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Modern Indian History-Events and Personalities

Places in news: Chandernagore

Prelims Only | | Mains Paper 1: Modern Indian History
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Chandernagore

Mains level: Colonization of India

The Registry Building, a two-storey structure at Chandernagore built in 1875 and a symbol of French settlement of the colonial town, has been awaiting restoration for a long time.

French in India

  • France was the last of the major European maritime powers of the 17th century to enter the East India trade.
  • The French settlement in India began in 1673 with the purchase of land at Chandernagore from the Mughal Governor of Bengal.
  • The next year they acquired Pondicherry from the Sultan of Bijapur. Both became the centers of maritime commercial activities of the French in India.
  • Joseph Francois Dupleix who was initially appointed as Intendent of Chandernagore in 1731, sowed the seeds of colonization.
  • The village, which hitherto was engaged in maritime commerce along with Pondicherry, got fortified by him.

Significance of Chandernagore

  • Chandernagore, though a part of French colonies in India, was unique in many ways.
  • It was very active in spearheading the freedom movement against the British. Due to its close proximity to Calcutta, it became a safe haven for freedom fighters of all hues.
  • Even Aurobindo Ghosh who was one of the accused in the Alipore Bomb case of 1909, was acquitted unconditionally and after a short stay at Chandernagore moved to Pondicherry.
  • Since the partition of Bengal in 1905, Chandernagore was in the thick of activities of freedom fighters against the British and produced several martyrs including Kanailal Dutt.

Merger into India

  • As the British decided to hand over powers to the people of India by August 15, 1947, the people living under French rule in Pondicherry, Chandernagore, Karaikal, Mahe and Yanam were eager to join their homeland.
  • But the French were yet to learn their lessons. They tried all the tricks in the book to avert this.
  • Facing the onslaught from the people under their rule and the British and Indian rulers, the French declared Chandernagore as free city in 1947.
  • In June 1948, they conducted a referendum in which an overwhelming majority of 97 per cent people opted for a merger with India.
  • After so many legal hurdles, it became a part of India on October 2, 1955.

Back2Basics: European Colonies in India

 

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Cyber Security – CERTs, Policy, etc

Taking a byte out of cyber threats

| Security Issues | Mains Paper 3: Cyber Security
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Zero Trust Model

Mains level: Paper 3- Cyber security

Context

Cyber-attacks may be a relatively new phenomenon, but in a short timeframe have come to be assessed as dangerous as terrorism.

A cyber attack is a type of attack that targets computer systems, infrastructures, networks, or personal computer devices using various methods at hand. India is ranked 10th (among 194 countries) in the Global Cybersecurity Index (GCI) 2020 ahead of China and
Pakistan.

The increasing threat of cyber attacks

  • Stuxnet Worm in 2010: Resulted in large-scale damage to Iran’s centrifuge capabilities.
  • Natanz nuclear facility (Iran) in 2021: Targeted the industrial control systems and destroyed the power supply to centrifuges used to create enriched uranium
  • Chinese cyberattack on the power system in Mumbai brought the entire city to a halt.
  • Ransomware as a Service (RaaS) — a business model for ransomware developers — is no mere idle threat.
  • Advanced Persistent Threats (APT) attacks are set to increase, with criminal networks working overtime and the Dark web allowing criminals to access even sensitive corporate networks.

Tools of Cyberattacks

  • Malware: Malicious software to disrupt computers. It can include Viruses, Spyware, Trojans, etc.
  • Phishing: It is the method of trying to gather personal information using deceptive e-mails and websites.
  • Denial of Service attacks: A Denial-of-Service (DoS) attack is an attack meant to shut down a machine or network, making it inaccessible to its intended users.
  • Hacktivism:  Misusing a computer system or network for a socially or politically motivated reason. For example, hacktivists can block access to Government’s website, deface the government’s website or unblock the sites which have been blocked by the Government.
  • Social Engineering: Entice users to provide confidential information. For example, these days u must have come across some of the fake Facebook accounts which are opened in the name of your close friends. First, the cyber attackers send you the friend request in the name of your close friend. Once u accept it, they will ask to request you to transfer some money.

Consequences of Cyberattacks

  • Impact on data: Confidentiality, Integrity and Availability of information.
  • Impact on Critical Information Infrastructure: Presently, most of the sectors are critically dependent on the use of ICT to carry on their operations. These sectors are Banking and Finance, Power systems, Transport sector, Telecommunication, etc. Cyber attacks on these critical information infrastructures can bring the entire country to a grinding halt. For example, the recent Chinese cyber attack on the power system in Mumbai brought the entire city to a halt.
  • Creates Distrust: A cyber-attack on a specific component exposes vulnerabilities in the entire system which may negatively impact relations with allies and adversaries and questions our nuclear reliability.
  • Financial loss: Estimates of the cost to the world in 2021 from cyberattacks are still being computed, but if the cost of cybercrimes in 2020 (believed to be more than $1 trillion) is any guide, it is likely to range between $3trillion-$4 trillion.
  • Threat to National Security and peace and stability in a country.

Steps taken by India to improve Cyber Security

  • Section 66F of ITA: Specific provision dealing with the issue of cyber terrorism that covers denial of access, unauthorized access, introduction of computer contaminant leading to harm to persons, property, critical infrastructure, disruption of supplies, ‘sensitive data’ thefts. Provides for punishment which may extend to life imprisonment.
  • National Cyber Security Policy 2013: Policy document drafted by the Department of Electronics and Information Technology. Established National Critical Information Infrastructure Protection Centre (NCIIPC) to improve the protection and resilience of the country’s critical infrastructure information; Create a workforce of 5 lakh professionals skilled in cybersecurity in the next 5 years.
  • National Critical Information Infrastructure Protection Centre (NCIIPC): It has been setup to enhance the protection and resilience of Nation’s Critical information infrastructure. It functions under the National Technical Research Organization (NTRO).
  • CERT-IN: Organization under the Ministry of Electronics and Information Technology with an objective of securing Indian cyberspace. The purpose of CERT-In is to respond to computer security incidents, report on vulnerabilities, and promote effective IT security practices throughout the country. According to the provisions of the Information Technology Amendment Act 2008, CERT-In is responsible for overseeing the administration of the Act.
  • Cyber Surakshit Bharat Initiative: It was launched in 2018 with an aim to spread awareness about cybercrime and build capacity for safety measures for Chief Information Security Officers (CISOs) and frontline IT staff across all government departments.
  • Cyber Crisis Management Plan (CCMP): It aims at countering cyber threats and cyber-terrorism.
  • National Cyber Coordination Centre (NCCC): It seeks to generate necessary situational awareness of existing and potential cyber security threats and enable timely information sharing for proactive, preventive and protective actions by individual entities.
  • National Cyber Security Coordinator (NCSC) under National Security Council Secretariat (NSCS) coordinates with different agencies at the national level for cyber security matters.
  • Cyber Swachhta Kendra: This platform was introduced for internet users to clean their computers and devices by wiping out viruses and malware.
  • Information Security Education and Awareness Project (ISEA): Training of personnel to raise awareness and to provide research, education, and training in the field of Information Security.

Challenges

  • Structural:
    a)Absence of any geographical constraints.
    b)Lack of uniformity in devices used for internet access.
  • Administrative:
    a) Lack of national-level architecture for cybersecurity
    b) Security audit does not occur periodically, nor does it adhere to the international standards.
    c) The appointment of the National Cyber Security Coordinator in 2014 has not been supplemented by creating liaison officers in states.
  • Procedural
    a) Lack of awareness in local police of various provisions of IT Act, 2000, and also of IPSC related to cybercrime.
    b) Lack of data protection regime.
  • Human Resource Related
    a) Inadequate awareness among people about the security of devices and online transactions.

Way forward

  • International Convention: Presently, Budapest Convention is the first international treaty that promotes greater cooperation between countries in fighting cybercrimes. India should accede to Budapest Convention at the earliest. It would reduce India’s capacity to combat cybercrimes at a global level.
  • PPP Framework for Cyber Security: Presently, most of the cyber security operations are carried out by the Government agencies such as CERT-In. Given the fast-changing nature and intensity of cyber threats, there is a need to leverage private sector expertise in combating cyber crimes through the PPP framework.
  • Capacity building and skill development- Recently, according to a report published by NASSCOM, India needs around 10 lakh, cyber security experts. However, presently there are only around 64,000 professionals. One of the main reasons for the lower number of cyber security professionals is due to lack of an adequate number of specialized courses in cyber security, poor training Infrastructure, lack of availability of trainers, etc. Hence, accordingly, the Government has to recognize the lacunae and increase the number of Skilled professionals.
  • Promoting Startups in the field of Cybersecurity.
  • Investment in R&D to improve Cyber Security- Big data, AI
  • Learning from best practices such as the Tallinn manual of the US.

Conclusion

Failure to build resilience — at both the ‘technical and human level — will mean that the cycle of cyber attacks and the distrust they give rise to will continue to threaten the foundations of a democratic society. Preventing erosion of trust is critical in this day and age.

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Modern Indian History-Events and Personalities

Back in news: Liberation of Goa

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

From UPSC perspective, the following things are important :

Prelims level: Goan Liberation

Mains level: Causes of delayed de-colonization

The PM recently took a jibe at then PM Nehru, saying that it could have liberated Goa in 1947 itself had Nehru sent the Indian Army there.

What is the news?

  • Goa was liberated 15 years after India attained freedom.
  • PM Modi accused Nehru as guilty of leaving satyagrahis in the dismay, refusing to send the Indian Army to liberate Goa, even after 25 of them were shot dead by the Portuguese Army.

Goa’s Colonization: A backgrounder

  • Goa became a Portuguese colony in 1510, when Admiral Afonso de Albuquerque defeated the forces of the sultan of Bjiapur, Yusuf Adil Shah.
  • The next four and a half centuries saw one of Asia’s longest colonial encounters — Goa found itself at the intersection of competing regional and global powers.
  • It received a religious and cultural ferment that lead eventually to the germination of a distinct Goan identity that continues to be a source of contestation even today.
  • By the turn of the twentieth century, Goa had started to witness an upsurge of nationalist sentiment opposed to Portugal’s colonial rule, in sync with the anti-British nationalist movement.

Beginning of freedom movement

  • Tristao de Braganza Cunha, celebrated as the father of Goan nationalism, founded the Goa National Congress at the Calcutta session of the Indian National Congress in 1928.
  • In 1946, the socialist leader Ram Manohar Lohia led a historic rally in Goa that gave a call for civil liberties and freedom, and eventual integration with India.
  • This event became a watershed moment in Goa’s freedom struggle.
  • At the same time, there was a thinking that civil liberties could not be won by peaceful methods, and a more aggressive armed struggle was needed.
  • This was the view of the Azad Gomantak Dal (AGD), whose co-founder Prabhakar Sinari is one of the few freedom fighters still living today.
  • Finally, Goa was liberated on December 19, 1961 by swift Indian military action that lasted less than two days.

Recognition of Goa

  • The Supreme Court of India recognized the validity of the annexation and rejected the continued applicability of the law of occupation.
  • In a treaty with retroactive effect, Portugal recognized Indian sovereignty in 1974.
  • Under the jus cogens rule, forceful annexations including the annexation of Goa are held as illegal since they have taken place after the UN Charter came into force.

Why was Goa left un-colonized?

As India moved towards independence, however, it became clear that Goa would not be free any time soon, because of a variety of complex factors.

  • No immediate war: Then PM Nehru felt that if he launched a military operation (like in Hyderabad) to oust the colonial rulers, his image as a global leader of peace would be impacted.
  • Trauma of Partition: The trauma of Partition and the massive rupture that followed, coupled with the war with Pakistan, kept the Government of India from opening another front.
  • Internationalization of the issue: This might have led the international community to get involved.
  • No demand from within: It was Gandhi’s opinion that a lot of groundwork was still needed to raise the consciousness of the people, and the diverse political voices emerging within be brought under a common umbrella.

Nehruvian dilemma

  • India’s global image: Nehru was headed in shaping India’s position in the comity of nations.
  • Trying peaceful options: He was trying to exhaust all options available to him given the circumstances that India was emerging from.
  • Portuguese obsession: Portugal had changed its constitution in 1951 to claim Goa not as a colonial possession, but as an overseas province.
  • Portugal in NATO: The move was apparently aimed at making Goa a part of the newly formed North Atlantic Treaty Organisation (NATO) military alliance. Hence the collective security clause of the treaty would be triggered.
  • Weak indigenous push: Nehru saw it prudent to pursue bilateral diplomatic measures with Portugal to negotiate a peaceful transfer while, at the same time, a more ‘overt’ indigenous push for liberation.

Why did Nehru wait until December 1961 to launch a full-scale military offensive?

India could no longer be seen to delay the liberation of Goa because:

  • Portuguese offensive against Satyagrahis: The firing incident also provoked a sharp response from the Government of India, which snapped diplomatic and consular ties with Portugal in 1955.
  • India as torchbearer of de-colonization: India got itself firmly established as a leader of the Non Aligned World and Afro Asian Unity, with decolonisation and anti-imperialism as the pillars of its policy.
  • Criticisms from African nations: An Indian Council of Africa seminar on Portuguese colonies organized in 1961 heard strong views from African as this was hampering their own struggles against the ruthless regime.
  • Weakening Colonialism: The delegates were certain that the Portuguese empire would collapse the day Goa was liberated.

The debate in 2022

  • Politics needs to be charitable to history, because at some point it would be put to the same scrutiny and judgment as it becomes history itself.
  • Goa has seen 60 years of eventful liberation and successful amalgamation in the Indian Union.
  • It is more important for it to look ahead to its future than to rapidly receding, increasingly dim images in the rear-view mirror.

 

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Police Reforms – SC directives, NPC, other committees reports

What is Habeas Corpus?

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

From UPSC perspective, the following things are important :

Prelims level: Writ Jurisdiction, Habeas Corpus

Mains level: Read the attached story

The Supreme Court has decided to examine a habeas corpus plea made by the children of a Pakistan national who they believe has been unlawfully detained for seven years.

What is Habeas Corpus?

  • Habeas corpus is a recourse in law through which a person can report an unlawful detention or imprisonment to a court.
  • He/she can request that the court order the custodian of the person, usually a prison official, to bring the prisoner to court, to determine whether the detention is lawful.
  • In India the power to issue a writ of habeas corpus is vested only in the Supreme Court and the High Court.
  • Habeas corpus is the writ which was visualized as an effective means to provide a quick remedy to a person who has lost his personal liberty without any legal justification.

What is Article 32?

  • Article 32 deals with the ‘Right to Constitutional Remedies’, or affirms the right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred in Part III of the Constitution.
  • It is one of the fundamental rights listed in the Constitution that each citizen is entitled.
  • It states that the Supreme Court “shall have the power to issue directions or orders or writs for the enforcement of any of the rights conferred by this Part”.
  • The right guaranteed by this Article “shall not be suspended except as otherwise provided for by this Constitution”.
  • Dr B R Ambedkar has called it the very soul and heart of the Constitution. It cannot be suspended except during the period of Emergency.

Rights protected by A32

  • The article is included in Part III of the Constitution with other fundamental rights including to Equality, Freedom of Speech and Expression, Life and Personal Liberty, and Freedom of Religion.
  • Only if any of these fundamental rights is violated can a person can approach the Supreme Court directly under Article 32.

Types of Writs under it

Both the High Courts and the Supreme Court can be approached for violation or enactment of fundamental rights through five kinds of writs:

  1. Habeas corpus (related to personal liberty in cases of illegal detentions and wrongful arrests)
  2. Mandamus — directing public officials, governments, courts to perform a statutory duty;
  3. Quo Warranto — to show by what warrant is a person holding public office;
  4. Prohibition — directing judicial or quasi-judicial authorities to stop proceedings which it has no jurisdiction for; and
  5. Certiorari — re-examination of an order given by judicial, quasi-judicial or administrative authorities.
  • In civil or criminal matters, the first remedy available to an aggrieved person is that of trial courts, followed by an appeal in the High Court and then the Supreme Court.
  • When it comes to violation of fundamental rights, an individual can approach the High Court under Article 226 or the Supreme Court directly under Article 32.

 

 

Try this PYQ:

Q.Which of the following is included in the original jurisdiction of the Supreme Court?

  1. Dispute between the Government of India and one or more States
  2. A dispute regarding elections to either House of the parliament or that of Legislature of a State
  3. A dispute between the Government of India and Union Territory
  4. A dispute between two or more States.

Select the correct answer using the codes given below:

(a) 1 and 2

(b) 2 and 3

(c) 1 and 4

(d) 3 and 4

 

Post your answers here.

 

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Indian Navy Updates

In news: Exercise Milan 2022

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

From UPSC perspective, the following things are important :

Prelims level: Exercise Milan

Mains level: NA

Exercise Milan as well as the Fleet Review by President is scheduled to be held this month for which 46 countries have been invited.

Exercise Milan

  • Milan began in 1995 and is held biennially and brings together Navies of all the countries in the region.
  • It has so far been held at Port Blair in Andaman and Nicobar but is now being shifted to Visakhapatnam which offers more infrastructure as well as sea space for the exercise.
  • It has several themes such as anti-submarine warfare among others along with deliberations, including by subject matter experts.

What is Fleet Review?

  • A Fleet Review is usually conducted once during the tenure of the President.
  • The first PFR was held in 1953 for the first President Dr. Rajendra Prasad.
  • Since Independence 11 PFRs have been conducted by the Navy, of which two have been International Fleet Reviews in 2011 and 2016.
  • In terms of significance, the Navy’s Presidential review is second only to the Republic Day Parade.

 

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Wildlife Conservation Efforts

Australia lists Koalas as Endangered Species

Species | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Koalas

Mains level: NA

Once found in abundance, Australia’s much-loved koalas have now been officially classified as ‘endangered’ after widespread bushfires, drought and land clearing destroyed much of their eucalyptus-rich habitat.

Koalas

IUCN Status: Vulnerable

  • According to fossil records, Koala species have inhabited parts of Australia for at least 25 million years, a WWF report states.
  • But today, only one species remains — the Phascolarctos cinereus.
  • They are found in the wild in the southeast and eastern sides of Australia — in coastal Queensland, New South Wales, South Australia and Victoria.

Threats to Koalas

  • Since Europeans first settled in the region, the Koala population has faced widespread habitat loss, particularly due to agriculture and the construction of urban settlements.
  • They survive on a strict diet of up to a kilogram of eucalyptus leaves every day.
  • Due to the low nutritional value of these leaves, koalas tend to sleep for extended periods, often up to 18 hours a day, to conserve energy.

 

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Forest Conservation Efforts – NFP, Western Ghats, etc.

How to expand India’s forest cover

| Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Forest cover

Mains level: Paper 3- Increasing India's forest cover

Context

The recently released India State of Forest Report (ISFR) 2021 shows the total forest and tree cover in India is 80.9 million hectares, which is 24.62 per cent of the geographical area of the country.

Definition of forest in India

  • India’s definition of forest cover is in sync with that of the Kyoto Protocol.
  • A “forest” has a minimum area of 0.05 to 1 ha (India has 1.0 ha minimum), with the tree crown cover percentage being more than 10 to 30 per cent (India has 10 per cent) and with trees having the potential to reach a minimum height of 2 to 5 m at maturity in situ (in India, it’s 2 m).
  • The definition thus arrived at by India assesses forests as all lands, more than 1 hectare in area, with a tree canopy density of more than 10 per cent irrespective of ownership and legal status.
  • Such lands may not necessarily be a recorded forest area.
  • It also includes orchards, bamboo, palm etc.

Assessment of forest cover

  • The assessment of forest cover is done based on the interpretation of satellite data, which basically identifies umbrella-shaped canopies from the sky.
  • The forest cover is also estimated from field inventory data, which corroborates the figures of forest cover obtained from the satellite-based interpretation.
  • The environment ministry is even considering providing forest cover maps through the Web Map Service to make the analyses of researchers and agencies easier.
  • Importance of plantations: The importance of plantations needs to be understood.
  • For example, cashew plantations, which mainly grow along the coast, serve as the first line of defence against cyclones, which are hitting with greater frequency and ferocity.
  • Mixed plantations, especially of native species, meet all the ecological functions of natural forests.
  • A lot of wildlife inhabits these plantations.
  • While we do not advocate equating natural forests with plantations, let us recognise their ecological functions.

Afforestation efforts

  • India is on track to achieve its national commitment to land degradation neutrality.
  • India is working towards restoring 26 million hectares of degraded land by 2030.
  • Our afforestation efforts are also aligned with our wildlife conservation efforts.
  • Project Tiger was launched in 1973.
  • From nine tiger reserves initially, we now have 51 tiger reserves.
  • These are the cornerstones of wildlife conservation and preserve natural ecosystems which support ecological processes responsible for providing various goods and services that are vital for human well-being.

Way forward

  • Notwithstanding these gains, the goal of 33 per cent area under forest and tree cover as per the National Forest Policy, 1988, remains to be achieved.
  • Focus on TOF: The balance of 9 per cent can be achieved through taking up plantation/afforestation outside the forests and restocking/plantation in degraded and scrub forests.
  • According to the ISFR 2021, the Trees outside forest (TOF) extent comprises 36.18 per cent of the total forest and tree cover of the country.
  • Given this fact, the draft NFP 2021 has focused on the promotion of TOF by including it among its objectives.
  • NFP 2021: Given this fact, the draft NFP 2021 has focused on the promotion of TOF by including it among its objectives.
  • The provisions in draft NFP 2021 include substantially increasing the tree cover outside forests by incentivising and promoting agro-forestry and farm forestry; managing and expanding green spaces in urban and peri-urban areas to enhance citizens’ well-being; plantation of trees outside forests in partnership with local communities, land-owning agencies, and private enterprises; creation, sustainable management and promotion of urban forests; afforestation/reforestation in public-private partnership (PPP) mode; promotion of urban forests.

Conclusion

It is with this holistic approach that India is moving towards restoring the ecological balance of the planet and ensuring sustainable development.

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Minimum Support Prices for Agricultural Produce

An MSP scheme to transform Indian agriculture

| Economics | Mains Paper 3: Issues Related To Farm Subsidies & Msp
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Changes in MSP mechanism

Context

The MSP must look especially into the requirements of farmers and the landless.

Background of price stabilisation for food grain

  • The Essential Commodities Act in 1955 sought to counter price rise due to speculative private trading and then MSP in the 1960s.
  • A buffer stock policy was developed over time to involve different kinds of mechanisms such as:
    a) setting cost-based minimum procurement price, paying the difference between procurement price and market price.
    b) storing the procured surplus for sale through the Public Distribution System (PDS) at issue price, and market intervention to stabilise price when deemed necessary.
  • This task required interlinking procurement, storage and distribution with more centralised investment and control of each of these tasks.

3 Purposes MSP could serve

MSP could serve, in principle, three purposes:

  • Price stabilisation in the food grains market.
  • Income support to farmers, and
  • As a mechanism for coping with the indebtedness of farmers.

Advantages of wide coverage

  • Fulfilling three objectives: In this way, the objectives of income support to farmers, price stabilization, food security, and inducing more climate-friendly cropping patterns can be combined to an extent.
  • Solution to debt problem: A real breakthrough in the recurring problem of agricultural debt can be made by the linking of selling of grains under MSP to the provision of bank credit particularly for small farmers.
  • The farmer can get a certificate selling grains at MSP which would be credit points proportional to the amount sold; this will entitle them to a bank loan as their right, and calibrate the fluctuations between good and bad harvest years by storing the certificates for later use.

Issues with MSP in current form

  • Low accessibility and awareness of the MSP regime: A survey highlighted that 81% of the cultivators were aware of MSP fixed by the Government for different crops and out of them only 10% knew about MSP before the sowing season.
  • Arrears in payments: More than 50% of the farmers receive their payments of MSP after one week.
  • Poor marketing arrangements: Almost 67% of the farmers sell their produce at MSP rate through their own arrangement and 21% through brokers.
  • Partial coverage resulting in skewed cropping pattern: This partial MSP coverage skewed the cropping pattern against several coarse grains and millets particularly in rain-fed areas.

Way forward

  • Flexible arrangement of MSP: Each crop within a band of maximum and a minimum price depending on harvest conditions i.e. higher price in a bad and lower price in a good harvest year in general will have its price set in the band.
  • High MSP for coarse grains: The price of some selected coarse grains can be fixed at the upper end of its band to encourage their production in rain-fed areas.

Conclusion

Greater coverage of all 23 crops under MSP is a way of improving both food security and income support to the poorest farmers in rain-fed regions.

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Governor and Related issues

| Polity | Mains Paper 2: Federalism
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Role of Governors in State

Mains level: Issues with role of Governor

Last week, West Bengal CM blocked its Governor on Twitter. Days earlier, the Tamil Nadu government had taken exception to Governor’s R-Day speech articulating the benefits of NEET.

These are two of many examples of bitterness between states and Governors.

Who is a Governor?

  • Parallel to President: The Governors of the states of India have similar powers and functions at the state level as those of the President of India at the Central level.
  • Nominal head: The governor acts as the nominal head whereas the real power lies with the Chief Ministers of the states and her/his councils of ministers.
  • Similar offices: Governors exist in the states while Lieutenant Governors or Administrators exist in union territories including National Capital Territory of Delhi.
  • Non-local appointees: Few or no governors are local to the state that they are appointed to govern.

Governor-State Relations

  • Acting on aid and advice: Although envisaged as an apolitical head who must act on the advice of the council of ministers, the Governor enjoys certain powers granted under the Constitution.
  • Discretion: He has monopoly for giving or withholding assent to a Bill passed by the state legislature, or determining the time needed for a party to prove its majority, or which party must be called first do so, generally after a hung verdict in an election.
  • Apparatus of interaction: There are no provisions laid down for the manner in which the Governor and the state must engage publicly when there is a difference of opinion. The management of differences has traditionally been guided by respect for each other’s boundaries.

Various friction points

In recent years, these have been largely about:

  1. Selection of the party to form a government
  2. Deadline for proving majority
  3. Sitting on Bills
  4. Passing negative remarks on the state administration

Recent contentious case

  • J&K: In November 2018, then J&K Governor dissolved the Assembly amid indications that various parties were coming together to form the government.
  • Maharashtra: In 2019, after a hung verdict in Maharashtra Governor quietly invited a party leader and administered him oath as CM at 6am early morning. This government lasted just 80 hours.
  • Nagaland: Governor has criticised affairs of the state and allegedly interfered in administration.

Is such friction recent?

  • Allegations of the Centre using the Governor’s position to destabilise state governments have been made since the 1950s.
  • In 1959, Kerala’s government was dismissed merely based on a report by the Governor.
  • Several state governments have been dismissed since then, including 63 through President’s Rule orders issued by Governors between 1971 and 1990.

Why does this happen?

  • Political appointment: This is because Governors have become political appointees. Politicians become Governors and then resign to fight elections.
  • Nature of appointment: In the Constitution, there are no guidelines for exercise of the Governor’s powers, including for appointing a CM or dissolving the Assembly.
  • Defying constituent assembly: The Constituent Assembly envisaged governor to be apolitical.
  • Nature of appointment: The CM is answerable to the people. But the Governor is answerable to no one except the Centre.
  • Constitutional vacuum: Once can sugercoat it with ideas of constitutional morality and values, but the truth is there is a fundamental defect in the Constitution.
  • Security of Tenure: There is no provision for impeaching the Governor, who is appointed by the President on the Centre’s advice. While the Governor has 5-year a tenure, he can remain in office only until the pleasure of the President.
  • Powers in legislation: There is no limit set for how long a Governor can withhold assent to a Bill.

What reforms have been suggested?

  • From the Administrative Reforms Commission of 1968 to Sarkaria Commission of 1988 and the one mentioned above, several panels have recommended reforms, such as:
  1. Selection of the Governor through a panel comprising the PM, Home Minister, Lok Sabha Speaker and the CM,
  2. Fixing his tenure for five years
  3. Provision to impeach the Governor by the Assembly
  • No government has implemented any of these recommendations.

 

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Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

What is a Ratings Agency and why do they matter?

| Economics | Mains Paper 3: Indian Economy
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Credit Ratings

Mains level: Assessment of economies by Credit Rating Agencies

Finance Secretary has accused rating agencies of “double standards” when assessing emerging markets and developing economies.

What is the news?

  • Fitch, a rating agency, has termed India as the most indebted emerging market.
  • It claimed that the latest budget did not provide clarity on fiscal consolidation plans.

What is a Rating Agency?

  • Rating agencies assess the creditworthiness or potential of an equity, debt or country.
  • Their reports are read by investors to make an informed decision on whether or not to invest in a particular country or companies in that geography.
  • They assess if a country, equity or debt is financially stable and whether it at a low/high default risk.
  • In simpler terms, these reports help investors gauge if they would get a return on their investment.

What do they do?

  • The agencies periodically re-evaluate previously assigned ratings after new developments geopolitical events or a significant economic announcement by the concerned entity.
  • Their reports are sold and published in financial and daily newspapers.

What grading pattern do they follow?

  • The three prominent ratings agencies, viz., Standard & Poor’s, Moody’s and Fitch subscribe to largely similar grading patterns.
  • Standard & Poor’s accord their highest grade, that is, AAA, to countries, equity or debt with the exceedingly high capacity to meet their financial commitments.
  • Its grading slab includes letters A, B and C with an addition a single or double letter denoting a higher grade.
  • Moody’s separates ratings into short and long-term definitions. Its longer-term grading ranges from Aaa to C, with Aaa being the highest.
  • Fitch, too, rates from AAA to D, with D being the lowest. It follows the same succession scheme as Moody’s and Fitch.

Criticism of rating agencies

  • Popular ratings agencies publicly reveal their methodology, which is based on macroeconomic data publicly made available by a country, to lend credibility to their inferences.
  • However, credit rating agencies were subjected to severe criticism for allegedly spurring the financial crisis in the United States, which began in 2017.
  • The agencies underestimated the credit risk associated with structured credit products and failed to adjust their ratings quickly enough to deteriorating market conditions.
  • They were charged for methodological errors and conflict of interest on multiple counts.

Do countries pay attention to ratings agencies?

  • Lowered rating of a country can potentially cause panic selling or offloading of investment by a foreign investor.
  • In 2013, the European Union opted for regulating the agencies.
  • Over reliance on credit ratings may reduce incentives for investor to develop their own capacity for credit risk assessment.
  • Ratings Agencies in the EU are now permitted to issue ratings for a country only thrice a year, and after close of trade in the entire Union.

 

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Parliament – Sessions, Procedures, Motions, Committees etc

What is Privilege Motion?

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

From UPSC perspective, the following things are important :

Prelims level: Privilege Motion

Mains level: Parliamentary privileges

An MP from Telangana submitted a Privilege Motion against PM regarding his remarks over the bifurcation of the erstwhile state of Andhra Pradesh.

What is Parliamentary Privilege?

  • Parliamentary privilege refers to the right and immunity enjoyed by legislatures.
  • The legislators are granted protection against civil or criminal liability for actions done or statements made in the course of their legislative duties.
  • They are granted so that the MPs/MLAs can effectively discharge their functions.
  • The powers, privileges, and immunities of either House of the Indian Parliament and of its members and committees are laid down in Article 105 of the Constitution.
  • Article 194 deals with the powers, privileges and immunities of the State Legislatures, their members and their committees.

What is a Privilege Motion?

  • When any of the rights and immunities are disregarded, the offence is called a breach of privilege and is punishable under the law of Parliament.
  • A notice is moved in the form of a motion by any member of either House against those being held guilty of breach of privilege.
  • Each House also claims the right to punish as contempt actions which, while not breach of any specific privilege, are offenses against its authority and dignity.

What are the rules governing privilege?

  • Rule No 222 in Chapter 20 of the Lok Sabha Rule Book and correspondingly Rule 187 in Chapter 16 of the Rajya Sabha rulebook govern privilege.
  • It says that a member may, with the consent of the Speaker or the Chairperson, raise a question involving a breach of privilege either of a member or of the House or of a committee thereof.
  • The rules however mandate that any notice should be relating to an incident of recent occurrence and should need the intervention of the House.
  • Notices have to be given before 10 am to the Speaker or the Chairperson.

What is the role of the Speaker/Rajya Sabha Chair?

  • The Speaker/RS chairperson is the first level of scrutiny of a privilege motion.
  • The Speaker/Chair can decide on the privilege motion himself or herself or refer it to the privileges committee of Parliament.
  • If the Speaker/Chair gives consent under Rule 222, the member concerned is given an opportunity to make a short statement.

What is the Privileges Committee?

  • In the Lok Sabha, the Speaker nominates a committee of privileges consisting of 15 members as per respective party strengths.
  • A report is then presented to the House for its consideration. The Speaker may permit a half-hour debate while considering the report.
  • The Speaker may then pass final orders or direct that the report be tabled before the House.
  • A resolution may then be moved relating to the breach of privilege that has to be unanimously passed.
  • In the Rajya Sabha, the deputy chairperson heads the committee of privileges, which consists of 10 members.

Answer this PYQ in the comment box:

Q.With reference to the Parliament of India, which of the following Parliamentary Committees scrutinizes and reports to the House whether the powers to make regulations, rules, sub-rules, by-laws etc. conferred by the constitution of delegated by the Parliament are being properly exercised by the Executive within the scope of such delegation?

(a) Committee on Government Assurances

(b) Committee on Subordinate Legislation

(c) Rules Committee

(d) Business Advisory Committee

 

Post your answers here.

 

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New Species of Plants and Animals Discovered

Species in news: White-Cheeked Macaque

Prelims Only | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia
Note4Students

From UPSC perspective, the following things are important :

Prelims level: White-Cheeked Macaque

Mains level: NA

In an important discovery, scientists have recorded presence of White-Cheeked Macaque (Macaca leucogenys) from central Arunachal Pradesh.

White-Cheeked Macaque

  • White- Cheeked Macaques are distinct from other macaques found in the region by displaying white cheeks, long and thick hairs on the neck area, and a longer tail.
  • The species was discovered in 2015 by a group of Chinese scientists from the Modog region in southeastern Tibet.
  • This discovery was considered a significant breakthrough as far as primates are concerned.

Existence in India

  • From India, the species has not been sighted or reported after a single incidence of photographic capture from Anjaw district, Arunachal Pradesh in 2015.
  • The number of these mammals reported from India stands at 434.
  • The significance of the discovery is that it marks a new addition to mammals of India.

Protection status

  • It has NOT been yet included in the Wildlife (Protection) Act, 1972 of India.
  • The potential threat to all species of macaques in the landscape is due to hunting by locals for consumption and habitat degradation due to urbanization and infrastructure development.

 

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Freedom of Speech – Defamation, Sedition, etc.

Central Media Accreditation Guidelines 2022

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

From UPSC perspective, the following things are important :

Prelims level: Freedom of Speech and Expression, Its many aspects

Mains level: Read the attached story

The Centre has issued a new policy on the accreditation of journalists, introducing an entire section about reasons that can result in the suspension of the accreditation.

What is the Policy for Accreditation?

  • The new policy lays down guidelines on how PIB accreditation will be granted to eligible journalists.
  • It is prepared by the Ministry of Information and Broadcasting (I&B) and issued by the Press Information Bureau.
  • At the moment there are 2,457 PIB-accredited journalists in the country.

Conditions laid

  • For the first time, it specifies conditions that can result in the journalist losing accreditation.
  • The new policy has ten points that may result in the accreditation being canceled, including if a journalist is charged with a “serious cognizable offense”.
  • If a journalist acts in a manner that is prejudicial to the following conditions, his/ her accreditation can be canceled:
  1. Sovereignty and integrity of India
  2. Security of the nation
  3. Friendly relations with foreign states
  4. Public order
  5. Decency or morality or
  6. Defamation or incitement of an offense
  7. In relation to Contempt of Court
  • Accreditation is also liable to be withdrawn/suspended if it is found to have been misused.

Who is eligible for accreditation?

  • Applications for accreditation are vetted by a Central Press Accreditation Committee headed by the DG, PIB.
  • After a journalist applies, a mandatory security check is conducted by the Home Ministry, which includes police verification of the journalist’s residence.

(1) Journalists

  • But a journalist needs to have a minimum of five years of professional experience as a full-time working journalist or a cameraperson in a news organization, or a minimum of 15 years as a freelancer to become eligible.
  • Veteran journalists, with over 30 years of experience, and who are older than 65 years of age, too are eligible.
  • Accreditation is only available for journalists living in the Delhi NCR region.
  • Similar rules apply to foreign news organizations and foreign journalists.

(2) Newspapers

  • A newspaper or a periodical needs to have a minimum daily circulation of 10,000, and news agencies must have at least 100 subscribers.

(3) Digital platforms and others

  • The policy has introduced a provision that journalists working with digital news platforms are also eligible, provided the website has a minimum of 10 lakh unique visitors per month.

How does accreditation help?

  • Professional status: The policy mentions that the accreditation does not “confer any official or special status” on the journalists, but only recognizes them as “professional working journalists”.
  • Reporting important offices: In certain events where VVIPs or dignitaries such as the President, the Vice President, or the Prime Minister are present, only accredited journalists are allowed to report from the premises.
  • Source Identity: Accreditation ensures that a journalist is able to protect the identity of his or her sources.
  • Authencity: An accredited journalist does not have to disclose who he or she intends to meet when entering offices of union ministries, as the accreditation card is valid for entry.
  • Perks and benefits: Accreditation brings certain benefits for the journalist and his or her family, like being included in the Central Government Health Scheme, and some concessions on railway tickets.

What concerns does this raise?

  • Intimidation: This could result, at times, in such powers trying to intimidate journalists or to block information from coming out.
  • Alleged defamation: A common tool used by powerful people is filing of defamation cases against journalists and media platforms.
  • Prevents constructive criticism: Journalists often report on issues and policy decisions that the government may not like.
  • Subjectivity of criteria: The new policy’s provision about acting “in manner which is prejudicial to the sovereignty and integrity of India can be subjective.
  • No watchdog: The policy is silent on who will decide if a journalist’s conduct violates any of these conditions.
  • Media trials: Any investigative story on sensitive issues could be held to be in violation of any of these provisions.

 

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Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

What is SWIFT?

Prelims Only | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth
Note4Students

From UPSC perspective, the following things are important :

Prelims level: SWIFT

Mains level: US sanctions on Russia

As tensions peaks over Ukraine the United States could exclude Russia from the Society for Worldwide Interbank Financial Telecommunication (SWIFT).

What is SWIFT?

  • SWIFT is an international network for banks worldwide to facilitate smooth money transactions globally.
  • It is basically a messaging network used by banks and financial institutions globally for quick and faultless exchange of information pertaining to financial transactions.
  • The Belgium-headquartered SWIFT connects more than 11,000 banking and securities organization in over 200 countries and territories.
  • First used in 1973, it went live in 1977 with 518 institutions from 22 countries, its website states.

What exactly is it?

  • SWIFT is merely a platform that sends messages and does not hold any securities or money.
  • It facilitates standardized and reliable communication to facilitate the transaction.

How does it facilitate banking?

  • Each participant on the platform is assigned a unique eight-digit SWIFT code or a bank identification code (BIC).
  • If a person, say, in New York with a Citibank account, wants to send money to someone with an HSBC account in London, the payee would have to submit to his bank the London-based beneficiary’s account number along with the eight-digit SWIFT code of the latter’s bank.
  • Citibank would then send a SWIFT message to HSBC. Once that is received and approved, the money would be credited to the required account.

How is the organization governed?

  • SWIFT claims to be neutral. Its shareholders, consisting of 3,500 firms across the globe, elect the 25-member board, which is responsible for oversight and management of the company.
  • It is regulated by G-10 central banks from Belgium, Canada, France, Germany, Italy, Japan, The Netherlands, the UK, the US, Switzerland, and Sweden, alongside the European Central Bank.
  • Its lead overseer is the National Bank of Belgium.
  • The SWIFT oversight forum was established in 2012.
  • The G-10 participants were joined by the central banks of India, Australia, Russia, South Korea, Saudi Arabia, Singapore, South Africa, the Republic of Turkey, and the People’s Republic of China.
  • Europe, Middle East, and Africa are highest contributors to SWIFT.

What happens if one is excluded from SWIFT?

  • US excluding Russia from SWIFT could have serious repercussions on how Russian banks carry out international financial transactions.
  • If a country is excluded from the most participatory financial facilitating platform, its foreign funding would take a hit, making it entirely reliant on domestic investors.
  • This is particularly troublesome when institutional investors are constantly seeking new markets in newer territories.
  • An alternative system would be cumbersome to build and even more difficult to integrate with an already expansive system.

Are any countries excluded from SWIFT?

  • Iranian banks were ousted from the system in 2018 despite resistance from several countries in Europe.
  • This step, while regrettable, was taken in the interest of the stability and integrity of the wider global financial system, and based on an assessment of the economic situation.

 

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Mother and Child Health – Immunization Program, BPBB, PMJSY, PMMSY, etc.

Intensified Mission Indradhanush (IMI) 4.0 launched

Prelims Only | Governance | Mains Paper 2: Health & Education
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Mission Indradhanush

Mains level: Universal vaccination

The Union Health Minister has launched the Intensified Mission Indradhanush (IMI) 4.0.

About IMI 4.0

  • The IMI 4.0 will have three rounds and will be conducted in 416 districts (including 75 districts identified for Azadi ka Amrit Mahotsav) across 33 States and UTs, a Health Ministry statement said.
  • It will immensely contribute in filling the gaps and make lasting gains towards universal immunisation.
  • It will ensure that Routine Immunisation (RI) services reach the unvaccinated and partially vaccinated children and pregnant women” he said.

What is Mission Indradhanush ?

  • With the aim to increase the full immunisation coverage, the PM launched Mission Indradhanush in December 2014.
  • It aimed to cover the partially and unvaccinated pregnant women and children in pockets of low immunisation coverage, high-risk and hard-to-reach areas and protect them from vaccine preventable diseases.
  • The first two phases of the Mission resulted in 6.7% increase in full immunisation coverage in a year.

Aims and objectives

  • It aims to immunize all children under the age of 2 years, as well as all pregnant women, against eight vaccine-preventable diseases.
  • The diseases being targeted are diphtheria, whooping cough, tetanus, poliomyelitis, tuberculosis, measles, meningitis and Hepatitis B.
  • In 2016, four new additions have been made namely Rubella, Japanese Encephalitis, Injectable Polio Vaccine Bivalent and Rotavirus.
  • In 2017, Pneumonia was added to the Mission by incorporating the Pneumococcal conjugate vaccine under Universal Immunisation Programme

 

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International Space Agencies – Missions and Discoveries

What is a Solar Storm?

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

From UPSC perspective, the following things are important :

Prelims level: Solar Storm

Mains level: NA

Spacex’s newest fleet of satellites is tumbling out of orbit after being struck by a solar storm.

Solar Storm

  • A solar storm or a Coronal Mass Ejection as astronomers call it is an ejection of highly magnetized particles from the sun.
  • These particles can travel several million km per hour and can take about 13 hours to five days to reach Earth.
  • Earth’s atmosphere protects us, humans, from these particles.
  • But the particles can interact with our Earth’s magnetic field, induce strong electric currents on the surface and affect man-made structures.

How did they impact SpaceX satellites?

  • The issue came up due to increased drag created by the solar storm in the upper reaches of the Earth’s atmosphere.
  • These storms cause the atmosphere to warm and atmospheric density at our low deployment altitudes to increase.
  • In fact onboard GPS suggests the escalation speed and severity of the storm caused atmospheric drag to increase up to 50 percent higher than during previous launches.

History of solar storms

  • The first recorded solar storm occurred in 1859 and it reached Earth in about 17 hours.
  • It affected the telegraph network and many operators experienced electric shocks.
  • A solar storm that occurred in 1921 impacted New York telegraph and railroad systems and another small-scale storm collapsed the power grid in Quebec, Canada in 1989.
  • A 2013 report noted that if a solar storm similar to the 1859 one hit the US today, about 20-40 million people could be without power for 1-2 years, and the total economic cost will be $0.6-2.6 trillion.

Why are they a cause of concern?

  • The Sun goes through an 11-year cycle – cycles of high and low activity.
  • It also has a longer 100-year cycle.
  • During the last three decades, when the internet infrastructure was booming, it was a low period.
  • And very soon, either in this cycle or the next cycle, we are going towards the peaks of the 100-year cycle.
  • So it is highly likely that we might see one powerful solar storm during our lifetime.

 

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Nuclear Energy

International Thermonuclear Experimental Reactor (ITER)

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

From UPSC perspective, the following things are important :

Prelims level: Nuclear Fusion Reaction, ITER

Mains level: NA

Scientists in the United Kingdom have achieved a new milestone in producing nuclear fusion energy or imitating the way energy is produced in the Sun. The record and scientific data from these crucial experiments are a major boost for ITER.

ITER Project

  • ITER is international nuclear fusion research and engineering megaproject, which will be the world’s largest magnetic confinement plasma physics experiment.
  • The goal of ITER is to demonstrate the scientific and technological feasibility of fusion energy for peaceful use.

Project details

  • The project is funded and run by seven member entities—the European Union, India, Japan, China, Russia, South Korea and the United States.
  • The EU, as host party for the ITER complex, is contributing about 45 per cent of the cost, with the other six parties contributing approximately 9 per cent each.
  • Construction of the ITER Tokamak (doughnut-shaped apparatus) complex started in 2013 and the building costs were over US$14 billion by June 2015.

How does it work?

  • Hydrogen plasma will be heated to 150 million degrees Celsius, ten times hotter than the core of the Sun, to enable the fusion reaction.
  • The process happens in a doughnut-shaped reactor, called a tokamak, which is surrounded by giant magnets that confine and circulate the superheated, ionized plasma, away from the metal walls.
  • The superconducting magnets must be cooled to -269°C (-398°F), as cold as interstellar space.
  • Scientists have long sought to mimic the process of nuclear fusion that occurs inside the sun, arguing that it could provide an almost limitless source of cheap, safe and clean electricity.
  • Unlike in existing fission reactors, which split plutonium or uranium atoms, there’s no risk of an uncontrolled chain reaction with fusion and it doesn’t produce long-lived radioactive waste.

Back2Basics: Nuclear Fusion

Major breakthrough on nuclear fusion energy - BBC News

  • Nuclear fusion is the process of making a single heavy nucleus (part of an atom) from two lighter nuclei. This process is called a nuclear reaction.
  • The nucleus made by fusion is heavier than either of the starting nuclei. It releases a large amount of energy.
  • Fusion is what powers the sun. Atoms of Tritium and Deuterium (isotopes of hydrogen, Hydrogen-3 and Hydrogen-2, respectively) unite under extreme pressure and temperature to produce a neutron and a helium isotope.
  • Along with this, an enormous amount of energy is released, which is several times the amount produced by fission.
  • Scientists continue to work on controlling nuclear fusion in an effort to make a fusion reactor to produce electricity.

How it is different from nuclear fission?

  • Simply put, fission is the division of one atom into two (by neutron bombardment), and fusion is the combination of two lighter atoms into a larger one (at a very high temperature).
  • Nuclear fission takes place when a large, somewhat unstable isotope (atoms with the same number of protons but a different number of neutrons) is bombarded by high-speed particles, usually neutrons.

 

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Disinvestment in India

Privatisation and Related issues

| Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Issues with privatisation and way forward

Context

There is a consensus that privatization is the panacea. Policymakers often cite the private sector’s ability to grow faster. This may not always be true.

Meaning of Privatisation

It means the transfer of ownership, management, and control of the public sector enterprises to the private sector. India adopted a mixed economy model, where the Public Sector Enterprises (PSEs) were established on a socialistic pattern of development. However, due to the poor performance of several PSEs and the consequent huge fiscal deficits, privatization was pursued. 

Privatization can suggest several things-

  • Migration of something from the public sector to the private sector.
  • It is also used as a metonym for deregulation when a massively regulated private firm or industry becomes less organized.
  • Government services and operations may also be (denationalised) privatised. In these circumstances, private entities are tasked with the application of government plans or the execution of government assistance that had earlier been the vision of state-run companies. Some instances involve law enforcement, revenue collection, and prison management.
  • Privatization of the public sector companies by selling off parts of the equity of PSEs to the public is known as disinvestment.

Objectives of Privatisation

1. Providing strong momentum for the inflow of FDI

2. Improving the efficiency of public sector undertakings (PSUs)

  • The efficiency of PSUs is improved by giving them the autonomy to make decisions.
  • Some companies were given special categories of Navratna and Miniratna.

3. Reduce the fiscal burden on the government in maintaining PSEs.

Ways of Privatisation

Government companies are transformed into private companies in two ways.

Transfer of ownership

Government companies can be converted into private companies in the following two ways:

  • By the withdrawal of the government from the ownership and management of public sector companies
  • By the outright sale of public sector companies.

Disinvestment

  • Disinvestment, or divestment, refers to the act of a business or government selling or liquidating an asset or subsidiary or the process of dilution of a government’s stake in a PSU.
  • The rationale for disinvestment is that the government has no business to be in a business. Thus, the government continues to disinvest in sectors where private companies are already the dominant player.

However, there are six methods of privatization.

  • Public sale of shares
  • Public auction
  • Public tender
  • Direct negotiations
  • Transfer of control of enterprises that were controlled by the state or by municipalities
  • Lease with a right to purchase

Benefit of Disinvestment

  • Improves corporate governance: It would result in the introduction of corporate governance in the privatized companies by freeing the PSEs from Government control and giving more scope to innovation. Enhanced corporate and with the introduction of independent Directors.
  • Develops and deepens the capital market through the spread of equity culture: The disinvestment would benefit the small investors and employees as it would lead to a wider distribution of wealth in the form of public offerings of privatized companies.
  • Disinvestment funds can be utilized for long-term goals such as:
    • Financing large-scale infrastructure development.
    • Investing in the economy to encourage spending
    • Expansion and Diversification of the firm
    • Repayment of Government Debts: Almost 40-45% of the Centre’s revenue receipts go towards repaying public debt/interest
    • Investing in social programs like health and education
  • Fiscal space for the relocation of resources locked with CPSEs: Disinvestment also assumes significance due to the prevalence of an increasingly competitive environment, which makes it difficult for many PSUs to operate profitably. This leads to a rapid erosion of the value of the public assets making it critical to disinvest early to realize a high value.
  • Resources locked in sectors developed enough to raise money from the market are channelized into areas of the economy that are less likely to access resources for the market because of their stage of economic development. Letting go of these assets is best in the long-term interest of the taxpayers as the current yield on these investments is abysmally low.
  • Unlocking of shareholder value: It is done with the help of issuing IPO. IPO means Initial Public Offering. It is a process by which a privately held company becomes a publicly-traded company by offering its shares to the public for the first time. Offering an IPO is a money-making exercise. Every company needs money for expansion, to improve their business, to better the infrastructure, to repay loans, etc.
  • Employees: Employees of a firm are benefitted by disinvestment through:
    • Pay rises, which has been done in past disinvestments.
    • Greater opportunities and avenues for career growth and further employment generation through capacity expansion.

Is privatization a solution?

  • No significant difference in performance: Studies indicate that the gap in growth (and service) between public sector undertakings (PSUs) with autonomy and private firms is not significant.
  • Experience of the privatization in the UK: One study highlighted that the famed British privatization initiative of British Airways, British Gas, and the Railways led to no systemic difference in performance.
  • Evidence on performance after privatization is even more mixed in developing countries.
  • Multiple factors: Growth post-privatization is often due to multiple factors, for example, better funding under a private promoter versus a starved government budget, a better business cycle.

Failure of Privatisation

  • Privatization as a revenue source:  As a state, we have sought to hock our generational wealth in PSUs for the past two decades, with limited success.
  • Failure to raise funds: Actual receipts from disinvestment have always fallen significantly short of targets.
  • In total, between FY11 and FY21, about ₹5 lakh crore was raised (that is, about 33% of just FY22’s projected fiscal deficit (PRS India, 2021) – some of this, notably through stake sale to other PSUs.
  • Considering social and institutional constraints, it is a slow process. For instance, BPCL’s long-awaited journey.

Challenges

  • Challenge of valuation: For instance, about 65% of about 300 national highway projects have been recording significant toll collection growth; any valuations of such assets will need to ensure they capture potential growth in toll revenue, as NHAI’s highway expansion bears fruit and the economy recovers.
  • Social consequences: There were about 348 CPSUs in existence in 2018, with a total investment of ₹16.4 trillion and about 10.3 lakh employees in Central Public Sector Enterprises (in 2019). Push for massive privatization resulting in mass layoffs in a period of low job creation.
  • Concentration of wealth: A greater concentration of public assets in select private hands is also a medium-term concern. About 70% of all profits generated in the corporate sector in FY20 were with just 20 firms.
  • Across sectors, a whiff of oligopoly is emerging – cigarettes continue to be dominated by a single player, paints have one entity with ~40% in FY21, airports now have a new operator with about six airports plus a 74% stake in Mumbai’s international airport, while telecom has just three players left.
  • Such concentration, mixed with the privatization of public assets, is likely to lead to higher usage fees (already being seen in telecom) and inflation, coupled with a loss of strategic control.

Way forward

  • Outright privatization is not a solution: Selective PSU Reform must be considered.
  • The Maruti model is instructive – the government had a joint venture with the Suzuki Corporation, but ceded control, despite Suzuki having only 26% shareholding, in return for a push by Suzuki for greater exports from India and manufacture of global models in India
  • Stake sale route: Empirical evidence highlights that stake sales are considered a preferred route (about 67% of all PSUs sales in about 108 countries between 1977 and 2000 were conducted via this route), as it gives time to ensure price discovery, allowing improved performance to raise valuations over time.
  • Global Experience: In China, for the past few decades, growth has been led by corporatized PSUs, all of them held under a holding company (SASAC), which promotes better governance, appoints leadership, and executes mergers and acquisitions.
  • In Singapore, the Ministry of Finance focuses on policymaking, while the holding firm is focused on corporatizing and expanding its PSUs on a global scale.
  • PSUs with greater autonomy, with the government retaining control via a holding firm, can also be subject to the right incentives.

Conclusion

The time has come to take a relook at privatization. Simply pursuing this path, while utilizing such proceeds for loan write-offs or populist giveaways in the election cycle will not do.

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Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

Agriculture finance in India

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

From UPSC perspective, the following things are important :

Prelims level: AOI

Mains level: Paper 3- India's low AOI

Context

While the overall budgetary allocation towards the agricultural sector has marginally increased by 4.4% in the Union Budget 2022-23, the rate of increase is lower than the current inflation rate of 5.5%-6%.

Agricultural Finance in India – A brief history

Phase 1 (1951-69):

  • Thrust on developing primary sector since 1st FYP in 1951.
  • National Credit Council in 1968 emphasized that commercial banks must increase financing to small scale industries and agriculture
  • Nationalization of banks in 1969 put thrust on the opening of rural/semi-urban bank branches

Phase 2 (1970-1990)

  • The decade of 1970s marked the entry of commercial banks into agricultural credit with the Lead Bank Scheme and regulatory prescription of Priority Sector Lending (PSL).
  • Regional Rural Bank Act, 1976 enacted to specifically provide banking and credit facilities for agriculture and
    other rural sectors.
  • National Bank for Agriculture and Rural Development (NABARD) was established in 1982 to promote agricultural and rural development, particularly by financing SHGs and MFIs.
  • RBI introduced in 1989 service area approach (SAA) & Annual Credit Plan (ACP) system to increase outreach
    to rural areas.

Phase 3 (1991-onwards)

  • Implementation of Narasimham Committee Report of 1991 to increase the operational efficiency of banks.
  • 1st major nationwide farm loan waiver in 1990.
  • Establishment of the Rural Infrastructure Development Fund (RIDF) with NABARD mainly meant for funding rural infrastructure projects.
  • NABARD started a pilot project SHG-Bank Linkage Programme in 1992.

Mechanisms of Agriculture Credit in India

  • Priority Sector Lending: PSL was introduced to ensure that vulnerable sections of the society get access to credit and that there is an adequate flow of credit to employment-intensive sectors like agriculture and MSME.
  • Interest Subvention Scheme (ISS) was launched for short-term crop loans in 2006-07. 2% interest subvention is given to farmers, which is reimbursed to banks (through RBI and NABARD). Additionally, a 3% prompt repayment incentive (PRI) is provided for good credit discipline.
  • Kisan Credit Card (KCC) Scheme, introduced in 1998, aimed at providing adequate and timely credit with flexible and simplified procedures for agriculture-related and also consumption requirements of farmer households.
  • Self Help Group- Bank Linkage Programme (SHG-BLP) aimed at harnessing the flexibility of an informal system with the strength and affordability of a formal system. The SHG-BLP model accepted informal groups as clients of banks – both deposit and credit linkage & allowed collateral-free lending to groups.
  • Joint Liability Groups (JLG) Scheme was initiated by NABARD in 2006 to enhance credit flow to share croppers/tenant farmers who do not have land rights.

Issues with India’s low spending in agriculture

  • The UN Food and Agriculture Organization (FAO) report for 2001 to 2019 shows that, globally, India is among the top 10 countries in terms of government spending in agriculture, constituting a share of around 7.3% of its total government expenditure.
  • However, India lags behind several low-income countries such as Malawi (18%), Mali (12.4%), Bhutan (12%), Nepal (8%), as well as upper-middle-income countries such as Guyana (10.3%) and China (9.6%).

Low budgetary allocation

a) Low allocation for important schemes

  • Drastic slashing of funds towards the allocation towards important schemes like Market Intervention Scheme and Price Support Scheme (MIS-PSS)- ₹1,500 crores (62% less than the previous allocation of ₹3,959.61 crores in the revised estimates (RE) of FY 2021-22).
  • Similarly, the Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA) was allocated just ₹1 crore for the year as against an expenditure of ₹400 crores in 2021-22.

b) Low Capital Investment

  • Allocation for the promotion of rural development was 5.59% in the previous budget which has been further reduced to 5.23% for the present financial year

Other issues

a) Institutional vis-à-vis Non-Institutional Agricultural Credit: Traditionally, rural agrarian credit needs were met primarily through money-lenders, which led to large-scale indebtedness.

  • According to National All India Rural Financial Inclusion Survey (NAFIS 2015), the share of non-institutional credit still persists at around 28%.
  • Unavailability of credit for consumption purposes and to tenant farmers, sharecroppers, and landless labourers, who are not able to offer collateral security, further pushes them towards non-institutional sources.

b) Skewed agency share in institutional credit: Dependency on scheduled commercial banks in agricultural & allied credit is still large (~78-80% of the credit). Though co-operative institutions (~15%) and Regional Rural Banks (~5%) play a significant role in extending agricultural credit, their share is highly skewed geographically.
c) Regional Disparity in Agricultural Credit: States falling under central, eastern, and northeastern regions are getting very low agri-credit as % of their agri-GDP.
d) Poor deployment of agricultural credit to allied sectors (~6-7%) despite a share of 38-42% in the agricultural output indicates neglect of allied sectors by the banks.
e) Issues with Priority Sector Lending (PSL): Though at the aggregate level banks have been able to achieve the overall PSL target of 40%, so far they have failed to achieve the agriculture target of 18% at the system-wide level. Moreover, ~60% of Small & Marginal Farmers (SMFs) have not been covered by SCBs.
f) Interest Subvention Scheme (ISS) on short-term loans have skewed the distribution of agricultural credit in favor of production credit against crop-related investment credit, which is important for the long-term sustainability of the agriculture sector.
g) Kisan Credit Card: As per Agricultural Census 2015-16, only 45% of the farmers possess operative KCCs. Agricultural households are unable to get credit for their consumption requirements and hence, they are compelled to go-to money lenders.
h) Diversion of agriculture loans for non-agriculture purposes: In many states like Tamil Nadu, Andhra Pradesh, Kerala, etc, agri-credit is far higher than their agri-GDP, indicating the possibility of diversion of
credit for non-agricultural purposes. Diversion accentuates the problem of debt overhang, fuels a high level of indebtedness, and deteriorates credit culture in long run.

Way forward

a) Improve the Reach of Institutional Credit:

  • Complete the digitization process and update land records in a time-bound manner.
  • Reforming of land leasing framework by adopting policies like the Model Land Leasing Act proposed by NITI Aayog, which intends to make all lease agreements formal and enhance access to formal credit.
  • Establish a federal institution in agriculture on the lines of GST Council to enable consultation with states during formulation & implementation of reforms.

b) Addressing regional disparity: PSL guidelines should be revisited for improving the credit off-take in central, eastern, and northeastern states.
c) Increasing Credit Flow to Allied Activities: Set separate targets for loans towards allied activities under Ground Level Credit (GLC) & Priority Sector Lending (PSL) guidelines.
d) Enhancing the sub-target of SMFs under PSL- Considering that the total operated area held by SMFs would amount to 51.85% by the year 2020-21, increase the share of agricultural credit under PSL to SMFs to 10% from the current 8%.
e) Agricultural Loans against Gold as Collateral: Banks should develop an MIS to flag agricultural loans sanctioned against gold as collateral in CBS in order to segregate such loans for effective monitoring of end-use of funds.
f) Utilizing Farmer Producer Organisations (FPOs): NABARD should promote women-oriented FPOs by identifying successful women SHGs. Government should expand the scope of its credit guarantee program through Small Farmers’ Agribusiness Consortium (SFAC).
g) Database for Indian Agriculture sector: Develop a centralized database capturing details related to crops cultivated, cropping pattern, output, sown/irrigated area, the health of the soil, natural calamity, etc. Besides, farmer-wise details like identity, land records, loan availed, subsidy given, insurance and details of crop cultivated, etc. should also be captured.
h) Convergence of National Highways development, Rural infrastructure, rural facilities, and increase the number of markets as recommended by the National Commission on Farmers. 

 

Consider the question “What explains India’s low score on Agriculture Orientation Index which is the ratio between government spending towards the agricultural sector and the sector’s contribution to GDP? Suggest the way forward.”

Conclusion

The intensification in government spending towards the agricultural sector is the key to attaining the sustainable development goals of higher agricultural growth and farm income.

 

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Foreign Policy Watch: India-Russia

India and the Great Power rivalry

| International Relations | Mains Paper 2: Effect Of Policies & Politics Of World On India'S Interests
Note4Students

From UPSC perspective, the following things are important :

Prelims level: AUKUS

Mains level: Paper 2- Challenges for India as world moves toward bloc politics

Context

Germany has become a weaker link in the Western coalition against Moscow and Beijing.

The US-Russia-China power dynamics

  • There is a convergence between China and Russia on a range of issues from NATO expansion to the AUKUS alliance. 
  • Despite their problems with the US, both Moscow and Beijing want a productive partnership with Washington.
  • Both Russia and China want to leverage the united front to negotiate better terms from America.
  • Exploiting the contradiction between Russia and China: Washington, in turn, wants to explore the cleavages between Moscow and Beijing.
  • Focus on challenges from China: Biden’s outreach to Putin last year was based on the premise that the US could better focus on the challenges from China in the Indo-Pacific if there was a reasonable relationship with Russia in Europe.
  • Putin is trying to take advantage of that proposition by raising the stakes in Europe.
  • Exploiting economic means: If Putin is focused on military means to rewrite the European security order with the US, Xi is focused on the economic means to alter the US ties.
  • Xi is making a big play for the Wall Street bankers who see merits in engagement with Beijing and lobby Washington to scale down the confrontation with China.

The US resilience

  •  The chaos of American domestic politics and the continuing arguments between the US and its European partners tend to amplify the disagreements within the West.
  •  It would be a mistake for Putin and Xi to mistake Western disagreements for strategic divergence.
  • Consensus on challenging China: The last few years have seen the quick emergence of a new US consensus on challenging China despite the polarisation of the American political class.
  • The idea that the US can’t risk a two-front challenge with Russia and China is popular but mistaken.
  • Power of the US and its allies: Despite the dramatic rise of China and its new partnership with Russia, the united front can’t really match the comprehensive national power of the US and its allies.
  • India is now a strategic partner of the US and faces growing challenges from China.
  • In Asia, Biden has revived the Anglosphere (the AUKUS alliance with the UK and Australia), elevated the Quad to the summit level, and reached out to the ASEAN.
  • In Europe, the US is getting NATO in order.
  • Britain has taken the lead in the diplomatic confrontation with Russia.
  • French President Emmanuel Macron is coordinating with the US in dealing with the Ukraine crisis.
  • Beyond the rebuilding of US alliances, Washington has an important lever which is the exploitation of the domestic political vulnerabilities of “Czar Putin” and “Emperor Xi”.

Challenge for India

  • New dynamics between two coalitions: India’s approach will depend upon the new dynamic between the two coalitions as well as its own relations with China, Russia, and the US.
  • As both sides consolidate their global coalitions, it will get harder to be in the middle.
  • India would like to see Russia find accommodation with the West in Europe; but if Russia’s relations with the West deteriorate further in Europe, Delhi is unlikely to let Moscow undermine its growing partnership with the US and its allies.

Conclusion

With the return of great power rivalry coinciding with India’s deteriorating ties with China, Delhi now stands closer than ever before to the West.

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