Note4Students
From UPSC perspective, the following things are important :
Prelims level: SPACs
Mains level: Not Much
The government is reportedly considering a regulatory framework for special purpose acquisition companies (SPACs) to lay the ground for the possible listing of Indian companies through this route in the future.
What are SPACs?
- An SPAC, or a blank-cheque company, is an entity specifically set up with the objective of acquiring a firm in a particular sector.
- They aim to raise money in an initial public offering (IPO) without any operations or revenues.
- The money that is raised from the public is kept in an escrow account, which can be accessed while making the acquisition.
- If the acquisition is not made within two years of the IPO, the SPAC is delisted and the money is returned to the investors.
- While SPACs are essentially shell companies, a key factor that makes them attractive to investors are the people who sponsor them.
- Globally, prominent celebrities have participated in SPACs.
Why in news?
- According to reports, the Company Law Committee was set up in 2019 to make recommendations to boost ease of doing business in India.
- This committee has made this suggestion regarding SPACs in its report submitted to the government recently.
- The concept of SPAC has existed for nearly a decade now, and several investors and company promoters have used this route to take their investments public.
- The vehicle gained momentum in 2020, which was a record year for SPAC deals; this record was broken in 2021.
Where does India stand?
- Early last year, renewable energy producer ReNew Power announced an agreement to merge with RMG Acquisition Corp II, a blank-cheque company.
- This became the first involving an Indian company during the latest boom in SPAC deals.
- As things stand now, the Indian regulatory framework does not allow the creation of blank cheque companies.
- The Companies Act, 2013 stipulates that the Registrar of Companies can strike off a company if it does not commence operations within a year of incorporation.
Risk factors around SPACs
- The boom in investor firms going for SPACs and then looking for target companies have tilted the scales in favour of investee firms.
- This has the potential, theoretically, to limit returns for retail investors post-merger.
- SPACs are mandated to return money to their investors in the event no merger is made within two years.
- However the fineprint of several SPAC prospectuses shows that certain clauses could potentially prevent investors from getting their monies back.
- Historically, though, this has not happened yet.
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From UPSC perspective, the following things are important :
Prelims level: Europa
Mains level: Hunt for extra-terrestrial life
A team of researchers from Stanford University have said that on one of Jupiter’s moons Europa, a prime candidate for life in the solar system might have abundance of water pockets beneath formations called double ridges.
About Europa
- Europa is slightly smaller than Earth’s moon and its diameter is about one-quarter that of the Earth.
- Even though Europa has a very thin oxygen atmosphere, it is considered one of the most promising places in the solar system to find present-day environments that are suitable for life beyond the Earth.
- It is also believed that underneath Europa’s icy surface the amount of water is twice that on Earth.
- NASA notes that scientists believe Europa’s ice shell is 15-25 km thick and is floating on an ocean, which is estimated to be 60-150 km deep.
- Interestingly, while its diameter is less than the Earth’s, Europa probably contains twice the amount of the water in all of the Earth’s oceans.
- NASA is expected to launch its Europa Clipper in 2024.
- The module will orbit Jupiter and conduct multiple close flybys to Europa to gather data on the moon’s atmosphere, surface and its interior.
What is the new finding?
- It is already known that Europa, whose surface is mostly solid water ice, contains water beneath it.
- The researchers are now saying that the double ridges – the formations which are most common on Europa’s surface and are similar to those seen on Earth’s Greenland ice sheet .
- They are formed over shallow pockets of water.
Significance of the recent findings
- The central implication is that the shallow water pockets beneath the double ridge increase the potential habitability of the moon.
- The ice shell, which is potentially miles thick, has been a difficult prospect for scientists to sample.
- But according to the new evidence, the ice shell is believed to be less of a barrier and more of a dynamic system.
- This means that the ice shell does not behave like an inert block of ice, but rather undergoes a variety of geological and hydrological processes.
- This suggests active volcanism and thus a possibility for life.
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From UPSC perspective, the following things are important :
Prelims level: Sarmat Missile
Mains level: ICBMs
Amidst stiff resistance from Ukraine in the ongoing war and harsh sanctions imposed by the West, Russia went ahead and tested its new Inter Continental Ballistic Missile (ICBM) Sarmat.
What is Sarmat?
- The RS-28 Sarmat (NATO name Satan-II) is reported to be able to carry ten or more warheads and decoys
- It has the capability of firing over either of the earth’s poles with a range of 11,000 to 18,000 km.
- It is expected to pose a significant challenge to the ground-and-satellite-based radar tracking systems of the western powers, particularly the USA.
- The ten warheads are Multiple Independently-Targetable Re-entry Vehicles and each has a blast yield of .75 MT.
- The Sarmat will also be the first Russian missile which can carry smaller hypersonic boost-glide vehicles. These are manoeuvrable and hard to intercept.
- It is a liquid-fuelled missile as compared to US ICBMs which have moved on to solid fuel systems.
Who is it named after?
- The Sarmat is named after nomadic tribes that roamed the steppes of present-day Southern Russia, Ukraine and Kazakhstan in the early medieval period.
- Sarmatians were highly developed in horsemanship and warfare.
- It goes on to say that the administrative capabilities and political expertise of Sarmatians contributed to their gaining widespread influence and by the 5th century BC.
- They held control of the land between the Urals and the Don River.
- In the 4th century they crossed the Don and conquered the Scythians, replacing them as rulers of almost all of southern Russia by the 2nd century.
Was Russia known to be developing this missile?
- It was widely known that Russia was developing a new ICBM to replace its older ones.
- An announcement in this regard was made by Vladimir Putin in 2018 while making his State of the Nation address to the Federal Assembly.
- He had stated at the time that the first Regiment fully armed with Sarmat ICBM will be operational by the end of 2022.
- The deteriorating relations between Russia and the Western Powers is said to have given an impetus to its development.
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From UPSC perspective, the following things are important :
Prelims level: Merit goods vs public goods
Mains level: Paper 2- Issues with competitive freebie politics
Context
Against the backdrop of promises of freebies in Punjab, this article deals with the harm caused by such freebies to the economy, life quality and social cohesion in the long run.
Macroeconomic stability of the Union and the States
- India is a Union of states. It is not a confederation of states.
- The Union is indestructible.
- The Union, therefore, is integral to both the Centre and the states.
- The strength of the Centre lies in the strength of the states.
- Therefore, the macroeconomic stability of the Union is contingent on the macroeconomic stability of both the Centre and states.
The complex issue of freebies
- There is great ambiguity in what “freebies” mean.
- Merit goods Vs. Public goods: We need to distinguish between the concept of merit goods and public goods on which expenditure outlays have overall benefits.
- Examples of this are the strengthening and deepening of the public distribution system, employment guarantee schemes, support to education and enhanced outlays for health, particularly during the pandemic.
- All over the world, these are considered to be desirable expenditures.
- Freebies could be expensive? It’s not about how cheap the freebies are but how expensive they are for the economy, life quality and social cohesion in the long run.
Issues with the culture of competitive freebie politics
1] It affects macroeconomic stability
- Freebies undercut the basic framework of macroeconomic stability.
- The politics of freebies distorts expenditure priorities.
- Outlays are being concentrated on subsidies of one kind or the other.
- Illustratively, in the case of Punjab, while estimates vary, some have speculated that the promise of freebies might cost around Rs 17,000 crore.
- As we know, the debt-to-GDP ratio of Punjab is already at 53.3 per cent for 2021-22, which would worsen on account of these new measures.
2] Distortion of expenditure priorities
- Take, for instance, the change to the new contributory pension scheme from the old scheme, which had a fixed return.
- Rajasthan announced that it would revert to the old pension scheme.
- This decision is regressive as the move away from the old scheme was based on the fact that it was inherently inequitable.
- The pension and salary revenues of Rajasthan amount to 56 per cent of its tax and non-tax revenues.
- Thus, 6 per cent of the population, which is made up of civil servants, stands to benefit from 56 per cent of the state’s revenues.
- Intergenerational inequality: This is fraught with dangers not only of intergenerational inequality, but also affects the broader principles of equity and morality.
3] Increases social inequality
- The issue of intergenerational equity leads to greater social inequalities because of expenditure priorities being distorted away from growth-enhancing items.
4] It affects the environment
- When we talk of freebies, it is in the context of providing, for example, free power, or a certain quantum of free power, water and other kinds of consumption goods.
- This distracts outlays from environmental and sustainable growth, renewable energy and more efficient public transport systems.
5] The distortion of agricultural priorities
- The depleting supply of groundwater is an important issue to consider when speaking of freebies pertaining to free consumption goods and resources.
6] Effect on the future of manufacturing
- Lower the quality of competitiveness: Freebies lower the quality and competitiveness of the manufacturing sector by detracting from efficient and competitive infrastructure enabling high-factor efficiencies in the manufacturing sector.
7] Subnational bankruptcy
- Freebies bring into question market differentiation between profligate and non-profligate states and whether we can have a recourse mechanism for subnational bankruptcy.
Way forward
- The race to the bottom implies government deregulation of markets and business.
- We must strive instead for a race to efficiency through laboratories of democracy and sanguine federalism where states use their authority to harness innovative ideas and solutions to common problems which other states can emulate.
Consider the question “What are the challenges in dealing with the competitive freebies politics? What are its drawbacks?”
Conclusion
The economics of freebies is invariably wrong. It is a race to the bottom. Indeed, it is not the road to efficiency or prosperity, but a quick passport to fiscal disaster.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 239AA
Mains level: Paper 2- Delhi statehood issue
Context
Recently, both Houses of Parliament passed the Delhi Municipal Corporation (Amendment) Act, 2022, to unify the trifurcated Delhi Municipal Corporations.
Background of the trifurcation
- The split-up was first proposed in the 1987 Balakrishnan Committee Report which was bolstered in the 2001 Virendra Prakash Committee Report.
- The proposal finally took shape in 2011 and the law to trifurcate was enacted.
- A seven-member Delhi Legislative Assembly Panel was set up in 2001 to study the recommendations and suggest modalities.
- Trifurcation in 2011: The proposal finally took shape in 2011 and the law to trifurcate was enacted.
Changes introduced by the amendment
- The law provides that the power to determine the number of wards, extent of each ward, reservation of seats, number of seats of the Corporation, etc. will now be vested in the Central government.
- The number of seats of councillors in the Municipal Corporations of Delhi is also to be decided now by the Central government.
- By exercising that very power, the number of councillors to the Municipal Corporations of Delhi has been reduced from 272 to 250.
- The Central government has also taken over powers from the State to decide on matters such as ‘salary and allowances, leave of absence of the Commissioner, the sanctioning of consolidation of loans by a corporation, and sanctioning suits for compensation against the Commissioner for the loss or waste or misapplication of municipal fund or property
Issues with the changes made
- The Central government’s line is that the amendment has been passed as in Article 239AA of the Constitution, which is a provision that provides for special status to Delhi.
- No consultation with Delhi govt.-The large-scale changes by the Central government has been done without any consultation with the Delhi government.
- Not in line with Part IXA of the Constitution: Part IXA specifically states that it will be the Legislature of the State that will be empowered to make laws concerning representation to the municipalities.
- Part IXA is a specific law while Article 239AA is general law: The argument of the Centre that Article 239AA can be applied over and above Part IXA of the Constitution does not hold good as the latter is a specific law that will override the general law relatable to Article 239AA.
- Against the federalism: In State of NCT of Delhi vs Union of India judgment the Supreme Court held, “The Constitution has mandated a federal balance wherein independence of a certain required degree is assured to the State Governments.”
- It was made clear that the aid and the advice of the State government of Delhi would bind the decision of the Lieutenant General in matters where the State government has the power to legislate.
- No doubt, the amendment to the Delhi Municipal Corporation Act, 1957 will lead to further litigation on the aspect of a sharing of powers between the State of NCT of Delhi and the Central government.
Conclusion
The interference of the Centre in matters such as municipal issues strikes a blow against federalism and the celebrated Indian model of decentralisation.
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From UPSC perspective, the following things are important :
Prelims level: MSP system
Mains level: Public procurement of wheat
Wheat procurement is now underway in various states of the country.
Wheat Procurement in India
- The main purpose of procuring for the central pool is ensuring the MSP as well as the country’s food security by making food available to the weaker sections at affordable prices.
- The Centre procures wheat by paying the minimum support price (MSP) announced for the crop.
- The States do it under two systems:
- The centralised one, also called the non-decentralised procurement system (non-DCP) and
- The decentralised one, also called DCP
(1) Non-DCP
- Under this system, the Food Corporation of India (FCI) directly or through state government agencies procure wheat from the purchase centres established across the states based on various parameters like moisture, lustre, broken/shrivelled etc.
- In Punjab and Haryana, farmers sell their crop to the central agency or state agencies through Arhtiyas (commission agents).
- The wheat procured by the state agencies is handed over to the FCI for storage or for transportation to the consuming states.
- The FCI, which is the central nodal agency for wheat procurement, pays the cost of procured wheat to the state agencies.
(2) DCP
- The decentralised system was brought in the late 1990s to promote local procurement and save the transportation cost and time.
- The state government or its agencies procure, store and distribute wheat against the Centre’s allocation for targeted PDS and other weaker sections etc. with the state.
- The excess stocks procured by the state and its agencies are handed over to the FCI for the central pool.
- The expenditure incurred by the state government on the procurement, storage and distribution of stocks under the decentralised system are reimbursed by the Centre.
Role of Arhtiyas
- Apart from paying the MSP, the Centre also reimburses the arhtiyas’ commission, administrative charges, mandi labour charges, transportation charges, custody and maintenance charges, interest charges, the gunny bag cost and statutory taxes.
- The cost of excess stocks handed over to the FCI is reimbursed to the state government or agencies as per the Centre’s policies.
- Procurement agencies ensure that the stocks brought to mandis are purchased as per the specifications fixed by the government and farmers are not compelled to sell their crop below the MSP.
- But if a farmer gets a better price from private players, he can sell to them.
From how many states is wheat procured for the central pool?
- There are 15 states on the procurement list for the central pool, but the contributions from seven of the states are negligible.
- Only Punjab, Haryana, Madhya Pradesh, Uttar Pradesh and Rajasthan are the main contributors to the central pool.
- Bihar also contributed to some extent in the last season.
How much wheat is procured for the central pool by the FCI every year?
- According to the records of the FCI, from 2011 to 2021, procurement for the central pool was between 25-40 per cent of the total wheat production.
- The procurement has doubled in the past one decade as 22.5 million tonnes of wheat was procured in 2011 and 43.3 million in 2021.
- The current season of procurement is going on.
What is the procurement scale against the total production of wheat in India?
- In 2011 the total production of wheat was 88 million tonnes while it was around 109 million tonnes in 2021.
- And the government’s procurement was 26 per cent and around 40 per cent in 2011 and 2021 respectively.
- The procured grain is used for export purposes, the public distribution system and maintaining a particular stock for an emergency period.
- The remaining 60 per cent of the production goes to the bakery industry and other wheat-related businesses.
- Farmers also keep some of this wheat for their self-consumption.
What is the share of wheat contribution of various states to the central pool?
- Barring 2020, Punjab has been the number one wheat contributor to the central pool.
- The state has increased its contribution from 102.09 lakh tonnes in 2011 to 132. 22 lakh tonnes in 2021.
- Haryana has also increased its contribution from 63.47 lakh tonnes to around 84.93 lakh tonnes in the same period.
- Madhya Pradesh’s contribution was 35.38 lakh tonnes in 2011, which jumped to the highest among all states—129.42 lakh tonnes—in 2020 and was 128.16 lakh tonnes last year.
- Uttar Pradesh’s contribution increased from 16.45 lakh tonnes to 56.41 lakh tonnes, and Rajasthan’s contribution rose from 4.76 lakh tonnes to 23.40 lakh tonnes in the same period.
Note: Punjab (despite its small size compared to MP, UP) is also the leading wheat producer state in India.
Back2Basics: Minimum Support Price (MSP)
- MSP is a form of market intervention by the GoI to insure agricultural producers against any sharp fall in farm prices.
- The MSP are announced at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).
- MSP is price fixed to protect the producer – farmers – against excessive fall in price during bumper production years.
- In case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market, govt. agencies purchase the entire quantity offered by the farmers at the announced minimum price.
- The minimum support prices are a guarantee price for their produce from the Government.
- The major objectives are to support the farmers from distress sales and to procure food grains for public distribution.
Methods of calculation
- In formulating the level of MSP and other non-price measures, the CACP takes into account a comprehensive view of the entire structure of the economy of a particular commodity or group of commodities.
- The CACP makes use of both micro-level data and aggregates at the level of district, state and the country.
- Other factors include cost of production, changes in input prices, input-output price parity, trends in market prices, demand and supply, inter-crop price parity, effect on industrial cost structure, effect on cost of living, effect on general price level, international price situation, parity between prices paid and prices received by the farmers and effect on issue prices and implications for subsidy.
Procurement agencies
- Food Corporation of India (FCI) is the designated central nodal agency for price support operations for cereals, pulses and oilseeds.
- Cotton Corporation of India (CCI) is the central nodal agency for undertaking price support operations for Cotton.
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From UPSC perspective, the following things are important :
Prelims level: UDAN Scheme
Mains level: Success of the UDAN Scheme
The Ministry of Civil Aviation’s flagship Regional Connectivity Scheme UDAN (Ude Desh ka Aam Nagrik) has been awarded Prime Minister’s Award for Excellence in Public Administration this year.
What is UDAN Scheme?
- The Ude Desh Ka Aam Nagrik (UDAN) scheme is a low-cost flying scheme launched with the aim of taking flying to the masses.
- The first flight under UDAN was launched by the PM in April 2017.
- It is also known as the regional connectivity scheme (RCS) as it seeks to improve air connectivity to tier-2 and tier-3 cities through revival of unused and underused airports.
Working of the Scheme
- Airlines are awarded routes under the programme through a bidding process and are required to offer airfares at the rate of ₹2,500 per hour of flight.
- At least 50% of the total seats on an aircraft have to be offered at cheaper rates.
- In order to enable airlines to offer affordable fares they are given a subsidy from the govt. for a period of three years.
Success of the scheme
- In a short span of 5 years, today 419 UDAN routes connect 67 underserved/unserved airports, including heliports and water aerodromes, and over 92 lakh people have benefited from it.
- More than 1 lakh 79 thousand flights have flown under this scheme.
- UDAN scheme has immensely benefitted several sectors pan-India including Hilly States, North-Eastern region, and Islands.
- The scheme also led to development of new Greenfield Airports such as Pakyong near Gangtok in Sikkim, Tezu in Arunachal Pradesh, and Kurnool in Andhra Pradesh.
- Krishi UDAN Scheme launched in August 2020, on international and national routes has assisted farmers in transporting agricultural products.
Issues with the working
- Discontinuance: In reality, some of the routes launched have been discontinued as most of the routes awarded under UDAN are not active.
- On-paper Ambitions: UDAN was expanded to provide improved connectivity to hilly regions and islands through helicopters and seaplanes. However, they mostly remain on paper.
- The reasons include:
- Failure to set up airports or heliports due to lack of availability of land
- Airlines unable to start flights on routes awarded to them or finding the routes difficult to sustain
- Adverse impact of the COVID-19 pandemic
Various challenges
- Lack of funds: Many small airlines await infusion of funds, to be able to undertake maintenance of aircraft, pay rentals to lessors, give salaries to its staff, etc.
- Maintenance issue: Many players don’t have more than one or two planes and they are often poorly maintained. New planes are too expensive for these smaller players.
- Availability of pilots: Often, they also have problems with the availability of pilots and are forced to hire foreign pilots which costs them a lot of money and makes the business unviable.
- Competition: Only those routes that have been bagged by bigger domestic players such as IndiGo and SpiceJet have seen a better success rate.
Way forward
- The govt offers subsidies for a route for a period of three years and expects the airline to develop the route during this time so that it becomes self-sufficient.
- Airlines need an extension of the subsidy period for their operational continuity.
- Due to the rise in COVID cases, travel restrictions and passenger safety too needs to be taken into consideration in the loss-making of such airlines.
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From UPSC perspective, the following things are important :
Prelims level: Smart City Mission
Mains level: Significance of Integrated Command and Control Centres (ICCCs)
The Union Housing and Urban Affairs Minister has announced that 80 Integrated Command and Control Centres (ICCCs), an integral component of the Smart Cities Mission, have already been set up.
What is the Smart Cities Mission?
- The Smart Cities Mission aims at developing 100 cities, which were shortlisted, into self-sustainable urban settlements.
- The mission was launched on June 25, 2015 and was projected as one aimed at transforming the process of urban development in the country.
- Among its strategic components is ‘area-based development’, which includes city improvement (retrofitting), city renewal (redevelopment) and city extension (greenfield development), plus a pan-city initiative in which ‘smart solutions’ are applied covering larger parts of the city.
Focus areas
- Key focus areas of the scheme include the construction of walkways, pedestrian crossings, cycling tracks, efficient waste-management systems, integrated traffic management and assessment.
- The scheme also assesses various indices to track urban development such as the Ease of Living Index, Municipal Performance Index, City GDP framework, Climate-Smart Cities assessment framework, etc.
What is an Integrated Command and Control Centre?
- The Smart Cities Mission includes setting up ICCCs for each such city as a vital step.
- These ICCCs are designed to enable authorities to monitor the status of various amenities in real time.
- Initially aimed at controlling and monitoring water and power supply, sanitation, traffic movement, integrated building management, city connectivity and Internet infrastructure, these centres have since evolved to monitor various other parameters.
- The ICCCs are now also linked to the CCTNS (Crime and Criminal Tracking Networks and Systems) network under the Ministry of Home Affairs.
- The ICCC acts of a smart city acts as a “nerve centre” for operations management. It processes a complex and large pool of data sets at an aggregated level.
- It is the nodal point of availability of all online data and information relating to smart services included in a smart city, such as like LED street lighting, CCTV surveillance cameras, air quality sensors, etc.
How did the ICCCs help in management of Covid-19?
- During the pandemic, they also served as war-rooms for Covid-19 management.
- During the peak of the first wave, when countries were struggling to figure out ways of combating the virus, the government used the ICCCs as war-rooms for managing the outbreak, with real-time surveillance and monitoring of districts across the country.
- Converted into war-rooms, the smart cities’ ICCCs used the central data dashboard and provided information about the status of Covid-positive cases in various administrative zones of these cities, officials aware of the exercise said.
- The war-rooms were also used for tracking people under quarantine and suspected Covid-19 cases.
What is the current status of the Smarts Cities Mission?
- The ambitious project, announced by Prime Minister Narendra Modi in 2015, had an initial deadline of 2021 for the first lot of 20 smart cities out of the 100 selected.
- Although the project was announced in 2015, the cities were selected over a period of two years between 2016 and 2018, each with a deadline of completion within five years from the time of their selection.
- On the recommendation of NITI Aayog, the timeline was extended last year until 2023 due to delays caused by the pandemic.
- According to current Ministry data, the SCM has so far covered over 140 public-private partnerships), 340 ‘smart roads’, 78 ‘vibrant public places’, 118 ‘smart water’ projects and over 63 solar projects.
What next?
- The Ministry of Housing and Urban Affairs has begun work to finalise its recommendation for providing ICCCs as a service to states and smaller cities.
- The Ministry aims to finalise an ICCC model and implement a pilot project across six major states — Uttar Pradesh, Maharashtra, Karnataka, Madhya Pradesh, Rajasthan and Tamil Nadu.
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From UPSC perspective, the following things are important :
Prelims level: INS Vagsheer
Mains level: Project P 75I
The sixth and last of the French Scorpene-class submarines, INS Vagsheer, was launched into water at the Mazagon Docks in Mumbai.
Launch of INS Vagsheer
- It was launched by Veena Ajay Kumar (wife of Union Defence Secretary), in keeping with the naval tradition of launch and naming by a woman.
- The six submarines were being built under Project-75 by the Mazagon Docks under technology transfer from the Naval Group as part of a $3.75-billion deal signed in October 2005:
- INS Kalvari was commissioned in December 2017;
- INS Khanderi in September 2019;
- INS Vagir in November 2020;
- INS Karanj in March 2021; and
- INS Vela in November 2021.
- P 75 is one of two lines of submarines, the other being P75I, as part of a plan approved in 1999 for indigenous submarine construction with technology taken from overseas firms.
Why ‘Vagsheer’
- Vagsheer is named after the sand fish, a deep sea predator of the Indian Ocean.
- The first submarine Vagsheer, from Russia, was commissioned into the Indian Navy on December 26, 1974, and was decommissioned on April 30, 1997.
- The new Vagsheer will be officially named at the time of its commissioning.
Specifications
- Vagsheer can take up to eight officers and 35 men.
- It is 67.5 metres long and 12.3 metres high, with a beam measuring 6.2 metres Vagsheer can reach top speed of 20 knots when submerged and a top speed of 11 knots when it surfaces
- It has four MTU 12V 396 SE84 diesel engines, 360 battery cells for power, and a silent Permanently Magnetised Propulsion Motor.
- The hull, fin and hydroplanes are designed for minimum underwater resistance and all equipment inside the pressure hull is mounted on shock-absorbing cradles for enhanced stealth.
Features
- Vagsheer is a diesel attack submarine, designed to perform sea denial as well as access denial warfare against the adversary.
- It can do offensive operations across the spectrum of naval warfare including anti-surface warfare, anti-submarine warfare, intelligence gathering, mine laying and area surveillance.
- It is enabled with a C303 anti-torpedo counter measure system.
- It can carry up to 18 torpedoes or Exocet anti-ship missiles, or 30 mines in place of torpedoes.
- Its superior stealth features include advanced acoustic absorption techniques, low radiated noise levels, hydro-dynamically optimised shape.
- It has the ability to launch a crippling attack using precision guided weapons, underwater or on surface.
Road ahead
- Vagsheer will be commissioned into the Indian Navy’s Western Command after 12 to 18 months when sea trials end.
- It will be based with Western Naval Command, mostly in Mumbai.
- The submarine will undergo a very comprehensive and rigorous set of tests and trials, for more than a year, to ensure delivery of a fully combat worthy submarine.
Back2Basics: Various classes of Submarines in India
In maritime terms, a class of ships is a group of vessels that have the same make, purpose and displacement.
- Chakra Class: Under a 10-year lease from Russia since 2012
- Arihant Class: Nuclear-powered ballistic missile submarines
- Shishumar Class: Diesel-electric attack submarines Indian variant of the Type 209 submarines developed by the German Navy
- Kalvari Class: Diesel-electric attack submarines designed by French company DCNS
- Sindhughosh Class: Kilo-class diesel-electric submarines built with the help of Russia
- Scorpene-Class: French submarines that can undertake various types of missions such as anti-surface warfare, anti-submarine warfare, intelligence gathering, mine laying, area surveillance etc.
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From UPSC perspective, the following things are important :
Prelims level: Space Bricks
Mains level: Not Much
Researchers from the Indian Space Research Organisation (ISRO) and the Indian Institute of Science (IISc) have developed a way to make bricks from Martian soil with the help of bacteria and urea.
Space Bricks
- ISRO and IISc have collaborated to develop a novel scalable technique of manufacturing space bricks using Martian Simulant Soil (MSS).
- The team first made the slurry by mixing Martian soil with guar gum, a bacterium called Sporosarcina pasteurii, urea and nickel chloride (NiCl2).
- This slurry can be poured into moulds of any desired shape, and over a few days the bacteria convert the urea into crystals of calcium carbonate.
- These crystals, along with biopolymers secreted by the microbes act as cement holding the soil particles together.
- This method ensures that the bricks are less porous, which was a problem with other methods used to make Martian bricks.
- The bacteria seep deep into the pore spaces, using their own proteins to bind the particles together, decreasing porosity and leading to stronger bricks.
Their significance
- In the past, the team had made bricks out of lunar soil using a similar method.
- These ‘space bricks’ can be used to construct building-like structures on Mars that could facilitate human settlement on the red planet.
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From UPSC perspective, the following things are important :
Prelims level: Veer Kunwar Singh
Mains level: Not Much
Political factions in Bihar has planned to organise the birth anniversary of the 1857 uprising hero Veer Kunwar Singh on April 23 at Jagdishpur in Bhojpur.
Veer Kunwar Singh
- Kunwar Singh also known as Babu Kunwar Singh was a leader during the uprising of 1857.
- He belonged to a family of the Ujjainiya clan of the Parmar Rajputs of Jagdispur, currently a part of Bhojpur district, Bihar.
- At the age of 80, he led a selected band of armed soldiers against the troops under the command of the British East India Company.
- He was the chief organiser of the fight against the British in Bihar.
- He is popularly known as Veer Kunwar Singh or Veer Babu Kunwar Singh.
Role in 1857 Uprising
- Singh led the Indian Rebellion of 1857 in Bihar. He was nearly eighty and in failing health when he was called upon to take up arms.
- He was assisted by both his brother, Babu Amar Singh and his commander-in-chief, Hare Krishna Singh.
- He gave a good fight and harried British forces for nearly a year and remained invincible until the end.
- He was an expert in the art of guerrilla warfare.
In popular culture
- To honour his contribution to India’s freedom movement, the Centre issued a commemorative stamp on 23 April 1966.
- The Government of Bihar established the Veer Kunwar Singh University, Arrah, in 1992.
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From UPSC perspective, the following things are important :
Prelims level: Article 21 of Indian Constitution
Mains level: Paper 2- Right to housing
Context
Communal clashes broke out during Ram Navami processions in several parts of the country including at Khargone in Madhya Pradesh. Subsequently, the Madhya Pradesh government bulldozed the houses of those who were allegedly involved in rioting.
Right to housing
- Fundamental right under Article 21: The right to housing is not only a fundamental right recognised under Article 21 of the Indian Constitution, it is also a well-documented right under the international human rights law framework, which is binding on India.
- Article 25 of the Universal Declaration of Human Rights (UDHR) states that “everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care.
- Likewise, Article 11.1 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises “the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living condition.
- The rights recognised under ICESCR, according to Article 4, can be restricted by States only if the limitations are determined by law in a manner compatible with the nature of these rights and solely to promote society’s general welfare.
- Besides, international law also prohibits arbitrary interference in an individual’s right to property.
- For instance, Article 12 of the UDHR states that “no one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation”.
- Article 12 also stipulates that “everyone has the right to the protection of the law against such interference or attacks”.
- This same right is also provided under Article 17 of the International Covenant on Civil and Political Rights (ICCPR).
Protection against Forced eviction
- According to the UN Human Rights Office, an integral element of the right to adequate housing is ‘protection against forced evictions’.
- The UN Human Rights Office defines ‘forced evictions’ as ‘permanent or temporary removal against the will of individuals, families and/or communities from the homes and/or land which they occupy, without the provision of, and access to, appropriate forms of legal or other protection’.
Way forward
- The apex court in cases like Bachan Singh vs State of Punjab, Vishaka vs State of Rajasthan, and recently in the famous Puttaswamy vs Union of India has laid down the principle that the fundamental rights guaranteed under the Constitution must be read and interpreted in a manner which would enhance their conformity with international human rights law.
- It is high time that the judiciary acted and imposed necessary checks on the unbridled exercise of power by the executive.
Conclusion
The bulldozing of the houses of the alleged rioters amounts to forced eviction and arbitrary interference with an individual’s home.
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From UPSC perspective, the following things are important :
Prelims level: AFSPA
Mains level: Paper 2- Peace process in Northeast
Context
Progress in settling border disputes, removal of AFSPA herald positive changes in the region.
Significant development for restoring normalcy in the region
- Efforts to address the issues of the Northeast have been moving according to a strategic plan which is premised on three objectives —
- 1] Ending all disputes.
- 2] Ushering in economic progress and taking the region’s contribution to GDP back to its pre-Independence levels,
- 3] making efforts to maintain and preserve the region’s languages, dialects, dance, music, food, and culture and make it attractive for the whole country.
- In this regard, two recent developments are significant:
- On March 29, the Assam and Meghalaya chief ministers signed an agreement to resolve the five-decade-old border dispute.
- The Union home ministry (MHA) decided to reduce the disturbed areas under the Armed Forces (Special Powers) Act (AFSPA) in Assam, Nagaland and Manipur after decades.
Progress on the border disputes
- As part of the strategy, existing issues of both interstate border disputes and insurgency have been closely studied and negotiated and a few agreements have been signed.
- Assam, with the maximum border disputes in the region, got into a proactive border dialogue.
- The dialogues on the state’s border disputes with Meghalaya, Arunachal Pradesh, Nagaland and Mizoram are continuing at a steady pace.
- After the violent flare-ups witnessed last year at the Assam-Mizoram border, today there are regular engagements to maintain peace and work out a permanent solution.
- The model of Assam’s engagement with Meghalaya, is a good one to emulate — the two chief ministers, after two rounds of talks in August last year, constituted three committees each under cabinet ministers in their states to go into the complex boundary issues.
Significance of notification on AFSPA
- Peace has been witnessed in most places across Assam, and even in Nagaland and Manipur talks with various groups for a permanent solution had resulted in a cessation of violence.
- The NLFT Tripura Agreement (August 2019), the Bru Agreement (January 2020), the Bodo Peace Accord (January 2020) and the Karbi Anglong Agreement (September 2021) have actually resulted in about 7,000 militants surrendering their arms.
- Removal of DAN: So the demand for the removal of the disturbed areas notification (DAN) was very much justified.
- DAN has been in force in the whole of Assam since 1990, in all of Manipur (except the Imphal Municipality area) since 2004 and in the whole of Nagaland since 1995.
- With the removal of the DAN tag, AFSPA has been removed with effect from April 1 this year completely from 23 districts and partially from one district of Assam, from 15 police station areas of six districts of Manipur and from 15 police station areas in seven districts in Nagaland.
- DAN is currently applicable in only three districts and in two police station areas in one other district of Arunachal Pradesh.
- AFSPA was completely removed from Tripura in 2015 and Meghalaya in 2018, respectively.
Conclusion
The efforts by the Union government to make the northeastern region the main pillar of the Act East policy have been useful in bringing a sense of political stability that is very crucial for optimal economic development and capacity enhancement in the region.
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From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Cost of election freebies
India could end up facing a Sri Lanka-type economic crisis if it doesn’t stop the “culture of freebies” and subsidies in sectors like agriculture, NITI Aayog member Ramesh Chand has warned.
What is a Freebie?
- The term Freebies is not new; rather it is a prevalent culture in Indian politics (in the name of socialism).
- The political parties are always trying to outdo each other in luring the Indian voters with assorted freebies.
- From free water to free smartphones the Indian politicians promise everything to attract prospective voters in favour.
- This trend has gained more momentum in the recent times with the political parties being innovative in their offerings as the ‘traditional free water and electricity’ is no longer sufficient as election goodies.
Examples of freebies
- Promise of Rs 15 lakh in our bank accounts
- Free TV, Laptops
- Free electricity
- Loan waivers
- Offering free public transport ride to all women in Delhi
Why are such policies popular among the public?
- Failure of economic policies: The answer lies in the utter failure of our economic policies to create decent livelihood for a vast majority of Indians.
- Quest for decent livelihood: The already low income had to be reoriented towards spending a disproportionately higher amount on education and health, from which, the state increasingly withdrew.
- Prevailing unemployment: Employment surveys have shown that employment growth initially slowed down from the 1990s, and then has turned negative over the past few years.
- Increased cost of living: Real income growth of the marginal sections has actually slowed down since 1991 reforms.
- Increased consumerism: The poor today also spend on things which appear to be luxuries; cellphones and data-packs are two such examples which are shown as signs of India’s increased affluence.
- Necessity: For migrant workers, the mobile phone helps them keep in touch with their families back home, or do a quick video-call to see how their infant is learning to sit up or crawl.
Can Freebies be compared with Welfare Politics?
- These freebies are not bad. It is a part of social welfare.
- Using freebies to lure voters is not good.
- Voter’s greediness may lead to a problem in choosing a good leader.
- When we don’t have a good leader then democracy will be a mockery.
Impact of such policies
- Never ending trail: The continuity of freebies is another major disadvantage as parties keep on coming up with lucrative offers to lure more number of votes to minimize the risk of losing in the elections.
- Burden on exchequer: People forget that such benefits are been given at the cost of exchequer and from the tax paid.
- Ultimate loss of poors: The politicians and middlemen wipe away the benefits and the poor have to suffer as they are deprived from their share of benefits which was to be achieved out of the money.
- Inflationary practice: Such distribution freebie commodity largely disrupts demand-supply dynamics.
- Lethargy in population: Freebies actually have the tendency to turn the nation’s population into: Lethargy and devoid of entrepreneurship.
- Money becomes only remedy: Everyone at the slightest sign of distress starts demanding some kind of freebies from the Govt.
- Popular politics: This is psychology driving sections of the population expecting and the government promptly responds with immediate monetary relief or compensation.
What cannot be accounted to a freebie?
- MGNREGA scheme (rural employment guarantee scheme)
- Right to Education (RTE)
- Food Security through fair price shops ( under National Food Security Act)
- Prime Minister Kisan Samman Yojana (PM-KISAN)
Arguments in favour
- Social investment: Aid to the poor is seen as a wasteful expenditure. But low interest rates for corporates to get cheap loans or the ‘sop’ of cutting corporate taxes are never criticized.
- Socialistic policy: This attitude comes from decades of operating within the dominant discourse of market capitalism.
- Election manifesto: Proponents of such policies would argue that poll promises are essential for voters to know what the party would do if it comes to power and have the chance to weigh options.
- Welfare: Economists opine that as long as any State has the capacity and ability to finance freebies then its fine; if not then freebies are the burden on economy.
- Other wasteful expenditure: When the Centre gives incentives like free land to big companies and announce multi-year tax holidays, questions are not asked as to where the money will come from.
A rational analysis of freebies
- Winning election and good governance are two different things. The role of freebies to avail good governance is definitely questionable.
- The social, political and economic consequences of freebies are very short-lived in nature.
- There are many freebies and subsidies schemes available in many States but we still find starvation deaths, lack of electricity, poor education and health service.
- Hence the sorrow of the masses of India cannot be solved by freebies or by incentives.
So are not freebies meant only to attract voters and swing voters by concentrating on a preferential group or community?
Way forward
- It can be agreed that a democracy requires popular support for its rule to continue. The sops and freebies to the poor buy it the requisite votes.
- But the democratic process of election and election promises should be clear. It should not control voters thought.
- What some people term as ‘populism’ actually constitutes what real economics should be.
- If you deprive people of what they really need, you will have to throw allurements at them.
- This can only be stopped if political masters try to follow what economist EA Schumacher had conveyed through his seminal work Small is beautiful – “Treat economics as if people matter.”
Conclusion
- There is nothing wrong in having a policy-led elaborate social security programme that seeks to help the poor get out of poverty.
- But such a programme needs well thought out preparation and cannot be conjured up just before an election.
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From UPSC perspective, the following things are important :
Prelims level: Collegium system, NJAC
Mains level: Read the attached story
What is Collegium System?
- The Collegium of judges is the Indian Supreme Court’s invention.
- It does not figure in the Constitution, which says judges of the Supreme Court and High Courts are appointed by the President and speaks of a process of consultation.
- In effect, it is a system under which judges are appointed by an institution comprising judges.
- After some judges were superseded in the appointment of the CJI in the 1970s, and attempts made subsequently to effect a mass transfer of High Court judges across the country.
- Hence there was a perception that the independence of the judiciary was under threat. This resulted in a series of cases over the years.
Evolution: The Judges Cases
- First Judges Case (1981) ruled that the “consultation” with the CJI in the matter of appointments must be full and effective.
- However, it rejected the idea that the CJI’s opinion, albeit carrying great weight, should have primacy.
- Second Judges Case (1993) introduced the Collegium system, holding that “consultation” really meant “concurrence”.
- It added that it was not the CJI’s individual opinion, but an institutional opinion formed in consultation with the two senior-most judges in the Supreme Court.
- Third Judges Case (1998): On a Presidential Reference for its opinion, the Supreme Court, in the Third Judges Case (1998) expanded the Collegium to a five-member body, comprising the CJI and four of his senior-most colleagues.
The procedure followed by the Collegium
Appointment of CJI
- The President of India appoints the CJI and the other SC judges.
- As far as the CJI is concerned, the outgoing CJI recommends his successor.
- In practice, it has been strictly by seniority ever since the supersession controversy of the 1970s.
- The Union Law Minister forwards the recommendation to the PM who, in turn, advises the President.
Other SC Judges
- For other judges of the top court, the proposal is initiated by the CJI.
- The CJI consults the rest of the Collegium members, as well as the senior-most judge of the court hailing from the High Court to which the recommended person belongs.
- The consultees must record their opinions in writing and it should form part of the file.
- The Collegium sends the recommendation to the Law Minister, who forwards it to the Prime Minister to advise the President.
For High Courts
- The CJs of High Courts are appointed as per the policy of having Chief Justices from outside the respective States. The Collegium takes the call on the elevation.
- High Court judges are recommended by a Collegium comprising the CJI and two senior-most judges.
- The proposal, however, is initiated by the Chief Justice of the High Court concerned in consultation with two senior-most colleagues.
- The recommendation is sent to the Chief Minister, who advises the Governor to send the proposal to the Union Law Minister.
Does the Collegium recommend transfers too?
- Yes, the Collegium also recommends the transfer of Chief Justices and other judges.
- Article 222 of the Constitution provides for the transfer of a judge from one High Court to another.
- When a CJ is transferred, a replacement must also be simultaneously found for the High Court concerned. There can be an acting CJ in a High Court for not more than a month.
- In matters of transfers, the opinion of the CJI “is determinative”, and the consent of the judge concerned is not required.
- However, the CJI should take into account the views of the CJ of the High Court concerned and the views of one or more SC judges who are in a position to do so.
- All transfers must be made in the public interest, that is, “for the betterment of the administration of justice”.
Loopholes in the Collegium system
- Lack of Transparency: Opaqueness and a lack of transparency, and the scope for nepotism are cited often.
- Judges appointing Judge: The attempt made to replace it with a ‘National Judicial Appointments Commission’ was struck down by the court in 2015 on the ground that it posed a threat to the independence of the judiciary.
- Criteria: Some do not believe in full disclosure of reasons for transfers, as it may make lawyers in the destination court chary of the transferred judge.
Way ahead
- In respect of appointments, there has been an acknowledgment that the “zone of consideration” must be expanded to avoid criticism that many appointees hail from families of retired judges.
- The status of a proposed new memorandum of procedure, to infuse greater accountability, is also unclear.
- Even the majority of opinions admitted the need for transparency, now Collegiums’ resolutions are now posted online, but reasons are not given.
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From UPSC perspective, the following things are important :
Prelims level: OPEC, OPEC Plus
Mains level: India's crude oil import
OPEC’s share of India’s oil imports for the FY22 financial year remained almost steady year-on-year, arresting sharp declines over the past six years, as refiners prefer crude from West Asia to counter rising global prices.
India’s crude oil imports from OPEC
- OPEC oil accounted for about 88% of India’s crude imports in FY08.
- Its share of India’s overall imports could decline because refiners in Asia’s third-largest economy are buying cheaper Russian oil.
- However, Russian oil continued to account for less than 1% of India’s crude imports in FY22.
What is OPEC?
- OPEC stands for Organization of the Petroleum Exporting Countries.
- It is a permanent, intergovernmental organization, created at the Baghdad Conference in 1960, by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
- It aims to manage the supply of oil in an effort to set the price of oil in the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.
- It is headquartered in Vienna, Austria.
- OPEC membership is open to any country that is a substantial exporter of oil and which shares the ideals of the organization.
- Today OPEC is a cartel that includes 14 nations, predominantly from the middle east whose sole responsibility is to control prices and moderate supply.
What is OPEC+?
- The non-OPEC countries which export crude oil along with the 14 OPECs are termed as OPEC plus countries.
- OPEC plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan.
- Saudi and Russia, both have been at the heart of a three-year alliance of oil producers known as OPEC Plus — which now includes 11 OPEC members and 10 non-OPEC nations — that aims to shore up oil prices with production cuts.
Why OPEC plus came into existence?
- When Russia concluded the Vienna Agreement in 2016, the Russian leadership believed that it would help prepare the country for the Russian presidential elections in March 2018.
- Higher oil prices ensured the Kremlin’s financial capacity to lead a successful electoral campaign.
- This changed the regime’s priorities – from satisfying the needs of the general population to ensuring the sustainability of the Kremlin’s alliance with powerful tycoons, including that controlling oil production.
- For Saudi Arabia, turning what had been an ad hoc coalition into a formal group provides a hedge (protection) against future oil-market turbulence.
- For Russia, the formalization of the group helps expand Putin’s influence in the Middle East
- However, both reportedly aimed at causing a drop in oil prices in order to hit US shale producers, who have continued to benefit from OPEC production cuts by expanding their market share.
Try this PYQ:
Q.The term ‘West Texas Intermediate’, sometimes found in news, refers to a grade of
(a) Crude oil
(b) Bullion
(c) Rare earth elements
(d) Uranium
Post your answers here.
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From UPSC perspective, the following things are important :
Prelims level: East Timor
Mains level: NA
Asia’s youngest nation, East Timor, also known as Timor Leste, holds the second and final round of its presidential election.
About East Timor
- The territory was colonized by Portugal in the 18th century and remained under is control until 1975.
- When the Portuguese withdrew, troops from Indonesia invaded and annexed East Timor as its 27th province.
- A long and bloody struggle for independence ensued, during which at least 100,000 people died.
- The East Timorese voted for independence in a 1999 U.N.-supervised referendum, but that unleashed even more violence until peace-keeping forces were allowed to enter.
- The country was officially recognized by the United Nations in 2002.
- East Timor has applied to be a member of the Association of Southeast Asian Nations (ASEAN). It currently holds observer status.
Its geography
- East Timor comprises the eastern half of Timor Island, the western half of which is part of Indonesia.
- It spans a 15,000 square km (5,792 square mile) land area – slightly smaller than Israel – and it’s 1.3 million people are predominantly Roman Catholic.
Politics and economy
- In nearly 20 years since independence, East Timor’s presidential and parliamentary elections have been dominated by many of the same faces.
- Its revolutionary have run for and held various positions of power and continue to feature prominently in the running of the country.
- East Timor depends on revenues from its offshore oil and gas reserves which account for 90% of its gross domestic product.
- Its main revenue stream, the Bayu Undan gas field, is set to dry up by 2023 and the country is now planning to collaborate with companies like Australia’s Santos to turn it into carbon capture facilities.
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From UPSC perspective, the following things are important :
Prelims level: Bitcoin
Mains level: Paper 3- How CBDC is different from Cryptocurrencies?
Context
Cryptocurrency will be discouraged via taxation and capital gains provisions. This was the message from the Finance Minister during the Budget discussion in Parliament.
Growing worry about the cryptocurrencies
- The Governor of the Reserve Bank of India, in February, highlighted two things.
- First, “private cryptocurrencies are a big threat to our financial and macroeconomic stability”.
- Second, “these cryptocurrencies have no underlying (asset).
- Clearly, statements from the RBI indicate a growing worry since the proliferation of cryptos threatens the RBI’s place in the economy’s financial system.
- This threat emerges from the decentralised character of cryptos based on blockchain technology which central banks cannot regulate and which enables enterprising private entities to float cryptos which can function as assets and money.
- The total valuation of cryptos recently was upward of $2 trillion — more than the value of gold held globally.
- Challenges in banning it: Cryptos which operate via the net can be banned only if all nations come together.
- Even then, tax havens may allow cryptos to function, defying the global agreement.
Crypto as currency
- A currency is a token used in market transactions.
- Historically, commodities (such as copper coins) have been used as tokens since they themselves are valuable.
- But paper currency is useless till the government declares it to be a fiat currency.
- Paper currency derives its value from state backing.
- Cryptos are a string of numbers in a computer programme. And, there is no state backing.
- Their acceptability to the well-off enables them to act as money.
- So, cryptos acquire value and can be transacted via the net.
- This enables them to function as money.
- Solving the problem of double spending: Fiat currency has the property that once spent, it cannot be spent again except through forgery, because it is no more with the spender.
- But, software on a computer can be used repeatedly.
- Blockchain and encryption have solved the problem by devising protocols such as ‘proof of work’ and ‘proof of stake’.
Why CBDC is not a solution
- A Central Bank Digital Currency (CBDC) will not solve the RBI’s problem since it can only be a fiat currency and not a crypto.
- Blockchain enables decentralisation.But, central banks would not want that.
- Further, central bank would want a fiat currency to be exclusively issued and controlled by them.
- But, theoretically everyone can ‘mine’ and create crypto.
- So, for the CBDC to be in central control, solving the ‘double spending’ problem and being a crypto (not just a digital version of currency) seems impossible.
- Validating transaction: A centralised CBDC will require the RBI to validate each transaction — something it does not do presently.
- Once a currency note is issued, the RBI does not keep track of its use in transactions.
- Keeping track will be horrendously complex which could make a crypto such as the CBDC unusable unless new secure protocols are designed.
Conclusion
CBDCs at present cannot be a substitute for cryptos that will soon begin to be used as money. This will impact the functioning of central banks and commercial banks.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GATT
Mains level: Paper 2- Challenges to global order
Context
Western nations want to throw Russia out of the G-20. China has opposed them. India will be chair of the G-20 from December 1, 2022. The world is greatly disordered. What should India stand for?
Challenges to the global order
- The war in Ukraine in February 2022 has put the final nail in the coffin of the boundary-less global economy that seemed to be emerging with the fall of the Berlin Wall and the collapse of the Soviet Union in 1991.
- Vaccines were hoarded by rich countries in the COVID-19 pandemic: poor countries starved.
- The World Trade Organization (WTO) was already in a bad state before the novel coronavirus pandemic, with rich and poor countries unable to agree on equitable rules, when COVID-19 froze global supply chains.
- Institutions of global governance have failed to unite the world.
Global order and governance challenge
- In the aftermath of the Second World war, new institutions for global governance were established — the United Nations and the General Agreement on Tariffs and Trade (GATT), and the World Bank and the International Monetary Fund (IMF) to provide finance to build the economies of all countries to eliminate poverty.
- However, the victors retained their veto power within the United Nations Security Council to determine when force can be used to keep the world in order, and to prevent the proliferation of nuclear power.
- The UN General Assembly meets every year — now 193 nations strong.
- It passes many resolutions to address global problems — hunger, poverty, women’s rights, terrorism, climate change, etc.
- However, “might is right”: members of the Security Council retain their right to deny the democratic will of the Assembly when it does not suit them.
- Global governance is not democratic.
G-7 and G-20
- The United States, the United Kingdom, France, Italy, Japan, West Germany and Canada formed the G7 in 1976. ‘so that the noncommunist powers could come together to discuss economic concerns, which at the time included inflation and recession following the Organization of the Petroleum Exporting Countries (OPEC) oil embargo’.
- The European Union was invited to attend in 1977.
- Russia joined in 1998 — and ‘its inclusion was meant as a signal of cooperation between East and West after the collapse of the Soviet Union in 1991’.
- However, Russia was removed from G-8 in 2014 when it invaded the Crimea. China was never a member.
- After the Asian financial crisis, the G20 was formed in 1999 with the aim of discussing policies in order to achieve international financial stability.
- Russia and China are members.
- Now western nations want to throw Russia out of the G-20. China has opposed them.
- India will be chair of the G-20 from December 2022.
- Meanwhile, India is being hectored by officials from the U.S. and the U.K. to support their sanctions on Russia.
- India has so far refused to be cowed down.
Backlash against globalisation
- The belief that unfettered flows of finance and trade across national borders will lift people in all poor countries out of poverty and make the world flatter in terms of inequality has failed.
- Strong leaders who put the interests of their own countries first are gaining power through elections — in Turkey, Hungary, Poland, Russia, and even India.
- Free market capitalism is not ideologically compatible with a genuine democracy.
- Capitalist institutions are governed by the fundamental principle of ‘property rights’.
- Whereas, genuine democracies are founded on the principle of equal human rights.
- The rules of governance of capitalist and democratic institutions have always been in tension within societies.
- Capitalist institutions want to be unfettered by democratic regulations to make it easier to do business.
- Democratic institutions want to rein in the competitive animal spirits of capitalism to create a more compassionate capitalism.
Conclusion
To prevent violence, it is essential that global governance becomes genuinely democratic. Countries must not attack each other. But they must be given the freedom to evolve their own democracies and economies and not be dictated to by others.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Consumer Protection Act, 2019
Mains level: Paper 2- Right to repair
Context
Apple recently announced that consumers will have the right to purchase spare components of their products, following an order of the Federal Trade Commission of the United States, which directs manufacturers to remedy unfair anti-competitive practice and asks them to make sure that consumers can make repairs, either themselves or by a third-party agency. The momentum is, however, not so strong in India.
Challenges in repairing of electronic goods
- Repairing is becoming unreasonably expensive or pretty much impossible because of technology becoming obsolete.
- Incompatibility: Companies avoid the publication of manuals that can help users make repairs easily.
- No repair manual: The absence of repair manuals means that manufacturers hold near-monopoly over repair workshops that charge consumers exorbitant prices.
- Incompatibility: Manufacturers have proprietary control over spare parts and most firms refuse to make their products compatible with those of other firms.
- Planned obsolescence results in products breaking down too soon and buying a replacement is often cheaper and easier than repairing them.
- Big companies often deploy mechanisms that practically forbid other enterprises to repair their products.
- Digital warranty cards, for instance, ensure that by getting a product from a “non-recognised” outfit, a customer loses the right to claim a warranty.
Right to repair
- The rationale behind the “right to repair” is that the individual who purchases a product must own it completely.
- This implies that apart from being able to use the product, consumers must be able to repair and modify the product the way they want to.
- Monopoly on repair processes infringes the customer’s’ “right to choose” recognised by the Consumer Protection Act, 2019.
- In Shamsher Kataria v Honda Siel Cars India Ltd (2017), for instance, the Competition Commission of India ruled that restricting the access of independent automobile repair units to spare parts by way of an end-user license agreement was anti-competitive.
International practices
- Many countries have taken initiatives, adopted policies and even tried to enact legislation that recognise the “right to repair” to reduce electronic waste.
- Some jurisdictions offer limited scope for exercising the right to repair.
- For instance, under the Australian Consumer Law consumers have a right to request that certain goods be repaired if they break too easily or do not work properly.
- The Massachusetts Motor Vehicle Owners’ Right to Repair Act, 2012 requires automobile manufacturers to provide spare parts and diagnostics to buyers and even independent third-party mechanics.
- The UK also introduced the path-breaking “right to repair” in 2021 that makes it legally binding on manufacturers to provide spare parts.
Way forward
- Well-drafted legislation will not only uphold the right to repair but may aid in striking a much-needed balance between intellectual property and competitive laws in the country.
Conclusion
If people want to fix things in a timely, safe and cost-effective way, whether by doing it themselves or taking it
to a service centre of their choice, providing access to spare parts and information is imperative.
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