems, Loss/damage resulting from the occurrence of identified localized risks like hailstorm, landslide, and Inundation affecting isolated farms in the notified area would also be covered.
Back2Basics: Beed Model
- The model of crop insurance in place in Maharashtra’s Beed district is being studied by a central government panel set up to suggest suitable working models for PMFBY.
- In the Beed model, there is a cap on the profit of the insurance companies.
- If the claims exceed the insurance cover, the state government pays the bridge amount.
- If the claims are less than the premium collected, the insurance company keeps 20 per cent of the amount as handling charges and reimburses the rest to the state government.
- This is expected to reduce burden of subsidies from state.
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From UPSC perspective, the following things are important :
Prelims level: SVAMITVA Scheme
Mains level: Land records management
India plans to prepare digital maps of all its 6,00,000 villages and pan-India 3D maps will be prepared for 100 cities to mark a year of the updated geospatial policy guidelines under the SVAMITVA Scheme.
What is SVAMITVA Scheme?
- SVAMITVA stands for Survey of Villages and Mapping with Improvised Technology in Village Areas.
- Under the scheme, the latest surveying technology such as drones will be used for measuring the inhabited land in villages and rural areas.
- The mapping and survey will be conducted in collaboration with the Survey of India, State Revenue Department and State Panchayati Raj Department under the Ministry of Panchayati Raj.
- The drones will draw the digital map of every property falling in the geographical limit of each Indian village.
- Property Cards will be prepared and given to the respective owners.
Broad Objectives
- Leveraging property as a financial asset by the citizens of rural India
- Creation of accurate land records for rural planning
- Provide an integrated property validation solution for rural India
- Serve as a means of reduction in property-related disputes. Facilitate with the determination of property tax
- Creation of survey infrastructure and GIS (Geographic Information System) maps that can be used by any department or agency
Features of the Scheme
- Accurate survey: SVAMITVA Scheme uses the combination of Survey Grade Drones and CORS network (Continuously Operated Reference Stations) to accurately survey large areas in a very short span of time.
- High resolution: The 1:500 scale maps generated through the drone survey are of very high accuracy i.e., 3-5 cms, which the conventional methodology does not provide.
- Geo-tagging: Moreover, editable and geo-tagged maps are produced at a fraction of the cost without the need for line-of-sight.
- Permanent records: These maps facilitate the creation of the most durable record of property holdings in areas with no legacy revenue records.
What are the updated guidelines?
- The updated guidelines help private companies to prepare a variety of maps without needing approvals from a host of ministries.
- They aim to make it easier to use drones and develop applications via location mapping.
- It encompasses the trinity of geospatial Systems, Drone Policy, and unlocked Space Sector will be the hallmark of India’s future economic progress.
Also read:
[Yojana Archive] SVAMITVA Scheme
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Indian economy
Context
There is fear that the way the money will be used by the Centre will disempower the states further, just when they must do most of the heavy lifting on public welfare.
Wealth creation and trickle-down
- Failure of trickle-down: Evidence from around the world is that the economic policy paradigm, of first increasing the overall size of the pie by reducing taxes at the top and then “redistributing” the wealth, has not delivered benefits to people.
- Gandhiji had declared that he was not against wealth creators. He lauded wealth creation.
- However, it must not be at the cost of workers and welfare.
- Wealth creators must be trustees of the wealth they create, not its exclusive owners.
The demand-side problem of the Indian economy
- The Indian economy is suffering from a chronic “demand-side” problem that is becoming worse with misguided economic policies.
- Young people who have been getting educated in larger numbers than before, even learning vocational skills, cannot find jobs.
- If people don’t earn, demand will not increase, and investments in businesses will not be attractive.
- Moreover, frustrated youth are tinderboxes for social unrest.
Financial globalization and its impact on India
- Around the world, there is a reaction to the financial globalization of the last 30 years.
- In his book, Davos Man, Peter Goodman explains how the wealthiest people have influenced economic policies in democratic countries from the 1990s to make themselves wealthier.
- Thomas Piketty has documented how wealth inequalities have increased alarmingly.
- Wealth has accumulated at the top, with regressive tax policies along with deregulation.
- Government expenditure on social reforms has been crimped.
Way forward
- The global economy must move on from hyper-financial, deregulated capitalism, which has given easy money too much freedom.
- They must move out from their ideological ruts.
- Invest in human capital: Until the economy grows there will be no resources to invest in human development — whereas China invested in human development before its economic take-off.
- Protection to industrial sector: That an unprepared industrial sector will thrive in global free trade — whereas the UK and US (and Japan and China too), grew their industrial sectors behind walls of protection, and then demanded that the rest open their markets to the might of their enterprises.
- Inclusive growth: Political divisions by religion and caste are tearing India’s social fabric again. The Indian economy must grow inclusively to repair it.
Conclusion
Indian policymakers must urgently discover India’s own, contextually appropriate model of development and shed defunct economic theories.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CPI and WPI
Mains level: Paper 3- Inflation and policy response
Context
The disconnect between retail and wholesale inflation suggests that the two measures are driven by distinct and unrelated shocks.
The disconnect between retain inflation and wholesale inflation
- In the months between April 2020 and November 2020, retail inflation remained above 6%, while average wholesale inflation was -0.20%.
- During the financial crisis (2008-2009) wholesale inflation came down significantly as commodity prices crashed after a boom, but retail inflation kept rising.
- Correlation: This disconnect is reflected in the contemporaneous correlation between these two measures of inflation, which we find to be very low (0.04), and not significant.
Understanding the reasons for the disconnect
- We cannot rule out feedback from wholesale inflation to retail inflation.
- To better explore this, it helps to understand the driving forces behind retail and wholesale inflation.
- Driving factors for CPI: Retail inflation is closely linked to food and beverage prices, partly because of their higher weightage in the consumer price index (CPI).
- The dominance of supply shocks: High retail inflation in 2020 was primarily due to the rising prices of food and beverages.
- The surge was likely led by the usual supply shocks—rainfall, agricultural productivity, or Covid-19-induced supply shocks.
- This suggests two important features of Indian retail inflation: it is predominantly led by supply shocks (food inflation shock) and it is transitory in nature.
- Driving factor for WPI: High wholesale inflation in recent months was mainly due to rising prices in fuel and power and manufacturing, which together comprise around 77% of the wholesale price index (WPI).
- Rising fuel and energy prices in India were a result of the recent increase in global oil prices.
Takeaways
- High wholesale inflation should not warrant any immediate policy responses as the two inflation measures seem to reflect different things.
- Overall, the high correlation between world energy inflation and India’s wholesale inflation (0.88) indicates that India’s wholesale inflation is predominantly driven by world commodity prices.
- On the other hand, the low correlation between India’s retail inflation and world energy inflation (-0.13, and not significant), suggests that India’s retail inflation is primarily driven by domestic food prices.
- Higher wholesale inflation implies a higher profit margin for producers, which acts as an incentive for investment
- There are, in fact, some early signs of a revival in investment in recent quarters, and policy must be careful not to derail this.
Policy options
- Given the pass-through of wholesale inflation into retail inflation, if the ongoing commodity boom persists, then the fuel and power component of the WPI is likely to raise retail inflation directly.
- At that point, there would be some urgency to increase the interest rate, which may be premature and could dampen the revival of growth prospects.
- To avoid the interest rate response, the best option going forward would be to rationalise fuel taxes, to reduce the pass-through of global commodity prices into wholesale prices and ultimately into retail inflation.
Conclusion
The correct fiscal-monetary coordination requires fiscal policy not to be inflationary, so that the RBI can support growth by keeping interest rates low.
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Source:
https://www.financialexpress.com/opinion/time-to-rationalise-fuel-taxes-oil-is-a-major-input-in-production-hence-a-tax-on-it-is-highly-inflationary/2430635/
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