Note4Students
From UPSC perspective, the following things are important :
Prelims level: UNSC
Mains level: Climate change negotiations
India has voted against a draft resolution at the United Nations Security Council (UNSC) linking climate to security.
About United Nations Security Council
- The UNSC is one of the six principal organs of the United Nations and is charged with the maintenance of international peace and security.
- Its powers include the establishment of peacekeeping operations, the establishment of international sanctions, and the authorization of military action through Security Council resolutions.
- It is the only UN body with the authority to issue binding resolutions to member states.
Its members
- The Security Council consists of fifteen members. Russia, the United Kingdom, France, China, and the United States—serve as the body’s five permanent members (P5).
- These permanent members can veto any substantive Security Council resolution, including those on the admission of new member states or candidates for Secretary-General.
- The Council also has 10 non-permanent members, elected on a regional basis to serve two-year terms.
- The body’s presidency rotates monthly among its members.
What was the recent draft about?
- The objective of the draft was to examine how terrorism and security risks could be linked to climate change.
Reasons cited by India
- Deviation from UNFCCC: The draft was an attempt to shift climate talks from the UN Framework Convention on Climate Change (UNFCCC) to the Security Council and a “step backward” for collective action on the issue.
- Evasion of responsibility: The attempt to discuss climate action and climate justice issues at the UNSC was “motivated by a desire to evade responsibility in the appropriate forum.”
- Veto hegemony over Climate Action: Countries are attempting to bring climate talks to the UNSC so that decisions could be taken without consensus or the involvement of most developing countries.
- Historic pollutants: Many of the UNSC members were the primary contributors to climate change due to historical emissions.
- Overtly ambitious targets: Indian officials had said at the conclusion of COP26 that India alone would need a trillion dollars by 2030 to achieve its climate ambitions.
Significance of UNFCC
- The UN already has a specialized agency, the UNFCCC, for discussing all matters related to climate change.
- The parties to the UNFCCC — over 190 countries — meet several times every year, including at a two-week year-ending conference like the one at Glasgow, to work on a global approach to combat climate change.
- It is this process that has given rise to the Paris Agreement, and its predecessor the Kyoto Protocol, the international instrument that is designed to respond to the climate change crisis.
Arguments in favor of UNSC in climate talks
- Preventing conflicts: The UNSC exists primarily to prevent conflicts and maintain global peace.
- International security: A few EU countries, led by Germany, have been pushing for a role for UNSC in climate change discussions citing international security dimensions.
- Climate-led conflicts: Climate change-induced food or water shortage, loss of habitat or livelihood, or migration can exacerbate existing conflicts or even create new ones.
- UN Peacekeeping: This can have implications for the UN field missions that are deployed across the world in peacekeeping efforts.
Issues with UNSC
- Veto by Russia and China: These two permanent members have always been opposed to the move to bring climate change on the Security Council agenda.
- Lack of expertise: The opposing countries claim that the UNSC does not have the expertise as compared to UNFCCC.
- Lack of consensus: Unlike UNFCCC, where decisions are taken by consensus of all the 190-plus countries, the UNSC would enable climate change decision-making by a handful of developed countries.
India is in highlight again
- This was the second time that India went against the tide to block a climate change-related proposal that it did not agree with.
- At the Glasgow COP, India had forced a last-minute amendment in the final draft agreement to ensure that a provision calling for “phase-out” of coal was changed to “phase-down”.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NDPS Act
Mains level: Narcotics crime in India
The Narcotic Drugs and Psychotropic Substances (Amendment) Bill, 2021 was passed by Lok Sabha.
Must read:
[Burning Issue] Substance Abuse in India
About NDPS Act
- The Narcotic Drugs and Psychotropic Substances Act, commonly referred to as the NDPS Act was promulgated in 1985.
- It prohibits a person from the production/manufacturing/cultivation, possession, sale, purchasing, transport, storage, and/or consumption of any narcotic drug or psychotropic substance
What is the 2021 amendment?
- The 2021 Bill amends the Narcotic Drugs and Psychotropic Substances Act, 1985 and seeks to rectify a drafting “anomaly” created by a 2014 amendment to the parent legislation.
- It contains a legislative declaration about what one section refers to.
- It says Section 2 clause viii(a) corresponds to clause viii(b) in Section 27, since 2014 when the provision was first brought in.
- Section 27A of the NDPS Act, 1985, prescribes the punishment for financing illicit traffic and harbouring offenders.
Earlier amendment in 2014
- In 2014, a substantial amendment was made to the NDPS Act to allow for better medical access to narcotic drugs.
- It defined “essential drugs”; under Section 9 and allowed the manufacture, possession, transport, import inter-State, export inter-State, sale, purchase, consumption and use of essential narcotic drugs.
- But before the 2014 amendment, a Section 2(viii)a already existed and contained a catalogue of offences for which the punishment is prescribed in Section 27A.
What is Section 21A?
- Section 27A reads: Whoever indulges in financing, directly or indirectly or harbours any person engaged in any of the aforementioned activities, shall be punishable with rigorous imprisonment.
- The term shall not be less than ten years and may extend to twenty years.
- The accused shall also be liable to fine which shall not be less than one lakh rupees but which may extend to two lakh rupees.
What was the drafting “anomaly”?
- While defining “essential drugs” in 2014, the legislation re-numbered Section 2.
- The catalogue of offences, originally listed under Section 2(viii)a, was now under Section 2(viii)b.
- In the amendment, Section 2(viii)a defined essential narcotic drugs.
- However, the drafters missed amending the enabling provision in Section 27A to change Section 2(viii)a to Section 2(viii)b.
What was the result of the drafting error?
- Section 27A punished offences mentioned under Section 2(viiia) sub-clauses i-v.
- However, Section 2 (viiia) sub-clauses i-v, which were supposed to be the catalogue of offences, does not exist after the 2014 amendment. It is now Section 2(viiib).
- This error in the text meant since 2014, Section 27A was inoperable.
When was the error noticed?
- In June this year, the Tripura High Court, while hearing a reference made by the district court, flagged the drafting error, urging the Centre to bring in an amendment and rectify it.
- In 2016, an accused had sought bail before a special judge in West Tripura in Agartala, citing this omission in drafting.
Why can’t it be applied retrospectively?
- Article 20(1) of the Constitution says that no person shall be convicted of any offence except for violation of the law in force at the time of the commission.
- The person shall not be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.
- This protection means that a person cannot be prosecuted for an offence that was not a “crime” under the law when it was committed.
Does the latest amendment make it retrospective?
- In September, the government brought in an ordinance to rectify the drafting error, which Lok Sabha. “It shall be deemed to have come into force on the 1st day of May 2014,” the Bill reads.
- Retrospective application is permitted in clarificatory amendments.
- This 2021 amendment is not a substantive one, that is why the retrospective is allowed.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Interstate boundry disputes in India
The Union Home Ministry (MHA) has informed that 11 States and one Union Territory have boundary disputes between them.
Why in news?
- There are disputes arising out of the demarcation of boundaries and claims and counterclaims over territories.
- Occasional protests and incidents of violence are reported from some of the disputed border areas.
Major boundary disputes include:
- The Belgaum district is arguably part of one of the biggest inter-state border disputes in India.
- The district has a large Marathi and Kannada-speaking populations and has been at the centre of a dispute for a long time.
- The area came under Karnataka in 1956 when states were reorganized and till then it was under the Bombay presidency.
[2] Assam-Mizoram
- The border dispute between Assam and Mizoram is a legacy of two British-era notifications of 1875 and 1933, when Mizoram was called Lushai Hills, a district in Assam.
- The 1875 notification differentiated Lushai Hills from the plains of Cachar and the other demarcated boundary between Lushai Hills and Manipur.
- While Mizoram became a state only in 1987 following years of insurgency, it still insists on the boundary decided in 1875.
- Assam, on the other hand, wants the boundary demarcated in 1986 (based on the 1933 notification).
- In that case, entire Mizoram was part of Assam before the Independence,” Assam Chief Minister Himanta Biswa Sarma said on July 27.
- Mizoram says the 1986 agreement is not acceptable as the Mizo civil society was not consulted at that time.
[3] Haryana-Himachal Pradesh
- The Parwanoo region has had the spotlight over the border dispute between the two states.
- It is next to the Panchkula district of Haryana and the state has claimed parts of the land in Himachal Pradesh as its own.
[4] Himachal Pradesh-Ladakh
- Himachal and Ladakh lay claim to Sarchu, an area on the route between Leh and Manali.
- It is considered a major point where travellers stop when travelling between the two cities.
- Sarchu is in between Himachal’s Lahul and Spiti district and Leh district in Ladakh.
[5] Arunachal Pradesh-Assam
- Arunachal’s grievance is that the re-organisation of North Eastern states unilaterally transferred several forested tracts in the plains that had traditionally belonged to hill tribal chiefs and communities to Assam.
- After Arunachal Pradesh achieved statehood in 1987, a tripartite committee was appointed which recommended that certain territories be transferred from Assam to Arunachal.
- Assam contested this and the matter is before the Supreme Court.
[6] Meghalaya-Assam
- The problem between Assam and Meghalaya started when the latter challenged the Assam Reorganisation Act of 1971, which gave Blocks I and II of the Mikir Hills or present-day Karbi Anglong district to Assam.
- Meghalaya contends that both these blocks formed part of the erstwhile United Khasi and Jaintia Hills district when it was notified in 1835.
- Meghalaya bases its case on survey maps of 1872 and 1929 and certain notifications of 1878 and 1951, while Assam wants to go by the rejected recommendations of the Churachand Committee.
[7] Assam-Nagaland
- The longest-running border dispute in the North East is between Assam and Nagaland, which began soon after Nagaland became a state in 1963.
- The Nagaland State Act of 1962 had defined the state’s borders according to a 1925 notification when Naga Hills and Tuensang Area (NHTA) were integrated into a new administrative unit.
- Nagaland, however, does not accept the boundary delineation and has demanded that the new state should also have all Naga-dominated areas in North Cachar and Nagaon districts.
- Since Nagaland did not accept its notified borders, tensions between Assam and Nagaland flared up soon after the latter was formed, resulting in the first border clashes in 1965.
- This was followed by major clashes between the two states along the border in 1968, 1979, 1985, 2007, 2014 and 2021.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Partnership in technological domain with UK
Context
When Delhi thinks of technological cooperation with major powers, the US, Europe and Japan come to mind. The missing link in India’s technological mind space, however, is the United Kingdom.
How India can benefit from technology partnership with Britain
- Britain was the first nation to industrialise and has a long tradition of scientific research and technological development.
- With top-ranking universities and the golden triangle of science and innovation — London, Oxford and Cambridge — Britain is one of the world’s top technology powers.
- WIPO ranking: This year, the World Intellectual Property Organisation ranked Britain fourth in the global innovation index.
- India is far behind at the 46th position.
- India, then, could gain in a technology partnership with Britain.
Overview of the India-UK bilateral ties
- Pakistan angle: India’s foreign policy community can’t shake off the Pakistan prism in viewing London.
- To be sure, London’s advocacy of Pakistan has always irritated Delhi.
- Instead of complaining about London’s South Asian policy, Delhi now simply ignores London’s claims for a special role in India’s political disputes with Pakistan.
- By focusing on the positive, Delhi is betting it can reduce the traditional negative elements in the engagement with the UK.
- At the same time, Delhi recognises the enormous strategic possibilities with Britain and is willing to invest political capital to build on those synergies.
- Meanwhile, the steady relative decline of Pakistan — its economy is now about a tenth of India’s — and Delhi’s deepening strategic partnership with Washington are also encouraging London to rethink its past approach to the Subcontinent.
- India is fully conscious of UK’s enduring global salience.
- External Affairs Minister Subrahmanyam Jaishankar has often highlighted Britain’s continuing weight in the world as the fifth-largest economy, a permanent member of the UN Security Council, a major financial centre, and a leading hub of higher education and technology.
- Britain also enjoys a global maritime reach and a measure of political influence across the world.
Possibilities for partnership in the technological domain
- While a trade agreement between Delhi and London is said to be imminent, it is in the technological domain that the prospects are immense but under-explored.
- There is insufficient awareness in India’s strategic community of the British moves to put science and technology at the very heart of its political, economic, security and foreign policies.
- London announced a raft of measures this year starting with a major report on “Global Britain in a Competitive Age: An Integrated Review of Security, Defence, Development, and Foreign Policy”.
- One of the broad themes stand out from these initiatives, which is forming a coalition of like-minded countries.
- London wants to build a coalition of like-minded countries to reshape the global governance of technology.
- This includes strengthening technological ties with the traditionally close partners in the Anglosphere — US, Canada, Australia, and New Zealand — as well as other partners like Japan and India.
- All these elements of British policy mesh with India’s own economic, political, and security interests.
- The British technology initiatives are also aligned with the technological agenda of the Quad — or the Quadrilateral forum that brings together Australia, India, Japan, and the US.
Consider the question “In India’s partnership with the UK, it is the technological domain where prospects are immense but underexplored. Comment.”
Conclusion
For Delhi, the essence of the new alliance with Britain is fourfold — generate domestic prosperity, enhance national security, climb up the global technology hierarchy, and contribute to the construction of a free, open, and democratic global technological order.
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Back2Basics: Major themes of the policy report on “Global Britain in a Competitive Age”
- [1] Leverage technology to “level up” the regional and social inequalities in Britain.
- [2] Ensure Britain’s privileged position as a leading science power.
- [3] Focus on technological innovation to drive Britain’s future economic growth.
- [4] Build internal security resilience against new technological threats.
- [5] Modernise the intelligence apparatus with the help of new technologies.
- [6] Integrate technology into the national defence strategy as new capabilities like AI become as consequential as battle-tanks, ships and fighter jets.
- [7] Project technological power to counter malevolent actors in the international system.
- [8]A coalition of like-minded countries.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: UNCTAD
Mains level: Paper 3- Opportunities for India in post-Pandemic world
Context
The COVID-19 pandemic has profoundly impacted lives and livelihoods across the world. Governments, global institutions, industry, academia and non-profit organisations around the world have joined hands to tackle the global challenge and help countries rebuild their economies.
Criticality of international cooperation and role for India
- The novel coronavirus pandemic has once again highlighted the criticality of international cooperation in combating current and future challenges.
- Areas of cooperation: Key among these include economic growth, building competitiveness of the investment climate, ensuring sustainable development paths and adapting to technology acceleration.
- Strengthening global partnership: Building resilience to cope with the threats posed by pandemics and other man-made and natural disasters has necessitated strengthening global partnerships now more than ever.
- Global partnerships help in building mutual trust and understanding by agreeing upon common rules and standards and sharing of best practices.
Areas to focus on
[1] Challenge of long term sustainability of growth process
- While the world economy is rebounding strongly, the long-term sustainability of the growth process needs to be strengthened.
- Exit from the massive stimulus packages itself may pose risks of economic and financial instability.
[2] Challenges of supply chain management:
- The pandemic severely disrupted global supply chains and set the global trade trajectory on a downward path.
- Even as the world emerges from the pandemic, facilitating medical supplies and essentials will continue to remain a top priority and for this, supply chains will need to be kept flowing.
- For this year, the United Nations Conference on Trade and Development (UNCTAD) indicates an increase of 22.4% in the value of global merchandise trade compared with 2020.
- World trade is expected to stand about 15% higher than before the COVID-19.
- FDI flows in developing economies also increased significantly, totalling $427 billion in the first half of 2021.
- Cooperation on trade facilitation for enhancing open and transparent markets, technical assistance and reduction of complex process and arrangements must be promoted.
[3] Increasing competitiveness
- Competitiveness will be key in facilitating growth and inclusive development.
- New opportunities and avenues across potential high growth sectors such as manufacturing and start-ups must be leveraged.
- An ecosystem of entrepreneurship and innovation with targeted policies and interventions will contribute to enhancing productivity and generating employment.
[4] Structural changes with the emergence of digital economy
- Certain structural changes are likely to become permanent in the future and this is especially true of the digital economy
- Equitable adaptation: The rise of telemedicine, remote work and e-learning, delivery services, etc. necessitates equitable adaptation to advanced technologies and tools, building robust infrastructure, and occupational transitions.
- Skill development and worker training, investments in education and vocational training, and capacity building would be some key areas of focus for filling technology gaps and nurturing new and existing talent.
- Investment in innovation: At the same time, investments in innovation will be crucial, especially during a crisis.
[5] Climate change
- Matter of urgency: Climate change has now acquired urgency from policymakers around the world, as seen in the recent COP26 at Glasgow.
- International alliances and cooperation on building sustainable solutions, green technology, resource efficiency, sustainable finance, etc., must be promoted to fast-track meeting the sustainable development goals and for ensuring all-round development.
Opportunities for India
- Attaining faster growth path: India’s recent reforms, role in combating the pandemic, and startup vibrancy, among other factors, have attracted global attention and can help it attain a faster growth path, provided its integration with the world economy and trade gains strategic intensity.
- Reliable and trusted player: With multiple strategic shifts, India’s role as a reliable and trusted player in the comity of nations stands enhanced.
Way forward
- In the post-pandemic world, it will be critical for India to improve on its investment climate and systematically target its export capabilities across sectors and regions.
- Ease of doing business and new free trade agreement with major markets will help it integrate closely with the world through trade and investment partnerships.
Conclusion
The time for India is here and it must leverage international partnerships for ensuring a robust and sustained economic growth path.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Semiconductor chip manufacturing in India
Context
India is aiming to manufacture silicon semiconductor chips.
Efforts to set up chip fabrication plant
- India has intensified efforts to set up a semiconductor fabrication plant with the help of Taiwan, the market leader.
- For this the government is investing over $7.5 billion.
- The Tata Group is in talks with three States — Tamil Nadu, Telangana and Karnataka — to invest over $300 million to set up a semiconductor manufacturing facility.
- In 2014, NASSCOM wanted to promote a National Technology Corridor along coastal A.P. stretching through the Visakhapatnam, Rajahmundry and Vijayawada region.
- Given the abundance of water, sand (raw material for making silicon ingots), road, rail, ports and airport connectivity, the industry body wanted to push and promote the design and manufacturing of electronic chips.
Challenges
- IP and design: While welcoming such moves by the government and technology experts, local players in the segment say that chip making itself will not be enough.
- Other aspects such as designing and Intellectual Property are required to make a mark.
- Designing is what brings value to the chips.
- If the Intellectual Property lies with the foreign entity, we end up manufacturing the basic material which does not serve the purpose.
- Need to promote SoCs: Rather, we need an ecosystem to promote SoCs (System on a Chip) which makes more sense.”
- There are several firms in India which are now making SoCs, which is a good sign.
- Connect related industries: The bigger challenge and immediate need for the Indian government is to connect related industries in India to create the ecosystem, industry players say.
Consider the question “What are the challenges India may face as it aims to manufacture silicon semiconductor chips?”
Conclusion
The initiative is an uphill task as many factors need to come together for India to make a mark in the niche chip making and designing industry. Also, upcoming firms should be able to sustain themselves in the market when subsidies from the government are withdrawn.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: IMBL, EEZ, UNCLOS
Mains level: UNCLOS and the chinese deterrence
India remains committed to promoting a free, open and rules-based order rooted in international law and undaunted by coercion, the Centre informed Parliament while reiterating support for the United Nations Convention on the Law of the Sea (UNCLOS).
Background of UNCLOS
- UNCLOS replaces the older ‘freedom of the seas’ concept, dating from the 17th century.
- According to this concept, national rights were limited to a specified belt of water extending from a nation’s coastlines, usually 3 nautical miles (5.6 km; 3.5 mi).
- This was considered according to the ‘cannon shot’ rule developed by the Dutch rulers.
About UNCLOS
- UNCLOS is sometimes referred to as the Law of the Sea Convention or the Law of the Sea treaty.
- It came into operation and became effective from 16th November 1982.
- It defines the rights and responsibilities of nations with respect to their use of the world’s oceans, establishing guidelines for businesses, the environment, and the management of marine natural resources.
- It has created three new institutions on the international scene :
- International Tribunal for the Law of the Sea,
- International Seabed Authority
- Commission on the Limits of the Continental Shelf
Note: UNCLOS does not deal with matters of territorial disputes or to resolve issues of sovereignty, as that field is governed by rules of customary international law on the acquisition and loss of territory.
Major conventions:
There had been three major conferences of UNCLOS:
- UNCLOS I: It resulted in the successful implementation of various conventions regarding Territorial Sea and Contiguous Zones, Continental Shelf, High Seas, Fishing Rights.
- UNCLOS II: No agreement was reached over breadth of territorial waters.
- UNCLOS III: It introduced a number of provisions. The most significant issues covered were setting limits, navigation, archipelagic status and transit regimes, exclusive economic zones (EEZs), continental shelf jurisdiction, deep seabed mining, the exploitation regime, protection of the marine environment, scientific research, and settlement of disputes.
The convention set the limit of various areas, measured from a carefully defined baseline.
These terminologies are as follows:
(1) Baseline
- The convention set the limit of various areas, measured from a carefully defined baseline.
- Normally, a sea baseline follows the low-water line, but when the coastline is deeply indented, has fringing islands or is highly unstable, straight baselines may be used.
(2) Internal waters
- It covers all water and waterways on the landward side of the baseline.
- The coastal state is free to set laws, regulate use, and use any resource. Foreign vessels have no right of passage within internal waters.
- A vessel in the high seas assumes jurisdiction under the internal laws of its flag State.
(3) Territorial waters
- Out to 12 nautical miles (22 km, 14 miles) from the baseline, the coastal state is free to set laws, regulate use, and use any resource.
- Vessels were given the Right of Innocent Passage through any territorial waters.
- “Innocent passage” is defined by the convention as passing through waters in an expeditious and continuous manner, which is not “prejudicial to the peace, good order or the security” of the coastal state.
- Fishing, polluting, weapons practice, and spying are not “innocent”, and submarines and other underwater vehicles are required to navigate on the surface and to show their flag.
- Nations can also temporarily suspend innocent passage in specific areas of their territorial seas, if doing so is essential for the protection of their security.
(4) Archipelagic waters
- The convention set the definition of “Archipelagic States”, which also defines how the state can draw its territorial borders.
- All waters inside this baseline are designated “Archipelagic Waters”.
- The state has sovereignty over these waters mostly to the extent it has over internal waters, but subject to existing rights including traditional fishing rights of immediately adjacent states.
- Foreign vessels have right of innocent passage through archipelagic waters, but archipelagic states may limit innocent passage to designated sea lanes.
(5) Contiguous zone
- Beyond the 12-nautical-mile (22 km) limit, there is a further 12 nautical miles (22 km) from the territorial sea baseline limit, the contiguous zone.
- Here a state can continue to enforce laws in four specific areas (customs, taxation, immigration, and pollution) if the infringement started or is about to occur within the state’s territory or territorial waters.
- This makes the contiguous zone a hot pursuit area.
(6) Exclusive economic zones (EEZs)
- These extend 200 nm from the baseline.
- Within this area, the coastal nation has sole exploitation rights over all natural resources.
- In casual use, the term may include the territorial sea and even the continental shelf.
(7) Continental shelf
- The continental shelf is defined as the natural prolongation of the land territory to the continental margin’s outer edge, or 200 nautical miles (370 km) from the coastal state’s baseline, whichever is greater.
India and UNCLOS
- As a State party to the UNCLOS, India promoted utmost respect for the UNCLOS, which established the international legal order of the seas and oceans.
- India also supported freedom of navigation and overflight, and unimpeded commerce based on the principles of international law, reflected notably in the UNCLOS 1982.
- India is committed to safeguarding maritime interests and strengthening security in the Indian Ocean Region (IOR) to ensure a favorable and positive maritime environment.
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From UPSC perspective, the following things are important :
Prelims level: Q-Commerce Model
Mains level: E-commerce boom in India
Online grocer Grofers has rebranded itself “Blinkit”, in line with its new focus on “quick commerce”, which essentially involves delivering customer orders much faster than it does currently.
Q-Commerce Model
- Q-commerce (‘quick commerce’) – sometimes used interchangeably with ‘on-demand delivery’ and ‘e-grocery’ – is e-commerce in a new, faster form.
- It combines the merits of traditional e-commerce with innovations in last-mile delivery.
- The premise is largely the same, with speed of delivery being the main differentiator. Delivery is not in days but minutes – 30 or less, to be competitive.
- This has in turn expanded the breadth of what individuals can order, with perishable goods – like groceries – being a large niche q-commerce companies speak to.
- It tends to focus on the micro – smaller quantities of fewer goods.
Features of this model
- Countering pandemic: The supply chain disruptions triggered by the Covid-19 pandemic led to the emergence of a new sub-vertical in the online grocery segment.
- Quickest delivery: It is the unique selling proposition (USP) of which was the promise of delivery within 10-30 minutes of ordering.
- Micro-warehousing : The focus of most of these ventures is on setting up micro-warehouses located closer to the point of delivery, and of restricting stocks of high-demand items.
Back2Basics: Marketplace and Inventory-Based Model
(1) Marketplace Model
- It provides an IT platform by an e-commerce entity on a digital & electronic network to act as a facilitator between the buyer and seller. Ex. India Mart, Amazon, Flipkart.
- The e-commerce firm does not directly or indirectly influence the sale price of goods or services and is required to offer a level playing field to all vendors.
(2) Inventory-Based Model
- Inventory based model of e-commerce means an e-commerce activity where the inventory of goods and services is owned by an e-commerce entity and is sold to the consumers directly.
- Ex. Alibaba
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From UPSC perspective, the following things are important :
Prelims level: NBFCs
Mains level: Co-Lending and associated issues
A November 2020 decision by the RBI to permit banks to “co-lend with all registered NBFCs based on a prior agreement” has led to unusual tie-ups between the banks and companies.
The ‘Co-Lending Model’
- In September 2018, the RBI had announced “co-origination of loans” by banks and Non-Banking Financial Companies (NBFCs) for lending to the priority sector.
- The arrangement entailed joint contribution of credit at the facility level by both the lenders as also sharing of risks and rewards.
- Subsequently, based on feedback from stakeholders, the RBI allowed the lenders greater operational flexibility, while requiring them to conform to regulatory guidelines.
- The primary focus of the revised scheme, rechristened as ‘Co-Lending Model’ (CLM), was to “improve the flow of credit to the unserved and underserved sector of the economy.
Repercussions of Co-Lending
(1) Bank-NBFC tie-ups at indiscriminate scale
- Several banks have entered into co-lending ‘master agreements’ with NBFCs, and more are in the pipeline.
- SBI, the country’s largest lender, signed a deal with Adani Capital, a small NBFC of a big corporate house, for co-lending to farmers to help them buy tractors and farm implements.
(2) Greater risk in co-lending
- NBFCs are required to retain at least a 20 per cent share of individual loans on their books.
- This means 80 per cent of the risk will be with the banks — who will take the big hit in case of a default.
(3) Corporates in banking
- While the RBI hasn’t officially allowed the entry of big corporate houses into the banking space, NBFCs — mostly floated by corporate houses — were already accepting public deposits.
- They now have more opportunities on the lending side through direct co-lending arrangements.
Back2Basics: Non-Banking Financial Company (NBFC)
- An NBFC is a company incorporated under the Companies Act 2013 or 1956.
- According to section 45-I (c) of the RBI Act, a Non–Banking Company carrying on the business of a financial institution will be an NBFC.
- It further states that the NBFC must be engaged in the business of Loans and Advances, Acquisition of stocks, equities, debt etc issued by the government or any local authority or other marketable securities.
NBFC business:
The NBFC business does not include business whose principal business is the following:
- Agricultural Activity
- Industrial Activity
- Purchase or sale of any goods excluding securities
- Sale/purchase/construction of any immovable property – Providing of any services
Difference between Banks and NBFCs:
- NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:
- NBFC cannot accept demand deposits;
- NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
- Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in the case of banks.
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From UPSC perspective, the following things are important :
Prelims level: Online Lokpal
Mains level: Lokpal and Lokayuktas Act, 2013
The (first) Chairperson, Lokpal of India, Justice Pinaki Chandra Ghose has inaugurated’ a digital Platform for Management of Complaints called ‘Lokpal-Online’.
Lokpal-Online
- Lokpal-Online is an end-to-end digital solution for the management of complaints against public servants filed under the Lokpal and Lokayuktas Act, 2013.
- It is a web-based facility, which will quicken the disposal of complaints in an accountable, transparent and efficient manner with benefits to all stakeholders.
- It facilitates handling of complaints during the complete lifecycle of the Complaint, right from its filing to the final disposal.
- It aims to bring more transparency and efficiency to the complaint handling mechanism.
Notable features of Online-Lokpal
- Convenience to complainants for filing complaints online from anywhere anytime
- Information to the complainant about action on the complaint at every stage through e-mails and SMS
- Facility to the complainant to ascertain the status of complaint at anytime
- Identity of the complaint is kept confidential
- The CVC, CBI and other inquiry agencies can upload their reports directly on the ‘Lokpal-Online’ platform.
- Reminders to inquiry agencies through e-mails and SMS
- Generation of analytical reports as per requirement
Back2Basics: Lokpal
- The Lokpal, the apex body to inquire and investigate graft complaints against public functionaries, came into being with the appointment of its chairperson and members in March 2019.
- In March 2019, former SC judge Justice Pinaki Chandra Ghose was selected as the first head of the Lokpal.
Lokpal and Lokayuktas Act, 2013
- The Lokpal Act 2013 is anti-corruption legislation that seeks to provide for the establishment of the institution of Lokpal.
- It seeks to inquire into allegations of corruption against certain important public functionaries including the PM, cabinet ministers, MPs, Group A officials of the Central Government, etc.
- The Bill was introduced in the parliament following massive public protests led by anti-corruption crusader Anna Hazare and his associates.
- The Bill is one of the most widely discussed and debated Bills in India in recent times.
Its history
- The term Lokpal was coined in 1963 by Laxmi Mall Singhvi, a member of parliament during a parliamentary debate about grievance mechanisms.
- The Administrative Reforms Commission (ARC) headed by Morarji Desai submitted an interim report on “Problems of Redressal of Citizen’s Grievances” in 1966.
- In this report, ARC recommended the creation of two special authorities designated as ‘Lokpal’ and ‘Lokayukta’ for a redress of citizens’ grievances.
- Maharashtra was the first state to introduce Lokayukta through The Maharashtra Lokayukta and Upa-Lokayuktas Act in 1971.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Judicial pendency
Context
Recently, the Chief Justice of India, in his own mild way, protested against the attack on judges. One can understand his pain and agony, but he too knows that judges do not, and should not live in ivory towers.
Questioning and analysing actions of the judiciary
- As the judiciary is one of the pillars of democracy, and the Constitution entrusts judges with the task of protecting the constitutional rights of the people, especially the right to life and liberty, the consumer of justice has every right, and would be fully justified in critically examining, and commenting upon each and every word of the judges spoken or written, howsoever unpalatable it may be.
- It appears that it is in the above spirit that MP Shashi Tharoor, speaking in Parliament on the High Court and Supreme Court Judges (Salaries and Conditions of Service) Amendment Bill said that the judiciary had failed to stem the tide of militant majoritarianism.
- He alleged that the “judiciary’s inaction almost always favours those in power”.
- He has raised pertinent questions, and has brought out the glaring failings of the judiciary in matters concerning the protection of the constitutional rights of citizens.
- Pendency of important cases such as the abrogation of Article 370 of the Constitution, the Citizenship Amendment Act, electoral bonds, and many petitions under the preventive detention laws highlights this issue.
Issues in functioning of collegium system
- As regards the functioning of the collegium system, judges are transferred without any seeming justification, and in some cases re-transferred, justifying neither their initial transfer nor the re-transfer.
- Some elevations of judges raise eyebrows, while some are ignored.
- Should the collegium not be more transparent than it has been in the past in the matter of the elevation and transfers of judges?
Conclusion
Judges cannot be shielded from citizens’ questions. After all, as a consumer of justice, the citizen has a right to know.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Regulating cryptocurrencies and challenges ahead
Context
The government has decided to introduce a bill that seeks to prohibit all private cryptocurrencies in India.
Background of the bill
- In 2018, the three-judge bench of the Supreme Court set aside the RBI circular that prevented crypto exchanges from dealing with the formal financial system on grounds of proportionality.
- Purpose of the bill: The current bill now attempts to define the rules of the game so that the RBI, tax authorities, SEBI and other agencies have much better legal guidance in deciding the course of action with respect to VCs in their respective domains.
- The rules can, therefore, range from a ban to controlled interaction with the formal financial system.
Issues involving cryptos
- Issues involving cryptos can be seen at three levels, each of which is equally important.
- The first is its impact on sovereignty.
- The second is its interaction with financial markets.
- Third is the value proposition that the entire concept of crypto brings to the economic debate.
- Incorporation of price stability mechanism: Some of the variants of cryptos such as the stable coin clearly indicate that these are attempts to create systems of money that incorporate features of price stability that imply a parallel monetary system.
- Diluting the sovereign function of money creation: Unrestricted co-opting of VC clearly dilutes the sovereign function of money creation, clearly impacting the revenues of RBI.
- Concerns pertaining to money laundering, terrorist threats and narco-trading also come under this category given the high value and anonymity offered by cryptocurrencies.
Challenges in cryptocurrencies interaction with the formal system
- As of now cryptos have been recognised as assets or commodities and as a medium of exchange. Their role as units of account or legal tender is rather limited.
- They may offer a store of value given their short supply. From a banking point of view, certain issues do arise.
- Since VCs are not legal tenders, they cannot be used in the discharge of debt.
- Thus, banks cannot accept VCs to close a loan account.
- Second, can banks lend in fiat by accepting VCs as collateral assuming the VC is an asset?
- Incompatible with the fractional system of banking: At a deeper level, the very idea of VCs and the way they are designed are incompatible with the fractional system of banking.
- The fluctuations in interbank liquidity require that money supply adjusts to system requirements.
- If money supply undergoes compositional change in favour of VCs, this ability will be curtailed thus accentuating the crisis.
- In financial markets, crypto such as ICOs bring another set of issues.
- The ICO is a creature that disrupts the very concept of limited liability in corporate finance.
- ICOs are, at times, designed in such a way that the beneficial owner identity is concealed.
- SEBI is yet to convey a position on various issues surrounding this idea.
- Issues with making VCs medium of exchange: VCs have emerged as a medium of exchange and many countries have permitted VC ATMs.
- But how does this proposition fare given that considerable advances have been made in the payment systems domain in India.
- Is it worthwhile that additional competition is introduced in a market that is hyper-competitive?
- It will have impact on existing investments in mobile payment and UPI technology.
- Impact on poor states: It is well known that the Indian population exhibits significant behavioural divergences in their savings and credit behaviour across regions.
- Such wide behavioural changes have profound implications on bank strategies and product designs.
- In the past, there have been several instances of states having low per capita income being more prone to chit fund investments that have negatively impacted the savings of many poor households.
- The issue of consumer protection needs to be addressed and the current laws may have to be reviewed considering this innovation.
Conclusion
The bill must meet many important objectives. While there are obvious concerns of money laundering and benami transactions, there are equal concerns with respect to company laws, payment systems and banking, securities and other commercial laws.
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Back2Basics: About Stablecoin
- Stablecoins bridge the worlds of cryptocurrency and everyday fiat currency because their prices are pegged to a reserve asset like the U.S. dollar or gold.
- This dramatically reduces volatility compared to something like Bitcoin and results in a form of digital money that is better suited to everything from day-to-day commerce to making transfers between exchanges.
What is ICO?
- ICO stands for “initial coin offering,” and refers to a formerly popular method of fundraising capital for early-stage cryptocurrency projects.
- In an ICO, a blockchain-based startup mints a certain quantity of its own native digital token and offers them to early investors, normally in exchange for other cryptocurrencies such as bitcoin or ether.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Section 124A IPC
Mains level: Sedition law and Free speech
Law Minister has informed the Parliament that there is no proposal to scrap sedition from the IPC despite severe remarks by the Supreme Court about the chilling effect of the “colonial law” which suppresses the freedoms of ordinary people.
What does Section 124A of the IPC say?
- The section deals with the offence of sedition, a term that covers speech or writing, or any form of visible representation, which brings the government into hatred or contempt, or excites disaffection towards the government, or attempts to do so.
- It is punishable with three years in prison or a life term.
- “Disaffection”, it says, includes disloyalty and feelings of enmity.
- However, it also says expressing disapproval of government measures or actions, with a view to getting them changed by lawful means, without promoting hatred or disaffection or contempt towards the government will not come under this section.
What is its origin?
- Colonial past: Sedition was introduced in the penal code in 1870, a decade after the Indian Penal Code came into force.
- It was a colonial law directed against strong criticism of the British administration.
- Putting curb on Freedom fighters: Its most famous victims included Bal Gangadhar Tilak and Mahatma Gandhi.
- Gandhiji called it “the prince among the political sections of the IPC designed to suppress the liberty of the citizen”.
Is it constitutionally valid?
- Violative of FRs: Two high courts had found it unconstitutional after Independence, as it violated the freedom of speech and expression.
- Reasonable restrictions: The Constitution was amended to include ‘public order’ as one of the ‘reasonable restrictions’ on which free speech could be abridged by law.
- Kedar Nath Case: Thereafter, the Supreme Court, in Kedar Nath Singh v. State of Bihar (1962) upheld its validity.
Why the controversy now?
- Frequent use: In recent times, the resort to this section is seen as disturbingly frequent.
- Curbing dissent: Activists, cartoonists and intellectuals have been arrested under this section, drawing criticism from liberals that it is being used to suppress dissent and silence critics.
- Misuse for propaganda: Authorities and the police who invoke this section defend the measure as a necessary step to prevent public disorder and anti-national activities.
- Irrelevance: Many of them have also been detained under the National Security Act and UAPA.
What is being debated about it?
- Liberals and rights activists have been demanding the scrapping of Section 124A.
- It is argued that the provision is “overbroad”, i.e., it defines the offence in wide terms threatening the liberty of citizens.
- The Law Commission has also called for a reconsideration of the section.
- It has pointed that Britain abolished it more than a decade ago and raised the question of whether a provision introduced by the British to put down the freedom struggle should continue to be law in India.
- Some argue that a presumption of constitutionality does not apply to pre-constitutional laws as those laws have been made by foreign legislature or bodies.
What has the apex court observed?
- Justice D.Y. Chandrachud had flagged the indiscriminate use of the sedition law against people who aired their grievances about the government’s COVID management.
- People have been charged even for seeking help to gain medical access, equipment, drugs and oxygen cylinders, especially during the second wave of the pandemic.
- Justice U.U. Lalit, in his recent judgment, quashed a sedition case against a person for his alleged remarks about the PM and the Union Government.
Way forward
- The time is long past when the mere criticism of governments was sufficient to constitute sedition.
- The right to utter honest and reasonable criticism is a source of strength to a community rather than a weakness, the CJI has recorded.
Try answering this PYQ:
Q.With reference to Rowlatt Satyagraha, which of the following statements is/are correct?
- The Rowlatt Act was based on the recommendations of the ‘Sedition Committee’.
- In Rowlatt Satyagraha, Gandhiji tried to utilize the Home Rule League.
- Demonstrations against the arrival of Simon Commission coincided with Rowlatt Satyagraha.
Select the correct answer using the code given below:
(a) 1 only
(b) 1 and 2 only
(c) 2 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: Bank Deposit Insurance Programme
Mains level: Bank distress and failure
The PM has addressed depositors during a programme titled ‘Depositors First: Guaranteed Time-bound Deposit Insurance Payment up to ₹5 Lakh’.
Deposit Insurance Programme
- The bank savings are insured under the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act providing full coverage to around 98 per cent of bank accounts.
- Earlier, account holders had to wait for years till the liquidation or restructuring of a distressed lender to get their deposits that are insured against default.
- Last year, the government raised the insurance amount to Rs 5 lakh from Rs 1 lakh.
- Prior to that, the DICGC had revised the deposit insurance cover to Rs 1 lakh on May 1, 1993 — raising it from Rs 30,000, which had been the cover from 1980 onward.
What are new changes?
- Earlier, out of the amount deposited in the bank, only Rs 50,000 was guaranteed, which was then raised to Rs 1 lakh.
- Understanding the concern of the poor, understanding the concern of the middle class, we increased this amount to Rs 5 lakh.
- If a bank is weak or is even about to go bankrupt, depositors will get their money of up to Rs five lakhs within 90 days.
Significance of the scheme
- Earlier account holders could not access their own money for up to 8-10 years after financial stress at banks.
- The new changes would give confidence to depositors and strengthen the banking and financial system.
- Now, depositors can get insurance money within 90 days, without waiting for the eventual liquidation of the distressed banks.
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From UPSC perspective, the following things are important :
Prelims level: Role of Governors in State Universities
Mains level: Issues with role of Governor
A controversy has erupted in Kerala over the reappointment of a person as the Vice-Chancellor of Kannur University, with Governor saying he approved the decision against his “better judgment” as Chancellor.
Role of Governors in State Universities
- In most cases, the Governor of the state is the ex-officio chancellor of the universities in that state.
- Its powers and functions as the Chancellor are laid out in the statutes that govern the universities under a particular state government.
- Their role in appointing the Vice-Chancellors has often triggered disputes with the political executive.
A disputed case
- In Kerala’s case, the Governor’s official portal asserts that while as Governor he functions with the aid and advice of the Council of Ministers.
- While acting as Chancellor he acts independently of the Council of Ministers and takes his own decisions on all University matters.
- In marked contrast, the website of Rajasthan’s Raj Bhawan states that the “Governor appoints the Vice-Chancellor on the advice/ in consultation with the State Government”.
What about Central Universities?
- Under the Central Universities Act, 2009, and other statutes, the President of India shall be the Visitor of a central university.
- With their role limited to presiding over convocations, Chancellors in central universities are titular heads, who are appointed by the President in his capacity as Visitor.
- The VCs too are appointed by the Visitor from panels of names picked by search and selection committees formed by the Union government.
- The Act adds that the President, as Visitor, shall have the right to authorize inspections of academic and non-academic aspects of the universities and also to institute inquiries.
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From UPSC perspective, the following things are important :
Prelims level: 5G technology
Mains level: Issues with 5g rollout
The US Federal Aviation Administration (FAA) has issued directives to create a framework as well as gather more information about the potential effects of 5G on crucial aviation safety equipment.
What is 5G technology?
- 5G or fifth generation is the latest upgrade in the long-term evolution (LTE) mobile broadband networks.
- It mainly works in 3 bands, namely low, mid and high-frequency spectrum — all of which have their own uses as well as limitations.
Three bands of 5G
- The low band spectrum has shown great promise in terms of coverage and speed of internet and data exchange, the maximum speed is limited to 100 Mbps (Megabits per second).
- This means that while telcos can use and install it for commercial cellphones users who may not have specific demands for very high-speed internet, the low band spectrum may not be optimal for specialised needs of the industry.
- The mid-band spectrum, on the other hand, offers higher speeds compared to the low band but has limitations in terms of coverage area and penetration of signals.
- Telcos and companies, which have taken the lead on 5G, have indicated that this band may be used by industries and specialised factory units for building captive networks that can be moulded into the needs of that particular industry.
- The high-band spectrum offers the highest speed of all the three bands, but has extremely limited coverage and signal penetration strength.
- Internet speeds in the high-band spectrum of 5G have been tested to be as high as 20 Gbps (gigabits per second), while, in most cases, the maximum internet data speed in 4G has been recorded at 1 Gbps.
What is the issue?
- There is a threat of potential radar altimeter interference from 5G cellular in the 3700 MHz-3800 MHz frequency or the C-band.
- The 3700-4200 MHz band is close to the 4200 MHz-4400 MHz range used by aircraft radio altimeters.
Potential impacts
- Operations by aircraft including large jets could be limited or prohibited from using certain landing and navigation systems in places where there is scope for potential interference from new 5G cellular networks.
- The restrictions could be severe for smaller aircraft and helicopters.
- Overall, these could result in flight cancellations, delays or diversions in 46 places where these towers are, according to an aviation report.
What is the aircraft equipment that can be affected?
- The radio altimeter measures height (not altitude) of the aircraft above the surface immediately below the plane. It transmits a radio signal directly below.
- There are various other systems that depend on inputs from the radio altimeter — for example, predictive wind shear, ground proximity warning system, traffic collision avoidance system, and auto land.
- These effects are only when the aircraft is close to the ground, i.e. up to 2,500 ft above ground level (depending on the aircraft make).
- Any disturbance to internal radio altimeter readings caused by 5G or other equipment transmitting in frequency bands close to it can result in disastrous effects on crucial systems during approach/landing.
Impact of mobile phones
- 5G devices can interfere with aircraft altitude instruments and recommended that they should be turned off (or put to flight mode) during flight.
- Experts believe that electrical interference from a mobile phone could have been a factor in the crash of a small aircraft.
- The navigation system of the small aircraft could be disrupted by mobile phone signals.
- But up until now, there has been no evidence of a mobile phone having caused a crash.
What about the implications for India?
- Pilots in India are aware of the implications of 5G in the country.
- However, in India, 5G could be rolled out in the 3.2 GHz-3.6 GHz band, which may not have the potential to interfere with aircraft operations.
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From UPSC perspective, the following things are important :
Prelims level: Chaperone Protein
Mains level: NA
Chaperones are a functionally related group of proteins assisting protein folding in the cell under physiological and stress conditions.
What are Chaperones?
- DNA is a linear chain of nucleotides, portions of which are faithfully transcribed into linear messenger RNA.
- The message in this RNA is translated into strings of amino acids – proteins.
- Proteins need to take a precise three-dimensional shape to become functional entities.
- This protein folding does not happen all by itself, at least most of the time.
- A special bunch of proteins called molecular chaperones assist in correctly folding the protein.
Functions of chaperone proteins
- In biological systems, Chaperones play crucial roles.
- Many molecular chaperones belong to the class of “heat shock” proteins (or stress-response proteins).
- This is because whenever an organism is subjected to elevated temperatures – a heat shock – proteins in the system begin to lose their native shapes, and chaperones are produced in large quantities to restore order.
General need of chaperones
Chaperones are needed under physiological conditions too, for normal cellular function since misfolding of proteins can cause a number of diseases.
- Alpha-synuclein protein, present in neurons, is wrongly folded in Parkinson’s disease.
- Brains of Alzheimer’s patients have plaques formed from aggregates of amyloid beta-peptide.
- This accumulation of amyloid fibrils is toxic, leading to widespread destruction of neurons – a ‘neurodegenerative’ disorder.
- Aberrant folding of crystallins of the eye lens leads to cataracts.
Types of Chaperones
- Major chaperones in humans include HSP70, HSC70 and HSP90: the numbers express the size of the proteins in kilodaltons.
- In normal cells 1%–2% of all proteins present are heat shock proteins.
- This number rises threefold during stressful conditions.
HSC70: The molecular thermometer
- HSC70 appears to be more like a molecular thermometer, with an ability to sense cold temperatures.
- It is induced by heat, whereas HSC70 is always present at high levels in normal cells.
- This knowledge comes from the study of an intriguing set of disorders, exemplified by Familial Cold Autoinflammatory Syndrome (FCAS).
HSC70 and HSP90: Role in Cancer
- Cancer cells divide at a break-neck pace, and heat shock proteins are very important in maintaining the stressful cancerous state.
- An overabundance of heat shock proteins in cancer cells is an indicator of a poor prognosis. Cancerous cells accumulate mutations in proteins that would normally suppress tumours.
- HSP70 and HSP90 play the roles of villains, as they continue to fold the mutated proteins, thus allowing tumor progression.
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From UPSC perspective, the following things are important :
Prelims level: Buxa Tiger Reserve
Mains level: Success of Tiger Conservation
In a major success for tiger conservation, a photograph of a tiger was captured in a camera trap in West Bengal’s Buxa Tiger Reserve since 1998.
Locate all major tiger reserves in India.
Buxa Tiger Reserve
- Buxa Tiger Reserve is a tiger reserve in northern West Bengal, India, covering an area of 760 km2 (290 sq mi).
- In altitude, it ranges from 60 m in the Gangetic Plains to 1,750 m bordering the Himalayas in the north.
- Its northern boundary runs along the international border with Bhutan.
- The Sinchula hill range lies all along the northern side of BTR and the eastern boundary touches that of the Assam state.
Key features of BTR
- It is the easternmost extension of extreme bio-diverse North-East India and represents highly endemic Indo-Malayan region.
- The fragile “Terai Eco-System” constitutes a part of this reserve.
- The Phibsoo Wildlife Sanctuary of Bhutan is contiguous to the north of BTR.
- It serves as an international corridor for Asian elephant migration between India and Bhutan.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Legal basis for MSP
Context
Amid the demand for a guarantee of MSP, many commentators fail to understand the true spirit of the demand for a legal MSP.
How demand for legal backing for MSP is misinterpreted?
- Mandatory enforcement of price above MSP: The demand has been interpreted as a mandatory enforcement of trade in agricultural produce, including private trade to be necessarily at or above the MSP for that crop.
- Nationalisation of agricultural trade: Another interpretation is the nationalisation of agricultural trade whereby the government promises to buy all the crop produced at MSP.
- Commentators have been using these two interpretations to project large estimates of government expenditure needed to implement.
- They fail to understand the true spirit of the demand for a legal MSP.
Current nature of MSP
- It is not an income support program: By definition MSP is not an income support programme.
- Intervention to stabilise prices: It is designed to be used as government intervention to stabilise prices, to provide remunerative prices to farmers.
- Public procurement program to meet requirements of NFSA: Currently, it is no more than a public procurement programme to meet the requirements of the National Food Security Act (NFSA).
- Only rice and wheat procured: As against the official announcement of MSP for 23 crops, only two, rice and wheat are procured as these are distributed in NFSA.
Larger context of demand for legal backing to MSP
- Droughts and declining commodity prices: In addition to the twin droughts of 2014 and 2015, farmers have also suffered from declining commodity prices since 2014.
- Impact of demonetisation and GST: The twin shocks of demonetisation and hurried rollout of GST, crippled the rural economy, primarily the non-farm sector, but also agriculture.
- Impact of pandemic: The slowdown in the economy after 2016-17 followed by the pandemic has ensured that the situation remains precarious for majority of the farmers.
- Increased input prices: Higher input prices for diesel, electricity and fertilisers have only contributed to the misery.
- In this context, the demand for ensuring remunerative prices is only a reiteration of the promise by successive governments to implement the Swaminathan Committee report.
What should be the true nature of MSP?
- Intervene to stabilise price: A true MSP requires the government to intervene whenever market prices fall below a pre-defined level, primarily in case of excess production and oversupply or a price collapse due to international factors.
- It does not require the government to buy all the produce but only to the extent that creates upward price pressures in the market to stabilise prices at the MSP level.
Way forward
- Mechanism for market intervention: What is needed is a mechanism to monitor the prices.
- While such a mechanism already exists, a policy for requisite market intervention is missing.
- Use MSP as incentive to achieve nutritional security and reduce import dependence: MSP can also be an incentive price for many of the crops which are desirable for nutritional security such as coarse cereals, and also for pulses and edible oils for which we are dependent on imports.
- Include pulses, edible oil and millets in PDS: Despite repeated demands from food activists, there has not been any progress in including pulses, edible oils and millets in PDS.
- A guaranteed MSP then is nothing more than restoring the true spirit and functions of MSP, applicable to a broad range of crops and all sections of farmers.
Issues
- The current MSP regime has no relation to prices in the domestic market.
- Its sole raison d’être is to fulfil the requirements of NFSA making it effectively a procurement price rather than an MSP.
- It is basically a lack of understanding of what agriculture needs and above all a lack of political commitment to ensure remunerative prices to farmers.
Conclusion
An efficient and functional MSP is certainly the least that the government can do to protect a sector which remains the largest employer and a refuge for the poor and vulnerable as was seen during the pandemic.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Challenges to GST
Context
Seen purely from a revenue point of view and as a fiscal policy tool, India’s GST is still on a rocky road.
Background
- The GST was launched by India on the midnight of July 1, 2017.
- Benefits of GST: Hailed as a landmark reform in India’s tax history, it was expected to improve tax-GDP ratio, end tax cascading, enhance efficiency, competitiveness, growth, and ensure lower prices.
- Fiscal federalism: It was also projected as a watershed in India’s fiscal federalism.
- the States have forgone a substantial part of their own tax revenue.
- States were in turn guaranteed a GST compensation assuring 14% growth in their GST revenue during the initial five years.
- India’s GST architecture: India’s GST architecture is built on the firm foundations of a GST Council and the GST Network (GSTN).
- GST Council as due federal process: The first is the key decision-making body, chaired by the Union Finance Minister with a Minister of State in charge of Finance and the Finance Ministers of States as members.
- This is envisaged as a due federal process to protect the interests of the States.
Unresolved issues
[1] Revenue neutrality not achieved
- India’s GST paradigm stands on two key pillars: revenue neutrality and GST compensation for the States.
- The assured revenue neutrality remains a mirage and many States have experienced a declining tax-GDP ratio.
- Decline in tax to GDP ratio of state: In the case of major 18 States, the ratio of own tax revenue to GDP has declined.
- While the share of the Centre in total GST increased by 6%, that of States put together lagged behind with only a 4.5% increase.
- Stark differences between the Revenue Neutral Rates (RNR) for the producing States and consumption State have been observed. States producing exempted food grains also lost out.
- Since the rates were lower under GST vis-à-vis the VAT regime, revenue neutrality was not adhered ab initio.
- The problems were compounded with massive evasion following the dismantling of check posts, and later on fake invoices, that grew by leaps and bounds.
- Experience of other countries: The South African experience illustrates how zero-rating and large exemptions have defeated revenue goals.
- Canadian experience shows that GST could be improved by limiting zero rating, tax-exemptions and harmonising tax rates.
- The resilience of the economy at the time of rolling out of GST is critical for its wider reception as the Australian experience shows.
[2] Not conducive to co-operative federalism
- While the States collectively forewent 51.8% of their total tax revenue, the Centre surrendered only 28.8%.
- Yet, GST is shared equally between the Centre and States despite two expert committees recommended for a higher share for the States.
- Given the revenue neutrality failure and the host of other issues, many of the States are left with no option except to depend on GST compensation.
- This is not conducive to sustainable co-operative federalism.
[3] Need for revenue sharing formula for IGST
- Although IGST is a key source of revenue for many of the States, the clearing house mechanism and the process therein remains unknown territory.
- It was pointed out that GST is discriminatory to manufacturing States, indicating the need for a revenue sharing formula that duly incentivises exporting States by sharing IGST revenue among three parties instead of two.
[4] Other issues
- Swift functioning of Input tax credit: The Malaysian experience demonstrates the need for swift and transparent functioning of the input tax credit system through a flawless IT infrastructure.
- We operate in an almost information vacuum especially with respect to IGST along with several glitches in the digital architecture.
- GSTN is now in the doldrums.
- Data monopoly: It neither makes effective use of the massive and invaluable data being generated nor shares them to enable others to make use of them.
- Such practice in “data monopoly” was a fact of history in India’s statistical system and has to go sooner rather than later.
- Australia, having several similarities with India, in terms of Centre and the subnational units, and destination-based, multi-stage tax with input credit provisions, has not been revenue-buoyant.
- It is a matter for consideration whether widening exemptions and the replacing of income-tax by GST in the case of small and medium enterprises are advisable measures in the Indian context.
Consider the question “What are the challenges facing the GST in India? What India can learn from the experience of other countries’ experience.”
Conclusion
Despite many years of efforts in evolving an Indianised GST system and over 50 months of adjustments with over a thousand notifications, with accompanying uncertainties in the first year and the novel coronavirus pandemic and the lockdown still in the saddle, GST continues to be an unfinished agenda. But how far and how long?
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