Note4Students
From UPSC perspective, the following things are important :
Prelims level: Credit growth in India
Mains level: Paper 3- India's banking sector
Context
The RBI’s latest Financial Stability Report (FSR) has given the banking system a reasonably clean bill of health. It’s a significant achievement, considering the stress of the previous decade, the shock of the pandemic and the associated slowdown of the economy.
Two indicators of banking system’s progress
- 1] Reduced NPAs: Successive waves of recapitalisation have given banks enough resources to write off most of their bad loans.
- As a result, they have been able to bring down their gross NPAs (non-performing loans) from 11 per cent of total advances in 2017-18 to 5.9 per cent in 2021-22.
- Even after these large write-offs, most banks retain comfortable levels of capital.
- 2] Credit growth doubled: During the decade when banks were under stress, non-food bank credit growth had been declining, reaching just 6 per cent in 2020, its lowest point in six decades.
- Since then, credit growth has nearly doubled.
Concerns
- Role of credit in supporting GDP growth: The problem is that very little of this credit is going to large-scale industry or for financing investment.
- Reluctance of banks to provide credit to industry: Over the last decade, banks have increasingly shifted away from providing credit to industry, favouring instead lending to consumers.
- This trend is continuing — in the year ending March 2022, consumer loans grew at 13 per cent, whereas loans to industry grew at just 8 per cent.
- Banks favoring MSMEs in industry loans: Bulk of the industry loans has been extended to the smaller firms (MSMEs), which benefitted from the credit guarantee scheme offered by the government in the wake of the pandemic.
- Reduced lending to private sector investment: A related problem is that there has been little lending for private sector investment.
- Over the last one year, bank lending to infrastructure has grown by 9 per cent, up from 3 per cent in 2020, but this was fuelled mainly by public sector capital expenditure.
Why is there so little lending for investment by large firms?
- Demand side reason: On the demand side, private sector investment has been sluggish for nearly a decade.
- The boom-and-bust of the mid-2000s had saddled firms with excess capacity, giving them little reason to expand their production facilities.
- In addition, the global financial crisis had shown the dangers of ambitious expansion supported by excessive borrowing, leading firms to conclude that it would be prudent to scale back their plans and instead focus on reducing their debts.
- Supply side reason: On the supply side, banks have learned similar lessons.
- During the period 2004-2009, rapid GDP growth in the Indian economy was fuelled by an unprecedented lending boom.
- Subsequently, many of those loans turned bad, leading to high levels of NPAs on bank balance sheets.
- As a result of these financial problems, banks for a decade were unable to extend much in the way of credit.
Challenges
- On the positive side, firms seem to have finally used up much of their spare capacity.
- Fundamental problems not resolved: But on the negative side, the fundamental problems that led to the difficulties of the past decade still have not been resolved.
- No framework for risk reduction: There is still no framework that will reduce the risk of private sector investment in infrastructure, certainly not in the critical and highly troubled power sector.
- Nor is there any reassurance for the banks that if problems do develop, they can be resolved expeditiously, since the Insolvency and Bankruptcy Code has been plagued by delays and other problems.
Way forward
- We need deep structural reforms — to the infrastructure framework, the resolution process, and indeed, in the risk management processes at the banks themselves.
- In the event that these reforms do not materialise, there may continue to be shortfalls in credit, investment, and ultimately in economic recovery and growth.
Conclusion
A healthy balance sheet of the banking sector is a necessary but not a sufficient condition for economic growth. The important question is whether banks and firms will once again be willing to take on the risk of investment in industry and infrastructure.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: MEITY
Mains level: Paper 2- Need for data protection law
Context
The Minister for the Ministry of Electronics and IT withdrew the Personal Data Protection Bill, 2019. The reasons for the withdrawal were circulated in a note to MPs, which stated that,“considering the report of the JPC (Joint Parliamentary Committee), a comprehensive legal framework is being worked upon…”.
Background of Personal Data Protection Bill
- An expert committee headed by Justice (retd) A P Shah recommended in October, 2012,“a detailed framework that serves as the conceptual foundation for the Privacy Act”.
- This did not come to fruition, with proposals buried by 2014 due to objections from the intelligence establishment on surveillance reforms.
- While petitions on the constitutionality of Aadhaar and the right to privacy were pending before the Supreme Court, the Union government constituted an expert group headed by Justice (retd) B N Srikrishna in July, 2017.
- In August, a nine-judge bench unanimously pronounced the Puttaswamy judgment that reaffirmed the fundamental right to privacy for the autonomy, dignity and liberty for every Indian.
- Justice D Y Chandrachud, who authored the majority opinion, noted the formation of the Srikrishna Committee as a positive obligation on the government to enact a law for informational privacy.
- In December 2019, government introduced the Personal Data Protection Bill, 2019 in Parliament.
- The draft law was referred to a JPC of 30 MPs that submitted a report after two years.
- With the withdrawal in Parliament on August 3, it almost seems institutional processes, in which all three branches of government worked for years, are being jettisoned in favour of “a comprehensive legal framework”.
Issues with reasons given for withdrawal of the Bill
- The JPC has nowhere suggested a withdrawal in favour of a “comprehensive legal framework”.
- The proper course was to consider the JPC’s recommendations including the dissent notes and expert analysis, redraft and introduce a new Data Protection Bill.
- Compliance burden concern of government: With the government setting the goal of a one trillion dollar digital economy, fears of a compliance burden can impede innovation and growth.
- Date protection is needed for innovation: Here, detailed reasoning is available in the Srikrishna Committee’s report as well as a growing international consensus suggesting that next-generation innovation in technology needs data protection.
- Regulatory intervention will improve business practices requiring engineering decisions that focus on user trust.
- Imperfections in law argument: With the imperfections within the Personal Data Protection Bill, 2019 and even the JPC report, there exists a reasonable argument that if passed into law, it may institutionalise bad privacy practices.
- Such a line of reasoning fails to recognise that institutional memory develops through reasonable due diligence and experience.
- Legislative foresight is limited and no law is perfect, which is why there exist parliamentary amendments and judicial review.
Conclusion
Today, there is a relentless pace of digitisation that relies on gathering personal data in all spheres of our lives. All of this is done in a legal vacuum without any oversight or remedy. This underscores the urgent need for data protection law.
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From UPSC perspective, the following things are important :
Prelims level: JCPOA
Mains level: US sanctions on Iran, Nuclear deal
Negotiators kicked off a fresh round of talks over Iran’s nuclear program in Vienna, seeking to salvage the agreement on Tehran’s atomic ambitions.
Do you know how the enmity between Iran and the US came into reality? We hope you have watched the Argo (2012) movie for sure!
Context
- After a gap of five months, Iran, Russia, China and the European countries resumed negotiations in Vienna to revive the 2015 nuclear agreement, known as the Joint Comprehensive Plan of Action (JCPOA).
- The 2015 JCPOA agreement sought to cut Iran off a possible path to a nuclear bomb in return for lifting of economic sanctions.
What is JCPOA?
- The Iran nuclear agreement, formally known as the JCPOA is a landmark accord reached between Iran and several world powers, including the United States, in July 2015.
- Under its terms, Iran agreed to dismantle much of its nuclear program and open its facilities to more extensive international inspections in exchange for billions of dollars’ worth of sanctions relief.
Expected outcomes of the deal
- Curb on the nuclear program: Proponents of the deal said that it would help prevent a revival of Iran’s nuclear weapons program.
- Increasing regional engagement: It would thereby reduce the prospects for conflict between Iran and its regional rivals, including Israel and Saudi Arabia.
Background of the JCPOA
- Iran had previously agreed to forgo the development of nuclear weapons as a signatory to the Nuclear Non-proliferation Treaty, which has been in force since 1970.
- However, after the overthrow of the Pahlavi dynasty in 1979, Iranian leaders secretly pursued this technology.
- In 2007, U.S. intelligence analysts concluded that Iran halted its work on nuclear weapons in 2003 but continued to acquire nuclear technology and expertise.
- Prior to the JCPOA, the P5+1 had been negotiating with Iran for years, offering its government various incentives to halt uranium enrichment.
Issues with the deal
(1) US withdrawal
- The deal has been in jeopardy since President Donald Trump withdrew the US from it in 2018.
- In retaliation for the US, Iran resumed some of its nuclear activities.
(2) Iran’s insistence over sanctions removal
- In 2021, President Joe Biden said the US will return to the deal if Iran comes back into compliance, though Iran’s leaders have insisted that Washington lift sanctions first.
- Iran now has indicated that he will take a harder line than his predecessor in nuclear negotiations.
Who are the participants?
- The JCPOA, which went into effect in January 2016, imposes restrictions on Iran’s civilian nuclear enrichment program.
- At the heart of negotiations with Iran were the five permanent members of the UN Security Council (China, France, Russia, the United Kingdom, and the United States) and Germany—collectively known as the P5+1.
- The European Union also took part. Israel explicitly opposed the agreement, calling it too lenient.
- Some Middle Eastern powers, such as Saudi Arabia, said they should have been consulted or included in the talks because they would be most affected by a nuclear-armed Iran.
What did Iran agree to?
- Nuclear restrictions: Iran agreed not to produce either the highly enriched uranium or the plutonium that could be used in a nuclear weapon.
- Monitoring and verification: Iran agreed to eventually implement a protocol that would allow inspectors from the International Atomic Energy Agency (IAEA), the United Nations’ nuclear watchdog.
What did the other signatories agree to?
- Sanctions relief: The EU, United Nations, and United States all committed to lifting their nuclear-related sanctions on Iran. However, many other U.S. sanctions on Iran, some dating back to the 1979 hostage crisis, remained in effect.
- Weapons embargo: The parties agreed to lift an existing UN ban on Iran’s transfer of conventional weapons and ballistic missiles after five years if the IAEA certifies that Iran is only engaged in civilian nuclear activity.
How has the deal affected Iran’s economy?
- Prior to the JCPOA, Iran’s economy suffered years of recession, currency depreciation, and inflation, largely because of sanctions on its energy sector.
- With the sanctions lifted, inflation slowed, exchange rates stabilized, and exports—especially of oil, agricultural goods, and luxury items—skyrocketed as Iran regained trading partners, particularly in the EU.
- After the JCPOA took effect, Iran began exporting more than 2.1 million barrels per day (approaching pre-2012 levels, when the oil sanctions were originally put in place).
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From UPSC perspective, the following things are important :
Prelims level: Election symbols
Mains level: Political split vs Defection
The Supreme Court has said it would decide the question of referring the battle between a political party leader and Maharashtra Chief Minister over the “real” heir of a political party to a Constitution Bench.
What is the news?
Why the split leader (the CM) is making such claims?
- One of the cardinal issues, as pointed out by the CJI, would be whether the dissent of split faction, without subsequently forming a new party or merging with another, amounted to a “split” from the original political party.
- The anti-defection law cannot be an “anti-dissent” law.
Issues raised by the apex Court
- The Bench warned that if the split is completely ignoring the political party after being elected then it is a danger to democracy.
Note: For aspirants, one thing is very clear. The Supreme Court will definitely give another landmark judgment in this regard. Arriving at a conclusion is a tight rope walk for the judiciary too. But our judiciary never disappoints!
EC’s powers in Election Symbol Dispute
- The question of a split in a political party outside the legislature is dealt by Para 15 of the Symbols Order, 1968.
- It states that the Election Commission of India’s (ECI) may take into account all the available facts and circumstances and undertake a test of majority.
- The decision of the ECI shall be binding on all such rival sections or groups emerged after the split.
- This applies to disputes in recognized national and state parties.
- For splits in registered but unrecognized parties, the EC usually advises the warring factions to resolve their differences internally or to approach the court.
How did the EC deal with such matters before the Symbols Order came into effect?
- Before 1968, the EC issued notifications and executive orders under the Conduct of Election Rules, 1961.
- The most high-profile split of a party before 1968 was that of the CPI in 1964.
- A breakaway group approached the ECI in December 1964 urging it to recognize them as CPI(Marxist). They provided a list of MPs and MLAs of Andhra Pradesh, Kerala and West Bengal who supported them.
- The ECI recognized the faction as CPI(M) after it found that the votes secured by the MPs and MLAs supporting the breakaway group added up to more than 4% in the 3 states.
Options for ECI
- The ECI in all likelihood can freeze the symbol so that neither of the two sides is able to use it until a final decision is made.
- EC hearings are long and detailed and may take at least six months.
What was the first case decided under Para 15 of the 1968 Order?
- It was the first split in the Indian National Congress in 1969.
- Indira Gandhi’s tensions with a rival group within the party came to a head with the death of President Dr Zakir Hussain on May 3, 1969.
Is there a way other than the test of the majority to resolve a dispute over election symbols?
- In almost all disputes decided by the EC so far, a clear majority of party delegates/office bearers, MPs and MLAs have supported one of the factions.
- Whenever the EC could not test the strength of rival groups based on support within the party organization (because of disputes regarding the list of office bearers), it fell back on testing the majority only among elected MPs and MLAs.
What happens to the group that doesn’t get the parent party’s symbol?
- The EC in 1997 did not recognize the new parties as either state or national parties.
- It felt that merely having MPs and MLAs is not enough, as the elected representatives had fought and won polls on tickets of their parent (undivided) parties.
- The EC introduced a new rule under which the splinter group of the party — other than the group that got the party symbol — had to register itself as a separate party.
- It could lay claim to national or state party status only on the basis of its performance in the state or central elections after registration.
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From UPSC perspective, the following things are important :
Prelims level: Carbon Credits
Mains level: Carbon trading
The Bill to amend the Energy Conservation Act, 2001 seeks to establish a domestic carbon market and facilitate trade in carbon credits.
What are Carbon Credits?
- Carbon credits are measurable, verifiable emission reductions from certified climate action projects.
- These projects reduce, remove or avoid greenhouse gas (GHG) emissions.
- But they also bring a whole host of other positive benefits, for example, they empower communities, protect ecosystems, restore forests or reduce reliance on fossil fuels.
- Projects must adhere to a rigorous set of criteria to pass verification by third-party agencies and a review by a panel of experts at a leading carbon offset standard.
- After an organization or an individual buys a carbon credit, the credit is permanently retired so it can’t be reused.
What are Carbon Markets?
- Carbon markets are regulatory structures that allow, in particular, oil and gas-intensive companies or heavy industry (or, in the case of COP25, countries) to reduce their economic footprint through a series of incentives.
- The idea behind this system is that the most polluting countries can purchase the right to pollute more from countries that have not reached their emissions limits.
- The 1997 Kyoto Protocol turned polluting emissions into a commodity.
- For example, the European Union Emissions Trading System (EU ETS) is the largest in the world and has been in operation since 2015.
How is the concept evolved?
- When the world evolved the ‘clean development mechanism’ (CDM) after the Kyoto Protocol agreement of 1997 as companies in the developing world could put up projects.
- These include renewable energy or afforestation — that helped reduce carbon dioxide emissions, and earn ‘credits’ that could be sold in the market.
- It was expected that these credits would be bought by the developed countries that had committed to emissions cuts under the Protocol.
- Thus emerged the CDM market, aka ‘compliance market’. Alongside, environmentally conscious entities also started buying these carbon credits (or offsets) — the ‘voluntary market’.
What is the status now?
- This system functioned well for a few years.
- But the market collapsed because of the lack of demand for carbon credits.
- As the world negotiated a new climate treaty in place of the Kyoto Protocol, the developed countries no longer felt the need to adhere to their targets under the Kyoto Protocol.
- A carbon market was envisaged to work under the successor Paris Agreement, but its details are still being worked out.
Global successes
- Domestic or regional carbon markets are already functioning in several places, most notably in Europe, where an emission trading scheme (ETS) works on similar principles.
- Industrial units in Europe have prescribed emission standards to adhere to, and they buy and sell credits based on their performance.
- China, too, has a domestic carbon market.
Mechanism in India
- A similar scheme for incentivizing energy efficiency has been running in India for over a decade now.
- This BEE scheme, called- Perform, Achieve and Trade (PAT) Scheme allows units to earn efficiency certificates if they outperform the prescribed efficiency standards.
- The laggards can buy these certificates to continue operating.
What does new Amendment seeks to bring?
- The new carbon market that is proposed to be created through this amendment to the Energy Conservation Act, would be much wider in scope.
- Although the details of this carbon market are not yet known, it is likely to be on the lines of the European ETS, facilitating the buying and selling of carbon credits.
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From UPSC perspective, the following things are important :
Prelims level: Earth's spin
Mains level: Read the attached story
On June 29, the Earth completed one full spin — a day — in 1.59 milliseconds less than its routine 24 hours. It was the shortest day recorded since the 1960s.
Note: A millisecond is one-thousandth of a second.
Earth spinning faster
- While the Earth has been completing its rotations faster in recent years, when looked at over a much longer period of time, our planet is actually spinning slower.
- Every century, the Earth takes a few milliseconds longer to complete one rotation — and on average, days are actually getting longer.
- So, 1.4 billion years ago, a day would have ended in less than 19 hours,
How did scientists find that?
- Scientists got to know by using precise atomic clocks to measure the Earth’s rotational speed.
Why are days getting shorter these days?
- Scientists aren’t entirely sure.
- Something has changed and changed in a way we haven’t seen since the beginning of precise radio astronomy in the 1970s.
Factors attributing Earth’s Spin
(1) Tidal Braking
- The research attributed the larger trend of the Earth’s slower spin mostly to the gravitational pull of the Moon, which causes tidal friction and slows down the Earth’s rotations.
(2) Climate change-induced surface variations
- Melting ice sheets in Greenland and Antarctica
- Changes in ocean circulation
(3) Geomorphic factors
- Movements in the planet’s inner molten core
- Seismic activity
- Wind speed, and shifting atmospheric gases
(4) Chandler wobble phenomenon
- This refers to the small deviation in the movement of Earth’s geographical poles.
- The normal amplitude of the Chandler wobble is about three to four metres at Earth’s surface, but from 2017 to 2020 it disappeared.
(5) Other propositions
- Activities that push mass towards the centre of the Earth will hasten the planet’s rotation.
- Anything that pushes mass outwards will slow down the spin, a report noted.
What can happen if the Earth continues to spin faster on a sustained basis?
- To ensure that the time on clocks matches the speed of the Earth’s rotation, a system of leap seconds has been used since the 1970s.
- They involve one-second adjustments to Universal Coordinated Time (UTC), the time standard used to synchronize clocks around the world.
- Due to the long-term slowing in the planet’s spin, 27 leap seconds have been added to UTC.
- However, if the Earth continues to spin faster and days subsequently become shorter, scientists may have to introduce the first ever ‘negative leap second,’ which involves subtraction of a second from clocks.
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From UPSC perspective, the following things are important :
Prelims level: MSP
Mains level: India's import dependece for semiconductors
India is aspiring to join the 11-member US-led partnership for critical mineral supply chains called ‘Minerals Security Partnership (MSP)’.
Why in news?
- A group of western nations are cooperating to develop alternatives to China to ensure key industrial supplies.
- This is a part of a global ‘China-plus-one’ strategy adopted post pandemic that caused massive supply-chain disruptions.
- India is not part of this arrangement but New Delhi is working through diplomatic channels to fetch an entry.
What is the Minerals Security Partnership (MSP)?
- The US and 10 partners — Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea (South Korea), Sweden, the United Kingdom, and the European Commission — have come together to form the MSP.
- The new grouping is aimed at catalysing investment from governments and the private sector to develop strategic opportunities.
- Demand for critical minerals, which are essential for clean energy and other technologies, is projected to expand significantly in the coming decades.
- The MSP will help catalyse investment from governments and the private sector for strategic opportunities — across the full value chain — that adhere to the highest environmental, social, and governance standards.
Focus of MSP
- The new grouping could focus on the supply chains of minerals such as Cobalt, Nickel, Lithium, and also the 17 ‘rare earth’ minerals.
- The alliance is seen as primarily focused on evolving an alternative to China, which has created processing infrastructure in rare earth minerals and has acquired mines in Africa for elements such as Cobalt.
What are Rare Earth Elements?
- The 17 rare earth elements (REE) include the 15 Lanthanides (atomic numbers 57 — which is Lanthanum — to 71 in the periodic table) plus Scandium (atomic number 21) and Yttrium (39).
- REEs are classified as light RE elements (LREE) and heavy RE elements (HREE).
- Some REEs are available in India — such as Lanthanum, Cerium, Neodymium, Praseodymium and Samarium, etc.
- Others such as Dysprosium, Terbium, and Europium, which are classified as HREEs, are not available in Indian deposits in extractable quantities.
Why are these minerals important?
- Minerals like Cobalt, Nickel, and Lithium are required for batteries used in electric vehicles.
- REEs are an essential — although often tiny — component of more than 200 consumer products, including mobile phones, computer hard drives, electric and hybrid vehicles, semiconductors etc.
Where does India stand?
- There is a dependence on countries such as China for HREEs, which is one of the leading producers of REEs, with an estimated 70 per cent share of the global production.
- India is seen as a late mover in attempts to enter the lithium value chain, coming at a time when EVs are predicted to be a sector ripe for disruption.
- The year 2022 is likely to be an inflection point for battery technology — with several potential improvements to the Li-ion technology.
- India has an ambitious plan to convert a large percentage of its transport to electric, and would require these minerals.
- According to the plan, 80 per cent of the country’s two- and three-wheeler fleet, 40 per cent of buses, and 30 to 70 per cent of cars will be EVs by 2030.
What is India’s major concern at this moment?
- If India is not able to explore and produce these minerals, it will have to depend on a handful of countries, including China, to power its energy transition plans to electric vehicles.
- That will be similar to our dependence on a few countries for oil.
Why was India excluded?
- Industry watchers say that the reason India would not have found a place in the MSP grouping is that the country does not bring any expertise to the table.
- In the group, countries like Australia and Canada have reserves and also the technology to extract them, and countries like Japan have the technology to process REEs.
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From UPSC perspective, the following things are important :
Prelims level: OTEC technology
Mains level: Renewable Energy in India
The National Institute of Ocean Technology is establishing an Ocean Thermal Energy Conversion (OTEC) plant with a capacity of 65 kilowatts (kW) in Kavaratti, the capital of Lakshadweep.
What is OTEC Plant?
- Ocean thermal energy conversion (OTEC) is a process or technology for producing energy by harnessing the temperature differences (thermal gradients) between ocean surface waters and deep ocean waters.
- Energy from the sun heats the surface water of the ocean.
- In tropical regions, surface water can be much warmer than deep water.
- This temperature difference can be used to produce electricity and to desalinate ocean water.
How do they work?
- The OTEC technology uses the temperature difference between the cold water in the deep sea (5°C) and the warm surface seawater (25°C) to generate clean, renewable electricity.
- The technology requires a minimum of 20°C difference between the surface and deep ocean temperatures.
- Warm surface water is pumped through an evaporator containing a working fluid. The vaporized fluid drives a turbine/generator.
- The vaporized fluid is turned back to a liquid in a condenser cooled with cold ocean water pumped from deeper in the ocean.
- OTEC systems using seawater as the working fluid can use the condensed water to produce desalinated water.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Population dividend
Context
The UN report, World Population Prospects 2022, forecasts that the world’s population will touch eight billion this year and rise to 9.8 billion in 2050. What is of immediate interest to India is that its population will surpass China’s by 2023 and continue to surge.
India’s potential workforce and growth as projected by consulting firms
- Deloitte’s Deloitte Insights (September 2017) expects “India’s potential workforce to rise from 885 million to “1.08 billion people over the next two decades from today”, and “remain above a billion people for half a century,” betting that “these new workers will be much better trained and educated,” than their existing counterparts.
- McKinsey & Company’s report, ‘India at Turning Point’ (August 2020), believes the “trends such as digitisation and automation, shifting supply chains, urbanisation, rising incomes and demographic shifts, and a greater focus on sustainability, health, and safety are accelerating” to “create $2.5 trillion of economic value in 2030 and support 112 million jobs, or about 30% of the non-farm workforce in 2030.”
- Four pillarsIn its May 14, 2022 issue, The Economist had this to say about India, “As the pandemic recedes, four pillars are clearly visible that will support growth in the next decade. The four pillars are:
- 1) The forging of a single national market.
- 2) An expansion of industry owing to the renewable-energy shift and a move in supply chains away from China,
- 3) Continued pre-eminence in IT.
- 4) High-tech welfare safety-net for the hundreds of millions left behind by all this.
- The Financial Times in an article, ‘Demographics: Indian workers are not ready to seize the baton’, believes that India’s bad infrastructure and poorly skilled workforce will impede its growth.
Comparing India’s preparedness with China’s in 1970s
- China is enduring an ongoing population implosion, which by 2050, will leave it with only 1.3 billion people, of whom 500 million will be past the age of 60.
- India’s population, by contrast, would have peaked at 1.7 billion, of whom only 330 million will be 60 years or older.
- Simply put, India is getting a demographic dividend that will last nearly 30 years.
- There is so much going on for India today compared to China, the only country it can be reasonably compared to.
- It is still a young country and in a much better position to transform itself compared to China of the 1970s.
- It is still an open society where mass protest matters and produces results.
- Indians have not been traumatised as Chinese were at the time of Mao Zedong’s death.
- IT backbone: The IT technologies now available in India, and most importantly the Internet they run on have matured exponentially.
- Many things right from video conferencing to instantaneous payments and satellite imaging are getting better and cheaper by the day.
- Better administrative system: Creaky and inadequate as they are, India’s administrative systems manage to deliver and its infrastructure is in far better shape today than it was for China at the start of its reforms.
- No rural urban divide: India does not have a Hukou system which in China tethers rural folk to rural parts creating a deep divide between a small and prosperous urban China and a much larger, very deprived rural China.
Way forward for India
- To wring the best out of its demographic dividend, India needs to invest massively in quality school and higher education as well as healthcare across India on an unprecedented scale, literally in trillions of rupees between now and 2050 when it would have reached the apogee of its population growth.
Conclusion
India must seize the moment and not be incremental in its approach. Given the will it can initiate and see through a transformation that will stun the world, even more than China’s has so far.
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From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Issues with Personal Data Protection Bill
The government has withdrawn the Personal Data Protection Bill from Parliament after several amendments were proposed by the Joint-Parliamentary Committee.
What is Personal Data?
- Data can be broadly classified into two types: personal and non-personal data.
- Personal data pertains to characteristics, traits or attributes of identity, which can be used to identify an individual.
- Non-personal data includes aggregated data through which individuals cannot be identified.
- For example, while an individual’s own location would constitute personal data; information derived from multiple drivers’ location, which is often used to analyse traffic flow, is non-personal data.
What is Data Protection?
- Data protection refers to policies and procedures seeking to minimise intrusion into the privacy of an individual caused by collection and usage of their personal data.
Why was a bill brought for Personal Data Protection?
- In August 2017, the Supreme Court had held that Privacy is a fundamental right under Article 21 of the Constitution.
- The Court also observed that privacy of personal data and facts is an essential aspect of the right to privacy.
- In July 2017, a Committee of Experts, chaired by Justice BN Srikrishna, was set up to examine various issues related to data protection in India.
- The committee submitted its report, along with a Draft Personal Data Protection Bill, 2018 to the Ministry of Electronics and Information Technology in July 2018.
How is personal data regulated currently?
- Currently, the usage and transfer of personal data of citizens is regulated by the Information Technology (IT) Rules, 2011, under the IT Act, 2000.
- The rules hold the companies using the data liable for compensating the individual, in case of any negligence in maintaining security standards while dealing with the data.
Issues with IT Rules, 2011
- The IT rules were a novel attempt at data protection at the time they were introduced but the pace of development of digital economy has shown its shortcomings.
- For instance, (i) the definition of sensitive personal data under the rules is narrow, and (ii) some of the provisions can be overridden by a contract.
- Further, the IT Act applies only to companies, not to the government.
What the Personal Data Protection Bill sought to provide?
- Collection and storage: The bill regulate personal data related to individuals, and the processing, collection and storage of such data.
- Data Principal: Under the bill, a data principal is an individual whose personal data is being processed.
- Data fiduciary: The entity or individual who decides the means and purposes of data processing is known as data fiduciary.
- Data processing: The Bill governs the processing of personal data by both government and companies incorporated in India.
- Data localization: It also governs foreign companies, if they deal with personal data of individuals in India.
- General consent: The Bill provides the data principal with certain rights with respect to their personal data. Any processing of personal data can be done only on the basis of consent given by data principal.
- Data Protection Authority: To ensure compliance with the provisions of the Bill, and provide for further regulations with respect to processing of personal data of individuals, the Bill sets up a DPA.
Issues with the PDP Bill
- Exemptions to the govt: Section 35 of the bill permits the Central Government to exempt any agency of the Government from the provisions of the law.
- No reasonable exemptions: There is no sufficient reason for government agencies to be exempted from basic provisions of the Bill.
- Easy breach: Though this would be subject to procedures, safeguards, and oversight mechanisms to be prescribed by the Government.
- Executive hegemony: There is no scope for oversight over the executive’s decision to issue such an order.
- Arbitrary and intrusive: As demonstrated by the Pegasus case, the current frameworks for protecting citizens from arbitrary and intrusive State action lack robustness.
Why is the state given exemption?
- Biggest needy of Data: The State is one of the biggest processors of data, and has a unique ability to impact the lives of individuals.
- Welfare objectives: It has a monopoly over coercive powers as well have the obligation to provide welfare and services.
Issues with Exemption to State
- Grounds of expediency: the use of this provision on grounds of expediency is an extremely low bar for the Government to meet.
- Non requirement for exemption order: There is no requirement for an exemption order to be proportionate to meeting a particular State function.
- No oversight on executive actions: There is no scope for oversight over the executive’s decision to issue such an order or any safeguards prescribed for this process.
- State surveillance: Section 36(a) of the Bill provides for an exception where personal data is being processed against criminal investigation. This provision could therefore encourage vigilantism or enable privatized surveillance.
Best practices followed across the world
- The European GDPR (General Data Protection Regulation) is commonly seen as the pinnacle of data protection regulation worldwide.
- The EU law has in place a separate law that deals with the processing of personal data by law enforcement agencies.
- UK’s Data Protection Act dedicates Part 3 that liberalises certain obligations while at the same time ensuring that data protection rights are also protected.
Way forward
- Balancing privacy interests with those of public needs (such as that of State security) is a difficult task.
- This should undergo rigorous consultations in Parliament taking into confidence all stakeholders.
- Once debated in Parliament, one can only hope that adequate time and attention is given to finding a better balance between competing interests.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Cost of election freebies
The Supreme Court has said that Parliament may not be able to effectively debate the issue of doing away with “irrational freebies” offered to voters during elections, saying the “reality” is that not a single political party wants to take away freebies.
Why in news?
- The freebies were paving the way for an “economic disaster” besides “distorting the informed decision of voters”, CJI said.
What did the CJI say?
Ans. Compose a non-partisan panel
- The court suggested setting up a specialized body composed of persons who can “dispassionately” examine the problem.
- The court directed the parties to make “suggestions for the composition of a body”.
- It proposed that this body could examine ways to resolve the issue of freebies and file a report before the Centre or the Election Commission of India (ECI).
- The court said once the parties come up with suggestions on the composition of such a body in a week, it would pass orders.
What is 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 that 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 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.”
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From UPSC perspective, the following things are important :
Prelims level: NDCs
Mains level: Read the attached story
India ratified pledges made by Prime Minister in Glasgow to accelerate the country’s reliance on renewable energy to power the economy and be effectively free from use of fossil fuels by 2070.
Why discuss them?
- The approved pledges were fewer than those PM committed to.
What is NDC (Nationally Determined Commitments)?
- NDCs are at the heart of the Paris Agreement and the achievement of these long-term goals.
- They embody efforts by each country to reduce national emissions and adapt to the impacts of climate change.
- The Paris Agreement (Article 4, paragraph 2) requires each Party to prepare, communicate and maintain successive NDCs that it intends to achieve.
- Parties shall pursue domestic mitigation measures, with the aim of achieving the objectives of such contributions.
- The agreement requests each country to outline and communicate their post-2020 climate actions, known as their NDCs.
India’s NDC
- India’s NDC, or nationally determined commitments, have been updated with these two promises, both of which are enhancements of existing targets, and would be submitted to the UN climate body.
- The 2015 Paris Agreement requires every country to set self-determined climate targets which have to be progressively updated with more ambitious goals every few years.
- India’s first NDC was submitted in 2015, just before the Paris Agreement was finalised.
India’s original NDC contained three main targets for 2030:
- A 33 to 35 per cent reduction in emissions intensity (or emissions per unit of GDP) from 2005 levels
- At least 40 per cent of total electricity generation to come from non-fossil renewable sources
- An increase in forest cover to create an additional carbon sink of 2.5 to 3 billion tonnes of carbon dioxide equivalent
Commitment made at Glasgow
- At the Glasgow meeting last year, Modi promised to strengthen India’s climate commitments.
- He made five promises, and called it the ‘Panchamrit’, the nectar that Indians prepare using five ingredients.
- Two of these were upward revision of existing targets, the ones that have been made official and put in the updated NDC. Accordingly,
- India will now reduce its emission intensity by at least 45 per cent, instead of just 33 to 35 per cent, from 2005 levels by 2030.
- Also, it would now ensure that at least 50 per cent of its total electricity generation, not just 40 per cent, would come from renewable sources by 2030.
- The forestry target has not been touched.
India’s climate targets: Existing and New
- PM had said that at least 500 GW of India’s installed electricity generation capacity in 2030 would be based on non-fossil fuel sources.
- Also, he had promised that the country would ensure avoided emissions of at least one billion tonnes of carbon dioxide equivalent between now and 2030.
- These two promises have not been converted into official targets.
- But these are closely linked with others, and any progress on official targets would get reflected in these goals as well.
What about Net Zero?
- Modi had also announced a net zero target for India for the year 2070.
- Net zero is a situation in which a country’s greenhouse gas emissions are offset entirely, either by absorption of carbon dioxide.
- This may be done through natural processes like photosynthesis in plants, or through physical removal of greenhouse gases using futuristic technologies.
- But net zero is a long-term target and does not qualify to be included in the NDC which seeks five to 10 year climate targets from countries.
India’s progress
- The upward revision of the two climate targets — those relating to reductions in emissions intensity and proportion of non-fossil sources in electricity generation — do not come as a surprise.
- India is on way to achieve its existing targets well ahead of the 2030 timeline.
- India’s emissions intensity was 24 per cent lower than the 2005 levels in the year 2016 itself, the last year for which official numbers are available.
- It is very likely that the 33 to 35 per cent reduction target has already been achieved, or is very close to being achieved.
- A further reduction of 10-12 per cent from here, to meet the new target, does not appear too challenging, even though these reductions get progressively tougher to achieve.
- The other target — having at least 40 per cent of electricity coming from non-fossil fuels — has officially been reached.
Tricky Glasgow promises
Two promises that Modi had made in Glasgow have not been converted into official targets:
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From UPSC perspective, the following things are important :
Prelims level: Appointment of CJI
Mains level: Read the attached story
Chief Justice of India N.V. Ramana has received a communication from the Union Law Minister seeking his recommendation on the appointment of the next top judge.
What is the news?
- Chief Justice Ramana is retiring this month.
- It is now left to CJI to give the Law Minister his recommendation on his successor.
How is CJI selected?
- Justice U.U. Lalit is the senior-most judge in the Supreme Court now.
- He is in line to be appointed the 49th CJI as per the seniority norm.
- The ‘Memorandum of Procedure of Appointment of Supreme Court Judges’ says “appointment to the office of the CJI should be of the seniormost Judge of the SC considered fit to hold the office”.
- The process begins with the Union Law Minister seeking the recommendation of the outgoing CJI about the next appointment.
What is the time frame?
- The Minister has to seek the CJI’s recommendation at the “appropriate time”.
- The Memorandum does NOT elaborate or specify a timeline.
Making final appointment
The Memorandum says:
- Receipt of the recommendation of the CJI
- The Union Minister of Law, Justice and Company Affairs will put up the recommendation to the PM
- PM will advise the President in the matter of appointment
- President of India appoints the CJI
Chief Justice of India: A brief background
- The CJI is the chief judge of the Supreme Court of India as well as the highest-ranking officer of the Indian federal judiciary.
Appointment
- The Constitution of India grants power to the President to nominate, and with the advice and consent of the Parliament, appoint a chief justice, who serves until they reach the age of 65 or until removed by impeachment.
- Earlier, it was a convention to appoint seniormost judges.
- However, this has been broken twice. In 1973, Justice A. N. Ray was appointed superseding 3 senior judges.
- Also, in 1977 Justice Mirza Hameedullah Beg was appointed as the chief justice superseding Justice Hans Raj Khanna.
Qualifications
The Indian Constitution says in Article 124 (3) that in order to be appointed as a judge in the Supreme Court of India, the person has to fit in the following criteria:
- He/She is a citizen of India and
- has been for at least five years a Judge of a High Court or of two or more such Courts in succession; or
- has been for at least ten years an advocate of a High Court or of two or more such Courts in succession; or
- is, in the opinion of the President, a distinguished jurist
Functions
- As head of the Supreme Court, the CJI is responsible for the allocation of cases and appointment of constitutional benches which deal with important matters of law.
- In accordance with Article 145 of the Constitution and the Supreme Court Rules of Procedure of 1966, the chief justice allocates all work to the other judges.
On the administrative side, the CJI carries out the following functions:
- maintenance of the roster; appointment of court officials and general and miscellaneous matters relating to the supervision and functioning of the Supreme Court
Removal
- Article 124(4) of the Constitution lays down the procedure for removal of a judge of the Supreme Court which is applicable to chief justices as well.
- Once appointed, the chief justice remains in the office until the age of 65 years. He can be removed only through a process of removal by Parliament as follows:
- He/She can be removed by an order of the President passed after an address by each House of Parliament supported by a majority of the total membership of that House and by a majority of not less than two-thirds of the members of that House present.
- The voting has been presented to the President in the same session for such removal on the ground of proven misbehavior or incapacity.
Try this PYQ:
- Who/Which of the following is the custodian of the Constitution of India?
(a) The President of India
(b) The Prime Minister of India
(c) The Lok Sabha Secretariat
(d) The Supreme Court of India
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: UN-CTC
Mains level: Counter-terrorism initiatives by the UN
In a first, India will host diplomats and officials from all 15 countries of the United Nations Security Council (UNSC), including China, Russia and the US, for a special meeting on terrorism, in Delhi and Mumbai in October.
Key determinants of the meet
The special meeting will specifically focus on three significant areas:
- Internet and social media
- Terrorism financing
- Unmanned aerial systems
What is Counter-Terrorism Committee (CTC)?
- The CTC is a subsidiary body of the United Nations Security Council (UNSC).
- The 15-member CTC was established at the same time to monitor the implementation of the resolution.
- In the wake of the 11 September 2001 terrorist attacks in the US, the UNSC unanimously adopted resolution 1373.
- This among its provisions obliges all States
- To criminalize assistance for terrorist activities,
- Deny financial support and safe haven to terrorists and
- Share information about groups planning terrorist attacks
Its executive body
- Seeking to revitalize the Committee’s work, in 2004 the Security Council adopted Resolution 1535.
- It created the Counter-Terrorism Committee Executive Directorate (CTED) to provide the CTC with expert advice on all areas covered by resolution 1373.
- It was established also with the aim of facilitating technical assistance to countries, as well as promoting closer cooperation and coordination both within the UN.
Its working
- While the CTC is not a direct capacity provider it does act as a broker between those states or groups that have the relevant capacities and those in the need of assistance.
- While the ultimate aim of the Committee is to increase the ability of States to fight terrorism, it is not a sanctions body nor does it maintain a list of terrorist groups or individuals.
Significance of the event
- India has been pushing for the UN members to adopt a Comprehensive Convention on International Terrorism (first proposed in 1996), which is likely to be raised during the meeting.
- The event will showcase India’s role as a victim of terrorism as well as a country at the forefront of global counter-terrorism efforts.
- CTC meeting in India could also pave the way for a possible visit to New York by PM Narendra Modi in December, when India will be the President of the UNSC for the entire month.
Way ahead: Hitting the nerve
- While terror financing was now recognised by FATF, it was necessary to build templates and “codes of conduct” for newer threats.
- Today terror financing now includes financing through cryptocurrency and the use of drones for terror attacks.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: FRP
Mains level: Issues with Sugarcane Pricing
The Cabinet Committee on Economic Affairs has approved Fair and Remunerative Price (FRP) of sugarcane for sugar season 2022-23 (October – September) at ₹305 per quintal.
What is FRP?
- FRP is fixed under a sugarcane control order, 1966.
- It is the minimum price that sugar mills are supposed to pay to the farmers.
- However, states determine their own State Agreed Price (SAP) which is generally higher than the FRP.
Factors considered for FRP:
- The amended provisions of the Sugarcane (Control) Order, 1966 provides for fixation of FRP of sugarcane having regard to the following factors:
- a) cost of production of sugarcane;
- b) return to the growers from alternative crops and the general trend of prices of agricultural commodities;
- c) availability of sugar to consumers at a fair price;
- d) price at which sugar produced from sugarcane is sold by sugar producers;
- e) recovery of sugar from sugarcane;
- f) the realization made from the sale of by-products viz. molasses, bagasse, and press mud or their imputed value;
- g) reasonable margins for the growers of sugarcane on account of risk and profits.
Who determines Sugarcane prices?
Sugarcane prices are determined by the Centre as well as States.
- The Centre announces Fair and Remunerative Prices which are determined on the recommendation of the Commission for Agricultural Costs and Prices (CACP) and are announced by the Cabinet Committee on Economic Affairs, which is chaired by Prime Minister.
- The State Advised Prices (SAP) are announced by key sugarcane producing states which are generally higher than FRP.
Minimum Selling Price (MSP) for Sugar
- The price of sugar is market-driven & depends on the demand & supply of sugar.
- However, with a view to protecting the interests of farmers, the concept of MSP of sugar has been introduced since 2018.
- MSP of sugar has been fixed taking into account the components of Fair & Remunerative Price (FRP) of sugarcane and minimum conversion cost of the most efficient mills.
Basis of price determination
- With the amendment of the Sugarcane (Control) Order, 1966, the concept of Statutory Minimum Price (SMP) of sugarcane was replaced with the Fair and Remunerative Price (FRP)’ of sugarcane in 2009-10.
- The cane price announced by the Central Government is decided on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).
- This is done in consultation with the State Governments and after taking feedback from associations of the sugar industry.
Try this PYQ:
Q.The Fair and Remunerative Price (FRP) of sugarcane is approved by the:
(a) Cabinet Committee on Economic Affairs
(b) Commission for Agricultural Costs and Prices
(c) Directorate of Marketing and Inspection, Ministry of Agriculture
(d) Agricultural Produce Market Committee
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: IDF-WDS
Mains level: India's dairy sector
At a time when several milk-producing centers are battling Lumpy Skin Disease (LSD), India will host the International Dairy Federation’s World Dairy Summit 2022 in Greater Noida.
World Dairy Summit
- The World Dairy Summit is an annual meeting of the global dairy sector, bringing together approximately 1500 participants from all over the world.
- The participant profile includes CEOs and employees of dairy processing companies, dairy farmers, suppliers to the dairy industry, academicians, government representatives, etc.
- The summit is composed of a series of scientific and technical conferences and social events including a welcome reception, farmers’ dinner, gala dinner as well as technical and social tours.
- The last World Dairy Summit was organised in 1974 in New Delhi.
Significance of the event
- It is a prestigious event for us as India is now the largest milk producer in the world and we have the highest number of cattle.
- The last time this event was held, India was import-dependent and now we are self-sufficient.
Back2Basics: India’s dairy sector
- Initiated in 1970, Operation Floodtransformed India into one of the largest milk producers.
- The per capita availability of milk in 2018-19 was 394 grams per day as against the world average of 302 grams.
- Today with an annual production of 187.75 million tonnes India accounts for about 22% of the world’s milk production.
- However, India is yet to join the ranks of major milk exporting nations, as much of what we produce is directed towards meeting domestic demands.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Taiwan issue
Context
The US House of Representatives Speaker Nancy Pelosi visited Taiwan evoking strong protest from China.
Brief history of China-Taiwan Tensions
- Taiwan is an island about 160 km off the coast of southeastern China, opposite the Chinese cities of Fuzhou, Quanzhou, and Xiamen.
- It was administered by the imperial Qing dynasty, but its control passed to the Japanese in 1895.
- After the defeat of Japan in World War II, the island passed back into Chinese hands.
- After the communists led by Mao Zedong won the civil war in mainland China, Chiang Kai-shek, the leader of the nationalist Kuomintang party, fled to Taiwan in 1949.
- Chiang Kai-shek set up the government of the Republic of China on the island, and remained President until 1975.
- Beijing has never recognised the existence of Taiwan as an independent political entity, arguing that it was always a Chinese province.
The US and One-China Principle
- With the shifting geopolitics of the Cold War, the PRC and the U.S. were forced to come together in the 1970s to counter the growing influence of the USSR.
- This led to the US-China rapprochement demonstrated by the historic visit of then US President Richard Nixon to PRC in 1972.
- The same year, the PRC displaced ROC as the official representative of the Chinese nation at the UN.
- Diplomatic relations with the PRC became possible only if countries abided by its “One China Principle” — recognizing PRC and not the ROC as China.
Why does China have a problem with Pelosi visiting Taiwan?
- For China, the presence of a senior American figure in Taiwan would indicate some kind of US support for Taiwan’s independence.
- This move severely undermined China’s perception of sovereignty and territorial integrity.
China’s reaction
- Increased military exercises around Taiwa : Military exercises around Taiwan have been expanded, with Chinese aircraft intruding more frequently across the informal median line which defines the zone of operations on each side.
- Increased naval presence: Chinese naval ships are cruising within the Taiwan Straits and around the island itself.
- Economic sanctions have been announced, prohibiting imports of a whole range of foodstuffs from Taiwan.
- One item which will be left out is semi-conductors, a critical import for a range of Chinese high-tech industries.
- Taiwanese firms like the Taiwan Semi-Conductor Manufacturing Company (TSMC) are world leaders in the most sophisticated brands of chips imported by a large number of countries.
- The main target of China’s escalating response will be Taiwan.
- Taiwan is indeed caught in the crossfire between China and the US and being a proxy in a fight between giants.
Implications for East Asia and South East Asia
- Forced into making a choice: Just as Taiwan is caught in a crossfire between the US and China, so are the East Asian and South East Asian countries.
- Prefer US military presence: They feel reassured by the considerable US military presence deployed in the region and tacitly support its Indo-Pacific strategy.
- Strong economic ties with China: However, their economic and commercial interests are bound ever tighter with the large and growing Chinese economy.
- This having it both ways strategy is beginning to fray at the edges with the escalating tensions between the US and China.
- Most do not wish to be forced into making a choice.
What should be India’s approach?
- Advantageous for India: In one sense, China’s preoccupation with its eastern ocean flank of the Yellow Sea, the Taiwan Strait and the South China Sea is good for India.
- It diminishes Chinese attention toward the Indian Ocean, India’s primary security theatre.
- Adhere to One China Policy: Prudence demands that India hew closely to its consistent one China policy even while maintaining and even expanding non-official relations with Taiwan.
- For the US, Japan and Australia, members of the Quad, Taiwan is a key component of the Indo-Pacific strategy.
- It is not for India.
Conclusion
One should use the opportunity to expand India’s naval capabilities and maritime profile in this theatre before the Chinese begin to look to our extended neighbourhood with renewed interest and energy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Finance Commission
Mains level: Paper 2- Freebies issue
Context
Concern over ‘freebies’ in Indian politics has recently been expressed by those in the highest offices in the country.
Issue of irrational freebies
- Challenge in defining freebies: There is often confusion on what constitutes ‘freebies’, with a number of services that the Government provides to meet its constitutional obligations towards citizens also being clubbed in this category.
- Distortion of electoral process: A Bench headed by the Chief Justice of India recently heard a public interest litigation in which the petitioner argued against the promise of ‘irrational freebies’ by claiming that these distort the electoral process.
- The bench asked the Central government to take a stand on the need to control the announcement of ‘freebies’ by political parties during election campaigns.
- The Court also suggested that the Finance Commission could be involved to look into the matter and propose solutions.
- The basic argument is that these are a waste of resources and place a burden on already stressed fiscal resources.
- Discussions on ‘freebies’ not only include the free distribution of what may be considered ‘club goods’ such as televisions but also welfare schemes such as free or subsidised rations under the Public Distribution System (PDS) and work provided through the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
Can we term foodgrain distribution under PDS as freebies?
- It ensures food security: Subsidised foodgrains distributed under the PDS not only contribute to ensuring basic food security but also act as an implicit income transfer allowing the poor to afford commodities that they otherwise could not.
- Price support for farmers: Further, the PDS also plays an important role in our country where public procurement at minimum support prices (MSPs) is one of the main instruments of support to farmers.
- The PDS allows foodgrains to be available for cheap for consumers while assuring remunerative prices to farmers.
- Food security during emergency: The PMGKAY is probably what kept many away from the brink of starvation during the novel coronavirus pandemic.
- From around the mid-2000s, the PDS increasingly became a political issue, with State governments expanding coverage and reducing prices.
- This ultimately led to the National Food Security Act being passed by Parliament unanimously in 2013.
- Despite its shortcomings, it cannot be denied that the PMGKAY and the support that it provided during the pandemic would have been impossible had it not been for the NFSA which expanded the coverage of the PDS to about two thirds of the population.
- In its absence, a much smaller number of people would have had ration cards with high errors in identification.
Other welfare schemes
- At a time when there are few employment opportunities, working under MGNREGA can guarantee some assured wages; if implemented in the true spirit of the legislation this is also demand-based and, therefore, responds to as much need as there is.
- Similarly, mid-day meals in schools have been proven to contribute to increased enrolment and retention in schools and addressing classroom hunger.
- A number of other schemes such as old age, single women and disabled pensions, community kitchens in urban areas, free uniforms and textbooks for children in government schools, and free health-care services play a critical role in providing social security and access to basic entitlements in our country.
Way forward
- Building public pressure towards making welfare delivery an electoral issue is the need of the hour.
- It is important to recognise that most welfare schemes contribute to improving human development outcomes, which also results in higher economic growth in future.
- As suggested by the Supreme Court, the Finance Commission could be tasked with formulating the criterion to come up with the criterion for freebies.
- Sometimes, this process throws up initiatives that seem ‘wasteful’ — while these must be discussed, one cannot deny them completely.
Conclusion
There are a number of lacunae in these programmes which call for expansion in coverage, allocation of greater resources, along with putting in place mechanisms for greater accountability and grievance redress.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CIC
Mains level: Paper 2- Challenges facing RTI
Context
Amidst renewed concern over its functioning across states, the Right to Information Act (RTI) is set to complete 17 years this October.
Issues facing RTI
- Backlog of appeals: Issues include a huge backlog of second appeals, lengthy wait time for hearings, hesitancy in posting penalties and increasing opacity in the working of the commissions.
- As on June 30, 2021, 2.56 lakh appeals were pending with 26 information commissions in the country.
- CICs downgraded rank: Any serious RTI query or one which concerns more than one government department requires intervention by higher officials, but it is the PIOs from junior ranks who attend hearings and are often clueless.
- Often, it requires a notice to higher authorities, in some cases, the secretary of the department, to elicit the right answer.
- With CICs downgraded in rank, there will be fewer and fewer notices served to the heads of departments and senior officers to appear and answer queries.
- Vacancies: The commissions have been plagued with vacancies, poor choice of commissioners, untrained staff and a non-cooperative set of public information officers (PIOs).
- Threat to some RTI activists: Apart from the PIOs’ general inexperience and unprofessionalism, comes the threat to some RTI activists who seek information to expose corruption.
- According to the Commonwealth Human Rights Initiative (CHRI), across India, 99 RTI activists have lost their lives, 180 assaulted and 187 were threatened since 2006.
- Political proclivity: The attitude of a few commissioners going public with their political proclivities is another cause for concern.
Way forward
- Training of officials: The Indian information law, rated as one of the strongest in the world, needs to be bolstered by raising awareness amongst the people and organising rigorous training of government officials.
- Code of conduct: A code of conduct must be evolved for the central and state information commissioners.
- It is imperative for the commissioners to keep a strict distance from government heads and officialdom.
- A strong political system is a must for the RTI regime to flourish.
- It is imperative to ensure freedom of the press and democratic institutions, punish errant officials and maintain complete autonomy of the information commissions, in the interest of the people and the nation at large.
Conclusion
As India emerges as a global power, the implementation of legislation like the RTI Act will be under the constant scrutiny of the comity of nations.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: One-China Principle
Mains level: India-Taiwan Relations
As US House Speaker Nancy Pelosi arrived upsetting China, India was keenly watching the developments, although it has not yet commented on it.
What is the ‘One China’ policy?
- It is the diplomatic acknowledgment of China’s position that there is only one Chinese government.
- Taiwan’s government was set up by the Kuomintang, whose party logo is reflected in Taiwan’s flag
- Initially, many governments including the US recognised Taiwan as they shied away from Communist China.
- But the diplomatic winds shifted as China and the United States saw a mutual need to develop relations beginning in the 1970s, with the US and other countries cutting ties with Taipei in favour of Beijing.
Why is China obsessed with Taiwan?
- Taiwan is the largest producer of electronic chips, which are supplied to almost all the industries, from phones to laptops, watches to game consoles, industrial equipment to automotive, and aircraft and fighter jets.
- TSMC (Taiwan Semiconductor Manufacturing Company) is the largest foundry in the world and holds around 65 percent of the global production of chips.
- Any potential conflict with China would completely disrupt the entire supply chain of TSMC and labor availability, and could cause major shortage of electronic chips.
- Additionally, China controls five percent of the global production of chips, which could also be affected.
- This could further impact the already existing supply-demand gap for electronic components.
India- Taiwan Relations
Background
- India does not have formal diplomatic ties with Taiwan yet, as it follows the One-China policy.
- However, during then Chinese premier Wen Jiabao’s visit to India in December 2010, India did not mention support for the One-China policy in the joint communique.
- In 2014, when PM Modi came to power, he invited Taiwan’s Ambassador Chung-Kwang Tien, along with Lobsang Sangay, president of the Central Tibetan Administration to his swearing-in.
Diplomatic ties
- While following the One-China policy, India has an office in Taipei for diplomatic functions — India-Taipei Association (ITA) is headed by a senior diplomat.
- Taiwan has the Taipei Economic and Cultural Center (TECC) in New Delhi. Both were established in 1995.
- Their ties focus on commerce, culture and education.
- Now in their third decade, these have been deliberately kept low-profile, owing to China’s sensitivities.
- For example, parliamentary delegation visits and legislature-level dialogues have stopped since 2017, around the time the India-China border standoff happened in Doklam.
The new push
- Any significant development in India-Taiwan relations runs the risk of meeting with a likely stern reaction from Beijing.
- This explains India’s steady, albeit slow, outreach to Taiwan.
- Given that India-China relations are not likely to witness a return to normalcy in the near future, India should consider adopting a bold, comprehensive and long-term approach to engage Taiwan.
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