Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Challenges facing Indian agriculture
Context
Many wish for legendary “Milk Man of India” Verghese Kurien’s presence in our midst today as the conflict between the Central government and the farming community on the issue of the farm laws appears to be still unresolved.
Adopting cooperative model
- Kurien won the farmers over with his professional integrity and his vision of a central role for farmers in India’s journey of development.
- It is on that foundation that Kurien went on to design his idea of Amul as a co-operative.
- He turned it over the years into a global brand, and later launched the White Revolution that would make India the largest milk producing nation in the world.
- Central to Kurien’s vision was the co-operative model of business development.
- Kurien’s fascination for the co-operative model was also influenced by Gandhian thinking on poverty alleviation and social transformation.
- Kurien could borrow from the ideas and the practices of the corporate world.
- In areas such as innovations in marketing and management, branding and technology, the private sector excels and sets benchmarks for businesses across the world to follow and adopt.
- Innovations and evolving technologies: At the same time, Amul was steadily emerging as a laboratory, developing significant innovations and evolving technologies of its own, and these have strengthened its competitive power against multinational corporations.
Challenges facing cooperative movements in India
- Amul’s success has not been the catalyst for similar movements across other agricultural commodities in India.
- Bypassing digital revolution: India’s digital revolution has bypassed the agriculture sector.
- The cooperative movement in India is in a state of flux.
- Decline of cooperative movement: India has suffered due to lack of professional management, adequate finance and poor adoption of technology.
Conclusion
This is truly a moment to reflect on Verghese Kurien’s remarkable legacy and the unfinished task he has left behind.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Making of Indian Constitution
Mains level: Paper 2- Indian Constitution
Context
On November 26, 1949,72 years ago, India adopted new Constitution. Provisions of the Constitution like those pertaining to citizenship, a provisional parliament and other transitional measures came into force immediately, on November 26, 1949.
Challenges faced by the Constituent Assembly
- Boycott of the members: The body was meant to comprise 296 members but was boycotted by some members who would eventually move to Pakistan.
- Hence, the assembly would be a 210-member body at the initial sessions.
- Deft statesmanship, not rage was displayed in response to the boycott.
- Juristicconcerns: There were other juristic concerns.
- The colonial constitutionalist Ivor Jennings, who long sought to be involved in India’s drafting project but was refused later, asked, why the Constitution of India “plays down communalism?”
- This was a stinging question, for Partition was the result of communalism, how could any of us forget that?
Important feature of Indian Constitution: Addressing historical discrimination
- India’s Constitution is unique in its approach for making reparations for historical discrimination on grounds of caste that defines the present and future of so many Indians.
- By contrast, America’s Constitution makes no apology nor enables reparations for slavery.
- Despite being a body that was not significantly diverse, the founders, having appreciated the concerns of their people, were able to stand outside of their own privilege and conceive of a founding document that would speak for those who have been silenced for thousands of years.
What makes the Indian Constitution enduring?
- After having studied every constitution from 1789 to 2005, Tom Ginsburg of the University of Chicago School of Law and his colleagues concluded that on average a constitution survives for around 17 years.
- France with 14 constitutions, Mexico at five constitutions and neighbouring Pakistan with three constitutions typify the global experience.
- Expansion of freedoms of citizens: India’s Constitution has endured because its founders, its interpreters — the constitutional courts — and litigants in the form of social movements have all ensured that it is used to consistently expand the freedoms of citizens, even if social morality thinks otherwise.
- Constitutional morality: The Constitution’s morality has stood firmly with disadvantaged castes, women, and religious minorities.
- Accommodating marginalised groups: In contemporary times, other marginalised groups like LGBT Indians have been heard by constitutional courts that have unanimously found for their freedoms and for a full equality.
Consider the question “Elaborate on the features that explain the endurance of the Indian Constitution.”
Conclusion
Today, we marvel at the 72nd year of the adoption of our Constitution, and 72 years of our birth as “We the People”. But, as we revel in our good fortune, we must also be aware that its endurance is deeply rooted in the ability of all of us to commit to the project of expanding freedom, not contracting it
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Blockchain technology
Mains level: Paper 3- Approach towards cryptocurrencies
Context
The draft legislation on crypto currency being introduced in Parliament and the stance of the RBI suggest that consideration is being given to banning crypto currencies in India.
What fascination with crypto reveals about our society?
- It is about faith in that value is largely a matter of belief.
- It is about politics because money is always about the allocation of power.
- The money itself may not be material, but it is still embedded in a materiality.
- The fact that money is subject to politics is actually the advantage of money.
- It allows a modicum of collective control over our future, and allows distributive questions to be posed.
- It is mania because the alchemy of creating something out of nothing is always deeply alluring.
- Cheap money: The global economy is awash with cheap money.
- Seeking return: In an Indian context small savers are desperate for return.
- In this context it is easy for the powerful to misallocate money and the small saver to express desperation by speculation.
Background
- Faced with the inflation of the 1970s, thinkers like Friedrich Hayek theorised about reasserting the dominance of private currencies, protected from the state.
- Crypto currencies are a fascinating technological innovation.
- Part of their initial attraction was that they promised a new governance order.
- It is at the confluence of faith, politics, and psychological mania.
- Solving the problem of trust: This project crucially depended on solving the problem of “trust” on which every currency depends.
- Crypto seemed to solve that problem, with its decentralised architecture and community and self-verification protocols.
How cryptocurrency poses challenges to the state?
- No state was going to let go of its power to assert control over the monetary system.
- Significance of fiat money: The sustenance of state-sponsored fiat money is one of the great achievements of modern state formation and the foundation of its power and legitimacy.
- Cryptocurrency requires material infrastructure: There was a delusion, as if crypto is conjured out of thin air: It actually requires substantial material infrastructure, which a state could always control.
- States can shut down mining as China has done.
Way forward
- We allow people to invest in all kinds of things. Why ban this, especially now that so many investors are in it?
- Analyse the risk to the financial system: The answer to this question depends on how much risk the existence of crypto assets pose to the stability of the rest of the financial system.
- Insulate financial system: One answer is if you can insulate the financial system from the gyrations of crypto markets there are few systemic risks.
- This is why it was a good idea of the RBI to prohibit the entanglement of financial institutions with this market.
- Instead of just focussing on issues of fraud, money laundering, and private risks, the RBI’s case would be strengthened if it spelled out the systemic risks that crypto might pose to the stability of the real economy.
- Avoid ban with exception scenario: For political economy reasons, the RBI should avoid a scenario where it bans but then carves out exceptions.
- Ensuring that trade does not go offshore: The second thing is that if it somehow allows Indians to invest then it has to ensure that trade does not go offshore.
- Not fully banning and allowing it offshore will be the worst of both worlds.
Challenges in insulating the crypto market
- In practice the insulation of crypto markets will be difficult to achieve.
- Political economy: The first reason is political economy. Once you have a large number of investors, and some influential ones, they will be a vested interest in their own right, potentially demanding the socialisation or mitigation of losses.
- Impact of volume: The second reason is that it is difficult to pretend that a major new class of assets, especially if volumes grow, does not have systemic effects on the rest of the economy.
Consider the question “What are the risks and advantages provided by the cryptocurrencies? Suggest the approach India should adopt in dealing with cryptocurrencies.”
Conclusion
As the RBI makes the case for banning crypto, we also need to ask, why it is alluring in the first place. What does this mania reveal about our politics and economics?
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Family Health Survey
Mains level: Read the attached story
The Union health ministry released the summary findings of the fifth round of the National Family and Health Survey (NFHS-5), conducted in two phases between 2019 and 2021.
About NFHS
- The NFHS is a large-scale, multi-round survey conducted in a representative sample of households throughout India.
- The previous four rounds of the NFHS were conducted in 1992-93, 1998-99, 2005-06 and 2015-16.
- The survey provides state and national information for India on:
Fertility, infant and child mortality, the practice of family planning, maternal and child health, reproductive health, nutrition, anaemia, utilization and quality of health and family planning services etc.
Objectives of the survey
Each successive round of the NFHS has had two specific goals:
- To provide essential data on health and family welfare needed by the Ministry of Health and Family Welfare and other agencies for policy and programme purposes
- To provide information on important emerging health and family welfare issues.
Key highlights of the NFHS-5
[1] Women outnumbering men
- NFHS-5 data shows that there were 1,020 women for 1000 men in the country in 2019-2021.
- This is the highest sex ratio for any NFHS survey as well as since the first modern synchronous census conducted in 1881.
- To be sure, in the 2005-06 NFHS, the sex ratio was 1,000 or women and men were equal in number.
[2] Fertility has decreased
- The Total Fertility Rate (TFR) has also come down below the threshold at which the population is expected to replace itself from one generation to next.
- TFR was 2 in 2019-2021, just below the replacement fertility rate of 2.1. To be sure, in rural areas, the TFR is still 2.1.
- In urban areas, TFR had gone below the replacement fertility rate in the 2015-16 NFHS itself.
[3] Population is ageing
- A decline in TFR, which implies that lower number of children are being born, also entails that India’s population would become older.
- Sure enough, the survey shows that the share of under-15 population in the country has therefore further declined from 28.6% in 2015-16 to 26.5% in 2019-21.
[4] Children’s nutrition has improved
- The share of stunted (low height for age), wasted (low weight for height), and underweight (low weight for age) children have all come down since the last NFHS conducted in 2015-16.
- However, the share of severely wasted children has not, nor has the share of overweight (high weight for height) or anaemic children.
- The share of overweight children has increased from 2.1% to 3.4%.
[5] Nutrition problem for adults
- For children and their mothers, there are at least government schemes such as Integrated Child Development Services (ICDS) that seek to address the nutritional needs at the time of childbirth and infancy.
- However, there is a need to address the nutritional needs of adults too.
- The survey has shown that though India might have achieved food security, 60% of Indians cannot afford nutritious diets.
- While the share of women and men with below-normal Body Mass Index (BMI) has decreased, the share of overweight and obese (those with above-normal BMI) and the share of anaemic has increased.
[6] Basic sanitation challenges
- Availability of basic amenities such as improved sanitation facilities clean fuel for cooking, or menstrual hygiene products can improve health outcomes.
- There has been an improvement on indicators for all three since the last NFHS. However, the degree of improvement might be less than claimed by the government.
- For example, only 70% population had access to an improved sanitation facility.
- While not exactly an indicator of open defecation, it means that the remaining 30% of the population has a flush or pour-flush toilet not connected to a sewer, septic tank or pit latrine.
[7] Use of clean fuel
- The share of households that use clean cooking fuel is also just 59%.
[8] Financial inclusion
- The share of women having a bank account that they themselves use has increased from 53% to 79%.
- Households’ coverage by health insurance or financing scheme also has increased 1.4 times to 41%, a clear indication of the impact of the government’s health insurance scheme.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NMPI
Mains level: Multidimensional Poverty in India
The Government think-tank NITI Aayog has released the National Multidimensional Poverty Index (MPI).
Multidimensional Poverty Index (MPI)
- This baseline report of India’s first-ever national MPI measure is based on the reference period of 2015-16 of the National Family Health Survey (NFHS)- 4.
- It uses the globally accepted and robust methodology developed by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP).
- It captures multiple and simultaneous deprivations faced by households.
Parameters used
- The NMPI is calculated using 12 indicators — nutrition, child and adolescent mortality, antenatal care, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, assets and bank account,
- They have been grouped under three dimensions namely, health, education and standard of living.
Why NFHS-4?
- Data collected during the NFHS-4 (2015-2016) corresponds to the period before the full roll out of new governments’ flagship schemes.
- Hence it serves as a useful source for measuring the situation at baseline i.e. before large-scale rollout of nationally important schemes.
How is the data used?
- The national MPI 2021 is calculated using the household microdata collected at the unit-level for the NFHS-4 that is used to derive the baseline multidimensional poverty.
- Further, the country’s progress would be measured using this baseline in the NFHS-5, for which the data was collected between 2019 and 2020.
- The progress of the country with respect to this baseline will be measured using the NFHS-5 data collected in 2019-20.
Key highlights NMPI
- As per the index, 51.91% of the population in Bihar is poor, followed by Jharkhand (42.16%), Uttar Pradesh (37.79%), Madhya Pradesh (36.65%) and Meghalaya (32.67%).
- On the other hand, Kerala registered lowest population poverty levels (0.71%), followed by Puducherry (1.72%), Lakshadweep (1.82%), Goa (3.76%) and Sikkim (3.82%).
- Other States and UTs where less than 10% of the population are poor include Tamil Nadu (4.89%), Andaman & Nicobar Islands (4.30%), Delhi (4.79%), Punjab (5.59%), Himachal Pradesh (7.62%) and Mizoram (9.8%).
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Solomon Islands
Mains level: NA
Australia has announced sending police, troops and diplomats to the Solomon Islands to help after anti-Government demonstrators.
Solomon Islands
- Solomon Islands is a sovereign country consisting of six major islands and over 900 smaller islands in Oceania, to the east of Papua New Guinea and northwest of Vanuatu.
- Its capital, Honiara, is located on the largest island, Guadalcanal.
- The country takes its name from the Solomon Islands archipelago, which is a collection of Melanesian islands that also includes the North Solomon Islands (a part of Papua New Guinea).
- It excludes outlying islands, such as the Santa Cruz Islands and Rennell and Bellona.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Role of the parliamentary committees
Context
The Prime Minister has informed the nation that the Government is going to repeal the farm laws. This victory indeed takes India’s politics to a new phase — a phase of robust non-political movements with a certain staying power.
Trajectory of the enactment of the farm laws and its shortcomings
- Farmers not taken into confidence: These laws have a far-reaching impact on the farmers and it was very improper and quite unwise to push them through without taking the farmers into confidence.
- Question on urgency: Under Article 123 of the Constitution the President can legislate on a matter when there is great urgency in the nature of an emergency and the sitting of Parliament is quite some time away.
- Farm laws which make radical changes in the farm sector and affect the life of farmers in very significant ways do not have the kind of urgency which necessitates immediate legislation through the ordinances.
- Bills not referred to committee: It is a wrong impression that Bills which are brought to replace the ordinances are not or cannot be referred to the standing committees of Parliament.
- The Speaker/Chairman has the authority to refer any Bill except a money Bill to the standing committees.
Significance of parliamentary committees
- Consultation with Parliament and its time honoured system is a sobering and civilising necessity for governments howsoever powerful they may feel.
- The accumulated wisdom of the Houses is an invaluable treasure.
- The experience of centuries shows that scrutiny of Bills by the committees make better laws.
- The case of the farm laws holds an important lesson for this Government or any government.
- A proper parliamentary scrutiny of pieces of legislation is the best guarantee that sectoral interest will not jeopardise basic national interest.
- So, in any future legislation on farmers it is absolutely necessary to involve the systems of Parliament fully so that a balanced approach emerges.
Way forward
- Available data shows that Bills are very rarely referred to the committees these days.
- Discretion in the presiding officer: House rules have vested the discretion in the presiding officers in the matter of referring the Bills to committees.
- No reasoned decisions of the presiding officers for not referring them are available.
- Since detailed examination of Bills by committees result in better laws, the presiding officers may, in public interest, refer all Bills to the committees with few exceptions.
- In the light of the horrendous experience of the Government over the farm laws, the present practice of not referring the Bills to committees should be reviewed.
Consider the question ” The experience of centuries shows that scrutiny of Bills by the committees make better laws. In context of this, examine the significance of the parliamentary committees and why fewer bills have been referred to the committees in the recent past?”
Conclusion
Speaker Om Birla has spoken about strengthening the committee system in the recent presiding officers’ conference. One way of strengthening it is by getting all the important Bills examined by them.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Net-zero through sustainable well being
Context
With current per capita emissions that are less than half the global average, India’s pledge to reach ‘net zero’ emissions by 2070 has cemented India’s credentials as a global leader.
Implication of net-zero by 2070
- The political implication of the date 2070 is that the world should get to ‘net-zero’ by 2050.
- For that, the rich countries will need to do more and step up closer to their share of the carbon budget.
- India’s stand also signals that it will not act under external pressure, as requiring equal treatment is the hallmark of a global power, and will have an impact on other issues.
How focus on coal harms developing countries
- The subject of oil was not touched at COP26, even as automobile emissions are the fastest growing emissions, because it is a defining feature of western civilisation.
- Most abundant source of energy: Coal is the most abundant energy source, essential for base load in electrification, and the production of steel and cement.
- Its use declines after the saturation level of infrastructure is reached.
- Declining role of G-7 in rule setting: That India and China working together forced the G7 to make a retraction has signalled the coming of a world order in which the G7 no longer sets the rules.
- Specific language on finance and adaptation: After 40 years there is more specific language on both finance and adaptation finally recognising that costs and near-term effects of climate change will hit the poorest countries hardest.
Feasibility of the goal of ‘net-zero’ by 2070
- Seeing the challenge in terms of the scale and the speed of the transformation of the energy system assumes that India will follow the pathway of western civilisation.
- Transition to electrification: India is urbanising as it is industrialising, moving directly to electrification, renewable energy and electric vehicles, and a digital economy instead of a focus on the internal combustion engine.
- Most of the infrastructure required has still to be built and automobiles are yet to be bought.
- Investment vs. incurring cost: India will not be replacing current systems and will be making investments, not incurring costs.
Challenge for the West
- The consumption of affluent households both determines and accelerates an increase of emissions of carbon dioxide.
- This is followed by socio-economic factors such as mobility and dwelling size.
- In the West, these drivers have overridden the beneficial effects of changes in technology reflected in the material footprint and related greenhouse-gas emissions.
- The West has yet to come out with a clear strategy of how it will remain within the broad contours of its carbon budget.
- And increasing inequality and a rise of protectionism and trade barriers imposing new standards need to be anticipated.
- This knowledge is essential for national policy as well as the next round of climate negotiations.
Way forward for India
- Climate change has to be addressed by the West by reducing consumption, not just greening it.
- Shifting the consumption pattern: Consumption patterns need to be ‘shifted away from resource and carbon-intensive goods and services, e.g. mobility from cars and aircraft to buses and trains.
- Reducing the carbon intensity: Along with’ reducing demand, resource and carbon intensity of consumption has to decrease, e.g. expanding renewable energy, electrifying cars and public transport and increasing energy and material efficiency’.
- Equal distribution of wealth and affordable energy use: Equally important, will be achieving a’ more equal distribution of wealth with a minimum level of prosperity and affordable energy use for all’, e.g., housing and doing away with biomass for cooking.
- Focused research group: The Government now needs to set up focused research groups for the conceptual frame of sustainable well-being.
- It should analyse the drivers of affluent overconsumption and circulate synthesis of the literature identifying reforms of the economic systems as well as studies that show how much energy we really need for a decent level of well-being.
Role for legislature
- Fundamental duty: After the Stockholm Declaration on the Global Environment, the Constitution was amended in 1976 to include Protection and Improvement of Environment as a fundamental duty.
- Use of provision under Article 253: Parliament used Article 253 to enact the Environment Protection Act to implement the decisions reached at the Stockholm Conference.
- Enabling new set of legislation: The decisions at COP26 enable a new set of legislation around ecological limits, energy and land use, including the efficient distribution and use of electricity, urban design and a statistical system providing inputs for sustainable well-being.
Consider the question “Examine the feasibility of India’s ‘net-zero’ target by 2070, also suggest the way forward for India to achieve the target by focusing on sustainable well being”
Conclusion
For India, in parallel with the infrastructure and clean technology thrust, the focus on a decent living standard leads to behavioural change in the end-use service, such as mobility, shelter and nutrition — for change modifying wasteful trends.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Land Boundary Agreement
Mains level: India-Bangladesh Relations
Union Home Minister has said that the Northeast States will be linked by road and railway to Bangladesh in a year or two under the historic Land Boundary Agreement (LBA).
Land Boundary Agreement (LBA)
- India and Bangladesh have signed the LBA in 2014 to ensure proper connectivity in the region.
- The operationalization of LBA lays the way for the exchange of 162 enclaves under the control of either country as per the 1974 pact.
- Under the Agreement, 111 border enclaves will be transferred to Bangladesh in exchange for 51 that will become part of India.
- The agreement settles an old land boundary dispute which dates back to colonial times as India transfers 111 border enclaves to Bangladesh in exchange for 51 enclaves.
- It also settles the question of citizenship for over 50,000 people residing under these enclaves.
Why was such an agreement needed?
- India and Bangladesh share a 4,096 km land boundary covering West Bengal, Assam, Tripura, Meghalaya and Mizoram.
- This is the largest among the international boundaries that India shares with its neighbors.
- On this boundary, some 50,000-100,000 people reside in so-called Chitmahals or Indo-Bangladeshi enclaves.
- There are 102 Indian enclaves inside Bangladesh and 71 Bangladeshi ones inside India.
- Inside those enclaves are also 28 counter-enclaves and one counter-counter-enclave, called Dahala Khagrabari.
The inception of the agreement
- For the first time, a vision to solve this issue had been enshrined in the Indira-Mujib pact of 1972.
- Accordingly, the India-Bangladesh LBA was signed between the two countries in 1974.
- However, this agreement need ratification from the parliaments of both countries as it involved the exchange of the territories.
- While Bangladesh had ratified it as back as 1974 only, it was not ratified by the Indian parliament till 2014.
- The 119th Amendment Bill 2013 sought to ratify the land boundary agreement between the two countries.
Key features of the LBA
- The LBA envisages a transfer of 111 Indian enclaves to Bangladesh in return for 51 enclaves to India.
- The area transferred to India is less than that transferred by India to Bangladesh. In totality, India incurs a net loss in terms of area occupancy.
- This remained a major concern of opposition from the north-eastern affected states and west Bengal.
- Also, most of the area concerned is occupied by the tribals of the North-Eastern states and hence the swapping takes away their land rights leaving them more vulnerable.
- Current Status of the Constitution (119th Amendment) Bill has been passed by the Parliament of India on 7th May 2015.
- While India will gain 510 acres of land, ten thousand acres of land will notionally go to Bangladesh.
- This legislation will redraw India’s boundary with Bangladesh by exchanging enclaves in Assam, West Bengal, Tripura and Meghalaya.
Implications of the Agreement
- It will secure the long-stranded boundary and enable to curb the illegal migration, smuggling and criminal acts across the border.
- It would help those stateless citizens by granting them citizenship from their respective countries. It would help settle the boundary dispute at several points in Meghalaya, Tripura, Assam, and West Bengal.
- It would improve the access to underdeveloped north-eastern states and would further enhance the developmental works in the region.
- It would help to increase the connectivity with south-east Asia as part of India’s North-eastern policy.
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From UPSC perspective, the following things are important :
Prelims level: GST slab
Mains level: Harmonization of GST
The Government can rationalize the GST rate structure without losing revenues by rejigging the four major rates of 5%, 12%, 18% and 28% with a three-rate framework of 8%, 15% and 30%, as per a National Institute of Public Finance and Policy (NIPFP) study.
GST Slabs
- In India, almost 500+ services and over 1300 products fall under the 4 major GST slabs.
- These comprise rates of 5%, 12%, 18%, and 28%. The GST Council periodically revises the items under each slab rate to adjust them according to industry demands and market trends.
- The updated structure ensures that the essential items fall under lower tax brackets, while luxury products and services entail higher GST rates.
- The 28% rate is levied on demerit goods such as tobacco products, automobiles, and aerated drinks, along with an additional GST compensation cess.
Why harmonize GST slabs?
- Multiple rate changes since the introduction of the GST regime in July 2017 have brought the effective GST rate to 11.6% from the original revenue-neutral rate of 15.5%.
- Merging the 12% and 18% GST rates into any tax rate lower than 18% may result in revenue loss.
- The nature of rate changes has also meant that over 40% of taxable turnover value now falls in the 18% tax slab, thus any move to dovetail that slab with a lower rate will trigger losses.
What next?
- Restructuring GST rates is a timely idea to improve revenues.
- It is important to sequence the transition to the new rate structure so as to minimize the costs associated with tax compliance, administration, and economic distortions.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Cryptocurrencies
Mains level: Need for Cryptocurrencies regulation
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 was listed for introduction in Parliament’s Winter Session.
About the Bill
- The bill aims to create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India”.
- It seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.
How are cryptocurrencies regulated in countries around the world?
The stance of countries and regulators has ranged from:
- A total ban on these financial assets Ex. China
- Allowing them to operate with some regulations
- Allowing virtual currency trading in the absence of any guidelines Ex. El Salvador
- Governments and regulators remain divided on how to categorize it as a currency or asset — and how to control it from an operational point of view.
- The evolution of the policy and regulatory response has been uncharacteristically discordant, with no apparent coordination in the responses of countries.
Among the countries that haven’t issued detailed regulations, there are those that have recognized and defined these currencies.
[A] CANADA
- It defines virtual currency under its Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, as:
(a) a digital representation of value that can be used for payment or investment purposes that is not a fiat currency and that can be readily exchanged for funds or for another virtual currency that can be readily exchanged for funds; or
(b) a private key of a cryptographic system that enables a person or entity to have access to a digital representation of value referred to in paragraph (a).
- The Canada Revenue Authority (CRA) generally treats cryptocurrency as a commodity for purposes of the country’s Income Tax Act.
[B] ISRAEL
- Israel in its Supervision of Financial Services Law includes virtual currencies in the definition of financial assets.
- The Israeli securities regulator has ruled that cryptocurrency is a security subject, while the Israel Tax Authority defines cryptocurrency as an asset and demands 25% on capital gains.
[C] GERMANY
- In Germany, the Financial Supervisory Authority qualifies virtual currencies as “units of account” and therefore, “financial instruments”.
- It considers Bitcoin to be a crypto token given that it does not fulfill typical functions of a currency.
- However, citizens and legal entities can buy or trade crypto assets as long as they do it through exchanges and custodians licensed with the German Federal Financial Supervisory Authority.
[D] UNITED KINGDOM
- In the UK, Her Majesty’s Revenue & Customs, do not consider crypto assets to be currency or money.
- It further notes that cryptocurrencies have a unique identity and cannot, therefore, be directly compared to any other form of investment activity or payment mechanism.
[E] UNITED STATES
- In US different states have different definitions and regulations for cryptocurrencies.
- While the federal government does not recognize cryptocurrencies as legal tender, definitions issued by the states recognize the decentralized nature of virtual currencies.
[F] THAILAND
- In Thailand, digital asset businesses are required to apply for a license, monitor for unfair trading practices, and are considered “financial institutions” for anti-money laundering purposes.
Conclusion
- While most of these countries do not recognize cryptocurrencies as legal tender, they do recognize the value these digital units represent.
- Almost all countries consider their functions as either a medium of exchange, unit of account, or a store of value (any asset that would normally retain purchasing power into the future).
- Like India, several other countries have moved to launch a digital currency backed by their central bank.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Religiious intolerance accross the world
Australian PM Scott Morrison has introduced a contentious piece of anti-discrimination legislation called the “Religious Discrimination Bill” in their parliament.
What is the Bill about?
- The bill aims to eliminate discrimination on the ground of religious beliefs or activities.
- It will ensure Australians are protected from discrimination on the basis of religious belief or activity.
- The timing of the introduction of this bill, ahead of the federal elections is being seen as an attempt by the Morrison government to target religious voters.
What does the Religious Discrimination Bill say?
- The Act makes it unlawful to discriminate against a person on the grounds of religious belief or activity in a range of areas of life including work, education, access to premises, and the provision of goods, services, and accommodation.
- Discrimination is unlawful if it occurs, for example, because of a religious belief or activity that the person holds or engages in.
- It is also unlawful if it occurs because of the person’s association with someone else who holds or engages in a religious belief or activity, regardless of whether or not they themselves hold or engage in a religious belief or activity.
Contentious provisions
- The bill also allows faith-based organizations such as religious schools to hire and enrol people from particular faiths.
- The bill states that religious bodies can give preference, “in good faith, to persons who hold or engage in a particular religious belief or activity”.
- It goes on to say that a religious body does not discriminate against a person under this Act by engaging, in good faith, in conduct that a person of the same religion as the religious body could reasonably consider.
Because of this clause, the bill has alarmed some LGBTQI groups and some legal experts who say that the bill will discriminate against gay teachers and students.
Criticisms
- Some critics of the bill see it as a piece of legislation that is legalizing hate.
- Some are questioning the government and asking for proof that people are discriminated against on the basis of religion in the country.
- Further, there are also demands to protect gay students from discrimination.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Pre-Legislative Consultation Policy
Mains level: Stake-holders consultation in lawmaking process
The Union Government has listed 29 Bills (26 new and three pending) to be tabled in the winter session of Parliament.
What is Pre-Legislative Consultation Policy?
- In 2014, the Pre-Legislative Consultation Policy was adopted, mandating a host of rules, including that whenever the Government makes any law, it must place a draft version of it in the public domain for at least 30 days.
- This policy provides a forum for citizens and relevant stakeholders to interact with policymakers.
- The policy also says that along with the draft, a note explaining the law in simple language and justifying the proposal, its financial implication, impact on the environment and fundamental rights, a study on the social and financial costs of the bill, etc. should be uploaded.
- The respective departments should also upload the summary of all the feedback that they receive on the circulated draft.
Why in news?
- Since the inception of the policy, 227 of the 301 bills introduced in Parliament have been presented without any prior consultation.
- Of the 74 placed in the public domain for comment, at least 40 did not adhere to the 30-day deadline.
The inception of the PLCP
- The PLCP was formulated based on the broad recommendations of the National Advisory Council in 2013 and the National Commission to Review the Working of the Constitution (2002).
- It aimed to create an institutionalized space for public participation in lawmaking processes.
Empowerment through Pre legislative consultation policy
- A Pre legislative consultation policy has numerous merits and can help nudge our country in the right direction.
- Given how diverse this nation is, it is crucial that we have a means for citizens to get directly involved in the formulation of policy decisions, especially those that have a direct stake in the bill and its nature.
- If we fail to do so we will risk falling behind the times. Countries like Britain and South Africa and even the state of Kerala already have already set up effective PLP processes.
- If anything, Kerala’s effective model is proof of how effective this process can be at home.
- Furthermore, this policy has the capacity to make historically marginalized groups feel more included and cared for.
Significance of the policy
- This policy provides a forum for citizens and relevant stakeholders to interact with the policymakers in the executive during the initial stages of lawmaking.
- Protests in the recent past over laws such as the farm laws, the RTI Amendment Act, the Transgender Persons (Protection of Rights) Act, etc. have all highlighted that there is discontent among relevant stakeholders and the public at large since they were not looped in while framing such laws.
- Public consultations enhance transparency, increase accountability, and could result in the building of an informed Government where citizens are treated as partners and not as subjects.
Status of its implementation
- During the 16th Lok Sabha (May 2014 to May 2019) 186 bills were introduced in Parliament, of which 142 saw no consultation prior to introduction.
- From the 44 bills placed in the public domain for receipt of comments, 24 did not adhere to the 30-day deadline.
- During the 17th Lok Sabha (June 2019 to present), 115 bills were introduced in Parliament, of which 85 saw no consultation prior to introduction.
- From the 30 bills placed in the public domain for receipt of comment, 16 of them did not adhere to the 30-day deadline.
- The tentative schedule for the winter session indicates that a total of 29 bills are listed for introduction and passing. Of these, 17 saw no prior consultation while from the 12 that were placed in the public domain, only six adhered to the 30-day deadline.
Why is implementation difficult?
- Though it is required that the mandates of an approved policy be heeded by all Government departments, the absence of a statutory or constitutional right has watered down its effect.
- The effective implementation of the policy requires subsequent amendments in executive procedural guidelines like the Manual of Parliamentary Procedures and Handbook on Writing Cabinet Notes.
- However, during a subsequent amendment to the Manual of Parliamentary Procedures, the Ministry of Parliamentary Affairs ignored the Ministry of Law and Justice when it requested them to incorporate PLCP provisions in the manual.
Conclusion
- Incorporation of pre-legislative consultation in the procedures of the Cabinet, Lok Sabha, Rajya Sabha etc. should be prioritized.
- Similarly, it must be required of ministers while introducing the bill to place an addendum note on the details of the pre-legislative consultation.
- Empowering citizens with a right to participate in pre-legislative consultations through a statutory and constitutional commitment could be a gamechanger.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Exercise Dosti
Mains level: Not Much
The 15th edition of the biennial trilateral coast guard exercise ‘Dosti’ involving India, the Maldives and Sri Lanka is underway in the Maldives.
Exercise Dosti
- The aim of this exercise is to further fortify the friendship, enhance mutual operational capability, and exercise interoperability and to build cooperation.
- Both the Maldives and Sri Lanka are of strategic importance to New Delhi and to its maritime security interests.
- 2021 marks 30 years since these exercises were first launched.
Significance of the exercise
- These exercises help during joint operations and missions undertaken by countries and also help enhance interoperability.
- Although piracy is not a major issue in this part of the Indian ocean, these kinds of exercises also help coast guards with training for possibilities.
- These exercises help develop a better understanding of the other nation’s coast guard operations and how to enhance coordination during different kinds of missions.
What it involves
- The scope of these exercises are wide-ranging.
- India, Sri Lanka and the Maldives have agreed to work on what they called the “four pillars” of security cooperation.
- These involved the areas of marine security, human trafficking, counter-terrorism and cyber security.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Issue of child marriage
Context
Reports suggest that more child marriages have been noticed during the Covid pandemic.
Covid-19 and Girls
Socio-economic impacts of Covid-19 are gendered, evident in the form of educational inequality, sexual violence, and increased household burden.
- Increased domestic violence: In India, the National Commission for Women reported 2.5 times to increase in domestic violence during the initial months of nationwide lockdown.
- Abuse & Trafficking: Closure of schools and pandemic induced poverty has increased the vulnerability of children especially the girl child to abuse and trafficking
- School dropout: UNESCO’s Global Education Monitoring Report (2021) throws light on increased educational inequalities for adolescent girls during the Covid-19 crisis. UNESCO estimates that around 11 million girls may not return to school.
- School Closures pushed Children into Labour: In 2021, says UNESCO, 24 million children may not find their way back to schools after the pandemic. Any child who is not in school is a potential child laborer.
- Child Marriages: India witnessed an increase in the number of child marriages since 2020. Girls are further at risk – married off early, these child brides are also often child laborers.
- Reduced Education Budget: Despite knowing the impact of the Pandemic on the education system & thus on Children’s future, the Union budget has Rs 5,000 crore less to spend on education for children this year.
- Digital gender gap: The digital gender gap deters girls’ remote education and access to information.
Child Marriage
- It is defined as a marriage of a girl or boy before the age of 18 and refers to both formal marriages and informal unions in which children under the age of 18 live with a partner as if married.
- UNICEF estimates suggest that each year, at least 1.5 million girls under 18 get married in India, which makes it home to the largest number of child brides in the world – accounting for a third of the global total.
- A recent study by the Lancet shows that up to 2.5 million more girls (below the age of 18) around the world are at risk of marriage in the next 5 years because of the Covid-19 pandemic.
Prevalence of child marriage in India
- Data from the fourth round of the National Family Health Survey (NFHS4) in 2015-16 shows that even before Covid, one in four girls in India was being married before 18.
- Around 8 percent of women aged 15-19 years were mothers or pregnant at the time of the survey.
- The first phase findings of NFHS5 (2019-20) show that the needle has not moved substantially on ending child marriage.
Why did Child Marriages have increased during Lockdowns?
- Lack of Alert Mechanism: Earlier, when child marriages happened at wedding halls, temples, etc, there were people who would alert the relevant authorities or activists who would be able to reach on time to stop it.
- But now, with marriages happening at homes, we may get fewer alerts and our going there could be treated as trespass.
- Pandemic Induced Pressures: Economic pressures due to the pandemic have pushed poor parents to marry off girls early.
- With no schools, the safety of children, particularly girls, was a major reason for the increase in violence against children and child marriages.
Causes for Child Marriages
- Age Factor: Some parents consider the age period of 15-18 as unproductive, especially for girls, so they start finding a match for their child during this age period.
- Further, the Right To Education Act makes education free and compulsory up to the age of 14 only.
- Insecurity: Law and Order are still not able to provide a secure environment for the girls in adolescent age, so some parents get their girl child married at a young age.
- Other Reasons:
- Poverty,
- Political and financial reasons,
- Lack of education,
- Patriarchy and gender inequalities, etc.
Consequences of child marriage
- Violation of human rights: Child marriage violates girls’ human rights. It makes them almost invisible to policy.
- Impact on education and health: It cuts short their education, harms their health, and limits their ability to fulfill themselves as productive individuals participating fully in society.
- The low domestic status of teenage wives typically condemns them to long hours of domestic labor; poor nutrition and anemia; social isolation; domestic violence; early childbearing; and few decision-making powers within the home.
- Malnutrition: Poor education, malnutrition, and early pregnancy lead to low birth weight of babies, perpetuating the intergenerational cycle of malnutrition.
- The costs of child marriage include teenage pregnancy, population growth, child stunting, poor learning outcomes for children, and the loss of women’s participation in the workforce.
What should be the policy interventions to end child marriage?
- CCTs: Conditional cash transfers (CCTs) have been the main policy instrument introduced by most states in the last two decades to end child marriage.
- CCTs alone cannot change social norms. We need a comprehensive approach.
- Legislative measures: Legislation is one part of the approach.
- Karnataka amended the Prohibition of Child Marriage Act in 2017, declaring every child marriage, making it a cognizable offense.
- Expansion of education: These include expansion of secondary education, access to safe and affordable public transport, and support for young women to apply their education to earn a livelihood.
- Expansion of education goes beyond access. Girls must be able to attend school regularly, remain there, and achieve.
- States can leverage their network of residential schools, girls’ hostels, and public transport, especially in underserved areas, to ensure that teenage girls do not get pushed out of education.
- Teachers should hold regular gender equality conversations with high school girls and boys to shape progressive attitudes that will sustain them into adulthood.
- Empowerment measures: Empowerment measures, too, are required to end child marriage, such as community engagement through programs like Mahila Samakhya.
- Children’s village assemblies in the 2.5 lakh gram panchayats across India can provide a platform for children to voice their concerns.
- Government actions driving social change: Field bureaucrats across multiple departments, including teachers, Anganwadi supervisors, panchayat, and revenue staff, all of whom interact with rural communities, should be notified as child marriage prohibition officers.
- Decentralizing birth and marriage registration: Most important of all, decentralizing birth and marriage registration to gram panchayats will protect women and girls with essential age and marriage documents, thus better enabling them to claim their rights.
Consider the question “What are the consequence of child marriage? Suggest the measures to deal with the issue.”
Conclusion
We need to adopt a comprehensive approach to deal with the problem of child marriage. The approach should include a focus on education and legal measures.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Challenges facing the telecom sector
Context
Shortly after the Cabinet announced nine structural and procedural reforms in September to address the deep financial woes of telcos, Vodafone Idea and Bharti Airtel hiked their tariff.
About the package for telecom sector
- The telecom relief package announced by the government in September supports proposals that have been repeatedly presented to the government by the regulator, industry associations and think tanks.
- Risk of duopoly: With the risk of a duopoly looming large, the government was pushed to take up these long-pending decisions that included nine key changes.
- Provisions in the package: Besides providing immediate relief on payment of licence fee and penalties due to the government, the package increased FDI limits, extended licence tenure to 30 years from 20, removed charges on spectrum-sharing and proposed timelines for spectrum auctions.
- The package will undoubtedly have a positive short-term impact and perhaps safeguard competition in the future.
Reforms and challenge of addressing the inequality
- From socialist to market-oriented economy: In July this year, we celebrated three decades of India’s 1991 reforms, one that catapulted India from being a socialist economy with a heart but no trickle-down, to a market-oriented economy with a mind but also very little trickle-down.
- Inequality has been a feature of both models.
- The 2018 Oxfam report showed that 10 per cent of the richest Indians took home 77.4 per cent of wealth (compared to 73 per cent the year before).
- Moreover, 58 per cent of India’s wealth was in the hands of 1 per cent of the country’s population.
- Changes in the modes of distribution: In the pre-1991 period, the principal modes of redistribution were taxation and public sector operations.
- In the post-1991 period, it has been a combination of taxation, technology, smartphones and the associated direct benefit transfers.
Role of telecom sector in addressing the challenge of achieving growth and inclusion
- High growth dividend of telecom sector: Every 10 per cent increase in investment in telecom, for example, leads to a 3.2 per cent increase in GDP growth for India.
- Not only is the growth dividend positive, it is large.
- Mobile as a mean of financial integration: At the same time, the mobile phone has become a means for sophisticated financial integration, as shown by the expanding usage of pre-paid payment instruments and mobile banking.
- The Jan-Dhan Yojana (JDY) attempts to include the marginalised and unbanked through technology.
- As of October 2021, a total of 440 million bank accounts have been opened and more than 310 million RuPay cards have been issued under the latter, indicating the large unmet demand for banking services.
- Making transfers predictable and targeted: The Jan-Dhan-Aadhaar-Mobile (JAM) trinity ties the Aadhaar number to an active bank account, making income transfers predictable and targeted.
- There is already evidence that payments through Aadhaar-linked bank accounts have increased efficiency and reduced leakages.
Way forward
- Predictable and less erratic telecom policy: The benefits of digitalisation could have been much larger and more widespread had telecom policy been more predictable and less erratic.
- That Indian reforms more often than not happen on the back of a crisis is true for the telecom sector.
- The principal motive of the New Telecom Policy of 1999 was to rescue the deeply indebted sector of its own reckless bidding by replacing the fixed licence fee system with a revenue-sharing regime.
- In hindsight, it was the right thing to do since it threatened business continuity.
- The move to auction spectrum “for all times to come” in 2008 was necessitated by the administrative bungling in spectrum assignment.
- Quick adaptation: A question we pose is why did it take a crisis — a grave one at that — to push the needle on policy change?
- It is a a reasonable expectation of policy to adapt quickly and not wait for a crisis to emerge.
Consider the question “Telecom sector could play an important role in achieving the growth with inclusion. In context of this, examine the challenges facing the sector and suggest the measures to deal with these challenges.”
Conclusion
The seemingly naïve question about the adaptation in policies may not be as credulous for the intensely dynamic digital markets. For there is no point shutting the stable door after the horse has bolted.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Lachit Borphukan, Battle of Saraighat
Mains level: Not Much
The Prime Minister has paid tributes to Lachit Borphukan on Lachit Diwas.
Who was Lachit Borphukan?
- The year was 1671 and the decisive Battle of Saraighat was fought on the raging waters of the Brahmaputra.
- On one side was Mughal Emperor Aurangzeb’s army headed by Ram Singh of Amer (Jaipur) and on the other was the Ahom General Lachit Borphukan.
- He was a commander in the Ahom kingdom, located in present-day Assam.
- Ram Singh failed to make any advance against the Assamese army during the first phase of the war.
- Lachit Borphukan emerged victorious in the war and the Mughals were forced to retreat from Guwahati.
Lachit Diwas
- On 24 November each year, Lachit Divas is celebrated statewide in Assam to commemorate the heroism of Lachit Borphukan.
- On this day, Borphukan has defeated the Mughal army on the banks of the Brahmaputra in the Battle of Saraighat in 1671.
- The best passing out cadet of National Defence Academy has conferred the Lachit gold medal every year since 1999 commemorating his valour.
Try this PYQ:
Q.What was the immediate cause for Ahmad Shah Abdali to invade and fight the Third Battle of Panipat:
(a) He wanted to avenge the expulsion by Marathas of his viceroy Timur Shah from Lahore
(b) The frustrated governor of Jullundhar Adina Beg khan invited him to invade Punjab
(c) He wanted to punish Mughal administration for non-payment of the revenues of the Chahar Mahal (Gujrat Aurangabad, Sialkot and Pasrur)
(d) He wanted to annex all the fertile plains of Punjab upto borders of Delhi to his kingdom
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper-Unicorns in Indian economy and issues with their valuation
Context
The biggest-ever initial public offering (IPO) in India fell flat on its face on the first day of its listing in the stock exchange, with shares being traded at prices less than 27% of the IPO price.
Rise of unicorns in India and factors driving it
- Unicorns in diverse sectors: There has been a unicorn gale in India in recent years, covering diverse sectors from fintech to cloud kitchen.
- Growth in digital payment is reflected in the fintech sector that has contributed the most to the unicorn list.
- Factors driving growth: An ecosystem which combines thriving digital payments, a growing smartphone user base and digital-first business models adopted by many start-ups has driven expectations of investors, resulting in large-scale fund flows into new business ventures.
- Growing smartphone user: Expectations are high as the country has around 640 million Internet users, of which 550 million are smartphone users.
- Growing digital payments: Digital payment has seen a growth of 30.19% as of March 31, 2021 and by the end of September 30, the unified payments interface (UPI) registered 3.5 billion transactions amounting to ₹6.54 trillion.
FinTech and EdTech leading unicorns
- American investment firms Tiger Global and Sequoia Capital have been the major investors, providing very quick follow-up rounds of funds across all stages and sectors.
- Fundamental financial performance of the business is not factored in these decisions which could lead to biased valuations.
- Idea of disruptive technologies: The idea of disruptive technologies has become a buzzword for characterising start-ups.
- The idea was that start-ups with limited resources can aim at technology disruption by inventing an entirely new way of getting something done.
- The story is similar in educational technologies (EdTech) as well.
- The novel coronavirus pandemic has been a blessing in disguise for EdTech firms, as it is this external environment that is pushing the industry, giving it an acceleration by four to five years.
- Too many acquisitions with big ambitions to grow inorganically puts pressure on the balance sheet in the years to come as some of the new acquisitions are likely to fail.
- Even, EdTech firms with reasonably good business models are highly overvalued due to abundant liquidity.
- Cost of achieving behaviour change: Almost every second advertisement on primetime television is either of a digital payment firm or EdTech platform.
- New firms in services will have to indulge in this process for a longer period than firms in other industries such as transportation as these firms have to bring about a particular kind of change that customers are significantly comfortable using the service.
- Firms burn cash to give massive discounts to customers in the hope that people will get so habituated to these platforms that they will remain active even when the prices are hiked.
- To some extent this worked in the context of mobile telephone services as Indians have got hooked to mobile phones and reoriented spending to buy more sophisticated smartphones and data.
- But in other services this does not seem to work so easily.
- The projection flaw: Data by the Centre for Monitoring Indian Economy (CMIE) points to this flaw of over-optimistic demand projections as there are just about 23 million households which earn more than ₹5 lakh per year i.e., less than ₹42,000 a month, which is about 7% of all Indian families.
- It is only this class which can be coaxed to behavioural changes — i.e. people who can afford various kinds of goods and services.
- If firms want to go beyond this 7% of households they have to offer bigger discounts, burning more cash, with the possibility that once the discounts are reduced, customers drop off.
Consider the question “India is witnessing the unicorn boom in the starts-ups. However, valuation of these unicorns has raised concerns. In light of this, examine the factors driving the rise of unicorns in India and why their valuation raises concerns?”
Conclusion
We are witnessing new unicorns emerging every month, which are products of inflated valuations to tap more funds to burn more cash. These valuations are solely on the basis of future earnings, with virtually no profits to show in the present.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Right to Privacy
Mains level: Personal Data Protection Bill
The Joint Parliamentary Committee (JPP) on the Personal Data Protection Bill of 2019 is said to have adopted the final draft. The Bill will be tabled in the Winter Session of Parliament.
What is Personal Data?
- Data can be broadly classified into two types: personal and non-personal data.
- Personal data pertains to characteristics, traits or attributes of identity, which can be used to identify an individual.
- Non-personal data includes aggregated data through which individuals cannot be identified.
- For example, while an individual’s own location would constitute personal data; information derived from multiple drivers’ location, which is often used to analyse traffic flow, is non-personal data.
What is Data Protection?
- Data protection refers to policies and procedures seeking to minimise intrusion into the privacy of an individual caused by collection and usage of their personal data.
Why was a bill brought for Personal Data Protection?
- In August 2017, the Supreme Court had held that Privacy is a fundamental right under Article 21 of the Constitution.
- The Court also observed that privacy of personal data and facts is an essential aspect of the right to privacy.
- In July 2017, a Committee of Experts, chaired by Justice BN Srikrishna, was set up to examine various issues related to data protection in India.
- The committee submitted its report, along with a Draft Personal Data Protection Bill, 2018 to the Ministry of Electronics and Information Technology in July 2018.
How is personal data regulated currently?
- Currently, the usage and transfer of personal data of citizens is regulated by the Information Technology (IT) Rules, 2011, under the IT Act, 2000.
- The rules hold the companies using the data liable for compensating the individual, in case of any negligence in maintaining security standards while dealing with the data.
Issues with IT Rules, 2011
- The IT rules were a novel attempt at data protection at the time they were introduced but the pace of development of digital economy has shown its shortcomings.
- For instance, (i) the definition of sensitive personal data under the rules is narrow, and (ii) some of the provisions can be overridden by a contract.
- Further, the IT Act applies only to companies, not to the government.
What does the Personal Data Protection Bill provide?
- Collection and storage: The bill regulate personal data related to individuals, and the processing, collection and storage of such data.
- Data Principal: Under the bill, a data principal is an individual whose personal data is being processed.
- Data fiduciary: The entity or individual who decides the means and purposes of data processing is known as data fiduciary.
- Data processing: The Bill governs the processing of personal data by both government and companies incorporated in India.
- Data localization: It also governs foreign companies, if they deal with personal data of individuals in India.
- General consent: The Bill provides the data principal with certain rights with respect to their personal data. Any processing of personal data can be done only on the basis of consent given by data principal.
- Data Protection Authority: To ensure compliance with the provisions of the Bill, and provide for further regulations with respect to processing of personal data of individuals, the Bill sets up a DPA.
Issues with the PDP Bill
- Exemptions to the govt: Section 35 of the bill permits the Central Government to exempt any agency of the Government from the provisions of the law.
- No reasonable exemptions: There is no sufficient reason for government agencies to be exempted from basic provisions of the Bill.
- Easy breach: Though this would be subject to procedures, safeguards, and oversight mechanisms to be prescribed by the Government.
- Executive hegemony: There is no scope for oversight over the executive’s decision to issue such an order.
- Arbitrary and intrusive: As demonstrated by the Pegasus case, the current frameworks for protecting citizens from arbitrary and intrusive State action lack robustness.
Why is the state given exemption?
- Biggest needy of Data: The State is one of the biggest processors of data, and has a unique ability to impact the lives of individuals.
- Welfare objectives: It has a monopoly over coercive powers as well have the obligation to provide welfare and services.
Issues with Exemption to State
- Grounds of expediency: the use of this provision on grounds of expediency is an extremely low bar for the Government to meet.
- Non requirement for exemption order: There is no requirement for an exemption order to be proportionate to meeting a particular State function.
- No oversight on executive actions: There is no scope for oversight over the executive’s decision to issue such an order or any safeguards prescribed for this process.
- State surveillance: Section 36(a) of the Bill provides for an exception where personal data is being processed against criminal investigation. This provision could therefore encourage vigilantism or enable privatized surveillance.
Best practices followed across the world
- The European GDPR (General Data Protection Regulation) is commonly seen as the pinnacle of data protection regulation worldwide.
- The EU law has in place a separate law that deals with the processing of personal data by law enforcement agencies.
- UK’s Data Protection Act dedicates Part 3 that liberalises certain obligations while at the same time ensuring that data protection rights are also protected.
Way forward
- Balancing privacy interests with those of public needs (such as that of State security) is a difficult task.
- This should undergo rigorous consultations in Parliament taking into confidence all stakeholders.
- Once debated in Parliament, one can only hope that adequate time and attention is given to finding a better balance between competing interests.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Bharat Gaurav Scheme
Mains level: Not Much
To tap the huge potential of tourism, the Railways has announced the ‘Bharat Gaurav’ Scheme.
Bharat Gaurav Scheme
- Under this Scheme, theme-based tourist circuit trains, on the lines of the Ramayana Express, can be run either by private or State-owned operators.
- Till now, the Railways had passenger segments and goods segments.
- Now, it will have a third segment for tourism under the Bharat Gaurav.
- The scheme has been developed after extensive stakeholder discussions and a lot of State Governments, including Odisha, Rajasthan, Karnataka and Tamil Nadu, have shown interest.
Key features
- Service providers, who can be an individual, company, society, trust, joint venture or consortium will be free to decide themes/circuits.
- They will offer an all-inclusive package to tourists including rail travel, hotel accommodation and sightseeing arrangement, visit to historical/heritage sites, tour guides etc.
- They have full flexibility to decide the package cost.
- The service providers will also be able to design/furnish the interior of the coaches based on the theme and put branding or advertising inside and outside of the train.
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