Note4Students
From UPSC perspective, the following things are important :
Prelims level: Consumer Confidence Survey (CCS)
Mains level: Read the attached story
The highlights of the Consumer Confidence Survey (CCS) were recently released by the RBI pointing to some all-time lows.
Consumer Confidence Survey (CCS)
- The RBI conducts this survey every couple of months by asking households in 13 major cities — such as Ahmedabad, Bhopal, Guwahati, Patna, Thiruvananthapuram — about their current perceptions and future expectations on a variety of economic variables.
- These variables include the general economic situation, employment scenario, overall price situation, own income and spending levels.
- Based on these specific responses, the RBI constructs two indices: the Current Situation Index (CSI) and the Future Expectations Index (FEI).
- The main variables of the survey are- Economic situation, Employment, Price Level, Income and Spending.
- The CSI maps how people view their current situation (on income, employment etc.) vis a vis a year ago. The FEI maps how people expect the situation to be (on the same variables) a year from now.
- By looking at the two variables as well as their past performance, one can learn a lot about how Indians have seen themselves fairing over the years.
Why does it matter?
- The CCS is a survey that indicates how optimistic or pessimistic consumers are regarding their expected financial situation.
- If the consumers are optimistic, spending will be more, whereas if they are not so confident, then their poor consumption pattern may lead to recession.
What was the main finding?
- As Chart 1 shows, the CSI has fallen to an all-time low of 48.5 in May.
- An index value of 100 is crucial here, as it distinguishes between positive and negative sentiment.
- At 48.5, the current consumer sentiment is more than 50 points adrift from being neutral — the farthest it has ever been. It is important to note that even a year ago, the CSI had hit an all-time low.
- The FEI moved to the pessimistic territory for the second time since the onset of the pandemic.
What are the factors responsible for pulling down the CSI and FEI respectively?
- The RBI states that CSI is being pulled down because of falling consumer sentiments on the “general economic situation” and “employment” scenario.
- So, on the “general economic situation”, RBI finds that there has been a largely secular decline in both current consumer sentiment and future expectations since PM Modi’s re-election in 2019.
- What is equally worse is that more people expect the employment situation to worsen a year from now — that is why the one year ahead expectation line is below the zero marks.
Big takeaways
- These data layout the tricky challenge facing the Indian economy.
- If the government’s strategy for fast economic growth — expecting the private sector to lead India out of this trough by investing in new capacities — is to succeed, then consumer spending (especially on non-essentials) has to go up sharply.
- But for that to happen, household incomes have to go up; and for that to happen, the employment prospects have to brighten; and for that to happen, again, companies have to invest in new capacities.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Autonomous districts, Sixth Schedule
Mains level: Sixth Schedule of Indian constitution
The Rengma Nagas in Assam have written to Union Home Minister demanding an autonomous district council amid a decision by the Central and the State governments to upgrade the Karbi Anglong Autonomous Council (KAAC) into a territorial council.
Karbi Anglong Autonomous Council
- KAAC is an autonomous district council in the state of Assam, India for the development and protection of tribals living in area namely Karbi Anglong and West Karbi Anglong district.
- The council is constituted under the Sixth Schedule of the Constitution of India and administratively functions under the Government of Assam.
Answer this PYQ in the comment box:
Q.The Government enacted the Panchayat Extension to Scheduled Areas (PESA) Act in 1996. Which one of the following is not identified as its objective?
(a) To provide self-governance
(b) To recognize traditional rights
(c) To create autonomous regions in tribal areas
(d) To free tribal people from exploitation
What are such Autonomous Council?
- The Sixth Schedule of the Constitution of India allows for the formation of autonomous administrative divisions which have been given autonomy within their respective states.
- Most of these autonomous district councils are located in North East India but two are in Ladakh, a region administered by India as a union territory.
- Presently, 10 Autonomous Councils in Assam, Meghalaya, Mizoram and Tripura are formed by virtue of the Sixth Schedule with the rest being formed as a result of other legislation.
Powers and competencies
Under the provisions of the Sixth Schedule, autonomous district councils can make laws, rules and regulations in the following areas:
- Land management
- Forest management
- Water resources
- Agriculture and cultivation
- Formation of village councils
- Public health
- Sanitation
- Village and town level policing
- Appointment of traditional chiefs and headmen
- Inheritance of property
- Marriage and divorce
- Social customs
- Money lending and trading
- Mining and minerals
Judicial powers
- Autonomous district councils have powers to form courts to hear cases where both parties are members of Scheduled Tribes and the maximum sentence is less than 5 years in prison.
Taxation and revenue
- Autonomous district councils have powers to levy taxes, fees and tolls on; building and land, animals, vehicles, boats, entry of goods into the area, roads, ferries, bridges, employment and income and general taxes for the maintenance of schools and roads.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Election Commission
Mains level: Appointment in constitutional bodies
President Ram Nath Kovind on Tuesday appointed of Anup Chandra Pandey, a retired Uttar Pradesh cadre IAS officer, to the post of Election Commissioner.
Election Commission of India (ECI)
- The ECI is a constitutional body responsible for administering elections in India according to the rules and regulations mentioned in the Constitution of India.
- It was established on January 25, 1950.
- The major aim of the election commission of India is to define and control the process for elections conducted at various levels, Parliament, State Legislatures, and the offices of the President and Vice President of India.
- It can be said that the Election Commission of India ensures the smooth and successful operation of the democracy.
Functions
According to Article 324 of the Indian Constitution:
- the ECI has superintendence, direction, and control of the entire process for conduct of elections to Parliament and Legislature (state legislative assembly & state legislative council) of every State and to
- the offices of President and Vice-President of India
Answer this PYQ in the comment box:
Q.Consider the following statements:
- The Election Commission of India is a five-member body.
- Union Ministry of Home Affairs decides the election schedule for the conduct of both general elections and bye-elections.
- Election Commission resolves the disputes relating to splits/mergers of recognized political parties.
Which of the statements given above is/are correct? (CSP 2017)
(a) 1 and 2 only
(b) 2 only
(c) 2 and 3 only
(d) 3 only
Its composition
- Initially, the commission had only a Chief Election Commissioner. Presently, it consists of a Chief Election Commissioner and two Election Commissioners.
- For the first time, two additional Commissioners were appointed on 16th October 1989 but they had a very short term till 1st January 1990.
- Afterward, on 1st October 1993, two additional Election Commissioners were appointed.
- The concept of a multi-member Commission has been in operation since then, with decision-making power by majority vote.
Appointment & Tenure of Commissioners
- The President has the power to select Chief Election Commissioner and Election Commissioners.
- They have a tenure of six years, or up to the age of 65 years, whichever is earlier.
- They have the same status and receive pay and perks as available to Judges of the Supreme Court of India.
- The CEC can be removed from office only through accusation by Parliament.
- The election commissioner or a regional commissioner shall not be removed from office except on the recommendation of the CEC.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CARA
Mains level: Child Adoption
The Supreme Court has directed the States and Union Territories (UTs) to take stringent action against private individuals and NGOs who invite people to illegally adopt children orphaned by the COVID-19 pandemic.
Also read
Legal issues involved in adoption pleas for Covid-19 orphans
SC ruling against illegal adoption
- The court ordered the government to step in and prevent private entities from revealing the identities of COVID-19 affected children, usually on social media and inviting people to adopt them.
- No adoption of affected children should be permitted contrary to the provisions of the Juvenile Justice Act, 2015 the court-ordered.
- It was illegal to invite strangers to adopt children, already traumatized by their personal losses, without the involvement of the Central Adoption Resource Authority (CARA).
About CARA
- Central Adoption Resource Authority (CARA) is an autonomous and statutory body of the Ministry of Women and Child Development. It was set up in 1990.
- It functions as the nodal body for the adoption of Indian children and is mandated to monitor and regulate in-country and inter-country adoptions.
- CARA is designated as the Central Authority to deal with inter-country adoptions in accordance with the provisions of the 1993 Hague Convention on Inter-country Adoption, ratified India in 2003.
- It primarily deals with the adoption of orphaned, abandoned and surrendered children through its associated and recognized adoption agencies.
- In 2018, CARA has allowed individuals in a live-in relationship to adopt children from and within India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Operation Pangea XIV
Mains level: NA
More than 1.10 lakh web links, including websites and online marketplaces, have been taken down in the operation Pangea XIV.
Operation Pangea XIV
- Code-named “Operation Pangea XIV”, the exercise was coordinated by Interpol.
- It involved the police, customs, and health regulatory authorities of 92 countries against the sale of fake and illicit medicines and medical products.
- Indian agencies also participated in the operation, said an official of the Central Bureau of Investigation that is the nodal body for the Interpol in the country.
- It showed that criminals were continuing to cash in on the huge demand for personal protection and hygiene products due to the COVID-19 pandemic.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Aravali Range and its geophysics
Mains level: NA
The Supreme Court has ordered the Haryana government to take “all essential measures” to remove encroachments, including some residential constructions, in the ecologically fragile Aravali forest land near a village.
Aravali Range
- The Aravali is a mountain range in Northwestern India, running approximately 670 km in a southwest direction, starting near Delhi, passing through southern Haryana and Rajasthan, and ending in Gujarat.
- The highest peak is Guru Shikhar at 1,722 meters.
- The Aravalli Range, an eroded stub of ancient mountains, is the oldest range of fold mountains in India.
- The natural history of the Aravalli Range dates back to times when the Indian Plate was separated from the Eurasian Plate by an ocean.
- Three major rivers and their tributaries flow from the Aravalli, namely Banas and Sahibi rivers which are tributaries of Yamuna, as well as Luni River which flows into the Rann of Kutch.
- The Sariska-Delhi leopard wildlife corridor is a 200 km long important biodiversity and wildlife corridor which runs from the Sariska Tiger Reserve in Rajasthan to Delhi Ridge.
Threats to its existence
- Ecological degradation in the Aravalli region is in an alarming situation.
- This is due to the increasing population of humans and cattle, injudicious use of natural resources, unscientific mining, uncontrolled grazing, and felling of trees.
Answer this PYQ in the comment box:
Q.With reference to the river Luni, which one of the following statements is correct?
(a) It fl ows into Gulf of Khambhat
(b) It fl ows into Gulf of Kuchchh
(c) It fl ows into Pakistan and merges with a tributary of Indus
(d) It is lost in the marshy land of the Rann of Kuchchh
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Quad
Mains level: Paper 2- Pushback against China
The article discusses the future pushback against China in South Asia and Indo-Pacific as Quad gains more momentum.
Context
Recently, the Chinese Ambassador to Bangladesh, Li Jiming, warned Dhaka that there will be “substantial damage” in bilateral ties between China and Bangladesh if the latter joins the Quad.
Bangladesh’s reaction
- Bangladesh Foreign Minister A.K. Abdul Momen promptly and publicly challenged the Chinese envoy’s statement, underlining categorically that Dhaka pursues an independent foreign policy.
- That China’s remarks would reverberate far beyond South Asia was expected and perhaps intended.
- The spokesperson of U.S. State Department remarked, “What we would say is that we respect Bangladesh’s sovereignty and we respect Bangladesh’s right to make foreign policy decisions for itself.”
Implications for South Asia and Info-Pacific
- With its message to Bangladesh, Beijing was laying down a marker that nations should desist from engaging with the Quad.
- This episode captures the emerging fault lines in South Asia and the wider Indo-Pacific.
- For all its attempts to play down the relevance of the Quad, Beijing realises that the grouping, with all its weaknesses, is emerging as a reality and there is little it can do to prevent that.
- And so, it is agitated about Quad’s future role and its potential success in offering the regional states an alternative to its own strong-arm tactics.
About Quad’s agenda
- The Quad member states are figuring out a cohesive agenda amongst themselves and there are no plans for an expansion.
- There is a desire to work with like-minded nations but that can only happen if the four members of the Quad can build a credible platform first.
- Quad has not asked any country to join and no one has shown an interest.
- But China wants to ensure that after failing in its initial attempt to prevent the Quad from gaining any traction.
- Its message is well understood by other states who may harbour any desire of working closely with the Quad members.
Way forward
- Beijing has failed to prevent nations from the West to the East from coming out with their Indo-Pacific strategies.
- It has failed to prevent the operationalisation of the Quad, and now it might be worried about other nations in the region thinking of engaging with the Quad more proactively.
- Even Bangladesh is planning to come out with its own Indo-Pacific strategy and Beijing has now warned Dhaka that a close cooperation with the Quad should not be part of the policy mix.
- As the Quad gains more momentum and the churn in the waters of the Indo-Pacific leads to new countervailing coalitions against China, Beijing’s belligerence can only be expected to grow.
Conclusion
Beijing is more likely to demand clear-cut foreign policy choices from its regional interlocutors, as its warning to Bangladesh underscores. But as Dhaka’s robust response makes it clear, states are more likely to push back than become subservient to Chinese largesse.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Opportunity for India to expand ties with the West
The article takes an overview of the growing convergence of India’s interest with the West in the changing geopolitical scenario and opportunities it offers to India.
Significance of G-7 Summit for India
- Summit of the G-7, the Group of Seven industrial countries, will be hosted by the United Kingdom this week.
- Prime Minister Narendra Modi will participate digitally in this summit.
- This participation also marks an important step towards a new global compact between India and the West.
- The global financial crisis of 2008, the rapid rise of China, divisions within the West during the Trump years, and the chaotic response in North America and Europe to the Covid-19 pandemic, were the factors that indicated the decline of the West.
- In his first tour abroad as the US president wants to demonstrate that the collective West is an enduring force to reckon with under renewed American leadership.
- For India, the G-7 summit is an opportunity to expand the global dimension of India’s growing partnerships with the US and Europe.
Convergence of interests between India and the West
- The challenges from an increasingly aggressive China, the urgency of mitigating climate change, and the construction of a post-pandemic international order are generating convergence between the interests of India and the West.
- India’s current engagement with the G-7 is about global issues.
- The idea of a global democratic coalition that is based more broadly than the geographic West has gained ground in recent years.
- And India is at the very heart of that Western calculus.
- For India, too, the G-7summit comes amidst intensifying strategic cooperation with the West.
- This includes strong bilateral strategic cooperation with the US, France, UK as well as the Quad and the trilateral partnerships with France and Australia as well as Japan and Australia.
- India has also stepped up its engagement with the European Union.
China factor
- India’s increasing engagement with the US and the West has been triggered in part by the continuous deterioration of the relationship with China.
- Besides the threat to territorial security, India finds that its hopes for strong global cooperation with China have taken a big beating in recent years.
- China is the only great power that does not support India’s permanent membership of the UN Security Council and blocks India’s membership of the Nuclear Suppliers Group.
- At the end of the Cold War, India believed that China was a natural partner in the construction of a multipolar world.
- India now can’t escape the conclusion that China is the greatest obstacle to India’s global aspirations and the West is an emerging partner.
- India has relied on Western support to fend off China’s effort to internationalise the Kashmir question after the 2019 constitutional changes.
- India walked away from RCEP due to the growing trade imbalance with China and the negative impact of Chinese imports on India’s domestic manufacturing.
- After China’s aggression in Ladakh last April, India has also sought to actively limit its exposure to Chinese investments and technology.
Way forward
- The convergence of interests between India and the West does not mean the two sides will agree on everything.
- There are many areas of continuing divergence within the West — from the economic role of the state to the democratic regulation of social media and the technology giants.
- It will surely not be easy translating the broad convergences between India and the West into tangible cooperation.
- That would require sustained negotiations on converting shared interests.
Consider the question “The idea of a global democratic coalition that is based more broadly than the geographic West has gained ground in recent years. This offers India an opportunity to expand the global dimension of India’s growing partnerships with the US and Europe. Comment.”
Conclusion
While India continues to strengthen its partnerships in Asia and the global south, a more productive partnership with the West helps secure a growing array of India’s national interests and adds a new depth to India’s international relations.
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From UPSC perspective, the following things are important :
Prelims level: Sustainable Public Procurement (SPP)
Mains level: Sustainable development measures
On the occasion of World Environment Day, a new product category of Green Room Air Conditioners was launched on the Government e-Marketplace (GeM) under the Sustainable Public Procurement (SPP) program.
What is Sustainable Public Procurement (SPP)?
- SPP is a process by which public authorities seek to achieve the appropriate balance between the three pillars of sustainable development – economic, social and environmental – when procuring goods, services or works at all stages of the project.
- These three pillars are called Triple Bottom Line.
- The UN Environment Programme (UNEP) has been active in the promotion of Sustainable Public Procurement at national, regional and global levels since 2005.
Why need SPP?
- Public procurement spend in India is nearly 15-20% of its GDP.
- Introducing SPP to this huge quantum of government procurement will further complement the country’s climate policy objectives.
- This innovation can provide financial savings for government buyers and will meet evolving environmental challenges by moving towards a circular economy.
Back2Basics: Government E-Marketplace
- The GeM is a one-stop National Public Procurement Portal to facilitate online procurement of common use Goods & Services required by various Government Departments / Organizations / PSUs.
- It was launched in 2016 to bring transparency and efficiency in the government buying process.
- GEM aims to enhance transparency, efficiency and speed in public procurement.
- It is a completely paperless, cashless and system driven e-marketplace that enables procurement of common use goods and services with minimal human interface.
- It provides the tools of e-bidding, reverse e-auction and demand aggregation to facilitate the government users to achieve the best value for their money.
- The purchases through GeM by Government users have been authorized and made mandatory by the Ministry of Finance by adding a new Rule No. 149 in the General Financial Rules, 2017.
- It has been developed by Directorate General of Supplies and Disposals (Ministry of Commerce and Industry) with technical support of National e-governance Division (MEITy).
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Supersonic plane
Mains level: NA
The United Airlines of USA has announced it was ordering 15 Overture planes with the ability to travel at Mach 1.7, faster than the speed of sound, from the Denver-based startup Boom.
What is a Supersonic Plane?
- Supersonic aircraft are planes that can fly faster than the speed of sound.
- The technology for supersonic flights is actually over 70 years old, but only recently has been used for commercial flying.
- Before 1976, when the first commercial supersonic flight took off, the planes were used entirely for military purposes.
- Usually, supersonic planes can travel at the speed of around 900 kmph, twice the speed of normal aircraft.
What about the Overture supersonic plane?
- The Overture aircraft would travel at the speed of Mach 1.7 or 1,805 kmph with a range of 4,250 nautical miles. In a single flight, it could carry 65 to 88 passengers and reach an altitude of 60,000 ft.
- The company has expressed confidence in getting an “experimental” jet ready by 2022, start rolling out aircraft by 2025 and eventually open them for passengers by 2029.
- It claims to build on Concorde’s legacy through faster, more efficient and sustainable technology.
Challenges with supersonic planes
Flying passengers at a supersonic speed is accompanied by a whole set of challenges.
- Firstly, the costs of making “sustainable” supersonic planes are extremely high.
- The very nature of its flying — using excessive amounts of fuel and energy — is likely to have high environmental costs.
- Despite the use of sustainable fuels, greenhouse gas emissions are not nullified.
- Secondly, the very speed of the planes results in producing excessive amounts of noise pollution in the environment.
- The “Sonic Boom” created by these planes feels like an explosion to the human ear.
- This, thus, limits where and when the supersonic planes can fly. They can only reach their actual speed until they are far enough from people and completely over the ocean.
- Lastly, it would not be economically feasible for everyone. Only the very rich can afford supersonic planes, as a ticket is likely to be way costlier than a first-class ticket of a regular plane.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Boha Geoglyphs
Mains level: NA
Using satellite observations and field visits, two independent researchers from France have identified eight sites around Jaisalmer in the Thar Desert, that show linear features resembling geoglyphs.
What are geoglyphs?
- Geoglyphs are large, un-explained geometrical patterns on land usually proposed to be man-made features.
- The largest concentration of geoglyphs is reported from southern Peru, covering an area of about 1,000 square km.
- A new paper published notes that the identified geoglyphs in the Thar Desert cover an area of about 6 square km.
Boha Geoglyphs in Thar
- The authors’ main area of interest was Boha, a small village 40 km to the north of Jaisalmer where they noticed a series of concentric and linear features.
- They named these features Boha geoglyphs and suggested that the features could be at least 150 years old.
- It is however conceivable that they were built at the beginning of the British colonial period, in the middle of the 19th century.
How are they patterned?
- The Boha geoglyphs are clearly manmade as the main unit is a giant spiral, but they have been eroded due to the cars running over the lines lately.
- So, they are clearly not formed by weathering or another natural phenomenon.”
- The observed features might have been formed naturally, but degraded over time due to both natural and human-related causes.
Degraded over time
- The rocky terrain is home to a typical weathering feature, especially over the iron-rich sandstone and shale beds.
- Here, extreme aridity and high temperature lead to slow geochemical translocation of minerals for centuries, such that the heavier minerals like iron and manganese move away from the lighter minerals.
- This lead to the gradual formation of alternate bands of harder and softer mineral concentrations.
- With time the areas with softer materials get slowly eroded, while the harder ones stand out, producing the typical concentric or box-like geometric features.
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From UPSC perspective, the following things are important :
Prelims level: Kinnaur Hydroelectric Project
Mains level: Hydel energy and its feasiblity
The people of Kinnaur, Himachal Pradesh have been protesting against the proposed 804-megawatt Jangi Thopan Powari hydroelectricity project (JTP HEP) over the Satluj since April 2021.
Kinnaur Hydroelectric Project
- The run-of-the-river (ROR) project envisages the construction of a concrete gravity dam of ±88 metres high above the deepest foundation level across river Satluj near Jangi village.
- The diversion of water will involve the construction of a 12-km-long tunnel.
- The tentative land requirement for the project is 295.93 hectares, out of which 270.43 ha is forest land and 25.5 ha is private.
- Construction of the dam will result in the submergence of about 156.2917 ha of land, out of which 143.2093 ha is forest land and 13.0824 ha is private.
Answer this PYQ in the comment box:
Q.What is common to the places known as Aliyar, Isapur and Kangsabati? (CSP 2017)
(a) Recently discovered uranium deposits
(b) Tropical rain forests
(c) Underground cave systems
(d) Water reservoirs
Why are people protesting?
- Kinnaur district is mainly marked by its cold desert, tribal population, fragile topography, rich and diverse culture, apple orchards, off-season vegetables and the Satluj river.
- The river has been dammed at multiple places along the valley to create an additional feature to Kinnaur’s identity as Himachal’s hydropower hub, which locals believe is a malediction.
- An integral part of the old Hindustan-Tibetan Route, Jangram Valley, lies on the right bank of the Satluj river in the district.
- This is not the first time that the cold desert has witnessed such a contestation.
Sutlej is oveloaded
- The Satluj has taken the biggest load of state hydropower ambition since the early 90s. Out of the total installed capacity, 56 per cent (5720MW) is done in the Satluj basin.
- According to the State of the Rivers of Himachal Pradesh Report 2017:
- In other words, 92 per cent of the river will either be flowing through tunnels or will be part of reservoirs.
- Such a cumulative scale of disturbance with the river’s natural state drastically impacted the life, livelihood and ecology in the Satluj basin.
Why need hydroelectric projects?
- Hydropower is a necessary choice for the nation’s clean energy transition.
- In purely technological terms, hydropower projects are an engineering marvel and generate clean, reliable electricity.
- HEPs are not viable just from the local livelihood and environmental point of view but they have also failed on the financial viability side.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Performance of the current government in the past seven years
The article compares the performance of the present government under Prime Minister Modi with the first seven years of the Manmohan Singh government on various fronts.
Context
The current government completed seven years at the Centre recently. It is time to reflect and look back at its performance on basic economic parameters over the last seven years. It may also be interesting to compare and see how it fared vis-à-vis the first seven years of UPA government (2004-05 to 2010-11) under Manmohan Singh.
Analysing the progress by studying key economic indicator
1) GDP growth
- One of the key economic parameters is GDP growth.
- It is not the most perfect one, as it does not capture specifically the impact on the poor, or on inequality.
- But higher GDP growth is considered central to economic performance as it enlarges the size of the economic pie.
- The average annual rate of growth of GDP under the Modi government so far has been just 4.8 per cent compared to 8.4 per cent during the first seven years of the Manmohan Singh government.
- If this continues as business as usual, the dream of a $5 trillion economy by 2024-25 is not likely to be achieved.
2) Inflation
- The Modi government scores much better on the inflation front with CPI (rural and urban combined) rising at 4.8 per cent per annum.
- It is well within the tolerance limits of RBI’s targeted inflation band and also much lower than 7.8 per cent during the first seven years of the Manmohan Singh government.
3) Forex reserves
- Also, at macro level, foreign exchange reserves provide resilience to the economy against any external shocks.
- On this score too, the Modi government fares quite well with forex reserves rising from $313 billion on May 23, 2014 to $593 billion on May 21, 2021.
4) Food and agriculture
- It engages the largest share of the workforce in the economy and matters most to poorer segments.
- On the agri-front, both governments recorded an annual average growth of 3.5 per cent during their respective first seven years.
- However, on the food and fertiliser subsidy front, the Modi government broke all records in FY21, by spending Rs 6.52 lakh crore and accumulating grain stocks exceeding 100 million tonnes in May end, 2021.
- One area in which the Modi government performed very poorly is agri-exports.
- In 2013-14 agri-exports had crossed $43 billion while during all the seven years of the Modi government agri-exports remained below this mark of $43 billion.
- Sluggish agri-exports with rising output put downward pressure on food prices.
- It helped contain CPI inflation, but subdued farmers’ incomes.
5) Infrastructure development
- The Modi government has done better in power generation by increasing it from 720 billion units per annum to 1,280 billion units per annum.
- Similarly, road construction too has been at least 30 per cent faster under the Modi government.
6) Social sector
- Based on an international definition of extreme poverty (2011 PPP of $ 1.9 per capita per day), the World Bank estimated India’s extreme poverty in 2015 to be about 13.4 per cent, down from 21.6 per cent in FY 2011-12.
- Even the incidence of multidimensional poverty hovered around 28 per cent in 2015-16.
- Three key indicators can be used to assess performance on this front:
- One, average annual person days generated under MGNREGA in the first five years since this programme started under the UPA in 2006-07 to 2010-11, which was 200 crore, and under Modi government it improved to 230 crore.
- Two, average annual number of houses completed under the Indira Awaas Yojana and PM Awaas Yojana-Gramin, which improved from 21 lakhs to 30 lakhs per annum.
- Three, open defecation free (ODF) which was only 38.7 per cent on October 2, 2014 and shot up to 100 per cent by October 2, 2019, as per government records.
Conclusion
The current government has turned out to be more welfare-oriented than reformist in revving up GDP growth. How long this welfare approach is sustainable without enlarging the size of GDP pie is an open question.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- One nation one election
The article deals with the issue frequent elections in the country and highlights the need for debate on the idea of “one nation, one election”.
Need for debate on one nation one election
The idea has been around since at least 1983, when the Election Commission first mooted it. The concept needs to be debated mainly around five issues.
1) Financial costs of conducting elections
- The costs of conducting each assembly or parliamentary election are huge and, in some senses, incalculable.
- Directly budgeted costs are around Rs 300 crore for a state the size of Bihar.
- But there are other financial costs, and incalculable economic costs.
- Before each election, a “revision” of electoral rolls is mandatory.
- The costs of the millions of man-hours used are not charged to the election budget.
- The economic costs of lost teaching weeks, delayed public works, badly delivered or undelivered welfare schemes to the poor have never been calculated.
2) Cost of repeated administrative freezes
- The Model Code of Conduct (MCC) has economic costs too.
- Works may have been announced long before an election is announced, but tenders cannot be finalised, nor work awarded, once the MCC comes into effect.
- Time overruns translate into cost overruns.
- But the huge costs of salaries and other administrative expenditures continue to be incurred.
- Add to this the invisible cost of a missing leadership.
- Important meetings and decisions get postponed, with costs and consequences that are difficult to calculate.
- A NITI Aayog paper says that the country has at least one election each year.
3) Visible and invisible costs of repeatedly deploying security forces
- There are also huge and visible costs of deploying security forces and transporting them, repeatedly.
- A bigger invisible cost is paid by the nation in terms of diverting these forces from sensitive areas.
4) Campaign and finance costs of political parties
- There is little doubt that the fiscal and economic costs of an election are not trivial, and that two elections, held separately, will almost double costs, including those incurred by political parties themselves.
5) Question of regional/smaller parties having a level playing field
- There are fears about the Centre somehow gaining greater power, or regional parties being at a disadvantage during simultaneously held elections.
- However, fixed five-year terms for state legislatures in fact take away the central government’s power to dissolve state assemblies.
- Until 1967 when simultaneous elections were the norm.
- The Constitution and other laws would need to be amended is obvious, but that is hardly an argument against the proposal.
Consider the question “There are huge costs associated with the frequent elections in the country. Is simultaneous elections a solution? What are the issues involved?”
Conclusion
As the elections in four states and one Union territory in March-April are suspected to have contributed to the second wave of Covid infections, a well-reasoned debate on a concept as important as “one nation, one election” is called for.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GST council decision making
Mains level: Paper 3- Issues with one state one vote system in GST council
The article highlights the issues with the one state one vote system adopted in the GST Council decision making.
Context
The Goods and Services Tax (GST) Council in India is still engaged in a discussion on whether life-saving and hard-to-come-by products should be taxed. Such delay in decision-making can largely be explained by the distorted design and incentive structure of the GST itself.
Imbalance in collection and distribution of taxes
- The taxes collected under GST are accumulated by the Union government and a portion is transferred back to each state under a formula.
- As is the case with most federal countries, there is a large imbalance in the collection and distribution of taxes between states.
- this holds true also for income accrued to, and distributed, from the GST pool.
- Four states — Maharashtra, Tamil Nadu, Karnataka, and Gujarat contribute nearly as much as the remaining 27 states combined.
- Most federal countries exhibit this characteristic where a few large, rich, provinces or states contribute disproportionately.
Variation in dependence of States on transfers from the Union government
- Only about 30 per cent of the overall revenue of the states mentioned above — Maharashtra, Tamil Nadu, Gujarat, and Karnataka — comes from the Union government.
- But for the remaining 27 states, roughly 60 per cent of their revenues are obtained through transfers from the Union government.
- For the smaller Northeastern states, these transfers from the Union government constitute 80-90 per cent of their total revenues.
- In effect, the states that contribute the most to the GST pool are the least dependent on transfers from the Union government while the ones that contribute the least are the most dependent.
Two problems in net-transfers in India
1) One-sided transfers
- In almost every federal union, net-transfers work to reduce differences in development between states over time.
- However, Over the last 25 years or so, net transfers have become increasingly one-sided in India.
- That is, the quantum of net-transfers diminishes, as states become more equal through such transfers.
- But in India, the opposite has occurred.
2) Indirect taxes and cess
- The Union government of the last seven years has greatly exacerbated this problem through two actions.
- First, it has reconstructed the composition of taxation away from the fair and progressive channel of direct taxation towards the inherently regressive and unfair channel of indirect taxes.
- Second, the Union has shifted a large proportion of taxation roughly 18 per cent of its overall revenues into cesses, a special form of taxes that remain outside the GST pool and hence do not have to be shared with the states.
- Since 2014, cess revenues grew 21 per cent every year leading to a doubling in terms of its share of GDP.
Implications of these two problems for fiscal federalism
- The combined effect of these problems is that all states (collectively) get a lower share of overall revenues.
- Individual states face an ever-increasing disparity in the ratio of funds received from the Union as a proportion of taxes collected by the Union from that state.
- This is an affront to fiscal federalism and an assault on “cooperative federalism”.
Issue of ‘one state one vote’ system
- States that are more dependent on transfers from the Union want to maximise GST collections while states that are less dependent can afford to be more sensitive to citizens’ concerns.
- The case of taxes on Covid products is perhaps the starkest instance of such differences.
- Most large states are ready to forego this tax revenue for humanitarian considerations.
- But 19 states representing the remaining 30 per cent of the population seem keen to continue to levy GST on Covid products.
- These are mostly smaller states.
- Given the smaller population of such states, the adverse impact of Covid taxes will be minimal for them.
- But they will reap the benefits of additional revenues from GST on Covid products levied on the much larger populations of the bigger states.
Conclusion
When direct tax policy decisions are legislated by Parliament, which has proportional representation from states according to their size of the population, indirect tax policy decisions should not be subject to one state one vote system.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: BRICS
Mains level: Future agenda of BRICS
As India is gearing up to host this year’s BRICS summit, the grouping is facing fresh challenges, from disputes among member countries to tackling COVID-triggered crises and opportunities.
What is BRICS?
- To be clear, BRICS was not invented by any of its members.
- In 2001, Goldman Sachs’ Jim O’Neill authored a paper called “Building Better Global Economic BRICs”, pointing out that future GDP growth in the world would come from China, India, Russia and Brazil.
- Significantly, the paper didn’t recommend a separate grouping for them, but made the case that the G-7 grouping, made up of the world’s most industrialized, and essentially Western countries, should include them.
- O’Neill also suggested that the G-7 group needed revamping after the introduction of a common currency for Europe, the euro, in 1999.
- In 2003, Goldman Sachs wrote another paper, “Dreaming with BRICs: Path to 2050”, predicting that the global map would significantly change due to these four emerging economies.
- In 2006, leaders of the BRIC countries met on the margins of a G-8 (now called G-7) summit in St. Petersburg, Russia, and BRIC was formalized that year.
Issues in its consolidation
- Common ground for the members was built by ensuring that no bilateral issues were brought up, but the contradictions remained.
- Many economists soon grew tired of “emerging” economies that didn’t reach the goals they had predicted.
- Others saw India’s closer ties with the US after the civil nuclear deal as a sign its bonds with BRICS would weaken.
- Meanwhile, Russia, which had hoped to bolster its own global influence through the group, had been cast out of the G-7 order altogether after its actions in Crimea in 2014.
- China, under Xi Jinping, grew increasingly aggressive, and impatient about the other underperforming economies in the group, as it became the U.S.’s main challenger on the global stage.
Long-term prospects
- China’s decision to launch the trillion-dollar Belt and Road Initiative in 2017 was opposed by India, and even Russia did not join the BRI plan, although it has considerable infrastructure projects with China.
- South Africa’s debt-laden economy and the negative current account have led some to predict an economic collapse in the next decade.
- Brazil’s poor handling during the Covid-19 crisis has ranked it amongst the world’s worst-affected countries, and its recovery is expected to be delayed.
- India’s economic slowdown was a concern even before Covid-19 hit, and government policies like “Aatmanirbhar” were seen as a plan to turn inward.
Issues with BRICS nations
- Concerns about aggressions from Russia in Ukraine and Eastern Europe and China in the South China Sea, the border with India and internally in Hongkong and Xinjiang are clear visible.
- There is creeping authoritarianism in democracies like Brazil and India have made investors question long-term prospects of the group.
- In the market, BRICS has been mocked for being “broken”, while others have suggested it should be expanded to include more emerging economies like Indonesia, Mexico and Turkey, called the “Next-11”.
A roadmap to progress
- BRICS is an idea that has endured two decades, an idea its members remain committed to, and not one has skipped the annual summits held since 2009.
- Along the way, BRICS has created the New Development Bank (NDB) set up with an initial capital of $100 billion.
- There is a BRICS Contingent Reserve Arrangement fund to deal with global liquidity crunches, and a BRICS payment system proposing to be an alternative to the SWIFT payment system.
Reforming the multilaterals
- The BRICS ministerial meeting held this week sent several important signals to that end, issuing two outcome documents.
- It included the first “standalone” joint statement on reforming multilateral institutions, including the UN and the UNSC, IMF and World Bank and the WTO.
- It remains to be seen how far countries like China and Russia, which are already “inside the tent” at the UNSC, will go in advocating for the other BRICS members.
- Another important agreement was the BRICS ministerial decision to support negotiations at the WTO for the waiver of trade-related intellectual property rights (TRIPs) for vaccines and medicines to tackle the Coronavirus.
Way forward
- What appears clear is in the post-Covid world, priorities for all economies will change, and offer up a churning in the world of the kind seen two decades ago, when the idea of a grouping of emerging economies was first floated.
- For BRICS, the next few months could crystallize that idea, or sink it further, leaving others to wonder whether the “Rise of the Rest” as it was once called, is an idea whose time will ever come at all.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Chinese encroachment of Lankan Sovereignty
Sri Lanka recently passed the controversial Colombo Port City Economic Commission Bill, which governs the China-backed Colombo Port City project worth $1.4 billion, amid wide opposition to the creation of a “Chinese enclave” in the island nation.
Colombo Port City Project
- The Colombo Port City has grabbed headlines in Sri Lanka in recent months even as the relentless third wave of the COVID-19 pandemic sweeps through the country.
- Almost an artificial island, the territory coming up on 2.69 square kilometers of land reclaimed from Colombo’s seafront has stirred controversy since its inception.
- Those backing it see in that patch of land their dream of an international financial hub — a “Singapore or Dubai” in the Indian Ocean.
When was it launched?
- The project was launched in September 2014 by Chinese President Xi Jinping during a visit to the island nation under the Mahinda Rajapaksa administration’s second term.
- After President Mahinda Rajapaksa was ousted in January 2015, the successor “national unity” government of Maithripala Sirisena and Ranil Wickremesinghe went ahead with the project after briefly halting it.
- On returning to power in November 2019, the Rajapaksas vowed to expedite the project. The Sri Lankan government says the project will bring in around 83,000 jobs and $15 billion initially.
Issues with the project
- But skeptics claim that it could well become a “Chinese colony”, with the Bill, which is now an Act.
- The law provides China substantial “immunity” from Sri Lankan laws, besides huge tax exemptions and other incentives for investors.
What is the extent of China’s involvement?
Effectively, China has substantial control over two key infrastructure projects in Sri Lanka for a century.
- The port city project is financed chiefly through Chinese investment amounting to $1.4 billion.
- In return, the company will receive 116 hectares (of the total 269 hectares) on a 99-year lease.
- The city separates from but located adjacent to the Colombo Port, the country’s main harbor — is the third major port-related infrastructure project where China has a significant stake.
- China Merchants Port Holdings has an 85% stake in the Colombo International Container Terminal under a 35-year ‘Build Operate and Transfer’ agreement with the Sri Lanka Port Authority.
- In 2017, the Sirisena-Wickremesinghe administration, unable to repay the Chinese loan with which it was saddled by the previous government, handed over the Hambantota Port to China on a 99-year lease.
Concerns from within Sri Lanka
- Since its launch, the Colombo Port City project has faced opposition from environmentalists and fisherfolk, who feared that the project would affect marine life and livelihoods.
- However, in the absence of wider political and societal support, their resistance did not dent successive governments’ resolve to pursue the project.
- The more recent opposition was specific to the Colombo Port City Economic Commission Bill.
- The resistance came from Opposition parties and civil society groups, including many who do not oppose the project per se, but rather its governance by “an all-powerful commission answerable to no one”.
- Significantly, a section of Buddhist monks, wielding much influence in Sri Lankan politics and the Sinhala society, also opposed the Bill and said that it eroded Sri Lanka’s sovereignty.
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From UPSC perspective, the following things are important :
Prelims level: G7, Global Minimum Tax
Mains level: Global Minimum Tax negotiaitions
Finance Ministers from the Group of Seven (G7) rich nations have reached a landmark accord setting a global minimum corporate tax rate, an agreement that could form the basis of a worldwide deal.
Why a global minimum?
- Major economies are aiming to discourage multinationals from shifting profits — and tax revenues — to low-tax countries regardless of where their sales are made.
- Increasingly, income from intangible sources such as drug patents, software and royalties on intellectual property has migrated to these jurisdictions, allowing companies to avoid paying higher taxes in their traditional home countries.
- With its proposal for a minimum 15% tax rate, the Biden administration hopes to reduce such tax base erosion without putting American firms at a financial disadvantage, allowing competition on innovation, infrastructure and other attributes.
Where are the talks at?
- The G7 talks feed into a much broader, existing effort.
- The OECD has been coordinating tax negotiations among 140 countries for years on rules for taxing cross-border digital services and curbing tax base erosion, including a global corporate minimum tax.
- The OECD and G20 countries aim to reach a consensus on both by mid-year, but the talks on a global corporate minimum are technically simpler and less contentious.
- If a broad consensus is reached, it will be extremely hard for any low-tax country to try and block an accord.
How would a global minimum tax work?
- The global minimum tax rate would apply to overseas profits.
- Governments could still set whatever local corporate tax rate they want, but if companies pay lower rates in a particular country, their home governments could “top-up” their taxes to the minimum rate.
- This would eliminate the advantage of shifting profits.
What about that minimum rate?
- Talks are focusing on the U.S. proposal of a minimum global corporation tax rate of 15% – above the level in countries such as Ireland but below the lowest G7 level.
- Any final agreement could have major repercussions for low-tax countries and tax havens.
- The Irish economy has boomed with the influx of billions of dollars in investment from multinationals.
- Dublin, which has resisted EU attempts to harmonize its tax rules, is unlikely to accept a higher minimum rate without a fight.
- However, the battle for low-tax countries is less likely to be about scuppering the overall talks and more about building support for a minimum rate as close as possible to its 12.5% or seeking certain exemptions.
Back2Basics: G7
- The G7 or the Group of Seven is a group of the seven most advanced economies as per the International Monetary Fund (IMF).
- The seven countries are Canada, USA, UK, France, Germany, Japan and Italy. The EU is also represented in the G7.
- These countries, with the seven largest IMF-described advanced economies in the world, represent 58% of the global net wealth ($317 trillion).
- The G7 countries also represent more than 46% of the global gross domestic product (GDP) based on nominal values, and more than 32% of the global GDP based on purchasing power parity.
- The requirements to be a member of the G7 are a high net national wealth and a high HDI (Human Development Index).
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From UPSC perspective, the following things are important :
Prelims level: Performance Grading Index
Mains level: NA
The Education Ministry’s Performance Grading Index for 2019-20 was recently released.
Performance Grading Index
- The PGI is a tool to provide insights on the status of school education in States and UTs including key levers that drive their performance and critical areas for improvement.
- It monitors the progress that States and UTs have made in school education with regard to learning outcomes, access and equity, infrastructure and facilities, and governance and management processes.
- Grading will allow all States and UTs to occupy the highest level i.e Grade I, at the same time which is a sign of a fully developed nation.
Its methodology
- This is the third edition of the index and uses 70 indicators to measure progress.
- Of these, the 16 indicators related to learning outcomes remain unchanged through all three editions, as they are based on data from the 2017 National Achievement Survey, which tested students in Classes 3, 5, 8, and 10.
Highlights of the 2019-20 Report
- Punjab, Tamil Nadu, and Kerala have all scored higher than 90%.
- Gujarat dropped from second to the eighth rank in the index, while MP and Chhattisgarh are the only States which have seen actual regression in scores over this period.
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From UPSC perspective, the following things are important :
Prelims level: Sea Snot, Marmara Sea
Mains level: Algal bloom
There has been growing environmental concern in Turkey over the accumulation of ‘sea snot’, a slimy layer of grey or green sludge in the country’s seas, which can cause considerable damage to the marine ecosystem.
What is ‘Sea Snot’?
- ‘Sea snot’ is marine mucilage that is formed when algae are overloaded with nutrients as a result of water pollution combined with the effects of climate change.
- A ‘sea snot’ outbreak was first recorded in the country in 2007. Back then, it was also spotted in the Aegean Sea near Greece.
- But the current outbreak in the Sea of Marmara is by far the biggest in the country’s history.
- The nutrient overload occurs when algae feast on warm weather caused by global warming. Water pollution adds to the problem.
- Environmental experts have said that the overproduction of phytoplankton caused by climate change and the uncontrolled dumping of household and industrial waste into the seas has led to the present crisis.
Where has it been found?
- Turkey’s Sea of Marmara, which connects the Black Sea to the Aegean Sea, has witnessed the largest outbreak of ‘sea snot’.
- The sludge has also been spotted in the adjoining Black and Aegean seas.
How badly can the crisis affect the marine ecosystem?
- The growth of the mucilage, which floats upon the surface of the sea like brown phlegm, is posing a severe threat to the marine ecosystem of the country.
- Divers have said that it has caused mass deaths among the fish population, and also killed other aquatic organisms such as corals and sponges.
- The mucilage is now covering the surface of the sea and has also spread to 80-100 feet below the surface.
- If unchecked, this can collapse to the bottom and cover the sea floor, causing major damage to the marine ecosystem.
- Over a period of time, it could end up poisoning all aquatic life, including fishes, crabs, oysters, mussels and sea stars.
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