Note4Students
From UPSC perspective, the following things are important :
Prelims level: Dinosaur species mentioned
Mains level: Not Much
In a major discovery, footprints of three species of dinosaurs have been found in the Thar desert in Rajasthan’s Jaisalmer district.
Details of the footprints
- The footprints, made in the sediment or silt of the seashore, later become permanently stone-like.
- They belong to three species of dinosaurs — Eubrontes cf. giganteus, Eubrontes glenrosensis and Grallator tenuis.
- While the giganteus and glenrosensis species have 35 cm footprints, the footprint of the third species was found to be 5.5 cm.
- The dinosaur species are considered to be of the theropod type, with the distinguishing features of hollow bones and feet with three digits.
- All three species, belonging to the early Jurassic period, were carnivorous.
- Eubrontes could have been 12 to 15 metres long and weighed between 500 kg and 700 kg, while the height of the Grallator is estimated to have been two metres, as much as a human, with a length of up to three metres.
Key findings
- The discovery of dinosaur footprints prove the presence of the giant reptiles in the western part of the State, which formed the seashore to the Tethys Ocean during the Mesozoic era.
- Careful geological observations enabled the scientists to interpret ancient environments in which the rocks of the footprints, which were once soft sediments, were deposited.
- Geochemical analyses and calculation of weathering indices showed that the hinterland climate was seasonal to semi-arid during the deposition of the footprints.
- Fieldwork in the Kutch and Jaisalmer basins has suggested that after the main transgression during the early Jurassic period, the sea level changed several times.
- Spatial and temporal distribution of sediments and traces of fossils and post-depositional structures provided an indication to this phenomenon.
Significance
- These trace fossils are significant to ascertain how life started and evolved after the mass extinction of species, including dinosaurs, at the end of the cretaceous period around 65 million years ago.
- This research also illustrates the evidence of a fluvial freshwater palaeo-environment and tropical palaeo-climate, indicating the presence of a tropical forest and a huge network of rivers.
No matter what, try this PYQ:
Q.The term “sixth mass extinction/sixth extinction” is often mentioned in the news in the context of the discussion of (CSP 2018):
(a) Widespread monoculture Practices agriculture and large-scale commercial farming with indiscriminate use of chemicals in many parts of the world that may result in the loss of good native ecosystems.
(b) Fears of a possible collision of a meteorite with the Earth in the near future in the manner it happened 65million years ago that caused the mass extinction of many species including those of dinosaurs.
(c) Large scale cultivation of genetically modified crops in many parts of the world and promoting their cultivation in other Parts of the world which may cause the disappearance of good native crop plants and the loss of food biodiversity.
(d) Mankind’s over-exploitation/misuse of natural resources, fragmentation/loss, natural habitats, destruction of ecosystems, pollution, and global climate change.
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GVA and GDP
Mains level: Paper 3- How to sustain economic recovery
Context
The April-June quarter GDP numbers indicated at 20.1 per cent growth.
Making sense of the numbers
- The higher GDP growth was driven by high indirect tax collections, largely GST.
- The more representative measure of economic activity, gross value added (GVA), grew by 18.8 per cent.
- GDP is derived by adding indirect tax collections, net of subsidy payouts, to GVA.
- These numbers are over a base quarter that had contracted sharply due to the lockdowns during the first Covid wave last year.
- The revival of manufacturing GVA was the most robust, with mining and electricity growth somewhat moderate.
- The overall and sector-specific activity levels need to be evaluated vis-à-vis the corresponding thresholds of (the pre-pandemic) first quarter of 2019-20.
- Agriculture grew at 4.5 per cent, with cereals, pulses and oilseeds output at all-time highs.
- As could be expected, the services sector remained vulnerable, with activity even softer than expected.
- Steel and cement output growth — proxies for construction activity — were also quite robust in the quarter.
- Demand and expenditure: Private consumption was up 19.3 per cent while investment was at 55.3 per cent.
- Government consumption was lower by 4.8 per cent.
- Export: Net exports are typically in deficit, but the gap was much lower in the first quarter.
How to sustain recovery: way forward
- Looking beyond the first quarter, the set of high-frequency economic signals suggest a strong recovery in July and August.
- But, how can this recovery over the rest of the year and beyond be sustained, and even accelerated?
- Sustaining 3 growth drivers: The three distinct potential growth drivers — consumption, investment and exports — will need to be effectively sustained by policy initiatives over the next couple of years.
- Government spending: Centre’s revenues and expenditures during April-July this year suggest that it has significant room to increase spending.
- National Monetisation Plan will open up further fiscal space to increase spending, in particular, on capex.
- Credit support to stressed segment: mid-and small-sized enterprises will take some time to restore their pre-pandemic operational levels.
- An increase in the flow of credit, from banks, NBFCs and markets, particularly to these stressed segments, is a priority, as a supplement to state spending.
- Opportunity for exports: Global inventories are low and depending on the progression of the pandemic relaxations across geographies, are likely to provide opportunities for Indian exports to fill some of these gaps.
- Reforms: Multiple reform initiatives, tax and other incentives are in the process of implementation.
- These need to be accelerated in coordination with states to enable an environment of steady, high growth in the medium term.
Challenges
- Global central banks’ are signalling the imminent normalisation of ultra-loose monetary policy.
- The resulting increase in financial sector volatility will have spillover effects on emerging markets, including India.
- To keep the process smooth, it is crucial to raise India’s potential growth so that the economic recovery does not rapidly close the output gap, thereby preventing a surge in inflationary pressures.
Conclusion
There is a limited window of opportunity for India to leverage the current ongoing realignment of global supply chains and progressively onboard both manufacturing and services entities.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Main Central Thrust
Mains level: Paper 3- Rethinking the hydroelectric projects in Himalayas
Context
The affidavit filed recently by the Ministry of Environment, Forest and Climate Change (MoEFCC) in an ongoing matter in the Supreme Court of India has recommended the construction of seven partially constructed hydroelectric projects in the Uttarakhand Himalaya.
Background
- After the Kedarnath tragedy of 2013, an expert body (EB-I) was constituted to investigate whether the hydro-power projects in the State of Uttarakhand was linked to the disaster.
- In its findings, EB-I said there was a “direct and indirect impact” of these dams in aggravating the disaster.
- The Ministry formed another expert body (EB-II; B.P. Das committee) whose mandate has been to pave the way for all projects through some design change modifications
- This affidavit, dated August 17, reveals that the government is inclined towards construction of 26 other projects, as in the recommendation of the expert body (EB-II; B.P. Das committee).
- Ministry’s own observations and admissions given in its earlier affidavit dated May 5, 2014 admitted that hydroelectric projects did aggravate the 2013 flood.
Concerns
- Sustainability: The sustainability of the dams in the long term is highly questionable as hydropower solely relies on the excess availability of water.
- Temperatures across the region are projected to rise by about 1°C to 2°C on average by 2050.
- Retreating glaciers and the alternating phases of floods and drought will impact the seasonal flows of rivers.
- Sediment hotspots: The most crucial aspect is the existence of sediment hotspot paraglacial zones, which at the time of a cloud burst, contribute huge amounts of debris and silt in the river.
- The flash floods in these Himalayan valleys do not carry water alone; they also carry a massive quantity of debris.
- This was pointed out by EB-II alongside its recommendation not build any projects beyond 2,000 metres or north of the MCT, or the Main Central Thrust (it is a major geological fault).
- Externalities: Though hydropower is renewable source, there are contentious externalities associated with the construction of dams such as social displacement, ecological impacts, environmental and technological risks.
- Climate change: these projects exacerbate ecological vulnerability, in a region that is already in a precarious state.
- The intense anthropogenic activities associated with the proliferation of hydroelectric projects in these precarious regions accelerate the intensity of flash floods, avalanches, and landslides.
- Failure of mountain slopes: The construction and maintenance of an extensive network of underground tunnels carrying water to the powerhouses contribute to the failure of mountain slopes.
- Aggravating the disaster: The Rishi Ganga tragedy and the disasters of 2012 (flashfloods), 2013 are examples of how hydroelectric projects which come in the way of high-velocity flows aggravate a disaster and should be treated as a warning against such projects.
Conclusion
Considering the environmental and cultural significance of these areas, it is imperative that the Government refrains from the construction of hydroelectric projects and declares the upper reaches of all the headstreams of the Ganga as eco-sensitive zones. It must allow the river to flow unfettered and free.
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Back2Basics: Main Central Thrust (MCT)
- The Main Central Thrust is a major geological fault where the Indian Plate has pushed under the Eurasian Plate along the Himalaya.
- The fault slopes down to the north and is exposed on the surface in a NW-SE direction (strike).
- It is a thrust fault that continues along 2200 km of the Himalaya mountain belt
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SEZ Act
Mains level: Paper 3- Learning from the success of IT industry in India
Context
Last Independence Day, the PM announced that 15,000 of our current 69,000+ employer compliances and 6000+ filings have been identified for removal.
Why India is a development economics outlier?
- Software industry despite being low-income country: Few models predict a $2,500 per-capita income country with five million people writing software and internet data costs per GB at 3 percent of US levels.
- Digital identity: In India there are1.2 billion people empowered with paperless digital identity verification.
- Digital economy: India also witnesses 3.5 billion real-time monthly digital payments.
- Attraction for Investment: $10 billion in private equity raised in July, and a $3 trillion public market capitalization.
- Harvard’s Ricardo Hausman believes, the only sustained predictor of sustained economic success is economic complexity and suggests that India’s prosperity is less than our economic complexity would predict.
India’s software industry
- Our software industry is an oasis of high productivity — 0.8 per cent of India’s workers generate 8 percent of GDP.
- The mandatory global digital literacy program and digital investment super-cycle sparked by Covid will double our software employment in five years.
- Our software industry’s talent, alumni, and global engagement — 50,000 tech startups that have raised over $90 billion since 2014 from 500+ institutional investors.
- India’s software services industry and tech startups are each estimated to be worth about $400 billion today which is expected to grow to $1 trillion by 2025.
Why did India’s manufacturing sector fail to perform while its software industry flourished?
- One of the reasons is the different regulatory thought worlds of the Software Technology Parks India rules of 1991 (STPI) and the Special Economic Zones Act of 2005 (SEZ).
- STPI’s genius was simplicity. It allowed rebadging existing assets, embraced trust over suspicion, and adopted self-reporting that was largely paperless, presence less, and cashless.
- SEZs largely replicated the regulatory cholesterol and distrust that has made India unfavorable for employment-intensive industries.
Way forward
- Productivity: Raising per-capita needs high productivity manufacturing and domestic services firms that disrupt our low-level equilibrium of labor handicapped without capital and capital handicapped without labor.
- Opportunities for India: Until recently, China’s tech industry seemed unstoppable — half of their 160 unicorns operate in AI, big data, and robotics. But this is changing.
- Over 50 recent regulatory actions against China’s tech industry have already cost investors over $1 trillion.
- This offers an opportunity for India due to its attractiveness to factories, multinationals, startups, venture capital, and pension funds.
- Replicate regulatory trust and simplicity offered to the technology industry to other sectors: India’s global soft power by reaching revenue and valuation possibilities that felt unimaginable — have come before physical infrastructure, farm employment reduction, and higher women’s labor force participation.
- Massifying our prosperity needs massive formal, non-farm job creation.
- Creating the productive firms that will offer these jobs to our young needs replicating the regulatory trust and simplicity that our technology industry enjoys in the rest of our economy.
Conclusion
Imagine India@100 if we cut regulatory cholesterol today and spent the next 25 years unleashing the entrepreneurial energies of 1.3 billion Indians — 65 percent of whom are below 35 years old.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Speaker and Dy Speaker
Mains level: Appointment of Constitutional posts
With the Delhi High Court asking the Central government to explain its stand on a petition that claimed to keep the post of Deputy Speaker of the Lok Sabha vacant is a violation of Article 93 of the Constitution, the issue is once again in the spotlight.
Article 93: The Speaker and Deputy Speaker of the House of the People The House of the People shall, as soon as may be, choose two members of the House to be respectively Speaker and Deputy Speaker thereof and, so often as the office of Speaker or Deputy Speaker becomes vacant, the House shall choose another member to be Speaker or Deputy Speaker, as the case may be …
Speaker and Dy Speaker of the Lok Sabha
[A] Speaker
- The Speaker of the Lok Sabha is the presiding officer and the highest authority of the Lok Sabha (House of the People), the lower house of the Parliament.
- Newly elected Members of Parliament from the Lok Sabha elect the Speaker among themselves.
- The Speaker should be someone who understands Lok Sabha functions and it should be someone accepted among the ruling and opposition parties.
- MPs propose a name to the Pro tem speaker. These names are notified to the President of India. The President through their aide Secretary-General notifies the election date.
- If only one name is proposed, the Speaker is elected without any formal vote. However, if more than one nomination is received, a division (vote) is called.
- MPs vote for their candidate on such date notified by President. The successful candidate is elected as Speaker of the Lok Sabha until the next general election
Power and Functions
On the order of precedence, the Speaker of Lok Sabha ranks sixth, along with the Chief Justice of India.
- Conduct of Business: The Speaker of the Lok Sabha conducts the business in house. They maintain discipline and decorum in the house and can punish a member for unruly behavior by suspending them. Further, all comments and speeches made by members of the House are addressed to the Speaker.
- Decisions on Money Bill: He/she decides whether a bill is a money bill or not.
- Various motions: They also permit the moving of various kinds of motions and resolutions such as a motion of no confidence, the motion of adjournment, motion of censure and calling attention notice as per the rules.
- Decision of agenda: The Speaker decides on the agenda to be taken up for discussion during the meeting. The date of election of the Speaker is fixed by the President.
- Joint sitting: The Speaker also presides over the joint sitting of both houses of the Parliament of India. The Speaker also has a casting vote in the event of a tie.
[B] Deputy Speaker
- The Deputy Speaker of the Lok Sabha is not subordinate to the speaker of Lok Sabha; is responsible for the Lok Sabha and is the second-highest-ranking legislative officer of the Lok Sabha.
- He/ She acts as the presiding officer in case of leave of absence caused by death or illness of the Speaker of the Lok Sabha.
- It is by convention that the position of Deputy Speaker is offered to the opposition party in India.
Try answering this PYQ:
Regarding the office of the Lok Sabha Speaker, consider the following statements:
- He/she holds the office during the pleasure of the President.
- He/she need not be a member of the house at the time of his/her election but has to become a member of the house within six months from the date of his/her election.
- if he/she intends to resign, the letter of his/her resignation has to be addressed to the Deputy speaker.
Which of the statement(s) given above is/are correct?
(a) 1 and 2
(b) Only 3
(c) 1, 2 and 3
(d) None of these
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Durand Line
Mains level: Afghan refugee crisis
With the Taliban’s seize of Kabul, a huge exodus of Afghan refugees and asylum seekers is outpouring into Pakistan along the Durand Line.
Durand Line
- The Durand Line is a legacy of the 19th century Great Game between the Russian and British empires in which Afghanistan was used as a buffer by the British against feared Russian expansionism to its east.
- The agreement demarcating what became known as the Durand Line was signed on November 12, 1893, between the British civil servant Henry Mortimer Durand and Amir Abdur Rahman, then the Afghan ruler.
- Abdur Rahman became king in 1880, two years after the end of the Second Afghan War in which the British took control of several areas that were part of the Afghan kingdom.
- He was essentially a British puppet.
- His agreement with Durand demarcated the limits of his and British India’s “spheres of influence” on the Afghan “frontier” with India.
- The line stretches from the border with China to Afghanistan’s border with Iran.
An illogical separation
- In reality, the line cut through Pashtun tribal areas, leaving villages, families, and land divided between the two “spheres of influence”.
- It has been described as a “line of hatred”, arbitrary, illogical, cruel, and trickery on the Pashtuns.
- Some historians believe it was a ploy to divide the Pashtuns so that the British could keep control over them easily.
- It also put on the British side the strategic Khyber Pass.
Cross-border tensions at Durand Line
- With independence in 1947, Pakistan inherited the Durand Line, and with it also the Pashtun rejection of the line, and Afghanistan’s refusal to recognize it.
- Afghanistan was the only country to vote against Pakistan joining the United Nations in 1947.
- ‘Pashtunistan’ — an independent country of the Pashtuns — was a demand made by Khan Abdul Ghaffar Khan at the time of Partition, although he later resigned himself to the reality of Partition.
- The proximity of the ‘Frontier Gandhi’ to India was a point of tension between the two countries almost immediately.
- The fear of Indian support to Pashtun nationalism haunts Pakistan to date and is embedded in its Afghan policy.
Pakistani support against the Pashtuns
- Pakistan’s creation and support for the Taliban are seen by some as a move to obliterate ethnic Pashtun nationalism with an Islamic identity.
- But it did not work out the way Pakistan had planned.
- When the Taliban seized power in Kabul the first time, they rejected the Durand Line.
- They also strengthened Pashtun identity with an Islamic radicalism to produce the Tehreek-e-Taliban Pakistan, whose terrorist attacks since 2007 left the country shaken.
Try answering this PYQ:
Consider the following pairs
Towns sometimes mentioned Country in news
- Aleppo — Syria
- Kirkuk — Yemen
- Mosul — Palestine
- Mazar-i-sharif — Afghanistan
Which of the pairs given above are correctly matched?
(a) 1 and 2
(b) 1 and 4
(c) 2 and 3
(d) 3 and 4
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Provident Fund
Mains level: Need for taxing PF
Following its Budget announcement in February, the Finance Ministry has now notified the rules for taxing interest income on contributions made to the Employees’ Provident Fund (EPF) beyond Rs 2.5 lakh (for private-sector employees) and Rs 5 lakh (for government sector employees).
What is Provident Fund?
- Provident Fund is a government-managed retirement savings scheme for employees, who can contribute a part of their savings towards their pension fund, every month.
- These monthly savings get accumulated every month and can be accessed as a lump sum amount at the time of retirement, or end of employment.
- Since the provident fund money consists of a large chunk of savings, it can be used to grow your retirement corpus easily.
Types of provident funds
There are mainly three different types of PFs, which are as follows:
- General provident fund: It is a type of PF which is maintained by governmental bodies, including local authorities, the Railways, and other such bodies. Thus, these types of PFs are mainly defined by government bodies.
- Recognized provident fund: It is the one that applies to all privately-owned organizations that contain more than 20 employees. Moreover, holding a rightful claim to the PF associated with your organization, you will be given a UAN or Universal Account Number. This enables you to transfer your PF funds from one employer to another whenever you move from one occupation to another.
- Public provident fund: It is defined by the voluntary nature of investment on the part of the employee. The PPF is also associated with a minimum deposit of Rs. 50 and a maximum amount of Rs. 1.5 lakhs. The PPF has a lock-in period of 15 years.
What is the tax on EPF contributions?
- In February, the Budget proposed that tax exemption will not be available on interest income on PF contributions exceeding Rs 2.5 lakh in a year.
- Although this has been a concern for salaried individuals contributing to EPF, it will impact only those who contribute more than Rs 2.5 lakh in a year.
- It will not affect their existing corpus or the aggregate annual interest on that.
- In March, the government proposed to double the cap on contribution from Rs 2.5 lakh to Rs 5 lakh for tax-exempt interest income where there is no contribution by the employer.
- With this, the government provided relief for contributions made to the General Provident Fund that is available only to government employees and there is no contribution by the employer.
Why tax the PF?
- There have been instances where some employees are contributing huge amounts to these funds and are getting the benefit of tax exemption at all stages — contribution, interest accumulation, and withdrawal.
- With an aim to exclude high net-worth individuals (HNIs) from the benefit of high tax-free interest income on their large contributions, the government has proposed to impose a threshold limit for tax exemption.
- This will be applicable for all contributions beginning April 1, 2021.
How will it get taxed?
- For an individual in the higher tax bracket of 30%, the interest income on contribution above Rs 2.5 lakh would get taxed at the same marginal tax rate.
- What this means is that if an individual contributes Rs 3 lakh every year to the provident fund (including the voluntary PF contribution) then the interest on his contribution above Rs 2.5 lakh —that is, Rs 50,000 — will be taxed.
- So, the interest income of Rs 4,250 (8.5% on Rs 50,000) will be taxed at the marginal rate. If the individual falls in the 30% tax bracket, he/ she will have to pay a tax of Rs 1,325.
- For an individual contributing Rs 12 lakh in a year, the tax will be applicable on interest income on Rs 9.5 lakh (Rs 12 lakh minus Rs 2.5 lakh). In this case, the tax liability would amount to Rs 25,200.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Blue Stragglers
Mains level: Not Much
Carrying out the first-ever comprehensive analysis of blue stragglers, Indian researchers found that half of the blue stragglers in their sample are formed through mass transfer from a close binary companion star.
What are Blue Stragglers?
- A blue straggler is a main-sequence star in an open or globular cluster that is more luminous and bluer than stars at the main sequence turnoff point for the cluster.
- The most likely explanation is that blue stragglers are the result of stars that come too close to another star or similar mass object and collide.
- The newly-formed star has thus a higher mass and occupies a position on the HR diagram which would be populated by genuinely young stars.
- One-third of them are likely formed through collisions of 2 stars, and the remaining are formed through interactions of more than 2 stars.
How are they formed?
- A bunch of stars born at the same time from the same cloud form a star cluster.
- As time passes, each star evolves differently depending on its mass.
- The most massive and bright stars evolve and move off the main sequence creating a bend in their track, known as the turnoff.
- Stars above this bend or brighter and hotter stars are not expected in a cluster, as they leave the main sequence to become red giants.
- But in 1953, Allan Sandage found that some stars seem to be hotter than the turnoff of the parent cluster.
Behind the nomenclature
- Initially, these blue stars still straggling above the turnoff were not part of these clusters.
- However, later studies confirmed that these stars are indeed cluster members, and they were termed “Blue Stragglers”.
- The only probable way these stars can still be present in these clusters is if they have somehow acquired extra mass along the way while on the main sequence.
- Confirming the mechanisms of the mass gain required a study using a large sample of blue-straggler stars and estimates of the mass they have gained.
What have Indian researchers found?
- Research showed that these stars are primarily present in the older and massive star clusters. And due to their large mass, they are segregated towards the centre of the clusters.
- The researchers compared the mass of the blue stragglers to the mass of the turnoff stars (which are the most massive ‘normal’ stars in the cluster) and predicted the formation mechanisms.
- The study will help improve understanding of these stellar systems to uncover exciting results in studies of large stellar populations, including galaxies.
- Following these findings, the researchers are conducting detailed analyses of individual blue stragglers in the catalog to obtain their stellar properties.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Species mentioned, Turtle Survival Alliance (TSA)
Mains level: NA
Indian biologist Shailendra Singh has been awarded the Behler Turtle Conservation Award for bringing three critically endangered turtle conservation species back from the brink of extinction.
Behler Turtle Conservation Award
- The Award is a major annual international award honoring excellence in the field of tortoise and freshwater turtle conservation and biology, and leadership in the chelonian conservation and biology community.
- It is co-presented by the Turtle Survival Alliance (TSA), the IUCN/SSC Tortoise and Freshwater Turtle Specialist Group (TFTSG) among others.
- It is widely considered the “Nobel Prize” of turtle conservation and biology.
Citation for the 2021 Award
- For some species, such as the Red-crowned Roofed Turtle (Batagur kachuga), Northern River Terrapin (Batagur Baska), and Black Softshell Turtle (Nilssonia nigricans) Dr. Singh and his team’s efforts are the last hope for their wild survival in the country.
- In just 15 years, there are few individuals that have made such monumental contributions to turtle conservation.
Turtles in India
- The Northern River Terrapin (Batagur Baska) is being conserved at the Sunderbans; the Red-crowned Roofed Turtle (Batagur kachuga) at Chambal; and the Black Softshell Turtle (Nilssonia nigricans) at different temples in Assam.
- These critically endangered turtles are being conserved as a part of TSA India’s research, conservation breeding and education programme in different parts of the country.
- There are 29 species of freshwater turtles and tortoises in the country.
About Turtle Survival Alliance (TSA)
- The TSA was formed in 2001 as an International Union for Conservation of Nature (IUCN) partnership for sustainable captive management of freshwater turtles and tortoises.
- This alliance arose in response to the rampant and unsustainable harvest of Asian turtle populations to supply Chinese markets, a situation known as the Asian Turtle Crisis.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SLR and CRR
Mains level: Paper 3- Mispricing of capital
Context
We have a situation in India today where the policy repo rate has been kept low. Banks are just about managing their non-performing assets (NPAs) and there is uncertainty in the air.
Mispricing of capital by banks
- There are different components of the cost of funds for banks, which are captured by the MCLR or marginal cost of funds-based lending rate.
- For every ₹100 deposits that enter the banking system, there are different accompanying costs for the system.
- These are deposit costs, provisioning for NPAs, return on assets (ROA or minimum profit), and the regulatory cost of cash reserve and statutory liquidity ratio balances (CRR and SLR) that perforce have to be held.
- Adding these components, the basic cost works out to be 8.9%, which should be the rate at which incremental lending should take place.
- By offering loans at a much lower rate of 7.23%, the system is actually mispricing capital.
- It may be noted that deposit rates have been compressed to a very large degree and so this cost of 4% is very low.
- Banks do have the advantage of getting free demand deposits and the right to offer differential rates on saving accounts.
- Clearly, deposit-holders are subsidizing borrowers quite significantly.
Issue of NPA provisioning in India
- In the past couple of years, provisions as a proportion of NPAs have averaged 30-40%.
- As NPAs increase, ideally, banks should load this cost onto their borrowers.
- But that rarely happens in India. Instead, it is taken on banks’ books and gets reflected in their balance sheets.
- If NPAs were kept in the region of, say, 4-5% of assets, it would have been possible to bring the cost down to 1.5% (from 3%), which would then have justified the present MCLR.
Low return on assets (ROA)
- The ideal return norm is 1%, which should be derived from all assets.
- This does not happen for banks’ investment portfolios, and the value imputed here is only for loans.
- The ROA for banks is abysmally low, as this aspect does not go into the pricing of products on the asset side.
- Deposit costs have been driven down as savers don’t have a choice.
- But a commensurate return does not materialize in the loan books of banks.
Cost of regulations
- The CRR component gets no compensation, while the SLR part earns around 6%, which is the average cost of fresh borrowing for the Union government.
- While these numbers vary across banks, the minimum rate of 8.9% would hold for the system, which will vary by the level of NPAs.
- The concept of linking benchmarks to certain loans further misprices fresh lending, as those loans are not ideal anchors to use, for they are being manually driven downwards by a deluge of liquidity in the system after the pandemic.
- Excess liquidity of ₹4-7 trillion a day since April 2020 has meant banks have been placing funds costing them 8.9% with the central bank which gives them just 3.35%.
- This is eventually borne by bank shareholders.
Implications
- With rather rigid policies on corporate lending to avert possible NPAs, banks have preferred lending to the retail segment, which is less risky, and small businesses, backed by the Centre’s credit guarantee.
- The central bank’s government-bond buying programme to provide liquidity has been successful.
- But in the absence of fructification of lending and a continuous rollover of funds at the reverse-repo window, Indian banks are bearing a negative carry trade, with a 6% return traded for just 3.35%.
Conclusion
Banks must price capital appropriately and not get overly influenced by arguments in favor of cheap credit or the fact that loans are cheaper in the West. We need to get practical on this issue.
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Back2Basics: CRR and SLR
- Cash Reserve Ratio, or popularly known as CRR is a compulsory reserve that must be maintained with the Reserve Bank of India.
- Every bank is required to maintain a specific percentage of their net demand and time liabilities as cash balance with the RBI.
- The banks are not allowed to use that money, kept with RBI, for economic and commercial purposes.
- It is a tool used by the apex bank to regulate the liquidity in the economy and control the flow of money in the country.
- Statutory Liquidity Ratio, shortly called as SLR also an obligatory reserve to be kept by the banks, as prescribed securities, based on a certain percentage of net demand and time liabilities.
- It is used to maintain the stability of banks by limiting the credit facility offered to its customers.
- CRR is maintained in the form of cash while the SLR is to be maintained in the form of gold, cash, and government-approved securities.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Net zero emission issue
Mains level: Paper 3- Net zero emission commitment
Context
The United Nations Climate Change Conference (COP26) in November in Glasgow is shaping up to be the most important climate meeting since the Paris Agreement in 2015.
What are net-zero emissions?
Carbon neutrality refers to achieving net-zero carbon dioxide emissions. This can be done by balancing emissions of carbon dioxide with its removal or by eliminating emissions from society.
Increase in pace and scale of climate action
- Over 50% of the global economy is already committed to net zero emissions by 2050.
- Over 100 countries have already committed to net zero emissions by 2050, with more expected at COP26.
- The pace and scale of climate action are only set to increase, with the recent IPCC report unequivocal on the need for urgent and stronger responses.
- It is not only governments that are increasing climate action. The business world is too, not just to protect themselves against the risks of climate change but also to take advantage of the massive opportunities arising as the global economy shifts to net-zero emissions.
Why India should commit to a net-zero target
- National interest due to vulnerability: India itself has a national interest in ambitious global and national climate action.
- It is among the most vulnerable countries to climate change and, therefore, should be among the more active against the threats.
- Influence as a rising power: Second, as a rising power, India naturally seeks stronger influence globally.
- Being an outlier on the global challenge facing our generation does not support this aim.
- Drag on international diplomacy: India’s reluctance to commit to net-zero will become a significant drag on India’s international diplomacy.
- This applies not just to key relationships like with the U.S., but also with much of the Group of 77 (G77) states, who are increasingly concerned to see climate action, and in multilateral groupings such as the United Nations and ASEAN-APEC.
- Interconnected with the economy: There is no longer a trade-off between reducing emissions and economic growth.
- For example, the U.K. has reduced emissions by over 40% and grown its economy by over 70% since 1990.
- Solar energy costs have fallen 90% in recent years, providing the cheapest electricity in India ever seen.
- Also, given the negative impacts, addressing climate change in India’s economic development is now central to success, not an added luxury to consider.
- The transition of the global economy to net zero emissions is the biggest commercial opportunity in history.
- In just the energy sector alone, an estimated $1.6 to $3.8 trillion of investment is required every year until 2050.
India’s climate actions
- India is set to significantly exceed its Paris Agreement commitment of reducing the emissions intensity of its GDP by 33-35% below 2005 levels by 2030.
- Emphasis on renewable: India is impressing the world with its leading roll-out of renewable energy and target for 450GW by 2030, linked to its leadership on the International Solar Alliance and recent national hydrogen strategy.
- Corporates: Indian corporates are also stepping up, with the Tata Group winning awards on sustainability, Mahindra committing to net-zero by 2040, and Reliance by 2035.
- Notwithstanding reasonable arguments about historical responsibility, per capita emissions, and equity, India’s national interests in climate action are now engaged in ways that go significantly beyond waiting for donor support to drive ambition.
The way forward: International cooperation
- The world needs to work together for success in the form of stronger political engagement, policy support in areas of mutual challenge such as energy policy, carbon markets, and economic recovery.
- Practical support and cooperation in areas like renewable energy and integrating it with the national grid, zero-emissions transport, decarbonising hard to abate sectors like steel, cement, and chemicals, and decarbonising agriculture offer significant scope to raise ambition.
- As does working with India on innovative green financing for decarbonizing investment.
Conclusion
India’s tryst with destiny rests in its own remarkable hands, as it always has been. In a land where the earth is called mother, and Mahatma Gandhi, major religions, and the Constitution enshrine environmental care, commitment to net zero emissions by 2050 should almost be foretold.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Definition of microfinance
Mains level: Paper 3- Making household income critical variable for loan assessment
Context
The Reserve Bank of India’s (RBI) recently released a Consultative Document on Regulation of Microfinance in June 2021.
Consultative document makes household income a critical variable
- Following the Malegam Committee Report, which is a decade old now, the current document looks to reassess and realign the priorities of the sector.
- Some of the key regulatory changes proposed in the document take household income as a critical variable for loan assessment
- Definition of microfinance: The definition of microfinance itself is proposed to mean collateral-free loans to households with annual household incomes of up to ₹1,25,000 and ₹2,00,000 for rural and urban areas respectively.
- Household income assessment: The document requires all Regulated Entities to have a board-approved policy for household income assessment.
- Cap on repayment: It caps loan repayment (principal and interest) for all outstanding loans of the household at 50% of household income.
- Therefore, measuring household income accurately becomes critical for the effective implementation of these norms.
Challenges in measuring the income of Low-Income-Household (LIH)
- Seasonal and volatile: Low-Income Households (LIHs), who typically form the customer base for Microfinance Institutions (MFIs), often also have seasonal and volatile income flows.
- Measuring expenditure doesn’t reflect their income: Since income for LIHs is seasonal and volatile, there have been attempts to understand their inflows by measuring their expenditure.
- But, given the rotational debts they avail to fund a consumption expenditure here and a loan repayment obligation there, expenditure also does not truly reflect the household’s income.
- Not separate personal expenditure: Moreover, for most LIHs, their expenditure on income-related activity is not separate from their personal expenses.
- Therefore, it is difficult to separate the household’s personal expenses from that of their occupational pursuits.
- Given these complexities, we need to understand and accept that for the bulk of LIHs, household finance is not just personal family finance, but their business finance as well.
3 ways to measure household income for microfinance client
- Structured survey approach: A structured survey-based approach could be used by Financial Service Providers (FSPs) to assess a household’s expenses, debt position and income from various sources of occupation and seasonality of income.
- Template-based approach: A template-based approach could be used wherein FSPs could create various templates for different categories of households (as per location, occupation type, family characteristics, etc.).
- These templates could then be used to gauge the household income of a client matching a particular template.
- Centralised database: FSPs could also form a consortium to collect and maintain household income data through a centralised database.
- This would allow for uniformity in data collection across all FSPs and, over time, can be used to validate the credibility of any new client’s reported income.
- Such a database would also enable FSPs to track the changes in household income over time.
Way forward
- Use technology: Finding cost-effective yet accurate ways of capturing this information becomes crucial.
- Creating new technology to document and analyze cash flows of LIHs would not only facilitate credit underwriting but also innovation in the standard microcredit contracts through customized repayment schedules and risk-based pricing, depending on a household’s cash flows.
Conclusion
Eventually, an accurate assessment of household-level incomes would avoid instances of over-indebtedness and ensure the long-term stability of the ecosystem.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Financial Emergency
Mains level: Forex crisis in Sri Lanka
Sri Lankan President has declared an economic emergency to contain soaring inflation after a steep fall in the value of the country’s currency caused a spike in food prices.
Sri Lankan Economic Emergency
- President Rajapaksa declared the state of emergency under the public security ordinance to prevent the hoarding of essential items, including rice and sugar.
- The government has appointed a former army general as commissioner of essential services, who will have the power to seize food stocks held by traders and retailers and regulate their prices.
- The military will oversee the action which gives power to officials to ensure that essential items, including rice and sugar, are sold at government-guaranteed prices or prices based on import costs at customs and prevent hiding of stocks.
- The emergency move followed sharp price rises for sugar, rice, onions and potatoes, while long queues have formed outside stores because of shortages of milk powder, kerosene oil and cooking gas.
- The wide-ranging measure is also aimed at recovering credit owed to State banks by importers.
Why came such an emergency?
- Sri Lanka, a net importer of food and other commodities, is witnessing a surge in COVID-19 cases and deaths which has hit tourism, one of its main foreign currency earners.
- Partly as a result of the slump in tourist numbers, Sri Lanka’s economy shrank by a record 3.6% last year.
- The Sri Lankan rupee has fallen by 7.5% against the US dollar this year.
- The Central Bank of Sri Lanka recently increased interest rates in a bid to shore up the local currency.
- According to bank data, Sri Lanka’s foreign reserves fell to $2.8 billion at the end of July, from $7.5 billion in November 2019.
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Back2Basics: Financial Emergency in India
- The President of India can declare the Financial Emergency on the aid and advise of the Council of Ministers.
- She/ He has to be satisfied that a situation has arisen due to which the financial stability or credit of India or any part of its territory is threatened.
- Article 360 gives authority to the President of India to declare a financial emergency.
- However, the 44th Constitutional Amendment Act of 1978 says that the President’s ‘satisfaction’ is not beyond judicial review.
- It means the Supreme Court can review the declaration of a Financial Emergency.
Parliamentary Approval and Duration
- A proclamation of financial emergency must be approved by both the Houses of Parliament within two months from the date of its issue.
- A resolution approving the proclamation of financial emergency can be passed by either House of Parliament (Lok Sabha or Rajya Sabha) only by a simple majority.
- Once approved by both the Houses of Parliament, the Financial Emergency continues indefinitely till it is revoked.
- It may be revoked by the President anytime without any Parliamentary approval (but with the usual aid and advice).
Effects of Financial Emergency
- During the financial emergency, the executive authority of the Center expands and it can give financial orders to any state according to its own.
- All money bills or other financial bills, that come up for the President’s consideration after being passed by the state legislature, can be reserved.
- Salaries and allowances of all or any class of persons serving in the state can be reduced.
- The President may issue directions for the reduction of salaries and allowances of: (i) All or any class of persons serving the Union and the judges of the Supreme Court and the High Court.
Try this PYQ:
With reference to the Constitution of India, prohibitions or limitations or provisions contained in ordinary laws cannot act as prohibitions or limitations on the constitutional powers under Article 142. It could mean which one of the following?
(a) The decisions taken by the Election Commission of India while discharging its duties cannot be challenged in any court of law.
(b) The Supreme Court of India is not constrained in the exercise of its powers by laws made by the Parliament.
(c) In the event of grave financial crisis in the country, the President of India can declare Financial Emergency without the counsel from the Cabinet.
(d) State Legislatures cannot make laws on certain matters without the concurrence of the Union Legislature.
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: South China Sea
Mains level: South China Sea Dispute
China’s new maritime rules designed to control the entry of foreign vessels in what Beijing calls “Chinese territorial waters” take effect.
What is the new Maritime Law?
- Foreign vessels, both military and commercial, will be henceforth required to submit to Chinese supervision in “Chinese territorial waters,” as per the new law.
- Operators of submersibles, nuclear vessels, ships carrying radioactive materials, and ships carrying bulk oil, chemicals, liquefied gas, and other toxic and harmful substances are required to report their detailed information upon their visits to Chinese territorial waters.
- Vessels that “endanger the maritime traffic safety of China” will be required to report their name, call sign, current position and next port of call, and estimated time of arrival.
- The name of shipborne dangerous goods and cargo deadweight will also be required.
Impact of the move
- The move is expected to have far-reaching consequences for the passage of vessels, both commercial and military, in the disputed South China Sea, East China Sea, and Taiwan Strait.
- It is likely to escalate the existing tension with the US and its neighbors in the region.
Why is this important?
- South China Sea: The South China Sea, which lies between China, Taiwan, the Philippines, Brunei, Malaysia, Indonesia, and Vietnam, is of great economic importance globally.
- Shipping: Nearly one-third of the world’s shipping passes through its lanes, and the waters house numerous important fisheries.
Significance for India
- The South China Sea is a critical route for India, both militarily and commercially.
- It plays a vital role in facilitating India’s trade with Japan, South Korea, and ASEAN countries, and assists in the efficient procurement of energy supplies.
- More than 55% of India’s trade passes through the South China Sea and Malacca Straits.
- India is also involved in oil and gas exploration in offshore blocks in the margins of the Sea, which has led to standoffs with Chinese authorities.
The actual row
- The waters around China are hotly contested.
- Under a “nine-dash line” map, China claims most of the South China Sea as its sovereign territory.
- This claim is contested by its neighbors in the region and by the United States, which, though it has no claim in the Sea, backs the smaller nations in the fight against Chinese overreach.
International position
- Currently, international maritime activities are governed by an international agreement called the United Nations Convention on the Law of the Sea (UNCLOS).
- China, India, and over a hundred other countries are signatories of UNCLOS (the US, significantly, is not).
- Accordingly, states have the right to implement territorial rights up to 12 nautical miles into the sea.
- The UNCLOS also states that all vessels have the right of “innocent passage” through this region – China’s new law violates this.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Coal mining in India
Mains level: Need for coal imports
The govt. has urged utilities to import coal despite having the world’s fourth-largest reserves, with several power plants on the verge of running out of fuel due to a surge in power demand.
Coal Mining in India
- Coal in India has been mined since 1774 and is now the second fastest mined in the world, producing 716 million metric tons (789 million short tons) in 2018.
- Due to high demand and poor average quality, India imports coking coal to meet the requirements of its steel plants.
- Dhanbad city is the largest coal-producing city and is called the Coal Capital of India.
- State-owned Coal India had a monopoly on coal mining between its nationalization in 1973 and 2018.
Consumption
- Coal-fired power accounts for more than 70% of India’s electricity generation. Electricity generation makes up three-fourths of India’s coal consumption.
Quality of coal
- The ash chemistry of Indian coal is such that it is high in silica and alumina.
- The ash is also highly abrasive because of its high quartz content, which can lead to erosion of the syngas cooling system when it gets fused.
- Indian coal’s sulfur content is low, about 0.5 percent.
- So, from a gas clean-up perspective, the flue gas desulphurization (removal of SOx gases) and NOx removal system is not economically justifiable and, therefore, not important.
- Also, in the Indian context, this is unnecessary to meet emission norms.
Coal reserves
- India has the fourth-largest coal reserves in the world. It is the second-largest producer of coal in the world, after China.
- Coal deposits are primarily found in eastern and south-central India.
- Jharkhand, Odisha, Chhattisgarh, West Bengal, Madhya Pradesh, Telangana, and Maharashtra accounted for 98.09% of the total known coal reserves in India.
- As of 31 March 2019, Jharkhand and Odisha had the largest coal deposits of 25.88% and 24.76% respectively.
Imports
- Coking Coal is being imported by the Steel Authority of India Limited (SAIL) and other Steel manufacturing units mainly to bridge the gap between the requirement and indigenous availability and to improve the quality.
- Coal-based power plants, cement plants, captive power plants, sponge iron plants, industrial consumers, and coal traders are importing non-coking coal.
- Coke is imported mainly by Pig-Iron manufacturers and Iron & Steel sector consumers using mini-blast furnaces.
Try answering this PYQ:
Which of the following is/are the characteristics/ characteristics of Indian coal?
- High ash content
- Low Sulphur content
- Low ash fusion temperature
Select the correct option using the codes given below:
(a) 1 and 2 only
(b) 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Snow leopard, black-necked crane
Mains level: Not Much
Ladakh has adopted two endangered species, snow leopard and black-necked crane, as State animal and State bird, two years after it was carved out as a separate Union Territory (UT) from the erstwhile State of J&K.
Snow Leopard
- The snow leopard (Panther unica) and black-necked crane (Grus nicricollis).
- Snow leopard, whose numbers are dwindling worldwide, has been categorized as “vulnerable” in the International Union for Conservation of Nature Red List.
- In total, there are about 7,500 snow leopards left in the world, out of which 500 are in India.
- However, experts state that the population of snow leopards is between 200-300 in Ladakh alone.
Black-necked Crane
- The black-necked crane is found in eastern Ladakh’s high-altitude wetlands and marshes.
- It is mostly listed as Near Threatened on the International Union for Conservation of Nature (IUCN) red list.
- Considered loyal couples, they are only found in Ladakh’s Changthang region. They arrive in March for breeding and migrate by October end or early November.
- It was the State bird of J&K before August 5, 2019.
About Ladakh
- Ladakh was established as a union territory of India on 31 October 2019, following the passage of the Jammu and Kashmir Reorganization Act.
- Prior to that, it was part of the Jammu and Kashmir state. Ladakh is the largest and the second least populous union territory of India.
- It extends from the Siachen Glacier in the Karakoram range to the north to the main Great Himalayas to the south.
- The eastern end, consisting of the uninhabited Aksai Chin plains, is claimed by the Indian Government as part of Ladakh and has been under Chinese control since 1962.
- The largest town in Ladakh is Leh, followed by Kargil, each of which headquarters is a district.
- The Leh district contains the Indus, Shyok and Nubra river valleys. The Kargil district contains the Suru, Dras and Zanskar river valleys.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: ZAPAD 2021
Mains level: Not Much
A contingent of 200 Army personnel will participate in the multinational Exercise ZAPAD 2021 being held at Nizhniy, Russia.
ZAPAD 2021
- ZAPAD is one of the theatre-level exercises of Russian armed forces and will focus primarily on operations against terrorists.
- The NAGA Battalion group participating in the exercise will feature an all arms combined task force.
- The exercise aims to enhance military and strategic ties amongst the participating nations while they plan and execute this exercise.
- In all, 17 countries have been invited by Russia for the exercise. Of these nine are Participating countries which include Mongolia, Armenia, Kazakhstan, Tajikistan, Kyrgyzstan, Serbia, Russia, India, and Belarus.
- The other eight countries are Observers which include Pakistan, China, Vietnam, Malaysia, Bangladesh, Myanmar, Uzbekistan, and Sri Lanka.
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Must read:
[Prelims Spotlight] Various Defence Exercises in News
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: MGNREGA
Mains level: Paper 3- Managing natural resources
Context
A project in Meghalaya empowers communities to take informed action pertaining to their environment.
Depletion of natural resources in Meghalaya
- In recent years, many parts of Meghalaya have witnessed the loss of forest cover and natural resources have rapidly deteriorated.
- The State, known to have spots designated as the ‘wettest places’ on earth, is now facing a severe water crisis.
- Natural resource management becomes critical in this context.
Challenges in natural resource management
- Traditional practices on sustainable use of natural resources have been passed down from one generation to another.
- Overexploitation: This indigenous knowledge began to slowly fade, however, owing to population growth, the quest for unsustainable developmental activities, and indiscriminate exploitation of natural resources.
- Inaccessibility of knowledge: Another roadblock to natural resource management was knowledge inaccessibility among rural communities.
Providing knowledge: Landscape Management Project
- The government wanted to see if, when provided with the correct knowledge, solutions to problems can be devised and even implemented by community members themselves.
- The World Bank-supported Meghalaya Community-Led Landscape Management Project seeks to reactivating the community’s connection to natural resources and enabling them to tackle the resource crisis.
- How the project worked: cross-functional teams with diverse expertise were set up.
- The Mahatma Gandhi National Rural Employment Guarantee Scheme became the main scheme channelizing resources to impact poor households so that there was systematic convergence of all line departments such as agriculture, horticulture, soil, and water conservation.
- The programme leverages technology and the youth population.
- Leveraging technology, more than 2,000 village community facilitators have already been trained and are working towards climate change reversal.
- Autonomy: To build autonomy, simple tools are used.
- They have been designed keeping in mind many things: creating community agency, building the capacities of all persons in the programme, and ensuring frequent interactions among them.
- Leveraging technology: Technology empowers them with real-time data, which in turn results in better programme governance, transparency, and accountability.
- Communities are now able to articulate the complexities of their problems through a scientific lens and create their own natural resource management plans.
- To carry forward this momentum, there is a plan to launch a Centre of Excellence in Meghalaya, a one-stop centre for natural resources management.
Conclusion
The project intends to empower thousands of village community facilitators and enable them to articulate the complexities of their problems through a scientific lens and create their own natural resource management plans.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Panjshir valley
Mains level: Paper 2- India's approach towards Taliban
Context
After the collapse of the government in Kabul, India has adopted a wait and watch approach in its dealing with the Taliban.
Taliban’s position in Afghanistan
- The Taliban grip over Afghanistan will only strengthen unless there is a popular revolt against it in the cities.
- The Panjshiri defiance is unlikely to go anywhere without considerable and abiding support from the US and a firm commitment from Tajikistan.
- After a talk between leaders of the extinguished Afghan Republic and the Taliban on central government formation, there has been no news of the process for more than a week.
- There is continuous pressure on Taliban leaders and Pakistan from the Western donor community for the formation of a government acceptable to it.
- Some Taliban leaders would want financial flows to continue to prevent a collapse of the Afghan economy.
The approach of the international community toward the Taliban
- Assurances would be sought from the Taliban not only by the West but also by Russia and China that there will be no attempt to put in place the 1990s practices of the Islamic Emirate on gender issues and the more medieval manifestations of the Sharia.
- Commitment to anti-terrorism: US will keep close scrutiny on the Taliban to honor its commitment to al Qaeda and will demand that it continues to cooperate on ISIS-K extermination, an objective shared by Russia.
- Diplomatic recognition of a Taliban government, including allowing it to occupy the United Nations seat in the forthcoming future will depend on its acceptability.
- However, the US and EU will not be reluctant to maintain open and direct contact with a Taliban government.
Issues with India’s wait and watch policy
- India continues to “wait and watch” Afghan developments.
- What is being overlooked is that “strategic patience” cannot be an alibi for inaction.
- The invocation of the British Raj policy of “masterly inactivity” by some scholars defies logic for it applied in a completely different context.
- Recognition v. legitimacy: Besides, while diplomatic recognition or its denial is a specific act of a country in inter-state relations, “legitimacy” is more applicable in the internal jurisdiction of countries.
- India “waited and watched” Afghan developments from the sidelines, at least since the US-Taliban deal.
- How long will India continue to “wait and watch”?
Way forward
- Establish open contact: To explore the Taliban’s approaches towards India there is an obvious need to establish open and direct contacts with it.
- That will also allow India to convey its red lines.
- This should not be confused with diplomatic recognition.
- Welcome Afghans: The establishment of open contacts with the Taliban will not be contradictory to actively welcome those Afghans, irrespective of their faith, who are closely connected with India.
Consider the question “What are the implications of the return of the Taliban in Afghanistan for India? What should be India’s approach in dealing with the Taliban controlled Afghanistan?”
Conclusion
It would damage India’s reputation greatly and into the future, if perceptions grow, as they are growing, that India has abandoned its friends in Afghanistan at the time of their need.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Freedom of Movement and Residence
Mains level: Read the attached story
The rights to free movement and residence across India cannot be curtailed on flimsy grounds, a Bench of Justices Indira Banerjee and V. Ramasubramanian held in a judgment.
Freedom of Movement and Residence
- Article 19(1)(d) and (e) of the Indian Constitution guarantees to every citizen of India right to move freely throughout the territory of India and to reside and settle in any Part of the of the Territory of India.
- This right is subject to reasonable restrictions imposed by law in the interest of the general public or for the protection of the interests of any Scheduled Tribes.
(A) Freedom of Movement under Article 19(1)(d)
- All Citizens of India have the right “to move freely throughout the territory of India.
- This Right is, however subject to reasonable restrictions mentioned under Article 19(5).
Restrictions:
- This clause (5) empowers the State to impose reasonable restrictions in the interest of the general public or for the protection of the interest of any Scheduled Tribe.
- Kharak Singh V. State of UP (1963) Case: The Supreme Court held that the right to move freely throughout the territory of India means the right of locomotion which connotes the right to move wherever one likes, and however one likes.
- State of UP V. Kaushalya Case (1964): In this case, the Supreme court held that the right of movement of prostitutes may be restricted on grounds of Public Health and in the interest of Public Morals.
(B) Freedom of Resident under Article 19(1)(e)
- Article 19(1)(e) of the Indian Constitution guarantees to every citizen of India, the right “to reside and settle in any part of the territory of India”.
- This right is subjected to reasonable restrictions which may be imposed by the State in the interest of the general public or for the protection of the interest of any Scheduled Tribe.
Some facts
- The Freedom of Movement and Residence apply only to citizens of India and not the Foreigners.
- A foreigner cannot claim the right to reside and settle in the country as guaranteed by Article Article 19(1)(e).
- The Government of India has the power to expel foreigners from India.
Why in news, now?
- The Supreme Court has held that the power of the State to pass an externment order or a direction barring certain people entry to specified areas should be exercised only in “exceptional cases”.
- The court said externment orders have their use in maintaining law and order.
- However, they cannot be employed as a vindictive or retaliatory measure.
- The drastic action of externment should only be taken in exceptional cases, to maintain law and order in a locality and/or prevent breach of public tranquility and peace, the court noted.
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Back2Basics: Article 19
Article 19(1) states that All citizens shall have the right:
- (a) to freedom of speech and expression;
- (b) to assemble peaceably and without arms;
- (c) to form associations or unions;
- (d) to move freely throughout the territory of India;
- (e) to reside and settle in any part of the territory of India; and
- (f) omitted
- (g) to practice any profession, or to carry on any occupation, trade, or business
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