Note4Students
From UPSC perspective, the following things are important :
Prelims level: Functions of RBI; Date of Commencement of Commercial Operations;
Mains level: Banking and Regulations; Issue of NPA’s;
Why in the News?
The RBI has issued draft regulations for a Harmonized Prudential Framework and revised DCCO criteria, to enhance the Regulatory Framework for long-term (infrastructure, non-infrastructure, and commercial real estate sectors) project financing.
- RBI’s purpose behind this is to regulate and supervise payment and settlement systems in the country, ensuring safe, secure, and efficient mechanisms for financial transactions.
What is the Date of Commencement of Commercial Operations (DCCO)?
The DCCO is a critical milestone for project loans, indicating the start of revenue-generating activities for the project.
Banks maintain the DCCO for project loans for several key reasons:
- Asset classification: The DCCO is crucial for determining the asset classification of a project loan. If the project fails to commence commercial operations by the stipulated DCCO, the loan may be classified as a Non-performing asset (NPA).
- Restructuring: The DCCO is used as a reference point for allowing the restructuring of project loans without treating it as an NPA. RBI guidelines permit banks to extend the DCCO by up to 1 year for commercial real estate projects and up to 2 years for infrastructure projects, without downgrading the asset classification, provided certain conditions are met.
- Viability assessment: When extending the DCCO, banks must satisfy themselves about the viability of the project and the restructuring plan.
- Provisioning: If a loan remains in the pre-commencement of the commercial operations phase for an extended period, banks may need to make higher provisions, considering the risk involved.
- Monitoring and control: Maintaining a clear DCCO allows banks to monitor the project’s progress and take timely action if there are delays or cost overruns. This helps in managing the bank’s exposure and mitigating risks.
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Key Highlights of the Proposed New Framework:
- Income Recognition and Asset Classification: The draft framework outlines guidelines for Income Recognition, Asset Classification, and Provisioning of Advances for Projects Under Implementation (IRACP-PUIMP).
- It emphasizes the importance of monitoring stress in projects and initiating resolution plans proactively.
- Increase in general provisioning at the construction stage from 0.4% to 5% on all existing and fresh exposures, phased over three years (2% for FY25, 3.5% for FY26, and 5% for FY27).
- Restructuring Norms: The RBI has prescribed norms for restructuring exposure in projects due to changes in the DCCO.
- Lenders are required to have a board-approved policy for resolving stress in projects, triggered by a credit event during the construction phase.
- Provisioning can be reduced to 2.5% and 1% at the operational phase if certain conditions are met.
- Consortium Arrangements: In projects financed under consortium arrangements, specific exposure limits have been set based on the aggregate exposure of lenders.
- Individual lenders must maintain a Minimum Exposure Percentage to ensure a balanced risk-sharing mechanism.
- Financial Closure and Repayment Structure: The framework mandates that financial closure must be achieved before the disbursement of funds.
- It discourages moratoriums on repayments beyond the DCCO period and sets guidelines for the repayment tenor not exceeding 85% of the economic life of the project.
- Projects must demonstrate a positive net operating cash flow to cover all repayment obligations and a reduction in total long-term debt by at least 20%.
- Net Present Value (NPV) Requirement: A positive NPV is a prerequisite for any project financed by lenders. The RBI stresses the importance of reevaluating the project NPV annually to ensure financial viability and address credit impairment risks.
- Guidelines for a standby credit facility to fund cost overruns due to delays, with incremental funding of 10% of the original project cost.
ICRA Observations:
ICRA set up in 1991 is an independent and professional investment Information and Credit Rating Agency. It observed the proposed new framework could have the following implications:
- Profitability Impact: Higher provisioning requirements for projects under implementation could impact the profitability of Non-banking Financial Companies and Infrastructure Financing Companies. The impact will be spread over 3 years.
- Funding Costs: Estimated increase in funding costs by 20-40 basis points as lenders build additional risk premiums.
- Major banks like SBI, Union Bank of India, and Bank of Baroda do not foresee significant impacts, although the pricing of loans may need adjustments.
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Way Forward:
- Enhanced Monitoring and Compliance: Implement robust monitoring mechanisms to ensure compliance with the new regulations. Regularly review and update the prudential framework to adapt to evolving market conditions.
- Capacity Building: Train bank staff and stakeholders on the new regulatory requirements and best practices for project financing.
Prelims PYQ:
Q The Reserve Bank of India regulates the commercial banks in matters of: (UPSC CSE 2013)
- liquidity of assets
- branch expansion
- merger of banks
- winding-up of banks
Select the correct answer using the codes given below.
(a) 1 and 4 only
(b) 2, 3 and 4 only
(c) 1, 2 and 3 only
(d) 1, 2, 3 and 4
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Climate Change; Madrid Protocol; Committee for Environmental Protection (CEP);
Mains level: NA
Why in the News?
The 26th Meeting of the Committee for Environmental Protection (CEP) is set to be held in Kochi, Kerala.
26th CEP Agenda
- Review of the Protocol on Environmental Protection to the Antarctic Treaty (the Madrid Protocol).
- Evaluation of the effectiveness of existing Environmental Protection Measures.
- Identification of areas for potential enhancement or amendment to strengthen environmental conservation efforts.
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What is the Committee for Environmental Protection (CEP?
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- It was formed as part of the Environmental Protocol (Madrid Protocol, 1991) to the Antarctic Treaty, which came into force in 1998.
- Aim: To advice and formulate recommendations on environmental protection measures in the Antarctic region.
- Composition: It consists of representatives from the consultative parties to the Antarctic Treaty, which includes countries active in Antarctic research and governance.
- Environmental Impact Assessment (EIA): The CEP oversees the EIA process for activities conducted in the Antarctic region to ensure they minimize environmental impacts.
- Site Inspections: It conducts inspections of Antarctic facilities and activities to verify compliance with environmental regulations.
- Scientific Research: The CEP promotes scientific research on Antarctic ecosystems and advises on measures to conserve biodiversity.
- Waste Management: It develops guidelines for waste management and pollution prevention in the Antarctic, aiming to minimize human impact on the environment.
- Policy Formulation: The CEP formulates policies and guidelines related to environmental protection in the Antarctic Treaty.
Back2Basics: Madrid Protocol, 1991
- The Madrid Protocol refers to the Protocol on Environmental Protection to the Antarctic Treaty.
- It is an international agreement that was adopted in 1991 and entered into force in 1998.
- Key aspects of the Madrid Protocol include:
- Environmental Principles: The Protocol outlines principles for the protection of the Antarctic environment, including the conservation of living resources, the prevention of pollution, and the protection of wilderness and scientific values.
- Designation of Protected Areas: It designates certain areas of Antarctica as specially protected areas (SPAs) and sites of special scientific interest (SSSI), where specific environmental protection measures apply to safeguard their ecological, scientific, and aesthetic values.
- Waste Management: It establishes guidelines and regulations for waste management and pollution prevention in Antarctica, aiming to minimize human impact on the environment and prevent pollution of the Antarctic ecosystem.
- Prohibition of Mineral Resource Activities: The Protocol prohibits all mineral resource activities, including exploration and exploitation, in Antarctica. This provision aims to preserve the pristine and fragile nature of the Antarctic environment and prevent the potential environmental damage associated with mineral extraction.
- Consultative Mechanisms: The Protocol establishes mechanisms for consultation and cooperation. This includes the CEP, which provides advice and recommendations on environmental matters to the Antarctic Treaty Consultative Meeting (ATCM).
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PYQs:
[2021] How do the melting of the Arctic ice and glaciers of the Antarctic differently affect the weather patterns and human activities on the Earth? Explain.
[2011] The formation of ozone hole in the Antarctic region has been a cause of concern. What could be the reason for the formation of this hole?
(a) Presence of prominent tropospheric turbulence; and inflow of chlorofluorocarbons.
(b) Presence of prominent polar front and stratospheric clouds; and inflow of chlorofluorocarbons.
(c) Absence of polar front and stratospheric clouds; and inflow of methane and chlorofluorocarbons.
(d) Increased temperature at polar region due to global warming. |
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Note4Students
From UPSC perspective, the following things are important :
Mains level: Data related to consumer size and consumption expenditure
Why in the news?
In 2023, India became the world’s most populous country, contrasting China’s declining birth rate. This prompts a comparison of their consumption patterns and geopolitical implications.
Consumer size of India and China
Private Final Consumption Expenditure (PFCE):
- India’s PFCE as a percentage of GDP is significantly higher than China’s, with India spending over 58% of its GDP on consumption compared to China’s 38%.
- Final consumption, including government expenditure, constitutes 68% of India’s GDP and 53% of China’s GDP.
- Despite China’s larger economy, its PFCE is only about 3.5 times that of India’s, indicating a higher contribution of consumption to India’s GDP.
Expenditure by Categories:
- India’s consumption expenditure is characterized by higher spending on food, clothing, footwear, and transport, typical of a developing market.
- In contrast, China’s consumption basket represents a relatively developed market, with higher spending on housing, white goods, recreation, education, and healthcare.
- India spends approximately half of what China spends on food, transport, and clothing and footwear, despite being a fifth of China’s economy.
- Real growth rates of individual consumption categories in India often outperform nominal growth rates observed in China.
Conclusion: India’s higher PFCE as a percentage of GDP reflects a greater reliance on consumption-driven growth compared to China.The composition of consumption expenditure in India and China highlights differences in market maturity and consumer behavior.Despite China’s larger economy, India’s consumption expenditure is relatively significant, indicating the potential for continued growth and economic development.
Mains PYQ
Q The time has come for India and Japan to build a strong contemporary relationship, one involving global and strategic partnership that will have a great significance for Asia and the world as a whole. Comment. (UPSC IAS/2019)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Terms and concepts in News; New Humanism;
Mains level: Types of Democracies; Radical Democracy;
Why in the News?
The ongoing socio-political and economic crises highlight the need for societal reorganization.
- Manabendra Nath Roy and colleagues proposed a theory reconciling Freedom with justice, countering the failures of Liberal democracy and modern dictatorship.
- They highlighted crises on the following grounds:
- 19th Century Liberal Democracy and Capitalist Exploitation.
- Degeneration of Communism and Rise of Fascism.
- World Wars and Global Conflict.
What is Radical Democracy?
- Radical democracy is a form of democracy that advocates for an extensive expansion of equality and liberty. It views democracy as an ongoing, inclusive, and reflexive process.
- Radical democracy differs from traditional democracy’s approach to equality, liberty, and the democratic process.
- Traditional democracy typically focuses on established structures and procedures, aiming for consensus and stability.
The key principles of radical democracy in India (by M. N. Roy):
- Decentralized Democracy: Radical democracy advocates for a highly decentralized democracy based on a network of people’s committees, enabling citizens to exercise democratic control over the state.
- Economic Reorganization: It emphasizes the progressive satisfaction of material needs as a prerequisite for individuals to unfold their intellectual potential, with economic liberation being essential for advancing toward freedom.
- Collective Efforts for Freedom: It envisions a world of freedom achieved through the collective efforts of intellectually free individuals who act as guides and friends of the people, promoting rational and ethical political practices.
- Social Renaissance: Radical democracies stressed the importance of educating people on freedom and rational cooperative living to achieve social revolution, requiring an increasing number of individuals committed to freedom, reason, and social harmony.
- Party-less Democracy Critique: Roy’s advocacy for party-less democracy is critiqued for potentially contradicting the fundamental democratic freedom of association, as political parties play a crucial role in democratic processes.
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Significance of Radical Approach towards Elections:
- Empowerment of Citizens: Radical democracy emphasizes empowering citizens beyond mere voting, focusing on raising individuals’ dignity and enabling active participation in decision-making processes.
- Critique of Traditional Democracy: Challenges the limitations of traditional liberal democracy, highlighting how parliamentary systems can lead to demagoguery and a loss of civil liberties, especially for economically disadvantaged individuals.
- Decentralization and Local Participation: Advocates for decentralization of legislative power to local councils, promoting direct participation and accountability at the grassroots level, ensuring a more inclusive and responsive democratic process.
- Protection Against Authoritarianism: Seeks to safeguard against authoritarianism and dictatorship by dispersing power and preventing monopolization by political parties or their leaders, fostering a more pluralistic and accountable political landscape.
- Enhanced Democratic Culture: Promotes a vibrant democratic culture that goes beyond institutional arrangements, emphasizing citizen empowerment through critical thinking, and participatory politics, and cultivating a public ethos that values democratic principles and practices.
How does a Radical Democracy provide a Humanist Economy?
- Roy criticizes Capitalist and Nationalized economies for their centralization and failure to prioritize human needs.
- He advocates for the modernization of agriculture through better irrigation, fertility improvement, and infrastructure development, emphasizing the cooperative organization of rural economies.
- Economic policies should focus on social security, unemployment insurance, old age pensions, and improving health, housing, and education.
- Roy argues for a balanced approach to industrialization that addresses immediate needs and promotes social and economic justice, warning against rapid industrialization that benefits only a small fraction of the population.
Significance of Radical Democracy:
- Achieve true freedom and social justice: Radical democracy, according to Roy, is essential for achieving true freedom and social justice. Democracy should be viewed as a product of civilization, possible only in advanced societies where individual freedom is recognized as interconnected with the freedom of others.
- Prevent totalitarianism: Roy emphasizes that economic deprivation and social oppression pave the way for totalitarianism. To prevent this, democracy must be grounded in individual creativity, rationality, and collective efforts to transform society.
- Humanism and moral radicalism: He advocates for a philosophy rooted in humanism and moral radicalism, asserting that humans are the creators of their world and emphasizing the need for a rational and scientific approach to societal development.
Conclusion: Radical democracy, rooted in humanism and moral radicalism, is crucial for true freedom and social justice, requiring a rational, creative, and collective effort to transform society and prevent totalitarianism.
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Manabendra Nath Roy, better known as M. N. Roy, was a prominent 20th-century Indian revolutionary, philosopher, radical activist, and political theorist. He played a significant role in the Indian independence movement and was the founder of the Mexican Communist Party and the Communist Party of India. Roy’s political career was marked by his involvement in various revolutionary activities, his advocacy for radical humanism, and his contributions to Marxist philosophy. |
Mains PYQ:
Q Starting from inventing the ‘basic structure’ doctrine, the judiciary has played a highly proactive role in ensuring that India develops into a thriving democracy. In light of the statement, evaluate the role played by judicial activism in achieving the ideals of democracy. (UPSC IAS/2014)
Prelims PYQs
Who among the following were the founders of the “Hind Mazdoor Sabha” established in 1948?
a) Krishna Pillai, E.M.S. Namboodiripad and K.C . George
b) Jayaprakash Narayan, Deen Day al Upadhyay and M.N. Roy
c) C .P. Ramaswamy Iyer, K. Kamaraj and Veeresalingam Pantulu
d) Ashok Mehta, T.S. Ramanujam and G.G. Mehta
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: MSMEs;
Mains level: Reviewing the Category of Micro-Enterprises
Why in the News?
A parliamentary panel suggested separating micro-enterprises from the broader MSME category and recommended revising definitions every five years.
- A government order for timely MSME payments has exposed knowledge gaps and unintentionally marginalized smaller enterprises, highlighting issues in understanding their structure and operations.
Present Status:
- According to the National Sample Survey Organisations (NSSO) Unorganised Enterprise Survey 2016, 95% of the enterprises surveyed reported revenues under Rs 50 lakh per annum. Of them, 89% reported an annual revenue of under Rs 12 lakh.
- In the Annual Survey of Industries (ASI), more than 66% of the enterprises reported an annual revenue of less than Rs 50 lakh, and of them, 45% reported annual revenues of Rs 12 lakh.
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What are the Categories of Micro-Enterprises?
- Category 1 – Micro: More than 98% of the MSMEs are within this category, with reporting annual revenue of Rs 50 lakh and less.
- Category 2 – Small: The MSMEs that are reporting annual revenue of Rs 50 lakh to Rs 5 crore.
Present Ambiguity and structural Gap in defining MSMEs
- Lack of Clarity and Consistency in defination: In India, the MSMED Act of 2006 categorized MSMEs based on investment in plants and machinery, which led to industries keeping their plants small to maintain MSME advantages.
- However, the MSMED Amendment Bill, 2018 proposed defining MSMEs solely based on yearly turnover, which has been criticized for under-reporting of qualifying enterprises.
- Quantitative vs. Qualitative Approaches: There are two main techniques for defining MSMEs: quantitative and qualitative, with MSMEs typically defined using a quantitative approach. Quantitative criteria like number of employees, total assets, and yearly revenue have limitations as they vary by industry and sector.
- Impact on Micro Enterprises: The ambiguity in defining MSMEs negatively impacts micro-enterprises, leading to issues like delayed payments and limited access to benefits and support schemes.
- Moreover, the unregistered micro-enterprises have been worse hit by the COVID-19 pandemic than small and medium enterprises, with micro-enterprises accounting for more than two-thirds of all MSMEs and having a higher rate of informality.
Way forward:
- Enhanced Data Collection: Conduct regular and comprehensive surveys to gather detailed data on MSMEs, particularly focusing on micro-enterprises.
- Further Classification within Micro-Enterprises: Establish sub-categories within the micro-enterprise category based on revenue thresholds (e.g., below Rs 10 lakh, Rs 10-25 lakh, Rs 25-50 lakh).
- Revenue Diversity: Significant variation in revenue among micro-enterprises necessitates further classification.
- Targeted Policies: Addressing classification gaps can enhance policy effectiveness, supporting micro-enterprise growth and sustainability.
BACK2BASICS
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| Program and Policies |
Explanation |
| MSME Development Act, 2006 |
Provides the legal framework for defining MSMEs and their classification into micro, small, and medium enterprises. |
| Credit Guarantee Fund Scheme for Micro and Small Enterprises |
Provides credit guarantee cover of up to 75% of the credit to micro and small enterprises. |
| Udyog Aadhaar |
A simple online process for MSME registration, requiring only the Aadhaar number and a self-declaration. |
| MSME Samadhaan |
Mechanism to facilitate the promotion and development of MSMEs, including Khadi, Village, and Coir Industries. |
| Mudra Yojana |
Provides loans up to 10 lakh to non-corporate, non-farm small/micro enterprises. |
| ZED Scheme |
Aims to enhance the manufacturing capabilities and competitiveness of MSMEs through Zero Defect Zero Effect (ZED) certification. |
| Stand-Up India |
Facilitates bank loans between 10 lakh and 1 crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one woman borrower per bank branch |
Make in India: Focuses on making India a global manufacturing hub, with MSMEs playing a crucial role.
Stand-Up India: Facilitates bank loans between 10 lakh and 1 crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one woman borrower per bank branch
Mains PYQ:
Q Account for the failure of manufacturing sector in achieving the goal of labour-intensive exports. Suggest measures for more labour-intensive rather than capital-intensive exports. (UPSC IAS/2017)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Present challenges in the Manufacturing sector;
Why in the News?
The emphasis on workers’ accommodation in the manufacturing sector is gaining traction in the news due to its potential to address key challenges and unlock India’s manufacturing ambitions.
About India’s goal to $10 trillion by 2035
India aims to grow its economy to $10 trillion by 2035, with a specific focus on transforming the manufacturing sector to increase its GDP share from 15% to 25%. This ambitious goal involves a four-fold growth in manufacturing to enhance employment elasticity. |
Present Challenges:
- Inadequate Infrastructure: Many factories currently lack the necessary infrastructure to support large-scale manufacturing, particularly in terms of workers’ accommodation.
- Land Regulation: Existing industrial land allocation regulations do not typically account for worker housing, necessitating regulatory changes at the state level.
- Commute and Productivity: Workers often face long commutes, with studies showing travel times of up to two hours each way, leading to exhaustion and reduced productivity.
- Living Conditions: Many workers live in ad hoc accommodations, which are not ideal for maintaining a stable and productive workforce.
- Skill Gaps: There is a need for more targeted skill development programs to enhance worker productivity and adaptability to new manufacturing processes and technologies.
- Lack of Coordinated Policy: There is a need for a more coordinated approach between state and central governments to provide the necessary fiscal and policy support.
Economic Factors that will steer Enlightened Self-Interest:
- Transportation Savings: By providing on-premises or factory-adjacent accommodation, companies can significantly reduce transportation costs, estimated at over Rs 5,000 per worker per month.
- Increased Productivity: Reduced commute times and better living conditions can lead to increased worker productivity.
- Reduced Attrition: Better living conditions and reduced commuting stress can decrease workforce attrition, ensuring a more stable and experienced workforce.
- Better Training Facilities: On-site accommodation can facilitate better training programs, enhancing workers’ skills and productivity.
- Lower Carbon Footprint: Reducing the need for long commutes can lower the overall carbon footprint of manufacturing operations.
Way forward:
- Tax and Fiscal Incentives: The Union government can catalyze investment in workers’ accommodation through tax incentives, GST reductions, and other fiscal benefits.
- Priority Sector Tagging: Tagging workers’ accommodation as a priority sector for construction finance can attract more investment.
- Collaborative Financing: Leveraging vehicles like the National Investment and Infrastructure Fund (NIIF) to finance credible worker housing projects can boost infrastructure development.
Mains PYQ:
Q The nature of economic growth in India in recent times is often described as a jobless growth. Do you agree with this view? Give arguments in favour of your answer. (UPSC IAS/2015)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: About Generalised System of Preferences (GSP)
Mains level: Trades and Relations; Changing Geopolitics of the World;
Why in the News?
It is widely believed that renewing the Generalised System of Preferences (GSP) program would pave the way for comprehensive U.S.-India trade negotiations, potentially elevating the bilateral trade relationship to new heights.
What is the ‘Generalised System of Preferences (GSP)’ Program about?
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- The Generalised System of Preferences (GSP) is a trade initiative by developed countries to aid developing countries.
- Nearly all developed countries have their versions of the GSP, tailored to their economic and policy goals.
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- It involves reducing tariffs on imports from these countries, aiming to stimulate their economic development. (It is not formally part of the World Trade Organization).
- Origin and its Evolution:
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- During the 1960s: The idea of the GSP emerged during the 1960s as part of broader efforts within the United Nations Conference on Trade and Development (UNCTAD) to help developing countries gain better access to markets in developed countries.
- During 1968: UNCTAD proposed the GSP as a mechanism to offer non-reciprocal, non-discriminatory tariff preferences to developing countries, aiming to promote their economic growth and industrialization.
- During 1974: The US officially established its GSP program under the Trade Act of 1974. This act authorized the U.S. to provide duty-free treatment for selected products imported from designated beneficiary developing countries (BDCs).
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The Significance of Renewing the GSP:
- US Factor: The GSP program is unique because it requires periodic reauthorization by Congress. This program of the U.S. expired in 2020 and has not yet been renewed, despite bipartisan support.
- For Stability in the Market: Renewal is challenging in a polarized political environment but is crucial for maintaining stable market access for developing countries.
- For Diversification: The GSP supports small businesses and women-owned enterprises, encouraging economic empowerment and diversification away from Chinese imports.
- To bring Reform: It will promote labor and environmental reforms and reduce tariff costs for American businesses, particularly small and medium-sized enterprises.
Significance of US – India Trade Relationship:
- Broader the Trade agreement: The U.S. and India have a significant trade relationship, with bilateral trade worth around $200 billion. Renewing the GSP could facilitate further negotiations and potentially lead to a broader trade agreement.
- Need for GSP renewal: Before the GSP expired, the U.S. and India were close to a trade deal covering various sectors including medical devices, agriculture, ethanol, and IT products.
- Despite ongoing trade dialogues, the U.S. is currently not negotiating new Free Trade Agreements (FTAs), making GSP renewal a key tool for enhancing trade relations.
- A renewed GSP could cover multiple areas such as labour rights, environmental laws, and regulatory practices, fostering a more robust and ambitious trade partnership.
- In the Indo-Pacific region.
- It can significantly boost trade and economic cooperation between the two countries.
- It would signal a mutual commitment to deepening their trade relationship and addressing broader economic and regulatory issues.
Way forward:
- Utilize GSP as a Negotiation Tool: Leverage GSP renewal as a platform to initiate broader trade negotiations between the U.S. and India, potentially leading to a more comprehensive trade agreement.
- Focus on Strategic Sectors: Identify and prioritize sectors such as technology, pharmaceuticals, and agriculture where both countries have mutual interests and complementary strengths.
Mains PYQ:
Q “What introduces friction into the ties between India and the United States is that Washington is still unable to find for India a position in its global strategy, which would satisfy India’s National self-esteem (UPSC IAS/2019)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Nuclear treaties and Co-operations; 123 Agreement;
Mains level: Nuclear Cooperation Agreement; Major powers;
Why in the News?
White House National Security Adviser Jake Sullivan will visit Saudi Arabia to discuss a Civil Nuclear Cooperation Agreement, aiming to foster Israeli-Saudi normalization.
What is a Civil Nuclear Cooperation Agreement?
- A civil nuclear cooperation agreement, often referred to as a “123 Agreement” after Section 123 of the U.S. Atomic Energy Act of 1954, sets the terms under which the United States can engage in significant nuclear cooperation with other countries.
- This includes the transfer of nuclear materials, technology, and information. Such agreements are designed to ensure that the cooperation is for peaceful purposes and to prevent nuclear proliferation.
- They require the partner country to adhere to nine nonproliferation criteria, including physical security measures, safeguards, and a commitment not to use the technology for nuclear weapons development. Additionally, these agreements must be reviewed and approved by the U.S. Congress.
Why does Saudi Arabia want a US nuclear cooperation agreement?
Saudi Arabia’s interest in a Nuclear Cooperation Agreement with the U.S. is driven by two primary motivations:
- Energy Diversification and its Vision 2030: Crown Prince Mohammed bin Salman’s Vision 2030 plan aims to diversify the Saudi economy and reduce its reliance on oil.
- Part of this vision includes developing renewable energy sources, and nuclear energy is seen as a key component.
- Strategic Considerations: There is also speculation that Saudi Arabia seeks to develop nuclear expertise as a hedge against Iran’s nuclear capabilities. The Saudi leadership has indicated that if Iran were to develop nuclear weapons, Saudi Arabia might consider doing the same.
- This potential for nuclear proliferation is a concern for arms control advocates and some U.S. lawmakers.
How would the US benefit from such a deal?
- Strategic Gains: The agreement could be a component of a broader effort to normalize relations between Saudi Arabia and Israel, thereby enhancing regional stability and security. This would bolster U.S. efforts to counter Iranian influence in the Middle East and build a coalition of allies in the region.
- Commercial Opportunities: U.S. nuclear companies could secure lucrative contracts to build and operate nuclear power plants in Saudi Arabia. This would provide a significant boost to the U.S. nuclear industry, which faces competition from Russian and Chinese firms.
- Geopolitical Influence: Strengthening ties with Saudi Arabia would reinforce U.S. influence in the Gulf region at a time when China is seeking to expand its presence. This would help maintain the U.S. strategic foothold in one of the world’s most geopolitically significant areas.
What are some likely hurdles to it?
Several challenges could impede the realization of a U.S.-Saudi nuclear cooperation agreement:
- Gaza Conflict: The ongoing conflict in Gaza, particularly the high Palestinian casualties resulting from Israeli military actions, complicates Saudi willingness to normalize relations with Israel.
- Nonproliferation Concerns: There are substantial concerns about the potential for nuclear proliferation. Ensuring that Saudi Arabia complies with stringent nonproliferation standards and does not pursue nuclear weapons capabilities will be a critical and contentious issue.
- Congressional Approval: Any agreement would need to pass through the U.S. Congress, where it could face opposition from lawmakers worried about proliferation risks and regional security dynamics. Congressional scrutiny could delay or block the agreement.
- Need of high Technical and Operational Details: Negotiating the specifics of nuclear technology transfer, including whether Saudi Arabia would be allowed to enrich uranium on its soil, and ensuring robust safeguards to prevent misuse of nuclear materials, are complex issues that require careful handling.
Way Forward:
- Need for Strict Safeguards: Establish stringent nonproliferation safeguards within the agreement, ensuring that Saudi Arabia adheres to international standards and commits to using nuclear technology solely for peaceful purposes.
- Need Regular Inspections: Implement a robust regime of regular inspections by the International Atomic Energy Agency (IAEA) to monitor Saudi nuclear facilities and ensure compliance with the agreement.
Mains PYQ:
Q In what ways would the ongoing US-Iran Nuclear Pact Controversy affect the national interest of India? How should India respond to its situation? (15) (UPSC IAS/2018)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Land and Property rights in India;
Mains level: Judicial Interventions; Judicial Review;
Why in the News?
To protect the rights of village landowners in Haryana, the Supreme Court has permitted a review of a 2022 judgment by Justices Hemant Gupta and V Ramasubramanian that allowed gram panchayats to acquire ‘shamlat deh’ land.
Context:
What is ‘Shamlat deh’?
- It refers to common land in the village, formed by multiple landowners each contributing an equal portion of their holdings to serve the “common purposes” of the village community. It is kept aside for common use in villages, as part of the Punjab Land Revenue Act of 1887.
- Article 31A was inserted by the First Amendment Act of 1951 in the Indian Constitution. It aimed to protect laws related to agrarian reforms and the acquisition of estates.
- According to the Supreme Court (April 2022), such land should be utilized by panchayats only for the needs of villagers. No part of the land can be re-partitioned amongst the proprietors, and such land would not be available for sale.
- A Bench of Justices B R Gavai and Sandeep Mehta reopened the challenge to the 1992 amendment on May 17, 2024, after observing that the 2022 decision disregarded an important and relevant Constitution Bench decision in the case of Bhagat Ram vs State of Punjab (1967).
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Bhagat Ram: Clarifying the Meaning of Land Acquisition under Article 31A:
- In 1967, a five-judge Bench reviewed a land consolidation scheme for the village of Dolike Sunderpur that reserved lands for common purposes and diverted the income to the panchayat.
- Landowners’ Argument: The scheme violated the second provision of Article 31A, which prevents acquiring land below the ceiling limit without compensation at market value.
- State’s Argument: The reservation for the panchayat was not land acquisition since the income would benefit the village.
- Ajit Singh v State of Punjab (1967): Distinguished land acquisition from modification or extinguishment of land rights.
- SC Decision: The panchayat was effectively acquiring land by reserving its income, making the state the beneficiary. The court ruled that the second provision of Article 31A applied. Punjab argued the acquisition predated the 17th amendment, but the SC noted the scheme’s implementation was stayed, hence possession and control had not been transferred.
Does Shamlat Land Belong to the Landowners or the Panchayat?
- In 2003, the Punjab and Haryana High Court reviewed a challenge to the 1992 amendment to the Punjab Act that vested control of ‘shamlat deh’ land in Haryana with the gram panchayat.
- Petitioners’ Argument: The Landowners however argued that the amendment did not allow panchayats to control the land for common purposes without compensation, violating Article 31A.
- High Court Decision: The court distinguished between land reserved for common purposes under the Consolidation Act (vested with the gram panchayat) and land contributed by proprietors but not reserved under the consolidation scheme (which could not vest with the panchayat without compensation).
- The decision relied on the SC’s Bhagat Ram ruling that acquiring land without compensation violates the second proviso of Article 31A.
SC Allows Review of 2022 Judgment:
- The 2022 Supreme Court decision by Justices Gupta and Ramasubramanian overruled the 2003 High Court decision, finding no need for compensation as Article 31 had been omitted. The court ruled that the panchayat merely managed the land on behalf of landholders and that control was vested in the panchayat upon assignment.
- Karnail Singh Review: Justices Gavai and Mehta reopened the challenge, noting the 2022 decision’s cursory reference to Bhagat Ram without addressing why the High Court’s reliance on it was wrong.
- The court found that ignoring a Constitution Bench decision was a manifest error, justifying a review.
- Recalled the 2022 SC decision: The 2022 decision was recalled, and the challenge to the 2003 High Court decision was set to be reheard, starting on August 7, 2024.
Way Forward:
- Need Comprehensive Judicial Reviews: Conduct detailed reviews of prior relevant judgments to provide clear, well-founded reasoning in court decisions.
- Need Clear Compensation Guidelines: Establish explicit guidelines for compensation in land acquisition cases, particularly those involving common land like ‘shamlat deh’, to protect landowners’ rights.
Mains PYQ:
Q The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 has come into effect from Ist January 2014. What are the key issues which would get addressed with the Act in place? What implications would it have on industrialization and agriculture in India? (UPSC IAS/2014)
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From UPSC perspective, the following things are important :
Prelims level: Glaciers;
Mains level: Climate change; Issue of rise in Temperatures;
Why in the News?
Venezuela has likely become the first country to lose all its glaciers, with its last Humboldt glacier melting faster than anticipated. While scientists projected it to last another decade, its rapid melting exceeded expectations.
Background:
- Venezuela was home to six glaciers about 5,000 meters above sea level in the Andes mountains.
- By 2011, five of them had vanished. Scientists expected the Humboldt glacier to last another decade.
What are glaciers?
- Glaciers are large masses of ice that form on land over long periods through the accumulation and compaction of snow. They flow like slow rivers and typically develop in regions with near-freezing temperatures, significant snowfall, and minimal summer melting.
- According to the United States Geological Survey (USGS), they usually exist and form in areas where mean annual temperatures reach near the freezing point; winter precipitation leads to significant snow accumulations; and temperatures throughout the remaining year do not cause the complete loss of the previous winter’s snow accumulation.
Why are Glaciers disappearing?
- Greenhouse Gas Emissions: The burning of fossil fuels since the Industrial Revolution have released large amounts of GHGs like carbon dioxide and methane into the atmosphere.
- Heat Trapping: The greenhouse gases act as a blanket, trapping heat in the atmosphere. While they allow sunlight to pass through, they prevent the heat from escaping back into space, leading to a rise in global temperatures.
- The global average temperature has increased by at least 1.1 degrees Celsius since 1880 due to the skyrocketing emissions of GHGs in recent decades.
- Consequences of Temperature Rise: The temperature rise has resulted in devastating consequences such as more frequent and intense heatwaves, floods, droughts, and a rise in sea levels.
- Accelerated Melting: Glaciers, like ice cubes exposed to heat, are melting at accelerated rates due to the warmer temperatures caused by global warming.
- Natural Climate Phenomena: Natural climate phenomena like El Nino can exacerbate glacier melting by causing abnormal warming of surface waters, as observed in the case of the Humboldt glacier in Venezuela.
What are the impacts of Glacier Loss?
- Freshwater Source: Glaciers are crucial sources of freshwater, especially during hot and dry periods, providing water for local communities, plants, and animals. Their disappearance would increase dependence on sporadic rainfall for freshwater supply.
- Temperature Regulation: Glacial runoff helps regulate downstream water temperatures, particularly keeping them cooler. This is essential for many aquatic species that require cold water temperatures to survive, impacting the entire ecosystem.
- Ecosystem Impact: Glacier loss directly affects aquatic species, disrupting the food web and potentially leading to declines in biodiversity.
- Contribution to Sea Level Rise: Melting glaciers contribute to rising sea levels, although smaller glaciers like Venezuela’s Humboldt glacier may not substantially impact sea levels.
- Cultural Impact: The loss of glaciers has significant cultural implications, particularly for communities where glaciers are part of their cultural identity. Activities such as mountaineering and tourism, which rely on glaciers, would be affected.
- Tourism and Recreation: Glaciers are often major tourist attractions, drawing visitors for activities like mountaineering and sightseeing. The disappearance of glaciers would impact tourism and recreational activities in affected regions.
Way Forward:
- International Cooperation: Foster collaboration among countries to tackle climate change on a global scale. Support international agreements such as the Paris Agreement, aimed at limiting global warming and reducing greenhouse gas emissions.
- Protect and Preserve Glacier Areas: Establish and enforce conservation measures to protect glacier regions from further degradation. This can involve creating protected areas, implementing zoning regulations, and promoting sustainable tourism practices.
Mains PYQ:
Q Bring out the relationship between the shrinking Himalayan glaciers and the symptoms of climate change in the Indian sub-continent. (UPSC IAS/2014)
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From UPSC perspective, the following things are important :
Prelims level: What is the dependency ratio?
Mains level: What are the opportunities for India?
Why in the News?
In a recent statement, the Finance Minister highlighted the pressing need for sophistication in India’s manufacturing sector to drive economic growth and competitiveness.
- The sophisticated manufacturing sector provides a conducive environment to enhance the efficiency of producing goods and services.
What is the current state of Indian Manufacturing?
- India’s manufacturing sector’s Gross Value Added (GVA) as a percentage of GDP has shown an upward trend (since 2014), currently hovering around 18%. There is a consensus that to compete on a global scale, Indian manufacturing needs to evolve and embrace sophistication in its processes, technologies, and products.
- India’s Dependency Ratio: The dependency ratio is a measure that compares the number of dependents (people who are either too young or too old to work) to the working-age population.
- According to the Economic Survey 2018-19, India’s Demographic Dividend will peak around 2041, when the share of working-age,i.e. 20-59 years, population is expected to hit 59%.
Importance of Sophistication in Manufacturing:
- Leveraging the Demographic Dividend: India’s young population and low dependency ratio offer a significant advantage in terms of labor force and consumption. To capitalize on this demographic dividend, there is a strong focus on ramping up skills in the Indian workforce through initiatives like the Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
- Enhancing Productivity and Quality: Embracing sophistication is crucial for enhancing productivity, quality, and competitiveness in the global market. By investing in technology, automation, and research and development, manufacturers can improve efficiency and deliver high-quality products.
- Increasing Share in Global Value Chains: To increase India’s share in global manufacturing and value chains, the government is considering providing policy support. This will help reduce dependence on imports and make India more Self-reliant (Atmanirbhar).
- Attracting Investments: Sophistication in manufacturing can attract significant investments from global companies looking to reduce their dependence on China. According to a Capgemini Research Institute report, 65% of senior executives in the U.S. and Europe plan to increase manufacturing investments significantly in India.
- Unlocking Opportunities in Specific Sectors: Sophistication in manufacturing can help unlock opportunities in sectors such as food spending, financial services, and consumer markets. By 2031, India’s consumer market is projected to double, presenting a $2.9 trillion opportunity.
What are the Challenges hindering the growth of the Sophisticated Manufacturing sector?
- Inadequate infrastructure: Lack of reliable power supply, poor connectivity, and limited access to advanced technologies. Difficulty in obtaining credit, especially for small and medium enterprises (SMEs), to invest in technology upgradation.
- Skill gaps: Shortage of skilled workers trained in modern manufacturing techniques and technologies
- Weak Intellectual Property Rights: Insufficient protection of patents, trademarks, and copyrights, discouraging innovation
- Regulatory hurdles: Complex bureaucratic processes, lack of clarity in policies, and inconsistent implementation
Government Initiatives and Support
- Make in India Initiative: Launched in 2014, the program aims to transform India into a global manufacturing hub by facilitating investment, fostering innovation, building best-in-class infrastructure, and making doing business easier. It focuses on 25 sectors, including automobiles, aviation, chemicals, and pharmaceuticals.
- National Manufacturing Policy: Introduced in 2011, it aims to increase the share of manufacturing in GDP to 25% and create 100 million jobs by 2022. It focuses on enhancing skill development, promoting innovation, and creating a favorable business environment.
- Production Linked Incentive (PLI) Scheme: It provides financial incentives to boost domestic manufacturing and attract investments in key sectors such as electronics, pharmaceuticals, automobiles, and telecom. It has helped reduce import dependence and increase exports in sectors like telecom and mobile manufacturing
Way Forward:
- Role of Financial Institutions: By providing access to capital, facilitating technology adoption, and offering financial expertise, they can empower manufacturers to invest in sophistication and drive growth.
- Enhanced Strategies: Manufacturers need to prioritize investments in technology, automation, research and development, and skill development to enhance sophistication. Collaborating with financial institutions for tailored financial solutions can help accelerate this transformation.
- Competitive Outlook: As Indian manufacturing embraces sophistication, it is poised to unlock new opportunities, improve competitiveness, and contribute significantly to the country’s economic growth. By aligning with the Finance Minister’s vision, the sector can chart a path towards sustainable success in the global market.
Conclusion: The Finance Minister’s call for sophistication in Indian manufacturing underscores the need for a strategic shift towards innovation, efficiency, and quality. With concerted efforts from stakeholders, including the government, financial institutions, and manufacturers, India can elevate its manufacturing sector to new heights of success and competitiveness.
Mains PYQ:
Q Demographic Dividend in India will remain only theoretical unless our manpower becomes more educated, aware, skilled and creative.” What measures have been taken by the government to enhance the capacity of our population to be more productive and employable? (UPSC IAS/2016)
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From UPSC perspective, the following things are important :
Prelims level: NSG group and NPT
Mains level: Why did India choose to conduct nuclear tests?
Why in the News?
In the year 2024, India’s Pokhran-I have completed 50 years of its tests. The present variation in adopting Nuclear policies (especially Russia and China) around the world, reminds us of the historic Pokhran tests of 1974 by the Indian Government that were held amid secrecy.
Background:
- Post-World War II, new global alliances and alignments emerged amidst the Cold War between the US and USSR.
- The Nuclear Nonproliferation Treaty (NPT) signed in 1968, aimed to prevent the spread of nuclear weapons. It defined nuclear-weapon states and non-nuclear states, but India objected to its discriminatory nature towards non-nuclear states.
- India refused to sign the NPT due to its failure to address India’s concerns about the discriminatory nature of the treaty, particularly regarding non-nuclear states’ obligations.
Why did India choose to conduct Nuclear Tests?
- India viewed the NPT as discriminatory towards non-nuclear states like itself, leading to its decision to conduct nuclear tests independently.
- Indian scientists, notably Homi J Bhabha and Vikram Sarabhai, laid the groundwork for nuclear energy in India. The Department of Atomic Energy (DAE) was established in 1954.
- Changes in leadership post-1960s, coupled with conflicts with China and Pakistan, influenced India’s decision to pursue nuclear capabilities. China’s nuclear tests in 1964 also played a role.
How did Pokhran-I happen?
- In Secrecy and Uncertainty: India conducted the nuclear test at Pokhran in 1974 without prior announcement, even amidst internal uncertainty among key decision-makers.
- Operation Smiling Buddha (MEA designation: Pokhran-I) was the code name of India’s first successful nuclear weapon test on 18 May 1974.
- The test demonstrated India’s nuclear capabilities and its ability to defend itself, though India chose not to weaponize immediately. The choice of Buddha Jayanti for the test date carried symbolic significance.
- By Autonomous Approval: Despite opposition from some advisers, Prime Minister Indira Gandhi gave the go-ahead for the test, signaling India’s resolve.
What was the impact of the Pokhran-I Test?
- Global Criticism: India faced criticism and sanctions from various countries, including the US, following the tests. The US enacted the Nuclear Non-Proliferation Act in 1978, halting nuclear assistance to India.
- Despite international criticism, India asserted itself as a nuclear-capable nation, paving the way for future developments like Pokhran-II in 1998.
- Diplomatic Goals: India sought acceptance as a responsible nuclear power and aimed to join international groups like the Nuclear Suppliers Group (NSG), facing resistance from some countries, notably China.
- India’s nuclear tests marked a significant milestone in its defense and foreign policy, shaping its stance on nuclear issues and its position in global nuclear politics.
Way forward for being in the NSG group:
Engage in Diplomatic Outreach:
- Strengthen bilateral relations with NSG member countries.
- Engage in diplomatic dialogue to address concerns and build consensus on India’s membership.
Demonstrate Commitment to Nonproliferation:
- Continue adhering to nonproliferation norms and standards.
- Showcase India’s responsible nuclear behaviour and track record in nuclear security.
Mains PYQ
Q With growing energy needs should India keep on expanding its nuclear energy programme? Discuss the facts and fears associated with nuclear energy. (250 Words, 15 Marks) (UPSC IAS/2018)
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From UPSC perspective, the following things are important :
Prelims level: Trends in wheat and Rice production
Mains level: National food security;
Why in the News?
The recent drop in agricultural production due to El-Nino has highlighted once more the critical role Punjab and Haryana play in ensuring India’s food security.
Role of Punjab and Haryana for the Food Security of India:
- Punjab and Haryana are crucial in years with bad monsoons or climate shocks.
- The average per hectare wheat and paddy yields in these states are 4.8 tonnes and 6.5 tonnes, respectively, significantly higher than the all-India averages of 3.5 tonnes and 4.1 tonnes.
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Wheat Production:
- Traditional procurement: Until the mid-2000s, Punjab and Haryana supplied over 90% of the wheat for India’s public distribution system (PDS) and other government programs.
- Impact of the Green Revolution: The spread of high-yielding varieties to other states and the establishment of infrastructure for buying grain at minimum support prices (MSP) reduced Punjab and Haryana’s share to around 65% by the early 2010s.
- In 2019-20 and 2020-21, total wheat procurement reached record levels (39-43.3 million tons), with Punjab and Haryana’s share falling to just over 50%. Madhya Pradesh became the top wheat procurer in 2019-20, surpassing Punjab.
- Climate Shocks: The last three years have seen production setbacks due to climate shocks, including: An unseasonal temperature surge in March 2022. Heavy rain in March 2023 during the grain formation stage.
Recent Climate Impact:
In 2023-24, unusually warm temperatures in November-December impacted wheat yields, especially in central India. The delayed winter, attributed to El Nino, led to premature flowering and shortened the vegetative growth phase.
Regional Impact:
- Madhya Pradesh’s wheat procurement dropped significantly from 12.8-12.9 million tons in 2019-20 and 2020-21 to about 4.6 million tons.
- Uttar Pradesh and Rajasthan also saw significant declines from their 2020-21 highs.
- Punjab and Haryana have been less affected due to longer winters and later sowing (early to mid-November).
- Uttar Pradesh and Bihar reported good production due to near-normal March temperatures, but much of their produce was sold to private traders at prices above the MSP.
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Rice production in the states:
- Traditional Procurement: Government rice procurement was historically concentrated in Punjab, Haryana, and the Godavari-Krishna and Kaveri delta regions of Andhra Pradesh (AP) and Tamil Nadu (TN).
- Diversification: There has been a diversification in rice procurement, with new states like Telangana, Chhattisgarh, Odisha, and Uttar Pradesh (UP) becoming significant contributors to the Central pool.
- Change in Procurement Shares: The combined share of Punjab and Haryana in total rice procurement decreased from 43-44% in the early 2000s to an average of 28.8% in the four years ending 2022-23. In the current crop year, this share has risen to around 32.9%, with some procurements still pending in Telangana, AP, and TN.
Impact of Irrigation:
- Farmers in Punjab and Haryana, with assured access to irrigation, did not suffer production losses from last year’s patchy monsoon attributed to El Niño.
- In contrast, states like Telangana saw reduced rabi paddy planting and struggled with irrigation due to depleted groundwater levels.
Policy implications
- NFSA Entitlements: Under the NFSA, about 813.5 million people are entitled to receive 5 kg of wheat or rice per month through the Public Distribution System (PDS) at highly subsidized prices.
- Current Government Policy: Since January 2023, the current government has been providing this grain to all NFSA beneficiaries free of cost.
Way Forward:
- Adoption of Climate-Resilient Varieties: Develop and promote high-yield, climate-resilient wheat varieties that are tolerant to heat, drought, and diseases.
- Efficient Irrigation Systems: Invest in modern irrigation systems such as drip and sprinkler irrigation to ensure efficient water use.
- Invest in Agricultural Research: Increase funding for agricultural research institutions to develop new wheat varieties and innovative farming techniques.
Mains PYQ:
Q Why did the Green Revolution in India virtually by-pass the eastern region despite fertile soil and good availability of water? (UPSC IAS/2014)
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From UPSC perspective, the following things are important :
Prelims level: Political Parties and their registration/de-registration in India;
Mains level: Issues related to Political Parties;
Why in the News?
The ECI urges star campaigners to uphold societal harmony, sparking debate on its efficacy in curbing MCC violations and enforcing norms.
Criteria for Registration of Political Parties:
- Section 29A of the Representation of the People Act, 1951 (RP Act) outlines the criteria for registering a political party with the Election Commission of India (ECI).
- Any party seeking registration must submit a copy of its memorandum or constitution. This document must declare that the party will faithfully adhere to the Constitution of India.
- Additionally, it must commit to the principles of socialism, secularism, and democracy, and uphold the sovereignty, unity, and integrity of India.
How are political parties registered in India?
- A political party recognized as a ‘National’ or ‘state’ party under the Election Symbols (Reservation and Allotment) Order, 1968 (Symbols Order) by the Election Commission of India (ECI) is referred to as a Recognized Political Party (RPP).
- Recognition as a ‘National’ or ‘state’ political party is contingent upon meeting specific criteria, such as winning a requisite number of seats or obtaining a required percentage of votes in a general election to the Lok Sabha or State Assembly.
- Currently, there are 6 National political parties and 61 state political parties that have been granted recognition. Recognized parties benefit from additional privileges, including the reservation of a symbol during elections and the designation of forty ‘star campaigners’.
- Registered political parties enjoy the following legal benefits:
- Tax exemption for donations received under Section 13A of the Income Tax Act, 1961.
- Common symbol for contesting general elections to the Lok Sabha/State Assemblies
- Twenty ‘star campaigners’ during the election campaign. As per the ECI, there are 2,790 active registered political parties in India.
What are the issues related Criteria for Deregistration?
- Misuse of Privileges: Non-contesting RUPPs raise concerns about potential misuse of benefits like income tax exemption and donations for purposes such as money laundering.
- Absence of De-registration Powers: The Representation of the People Act (RP Act) does not explicitly empower the Election Commission of India (ECI) to de-register political parties for failure to contest elections, conduct inner-party elections, or submit required returns.
- Legal Limitations: The Supreme Court ruling in “Indian National Congress versus Institute of Social Welfare & Ors (2002)” affirmed that the ECI lacks the authority to de-register political parties under the RP Act, except under extraordinary circumstances such as fraudulent registration or cessation of allegiance to the Constitution.
- Violations of Model Code of Conduct (MCC): Recognised political parties have been found guilty of breaching the MCC, which prohibits the exploitation of caste and communal sentiments for electoral gain, as well as voter bribery and intimidation.
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What needs to be done? (Way Forward)
- The Election Commission of India (ECI) has proposed amendments to the law in its 2016 memorandum for electoral reforms, aiming to grant the ECI the authority to deregister political parties.
- The Law Commission’s 255th report on ‘Electoral reforms’ in 2015 also advocated for amendments allowing the de-registration of a political party if it abstains from contesting elections for 10 consecutive years. These recommendations should be put into effect.
- Paragraph 16A of the Symbols order grants the ECI the power to suspend or revoke the recognition of a recognized political party if it fails to adhere to the Model Code of Conduct (MCC) or comply with lawful directives from the Commission.
- Although this provision has been utilized only once, as seen in the temporary suspension of the National People’s Party’s recognition in 2015 for non-compliance with ECI directives, stricter enforcement of this measure would foster adherence to the MCC.
Mains PYQ:
Q Discuss the role of the Election Commission of India in the light of the evolution of the Model Code of Conduct.(UPSC IAS/2022)
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From UPSC perspective, the following things are important :
Prelims level: Hysterectomy Among Women;
Mains level: Health and disease Issues; Hysterectomy Among Women;
Why in the News?
According to the recent report published in Women’s Reproductive Health under the title ‘Reported Reasons for Undergoing Hysterectomy Among Women Aged 45 Years and Above‘, it was seen that data is lacking on women’s health conditions; thus the true magnitude is never known, impeding funding and escaping the attention of policymakers.
What is Hysterectomy?
- A hysterectomy is surgery to remove the uterus. After a hysterectomy, you will not menstruate (have periods) or be able to get pregnant.
- Uterus removal is a common treatment for a variety of conditions that affect a woman’s reproductive organs.
Key highlights of the Report:
Reasons for Undertaking Hysterectomy:
- Medical Conditions: Common medical reasons such as fibroids, excessive bleeding, prolapse, endometriosis, and cancer.
- Socioeconomic Factors: Influence of sociodemographic factors like age, education, income, and access to healthcare services.
- Cultural and Regional Differences: Variations in hysterectomy rates and reasons across different regions and cultural contexts within India.
Frequency of Hysterectomy:
- Global Context: Hysterectomy is one of the most frequently performed surgeries among women worldwide.
- Prevalence in India: The countrywide hysterectomy prevalence rate is 11.5%. The highest prevalence is reported in the southern (18.2%) and western (12.7%) regions of India.
- According to the NFHS-5 (2019-2021), 3.3% of women aged 15–49 underwent hysterectomy, a slight increase from 3.2% in NFHS-4. Alarmingly, 50% of women who underwent hysterectomy did so before the age of 35.
- Regional Variations: Andhra Pradesh has the highest prevalence rate at 63 per 1,000 women, followed by Telangana (55 per 1,000), Karnataka (29 per 1,000), and Punjab (23 per 1,000).
- Sociodemographic Factors: Higher risk of hysterectomy among women from the OBC category, the richest wealth quintile, those with lower education levels, those who married at a younger age, and those with three or more children.
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Most Cited Reasons for Hysterectomy:
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- Heavy Menstrual Bleeding or Pain: Cited by 32.1% of women as the reason for undergoing hysterectomy.
- Fibroids or Cysts: Cited by 24.2% of women as the reason for the surgery.
- Uterine Prolapse: Cited by 16.3% of women.
- Less Frequently Reported Reasons:
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- Cancer: Among the least reported reasons for undergoing a hysterectomy.
- Severe Post-Partum Hemorrhage is also among the least reported reasons.
- Sociodemographic Factors:
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- Higher risk of undergoing hysterectomy among women from the OBC category, the richest wealth quintile, those with lower education levels, those who married at a younger age, and those with three or more children.
What are the Ministerial guidelines?
- Hysterectomy is a major surgery with a long recovery time and should be considered only after less invasive treatments have been tried.
- The government emphasizes on attempting nonsurgical alternatives in elective cases before opting for a hysterectomy.
Way Forward:
- Healthcare Providers: Train healthcare providers about the potential overuse of hysterectomy and emphasize the importance of considering nonsurgical alternatives.
- Public Awareness: Launch awareness campaigns to educate women about gynecological health, the implications of hysterectomy, and available alternatives.
Mains PYQ:
Q Public health system has limitation in providing universal health coverage. Do you think that private sector can help in bridging the gap? What other viable alternatives do you suggest? (UPSC IAS/2015)
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From UPSC perspective, the following things are important :
Prelims level: Climate Change; Heat Waves;
Mains level: Impacts of Climate change;
Why in the News?
According to the Indian Meteorological Department (IMD), heatwave conditions are affecting either the smaller regions or the larger geographical areas in India at every 26 days of the month.
What are the Heat Waves?
- The “World Meteorological Organization” defines a heat wave as five or more consecutive days during which the daily maximum temperature exceeds the average maximum temperature by five degrees Celsius.
- If the maximum temperature of any place continues to be more than 45 Degree Celsius consecutively for two days, it is called a heat wave condition.
Heatwaves in India:
- Regional Observations: A place with a normal temperature of 40°C in summer is not experiencing a heatwave at 42-43°C, but another location with a normal temperature of 27-28°C is in a heatwave at 35°C.
- Heatwaves are common in northern, central, and eastern India during summer. Heatwaves are becoming more frequent, intense, and prolonged due to climate change.
- In February 2023 (winter month for India), several regions experienced heatwaves with maximum temperatures 5 to 11 degrees higher than normal. (with a mean temperature 1.36°C higher than normal)
- Predictions and Records: The outlook for heatwaves this year is grim, with predictions of prolonged heatwaves lasting 10 to 20 days in some areas, compared to the usual 4 to 8 days.
- In April 2023, Odisha experienced an 18-day heatwave, the second-longest in the state’s history.
- Gangetic West Bengal recorded the highest number of heatwave days in any month over the last 15 years. Eastern India recorded its warmest April ever.
- Upcoming Heatwave: The India Meteorological Department (IMD) forecasted a fresh spell of heatwaves starting over northwest India.
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Impact of Heatwaves:
- Impact on Resource Availability:
- Water Resources: It exacerbates water scarcity by drying up of water bodies, reducing water availability for agriculture and domestic use, and increasing competition for resources. This can lead to conflicts over water, affect irrigation practices, and impact water-dependent industries.
- Energy Resources: It increases electricity demand for cooling purposes, leading to strain on power grids and potential blackouts. This can disrupt economic activities, affect productivity, and impact vulnerable populations.
- Impact on Health:
- Prolonged exposure to heat can lead to Dehydration and Cardiovascular and Respiratory diseases.
- Rapid rises in heat gain can compromise the body’s ability to regulate temperature and can result in a cascade of illnesses, including heat cramps, heat exhaustion, heatstroke, and hyperthermia.
- Health Ministry reported 264 heat-related deaths in the first six months of 2023. NCRB reported 730 heat-related deaths in the same year.
However, data collected and maintained by IMD and NDMA (National Disaster Management Authority) showed a sharp decline in heat-related deaths ever since state governments and district administrations began implementing heat action plans.
Mitigation of Heatwaves:
- Need to establish an Early Warning System: The Inter-Agency Coordination needs to alert residents on predicted high and extreme temperatures. Who will do what, when, and how is made clear to individuals and units of key departments, especially for health.
- Increase Public Awareness and Community Outreach: Disseminating public awareness messages on how to protect against the extreme heat – wave through social media and advertisements. Additionally, the government needs to aware the general public through Television programs the Do’s and Dont’s for heat-related illnesses.
Conclusion: Need to improve collaboration with Non-governmental organizations and Civil society organizations to improve public spaces wherever necessary, improve water delivery systems in public areas, and other innovative measures to tackle heatwave conditions.
Mains PYQ:
Q ‘Climate change’ is a global problem. How India will be affected by climate change? How Himalayan and coastal states of India will be affected by climate change? (UPSC IAS/2017)
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From UPSC perspective, the following things are important :
Prelims level: Migration Pattern;
Mains level: Internal security issues; Changing Migration Pattern in India;
Why in the News?
The report by the Geneva-based Internal Displacement Monitoring Centre (IDMC) termed it the highest number of displacements in India triggered due to the conflict and violence in India since 2018.
Key highlights on Internal Displacement in India (2009-2023):
- The above image shows the Internally Displaced People (IDP) currently living in India.
- This term focuses on the individuals who have been displaced till the end of every year. At the end of 2023, there were 0.61 million such persons in India.
- Globally, India was among the top five countries with the highest number of new internal displacements in 2022 due to disasters, with 2.5 million displacements.
- Causes:
- Natural: In 2023, India experienced over half a million internal displacements due to floods, storms, earthquakes, and other disasters.
- Artificial: Over the past five years (2009-2023), the number of internally displaced people resulting from regional conflict and land disputes has increased by 22.6 million, with the two biggest increases in 2022 and 2023.
- Over 1/3rd of the displacements took place within Manipur, with almost a fifth moving to the neighboring state of Mizoram and smaller numbers to Nagaland and Assam.
Regional Scenario (2009-2023):
- In 2023, conflict and violence triggered 69,000 displacements in South Asia, with Manipur violence alone accounting for 67,000, the highest number since 2018.
- The violence erupted after a ‘Tribal Solidarity March’ was organized in Manipur’s hill districts to protest against the Meitei community’s demand for Scheduled Tribe (ST) status.
- This led to ethnic clashes between the Meitei and Kuki communities even in bordering areas of Myanmar and Bangladesh.
Global Scenario (2009-2023):
- The number of IDPs has grown by 50% in the last five years. The report said that 68.3 million people worldwide were displaced by conflict and violence as of 2023.
- By the end of 2022, at least 8.7 million people in 88 countries and territories were internally displaced by disasters, with India being one of them.
- Conflicts in Sudan, the Democratic Republic of the Congo (DRC), and Palestine accounted for nearly two-thirds of new conflict movements in 2023
- 3.4 million new movements in the Gaza Strip in the last quarter of 2023, leaving 1.7 million internally displaced by the end of the year.
Way Forward:
- Dialogue and Mediation: Facilitate dialogue between conflicting communities, such as the Meitei and Kuki, to address underlying issues like land disputes.
- Legal Framework: Strengthen legal frameworks to protect minority rights and address grievances that may lead to violence.
- Peacebuilding Initiatives: Implement peacebuilding programs that promote social cohesion and understanding among different ethnic and community groups.
Mains PYQ:
Q How far are India’s internal security challenges linked with border management particularly in view of the long porous borders with most countries of South Asia and Myanmar? (UPSC IAS/2013)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Local Governance; Delhi Pollution;
Mains level: Delhi Pollution and Local Governance; Solid Waste Management;
Why in the News?
On May 13, the Supreme Court stated that addressing the “horrible” issue of 3,800 metric tonnes of untreated Municipal Solid Waste (MSW) accumulating daily in the national capital requires moving beyond party politics.
What is the status of Delhi’s SWM system?
- Population Growth and Waste Generation:
- According to the 2011 Census Data, New Delhi’s population was approximately 1.7 crore. However, this Population is expected to increase to around 2.32 crore.
- This increase will lead to a significant rise in waste generation, estimated at approximately 13,000 tonnes per day (TPD), which equates to roughly 1,400 truckloads daily.
- Presently, this daily waste generation accumulates to about 42 lakh tonnes per annum. The population is anticipated to reach 2.85 crore by 2031 due to which the waste generation could increase to 17,000 TPD.
- Waste Collection: Around 90% of the waste generated in the city is collected by three municipal corporations:
- Municipal Corporation of Delhi (MCD)
- Delhi Cantonment Board
- New Delhi Municipal Corporation
- Waste Composition is of major types – Biodegradable Wet Waste (50-55%), Non-Biodegradable Dry Waste (around 35%), and Inert Waste (10% that does not decompose). The total collective capacity of these facilities is about 9,200 tonnes per day (TPD).
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Issue of Unprocessed Waste Disposal:
- The Municipal Corporation of Delhi (MCD) is disposing of 3,800 TPD of unprocessed waste in landfills.
- Designated Landfills (Gazipur, Bhalswa, and Okhla) are filled with unprocessed wet and dry waste, leading to significant environmental issues such as methane gas emissions, leachate production, and landfill fires.
- The landfills have accumulated a total of 2.58 crore tonnes of legacy waste, covering 200 acres of land.
What are the challenges faced by MCD?
- Lack of Waste Segregation at Source: Many households and commercial establishments do not segregate waste. Unprocessed mixed waste enters landfills as a result.
- Land Availability for Waste Processing Plants: Waste processing plants require large land parcels (30-40 acres each). Securing such large tracts of land is challenging in Delhi.
- Public Awareness and Practices: There is a lack of public awareness regarding proper waste management practices. This leads to littering and improper disposal habits. MCD’s focus shifts to clearing open points rather than processing wet waste.
- Inadequate Waste Collection Services: Some areas suffer from irregular waste collection services. This contributes to waste buildup and increased littering.
- Illegal Dumping: Waste is often illegally dumped in open areas and water bodies. This increases the pressure on the MCD and requires additional resources for cleanup.
What efforts need to be made by MCD?
- Need for a Decentralized Approach: Given the challenges of identifying large land parcels, Delhi will need to partner with its neighboring States to set up a few of these composting plants.
- Additionally, the market for organic compost produced from wet waste lies in the neighboring States of Haryana and Uttar Pradesh.
- Need to work on Biodegradable Wet Waste: The design capacity for wet waste processing should be 9,000 TPD. This would require at least 18 composting or biogas plants (assuming each plant has a capacity of 500 TPD).
- Significant efforts will be needed to identify land, establish composting facilities, and ensure their proper operation to prevent biodegradable waste from reaching landfills.
- Need to work on Non-Biodegradable Dry Waste: Approximately 2% of dry waste is recyclable and should be sent to recycling facilities. The remaining 33% of non-recyclable dry waste (plastics, paper, textile waste) can be used as RDF for power generation in waste-to-energy projects.
- Coordination Among Stakeholders: Improved coordination between various Municipal Corporations to streamline waste collection and segregation processes by collaborating with private companies and non-governmental organizations is needed to enhance waste segregation and processing efforts.
Conclusion: Already, Biomining Initiative was launched in 2019 by the MCD to reduce the amount of waste. The COVID-19 pandemic interrupted these efforts. Originally planned for completion by 2024, now expected to take an additional two to three years.
Mains PYQ:
Q What are the impediments in disposing the huge quantities of discarded solid wastes which are continuously being generated? How do we remove safely the toxic wastes that have been accumulating in our habitable environment? (UPSC IAS/2018)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Emerging Technologies
Mains level: e-Governance; AI; Regulatory sandboxes;
Why in the News?
Regulatory sandboxes are now widely used in many countries because they allow new ideas to be tested in a controlled and supervised environment.
What are Regulatory Sandboxes?
- A regulatory sandbox is a tool allowing businesses to explore and experiment with new and innovative products, services, or businesses under a regulator’s supervision. They are introduced in highly regulated Finance and Energy industries.
- This is also related to specific spheres or regulations, such as AI or GDPR, to promote responsible innovation/and or competition, address regulatory barriers to innovation, and advance regulatory learning.
Regulatory Sandboxes in the World:
- According to a World Bank study, more than 50 countries are currently experimenting with fintech sandboxes.
- Japan: Japan introduced in 2018 a sandbox regime open to organizations and companies including blockchain, AI, and the Internet of Things (IoT), as well as in fields such as financial services, healthcare, and transportation.
- UK: A sandbox has been set up to explore new technologies such as voice biometrics and facial recognition technology, and the related data protection issues.
Significance of Regulatory Sandboxes:
- Provides Empirical Evidence: Regulators can acquire a better understanding of innovative products, which allows them to develop adequate rule-making, supervision, and enforcement policies.
- For example, in the banking industry, the sandbox may result in amending the rules on identity verification without a face-to-face meeting in certain circumstances.
- Controlled Environment: Regulatory sandboxes help innovators to develop a better understanding of supervisory expectations. Moreover, for innovators, testing in a controlled environment also mitigates the risks and unintended consequences when bringing a new technology to market, and can potentially reduce the time-to-market cycle for new products.
- Provides high Insights: It promotes higher insights on technical experiments by closely monitoring and evaluating the performance of emerging technologies, and generating valuable empirical evidence.
- Promotes Collaboration: Regulatory sandboxes foster collaboration between innovators and regulators. This partnership helps ensure that the development of new technologies aligns with regulatory standards and public interests.
- Benefits to the end consumer: Consumers benefit from the introduction of new and potentially safer products, as regulatory sandboxes foster innovation and consumer choice in the long run.
- Regulatory sandboxes can enhance access to funding for businesses by reducing information imbalances and regulatory costs.
Need to find a Middle path:
- Balancing Regulation and Innovation: Regulatory sandboxes allow for a balanced approach, where innovation is encouraged without completely foregoing necessary regulatory oversight. This balance is crucial to prevent stifling innovation while ensuring safety towards data security and compliance.
- Risk Mitigation and Ethical Development: The features where regulatory sandboxes encourage responsible innovation by mandating risk assessments and implementing safeguards need to be used efficiently.
What approach does India need to keep?
- Multifaceted Approach: India’s strategy should encompass economic ambitions, ethical considerations, job creation, industrial transformation, and societal welfare. This holistic approach ensures that AI development aligns with the country’s broader goals.
- Regulatory Sandbox as a Preparatory Step: Rather than immediately imposing stringent regulations, India should use regulatory sandboxes as a preparatory measure. This allows for the testing of AI applications in a controlled environment, generating insights that inform future regulatory frameworks.
- Adaptable and Progressive Legislation: India’s AI regulations should be flexible and adaptable, capable of evolving with technological advancements. This can be achieved by initially using sandboxes to test and refine regulatory approaches before formalizing them.
- Ethical and Cultural Alignment: AI development in India should align with the country’s cultural and ethical values. This ensures that AI technologies are deployed responsibly and ethically, respecting societal norms and expectations.
Conclusion: The EU has come up with an AI Act, the U.S. has released a white paper on the AI Bill of Rights, and the U.K. has a national AI Strategy. China is trying to regulate various aspects of AI like generative AI while Singapore is following an innovation-friendly approach. Therefore, in a Global Competitive race, we too need some regulations to harness AI’s vast potential.
Mains PYQ:
Q The emergence of the Fourth Industrial Revolution (Digital Revolution) hasinitiated e-Governance as an integral part of government”. Discuss.(UPSC IAS/2020)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: IMF; Debt-to-GDP ratio;
Mains level: International Market and Economy; Fiscal Issues;
Why in the News?
SRI Lanka’s Cabinet has approved a new economic law to stabilize its debt-to-GDP ratio that will cover key targets set by the International Monetary Fund (IMF).
- The debt-to-GDP ratio measures the proportion of a country’s national debt to its gross domestic product.
- According to the World Bank, the countries whose debt-to-GDP ratios exceed 77% for prolonged periods experience significant slowdowns in economic growth.
What are the IMF Targets?
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- The IMF has various targets and initiatives aimed at achieving sustainable economic growth and prosperity for its member countries.
- It includes promoting financial stability, monetary cooperation, and transparency in economic policies to enhance productivity, job creation, and economic well-being.
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- India has not taken any financial assistance from the IMF since 1993.
- India’s current quota in the IMF is SDR (Special Drawing Rights) 5,821.5 million, making it the 13th largest quota-holding country at IMF and giving it shareholdings of 2.44%.
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- The IMF targets Sri Lanka to reduce its debt to gross domestic product (GDP) ratio to 95% by 2030.
- Another target set by the IMF is to reduce debt servicing costs to 4.5% of GDP. It means Sri Lanka needs to focus on managing the costs associated with servicing it’s debt obligations, aiming to make it more sustainable and manageable in the long term.
How will the debt-to-GDP ratio be reduced?
- Fiscal Discipline: Sri Lanka may need to implement measures to improve fiscal discipline, such as reducing government Expenditure, increasing Tax revenue, and narrowing Budget Deficits.
- Debt Restructuring: Sri Lanka can explore negotiating with creditors to extend debt maturities, reduce interest rates, or reprofile debt payments.
- Revenue Enhancement: The government could focus on enhancing revenue generation through tax reforms, improved tax administration, and efforts to broaden the tax base.
- Economic Growth: Promoting economic growth is essential for reducing the debt-to-GDP ratio over the long term. Sri Lanka could implement policies to stimulate investment, boost productivity, and enhance competitiveness, leading to higher GDP growth rates and a more sustainable debt trajectory.
What does India do presently to reduce its debt-to-GDP ratio?
- Targeted Reduction: According to a research paper by the Reserve Bank of India (RBI), the government aims to lower the general government debt-GDP ratio to 73.4% by 2030-31. This target is approximately 5% points lower than the trajectory projected by the IMF, indicating ambitious yet achievable goals.
- Promotes Fiscal Space: The Indian Central Bank – RBI emphasized reducing debt burdens to free up fiscal space for new investments, particularly in critical areas like the green transition. This suggests a strategic focus on investing in sustainable and environmentally friendly initiatives.
- Aligning with IMF: The IMF projects a positive trend in India’s debt reduction efforts, forecasting a decline in government debt from 81% of GDP in 2022 to 80.5% in 2028. This indicates that India’s debt reduction measures are consistent with international expectations and standards.
Conclusion: Focus on enhancing revenue generation through Comprehensive Tax reforms, improved tax compliance, and efforts to broaden the tax base is needed. Secondly, rationalizing Tax revenues can provide additional resources to finance government expenditures without relying heavily on borrowing, thus reducing the debt-to-GDP ratio.
Mains PYQ:
Q The World Bank and the IMF, collectively known as the Bretton Woods Institutions, are the two inter-governmental pillars supporting the structure of the world’s economic and financial order. Superficially, the World Bank and the IMF exhibit many common characteristics, yet their role, functions and mandates are distinctly different. Elucidate. (UPSC IAS/2013)
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