Note4Students
From UPSC perspective, the following things are important :
Prelims level: DPCO
Mains level: Paper 2- Vaccine pricing issue
How government regulate prices of drugs
- The Supreme Court flagged the issue of differential pricing for vaccines among States and the Centre and directed the central government to clarify it in an affidavit.
- To ensure accessibility, the pricing of essential drugs is regulated centrally through The Essential Commodities Act, 1955.
- Under Section 3 of the Act, the government has enacted the Drugs (Prices Control) Order (DPCO).
- The DPCO lists over 800 drugs as “essential” in its schedule, and has capped their prices.
- The capping of prices is done based on a formula that is worked out in each case by the National Pharmaceutical Pricing Authority (NPPA), which was set up in 1997.
So, why the government is not regulating price of vaccines through DPCO
- This is because the regulation through DPCO is not applicable for patented drugs or fixed-dose combination (FDC) drugs.
- This is why the price of the antiviral drug remdesivir, which is currently in great demand, is not regulated by the government.
- To bring vaccines or drugs used in the treatment of Covid-19 such as remdesivir under the DPCO policy, an amendment can be brought.
What other options government can explore to deal with the vaccine price issue
1) Patent Act 1970
- The Patent Act 1970 has two key provisions that could be potentially invoked to regulate the pricing of the vaccine.
- Section 100 of the Patents Act gives the central government the power to authorise anyone (a pharma company) to use the invention for the “purposes of the government”.
- It enables the government to license the patents of the vaccine to specific companies to speed up manufacturing and ensure equitable pricing.
- Under Section 92 of the Act, which deals with compulsory licensing, the government can, without the permission of the patent holder, license the patent under specific circumstances prescribed in the Act.
- Section 92 can be invoked in case of circumstances of national emergency or in circumstances of extreme urgency or in case of public non-commercial use.
- After the government issues a notification under Section 92, pharma companies can approach the government for a licence to start manufacturing by reverse engineering the product.
- However, in the case of biological vaccines like Covid-19, even though ingredients and processes are well known, it is difficult to duplicate the process from scratch.
- The process will also entail new clinical trials to establish safety and efficacy, which makes compulsory licensing less attractive.
2) The Epidemic Diseases Act, 1897
- Section 2 of this law gives the government “power to take special measures and prescribe regulations as to dangerous epidemic disease”.
- These broad, undefined powers can be used to take measures to regulate pricing.
- However, the law lacks the teeth to implement such an important policy framework.
- Violation of the Act is penalised under Section 188 of the Indian Penal Code, which deals with “disobedience to order duly promulgated by (a) public servant”.
3) Direct procurement by the Centre
- Apart from these legislative options, experts suggest that the central government procuring directly from the manufacturers could be the most beneficial route to ensure equitable pricing.
- As the sole purchaser, it will have greater bargaining power.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Himalayan Frontal Thrust
Mains level: Paper 1- Major seismic hazards along Assam faultline
Location of epicentre
- An earthquake of magnitude 6.4 on the Richter scale hit Assam around 8 am on Wednesday.
- The primary earthquake had its epicentre at latitude 26.690 N and longitude 92.360 E, about 80 km northeast of Guwahati, and a focal depth of 17 km, the National Centre for Seismology (NCS) said.
The faultline
- The preliminary analysis shows that the events are located near to Kopili Fault closer to Himalayan Frontal Thrust (HFT).
- The Kopili Fault is a 300-km northwest-southeast trending fault from the Bhutan Himalaya to the Burmese arc.
- The fault is a fracture along which the blocks of crust on either side have moved relative to one another parallel to the fracture.
- The area is seismically very active falling in the highest Seismic Hazard zone V associated with collisional tectonics where Indian plate sub-ducts beneath the Eurasian Plate the NCS report said.
- HFT, also known as the Main Frontal Thrust (MFT), is a geological fault along the boundary of the Indian and Eurasian tectonic plates.
Need for earthquake preparedness
- The Northeast is located in the highest seismological zone, so we must have constant earthquake preparedness at all levels.
- Continuous tectonic stress keeps building up particularly along the faultlines.
- Today’s earthquake was an instance of accumulated stress release — probably, stress was constrained for a fairly long time at this epicentre, and hence the release was of relatively higher intensity.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: RT-PCR Test
Mains level: Paper 2- Ct value in RT-PCR test
Recently, the Maharashtra government sought clarity from the Indian Council of Medical Research (ICMR) on the threshold Ct value to treat a person Covid-negative.
What is Ct value
- Short for cycle threshold, Ct is a value that emerges during RT-PCR tests.
- In an RT-PCR test, RNA is extracted from the swab collected from the patient.
- It is then converted into DNA, which is then amplified.
- Amplification refers to the process of creating multiple copies of the genetic material — in this case, DNA.
- Amplification takes place through a series of cycles — one copy becomes two, two becomes four, and so on.
- Put simply, the Ct value refers to the number of cycles after which the virus can be detected.
- The lower the Ct value, the higher the viral load — because the virus has been spotted after fewer cycles.
Why Ct value is important
- According to the ICMR, a patient is considered Covid-positive if the Ct value is below 35.
- If the benchmark were to be lowered to 24 — the value mentioned in Maharashtra’s letter — it would mean that Ct values in the range 25-34 would not be considered positive.
- A benchmark of 35, therefore, means that more patients would be considered positive than we would get if the benchmark were 24.
- The ICMR has said lowering Ct threshold parameter may lead to missing several infectious persons.
Does Ct score indicate the severity of disease
- A small study published in the Indian Journal of Medical Microbiology in January this year found that there was no correlation between Ct values and severity of disease or mortality in patients with Covid-19 disease.
- It found that the time since the onset of symptoms has a stronger relationship with Ct values as compared to the severity of the disease.
- The Ct value tells us about the viral load in the throat and not in the lungs.
- The Ct value does not correlate with severity – only with infectivity.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Herd immunity
Mains level: Paper 2- Herd immunity and issues related to it
What is herd immunity
- The herd immunity concept is based on lowering the number of susceptible individuals.
- If sufficient individuals in the population are immune either through vaccination or a prior exposure, then the number of susceptible individuals drops.
- For example, if the immune population is 70%, then the susceptible population is 30%.
Does herd immunity really protect from subsequent waves?
- The number of daily cases depends on three factors: The number of infectious people in the population, the number of susceptible individuals, and the rate of transmission of the virus.
- The rate of transmission is dependent on the nature of the virus and the extent of contact between individuals.
- So, if the rate of transmission increases due to change in social behaviour and increased contact then even with a large percentage of the immune population, a significant number of daily cases can result.
- The “herd immunity” number is not a static number but it changes depending on the rate of transmission of the virus and the extent of virus present.
Estimating exposures in metro cities
- Serosurveys indicated that Covid had touched 56% of population in Delhi by January; 75% in some slums Mumbai in November, and about 30% in Bengaluru in November.
- The population touched by Covid can also be estimated by the Infection Fatality Rate (IFR).
- This is the total number of deaths divided by the total people infected. In India, the estimate is 0.08%.
- So this number can be used to back-calculate the number of infections based on the number of deaths in the different cities.
- The table given below shows the number of people exposed to Covid in some metros until January 31 using the method above.
What are the reasons behind the recent surge
- The reasons behind the recent surge are not fully understood.
- The one factor that is not in doubt, however, is that interaction and contact with the population has increased since February.
- Such increased contact increased the virus in circulation and led to increased cases in the susceptible population.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Anatolia region
Mains level: Paper 2- Relations between Turkey and the US
What is genocide
- According to Article II of the UN Convention on Genocide of December 1948, genocide has been described as carrying out acts intended “to destroy, in whole or in part, a national, ethnic, racial or religious group”.
Why Armenians were targeted
- In a way, the Armenians were victims of the great power contests of the late 19th and early 20th centuries.
- The resentment started building up after the Russo-Turkish war of 1877-78 in which the Turks lost territories.
- In the Treaty of Berlin, big powers dictated terms to the Ottomans, including putting pressure on Sultan Abdülhamid II to initiate reforms “in the provinces inhabited by Armenians, and to guarantee their security against the Circassians and Kurds.”
- The Sultan saw this as a sign of strengthening ties between the Armenians and other rival countries, especially Russia.
- Post the treaty, there were a series of attacks on Armenians by Turkish and Kurdish militias.
- In 1908, the Young Turks wrested control from the Sultan and promised to restore imperial glory.
- Under the Turks, the empire became more and “Turkik” and persecution against the ethnic minorities picked up.
- In October 1914, Turkey joined the First World War on the side of Germany.
- In the Caucasus, they fought the Russians, their primary geopolitical rival.
- But the Ottomans suffered a catastrophic defeat in the Battle of Sarikamish by the Russians in January 1915.
- The Turks blamed the defeat on Armenian “treachery”.
How the killings took place
- As the War was still waging, the Ottomans feared that Armenians in eastern Anatolia would join the Russians if they advanced into Ottoman territories.
- First, Armenians in the Ottoman Army were executed.
- On April 24, the Ottoman government arrested about 250 Armenian intellectuals and community leaders. Most of them were later executed.
- The Ottoman government passed legislation to deport anyone who is a security risk.
- Then they moved Armenians, including children, en masse to the Syrian Desert. That was a march of death.
- Before the First World War broke out in 1914, there were 2 million Armenians in the Ottoman Empire.
- According to a study by the University of Minnesota’s Center for Holocaust and Genocide Studies, in 1922, four years after the War, the Armenian population in the region was about 387,800.
- This has led historians to believe that up to 1.5 million Armenians were killed during the course of the War.
What is Turkey’s response
- Turkey has acknowledged that atrocities were committed against Armenians, but denies it was a genocide which comes with legal implications.
- Turkey also challenges the estimates that 1.5 million were killed.
- The Turkish Foreign Ministry has issued a strong statement to Mr. Biden’s announcement saying it doesn’t not have “a scholarly and legal basis, nor is it supported by any evidence”.
- Turkey has called on the U.S. President to correct the mistake of recognition as genocide.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Vaccine inequality
Issue of diverting the vaccine stock to India
- Epidemiologists to industry leaders are urging the Biden administration to release the reserve to countries like India and Brazil, given the assertion that the doses won’t be used in the US.
- According to Brown University School of Public Health Ashish Jha, the US is “sitting on 35-40 million doses of AstraZeneca vaccine Americans will never use”.
- In early April, US chief medical adviser Anthony Fauci said the US will likely not need the AstraZeneca shot.
- The AstraZeneca vaccine has not been granted Emergency Use Authorization by the US Federal Drug Administration (FDA).
- With documented cases of blood clots in younger women in Europe correlated with the vaccine, FDA authorisation may be further delayed.
What has the US said in response
- Co-ordinator of the US Covid-19 taskforce that the Quad partnership and team is providing assistance across government to the country.
- He also stated that as their confidence around our supply increases, we will explore the option of exporting the vaccines.
Vaccine inequality
- According to Bloomberg’s Vaccine Tracker, highest-income countries are vaccinating at a pace 25 times faster than the lowest ones.
- The US has 22.9% of the world’s vaccines but only 4.3% of the world’s population.
- China has 21.9% and 18.2% respectively, and India 13.8% and 17.7%, according to the tracker.
- Almost half of all vaccines have gone to 16% of the world’s population.
- The Washington Post reported that the world’s poorest 92 countries may not be able to vaccinate even 60% of their population for another three years.
- India has vaccinated 8% per cent of the population with one dose and 1% with two. Brazil has vaccinated less than 12% with one.
Impact on vaccination in African nations
- India’s stalled vaccine exports have domino effects on the rollouts in African nations and other developing countries, as Serum’s productions were fuelling efforts globally before India’s second wave.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: How vaccine works
Mains level: Paper 2- Breakthrough infections
Breakthrough infections
- There have been several cases of Covid-19 vaccinated people, even those who have received both doses, testing positive for the virus.
- Such cases are referred to as “breakthrough” infections, indicating that the virus has been able to break through the defences created by the vaccine.
- Such cases have led to some doubts being expressed about the effectiveness of the vaccine, and contributed to the already prevailing vaccine hesitancy.
- However, vaccines protect not against the infection, but against moderate or severe disease and hospitalisation.
- It typically takes about two weeks for the body to build immunity after being vaccinated.
- So, the chances of a person falling sick during this period are as high — or as low — as the chances for any person who has not been vaccinated.
- Also, those in the priority list of vaccination, such as healthcare workers and frontline workers, have been prone to getting infected due to prolonged occupational exposure to the virus
Full protection not possible
- It is very well understood that no vaccine offers 100% protection from any disease.
- However, according to the Centers for Disease Prevention and Control (CDC) in the United States, vaccinated people are much less likely to get sick, but it is never entirely ruled out.
- Then there is the emergence of new variants of the virus.
- Some variants of the virus are able to evade the human immune response, and therefore have a greater chance to break through the defences created through the vaccine.
Breakthrough cases in India
- Among 10.03 crore people who had taken only the first dose of Covishield vaccina, 17,145 had got infected.
- That translates into a 0.02% prevalence.
- Among the 1.57 crore people who received the second dose as well, 5,014, or about 0.03%, had got infected later.
- About 1.1 crore doses of Covaxin have been administered until now.
- Of the 93.56 lakh who took only the first dose, so far 4,208 have got the infection.
- That is about 0.04% of the total.
- Among the 17.37 lakh who have taken the second shot, only 695 had been infected, again 0.04%.
Challenges
- “Given the scope of the pandemic, there’s a huge amount of virus in the world right now, meaning a huge opportunity for mutations to develop and spread.
- That is going to be a challenge for the developers of vaccines.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Epithelial cell
Mains level: Paper 2-Oxygen requirement in covid patients
How Covid-19 leads to shortness of breath?
- Shortness of breath occurs because of the way Covid-19 affects the patient’s respiratory system.
- When a person inhales, the tiny air sacs in the lungs — alveoli — expand to capture this oxygen, which is then transferred to blood vessels and transported through the rest of the body.
- Respiratory epithelial cells line the respiratory tract.
- Their primary function is to protect the airway tract from pathogens and infections, and also facilitate gas exchange.
- And the SARS-CoV-2 coronavirus can infect these epithelial cells.
- To fight such infection, the body’s immune system releases cells that trigger inflammation.
- When this inflammatory immune response continues, it impedes the regular transfer of oxygen in the lungs.
- Simultaneously, fluids too build up.
- Both these factors combined make it difficult to breathe.
- Low levels of oxygen triggered by Covid-19 are inflammatory markers, which include elevated white blood cell counts and neutrophil counts.
Does a patient always show Covid symptoms when their oxygen levels drop?
- No.
- According to the FAQs on Covid-19 from AIIMS e-ICUS, sudden deaths have been reported at presentation to the emergency department, as well as in hospital.
- AIIMS has said that the reasons that have been proposed include a sudden cardiac event, preceding “silent hypoxia” that went unnoticed, or due to a thrombotic complication such as pulmonary thromboembolism.
- In silent hypoxia, patients have extremely low blood oxygen levels, yet do not show signs of breathlessness.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: President’s address
Mains level: Significance of Presidential address
Many Opposition parties announced their decision to boycott the President’s address to the joint sitting of Parliament at the start of the Budget session in solidarity with the farmers protesting against the three farm laws.
Try this PYQ:
Q. The President’s address is one of the most solemn occasions in the Parliamentary calendar. Discuss. Highlight its importance in Parliamentary Democracy.
President’s address
- The Constitution gives the President the power to address either House or a joint sitting of the two Houses of Parliament.
- Article 87 provides two special occasions on which the President addresses a joint sitting. The first is to address the opening session of a new legislature after a general election.
- The second is to address the first sitting of Parliament each year. A session of a new or continuing legislature cannot begin without fulfilling this requirement.
- When the Constitution came into force, the President was required to address each session of Parliament.
In the UK, the history of the monarch addressing the Parliament goes back to the 16th century. In the US, President Gorge Washington addressed Congress for the first time in 1790.
History & precedent
- In India, the practice of the President addressing Parliament can be traced back to the Government of India Act of 1919.
- This law gave the Governor-General the right of addressing the Legislative Assembly and the Council of State.
- The law did not have a provision for a joint address but the Governor-General did address the Assembly and the Council together on multiple occasions.
- There was no address by him to the Constituent Assembly (Legislative) from 1947 to 1950.
- And after the Constitution came into force, President Rajendra Prasad addressed members of Lok Sabha and Rajya Sabha for the first time on January 31, 1950.
By the govt, about the govt
- The President’s speech essentially highlights the government’s policy priorities and plans for the upcoming year. The address provides a broad framework of the government’s agenda and direction.
- There is no set format for the President’s speech. The Constitution states that the President shall “inform Parliament of the cause of the summons”.
How it is done in India?
- The speech that the President reads is the viewpoint of the government and is written by it.
- Usually, in December, the PM’s Office asks the various ministries to start sending in their inputs for the speech.
- A message also goes out from the Ministry of Parliamentary Affairs asking ministries to send information about any legislative proposals that need to be included in the President’s address.
- All this information is aggregated and shaped into a speech, which is then sent to the President. The government uses the President’s address to make policy and legislative announcements.
Assembly debates on the matter
- During the making of the Constitution, Prof K T Shah wanted the President’s address to be more specific.
- He suggested that the language be changed to specify that the President shall inform Parliament “on the general state of the Union including financial proposals, and other particular issues of policy he deems suitable for such address”.
- His amendment was inspired by the US Constitution, according to which the President gives to Congress information on the State of the Union, and recommend measures as he shall judge necessary.
- But Shah’s amendment was rejected by the Constituent Assembly.
- The address of the President follows a general structure in which it highlights the government’s accomplishments from the previous year and sets the broad governance agenda for the coming year.
Notable addresses till date
- In 1985 President Giani Zail Singh announced that PM Rajiv Gandhi’s government intended to introduce a new national education policy and the anti-defection law.
- In 1996, PM Vajpayee’s 13-day government announced its intention of giving statehood to Uttaranchal and Vananchal (Jharkhand) and 33 percent reservation to women in legislatures.
- During his second stint in 1999, Vajpayee’s government mooted the idea of a fixed term for Lok Sabha and State Vidhan Sabhas.
- After the devastating tsunami of 2004, PM Manmohan Singh’s government used the President’s Address to announce the creation of a national law for disaster management.
Procedure & tradition
- In the days following the President’s address, a motion is moved in the two Houses thanking the President for his address.
- This is an occasion for MPs in the two Houses to have a broad debate on governance in the country.
- The PM replies to the motion of thanks in both Houses and responds to the issues raised by MPs.
- The motion is then put to vote and MPs can express their disagreement by moving amendments to the motion.
Role of the opposition
- Opposition MPs have been successful in getting amendments passed to the motion of thanks in Rajya Sabha on five occasions (1980, 1989, 2001, 2015, 2016).
- They have been less successful in Lok Sabha. For example in 2018, Lok Sabha MPs tabled 845 amendments of which 375 were moved and negated.
Significance of the address
- The President’s address is one of the most solemn occasions in the Parliamentary calendar.
- It is the only occasion in the year when the entire Parliament, i.e. the President, Lok Sabha, and Rajya Sabha come together.
- The event is associated with ceremony and protocol.
- The Lok Sabha Secretariat prepares extensively for this annual event.
- In the past, it used to get 150 yards of red baize cloth from the President’s house for the ceremonial procession.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GDP, GNP, GVA etc.
Mains level: India's GDP related issues
In IMF’s latest Economic Outlook, Bangladesh has overtaken India in GDP per capita. This has caught everyone’s attention.
Do you know?
- In the 2019 edition of Transparency International’s rankings, Bangladesh ranks a low 146 out of 198 countries (India is at 80th rank; a lower rank is worse off).
- In the latest gender parity rankings, out of 154 countries mapped for it, Bangladesh is in the top 50 while India languishes at 112.
Bangladesh surpasses India
- Typically, countries are compared on the basis of GDP growth rate, or on absolute GDP.
- For the most part since Independence, on both these counts, India’s economy has been better than Bangladesh’s.
- This can be seen from Charts 1 and 2 that map GDP growth rates and absolute GDP — India’s economy has mostly been over 10 times the size of Bangladesh, and grown faster every year.
- However, per capita income also involves another variable — the overall population — and is arrived at by dividing the total GDP by the total population.
What made India lag behind?
There are three reasons why India’s per capita income has fallen below Bangladesh this year:
- The first thing to note is that Bangladesh’s economy has been clocking rapid GDP growth rates since 2004.
- Secondly, over the same 15-year period, India’s population grew faster (around 21%) than Bangladesh’s population (just under 18%).
- Lastly, the most immediate factor was the relative impact of Covid-19 on the two economies in 2020. While India’s GDP is set to reduce by 10%, Bangladesh’s is expected to grow by almost 4%.
How has Bangladesh managed to grow so fast and so robustly?
- Freshly start: In the initial years of its independence with Pakistan, Bangladesh struggled to grow fast. However, moving away from Pakistan also gave the country a chance to start afresh on its economic and political identity.
- Diverse labour participation: As such, its labour laws were not as stringent and its economy increasingly involved women in its labour force. This can be seen in higher female participation in the labour force.
- Textile boom: A key driver of growth was the garment industry where women workers gave Bangladesh the edge to corner the global export markets from which China retreated.
- Less dependence on Agriculture: It also helps that the structure of Bangladesh’s economy is such that its GDP is led by the industrial sector, followed by the services sector. Both of these sectors create a lot of jobs and are more remunerative than agriculture.
- Better social capital: Bangladesh improved a lot on several social and political metrics such as health, sanitation, financial inclusion, and women’s political representation.
Retaining the lead
- The IMF’s projections show that India is likely to grow faster next year and in all likelihood again surge ahead.
- But, given Bangladesh’s lower population growth and faster economic growth, India and Bangladesh are likely to be neck and neck for the foreseeable future in terms of per capita income.
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From UPSC perspective, the following things are important :
Prelims level: Auction Theory, Nobel Prizes
Mains level: Auction theory and its utility
This year, the Nobel Prize for Economics was awarded to Paul R Milgrom and Robert B Wilson for “improvements to auction theory and inventions of new auction formats”.
Do you remember the 2G spectrum scam, Coalgate scam etc. that rocked the nation? Can you relate this auction theory for bidding public assets to private entities?
What is Auction?
- Essentially, it is about how auctions lead to the discovery of the price of a commodity.
- Auction theory studies how auctions are designed, what rules govern them, how bidders behave and what outcomes are achieved.
- When one thinks of auctions, one typically imagines the auction of a bankrupt person’s property to pay off his creditors.
- Indeed, this is the oldest form of auction. This simple design of such an auction — the highest open bidder getting the property (or the commodity in question) — is intuitively appealing as well.
Evolving definitions of auction
- Over time, and especially over the last three decades, more and more goods and services have been brought under auction.
- The nature of these commodities differs sharply. For instance, a bankrupt person’s property is starkly different from the spectrum for radio or telecom use.
- Similarly, carbon dioxide emission credits are quite different from the spot market for buying electricity, which, in turn, is quite different from choosing which company should get the right to collect the local garbage.
- In other words, no one auction design fits all types of commodities or seller.
The Auction Theory
Three key variables need to be understood before we move to actual propositions.
(1) Rules of the auction
- Imagine participating in an auction. Your bidding behaviour is likely to differ if the rules stipulate open bids as against closed/sealed bids.
- The same applies to single bids versus multiple bids, or whether bids are made one after another or everyone bids at the same time.
(2) Commodity or service
- The second variable is the commodity or service being put up for auction. In essence, the question is how each bidder values an item.
- This is not always easy to ascertain. In terms of telecom spectrum, it might be easier to peg the right value for each bidder because most bidders are likely to put the spectrum to the same use.
- This is called the “common” value of an object.
(3) Uncertainty
- The third variable is uncertainty.
- For instance, which bidder has what information about the object, or even the value another bidder associates with the object.
The theory
- Wilson developed the theory for auctions of objects with a common value — a value which is uncertain beforehand but, in the end, is the same for everyone”.
- Wilson showed what the “winner’s curse” is in an auction and how it affects bidding.
- As shown in the illustration, it is possible to overbid — $50 when the real value is closer to $25. In doing so, one wins the auction but loses out in reality.
- Milgrom “formulated a more general theory of auctions that not only allows common values but also private values that vary from bidder to bidder”.
- He analysed the bidding strategies in a number of well-known auction formats, demonstrating that a format will give the seller higher expected revenue when bidders learn more about each other’s estimated values.
Significance of Auction theory
- Throughout history, countries have tried to allocate resources in various ways.
- Some have tried to do it through political markets, but this has often led to biased outcomes. For Ex: The rationing of essential goods worked in State-controlled economies. People who were close to the bureaucracy and the political class came out ahead of others.
- Lotteries are another way to allocate resources, but they do not ensure that scarce resources are allocated to people who value it the most.
- Auctions, for a good reason, have been the most common tool for thousands of years used by societies to allocate scarce resources.
- When potential buyers compete to purchase goods in an auction, it helps sellers discover those buyers who value the goods the most.
- Further, selling goods to the highest bidder also helps the seller maximise his or her revenues. So, both buyers and sellers benefit from auctions.
- Whether it is the auction of spectrum waves or the sale of fruits and vegetables, auctions are at the core of allocation of scarce resources in a market economy.
What are the criticisms levelled against auctions and what are the economists contribution?
1.Issue of Winner’s Curse
- The most common one is that auctions can lead buyers to overpay for resources whose value is uncertain to them.
- This criticism, popularly known as the ‘winner’s curse’, is based on a study that showed how buyers who overpaid for U.S. oil leases in the 1970s earned low returns. Dr. Wilson was the first to study this matter.
- The rational bidders may decide to underpay for resources in order to avoid the ‘winner’s curse’, and Dr. Wilson argued that sellers can get better bids for their goods if they share more information about it with potential buyers
2.Auction formats
- Economists traditionally working on auction theory believed that all auctions are the same when it comes to the revenues that they managed to bring in for sellers. The auction format, in other words, did not matter.
- This is known as the ‘revenue equivalence theorem’.
- But Dr. Milgrom showed that the auction format can actually have a huge impact on the revenues earned by sellers.
- The most famous case of an auction gone wrong for the seller was the spectrum auction in New Zealand in 1990.
- In what is called a ‘Vickrey auction’, where the winner of the auction is mandated to pay only the second-best bid, a company that bid NZ$1,00,000 eventually paid just NZ$6 and another that bid NZ$70,00,000 only paid NZ$5,000.
- In particular, Dr. Milgrom showed how Dutch auctions, in which the auctioneer lowers the price of the product until a buyer bids for it, can help sellers earn more revenues than English auctions.
- In the case of English auctions, the price rises based on higher bids submitted by competing buyers. But as soon as some of the bidders drop out of the auction as the price rises, the remaining bidders become more cautious about bidding higher prices.
Conclusion
- The contributions of Dr. Milgrom and Dr. Wilson have helped governments and private companies design their auctions better.
- This has, in turn, helped in the better allocation of scarce resources and offered more incentives for sellers to produce complex goods.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Narcoanalysis, Polygraph Test
Mains level: Not Much
Involuntary administration of narco or lie detector tests is an “intrusion” into a person’s “mental privacy,” a Supreme Court judgment of 2010 has held.
Try this question:
Q.What are the ethical issues associated with the Lie-detection tests?
Various Lie detector tests
(1) Polygraph Test
- A polygraph test is based on the assumption that physiological responses that are triggered when a person is lying are different from what they would be otherwise.
- Instruments like cardio-cuffs or sensitive electrodes are attached to the person, and variables such as blood pressure, pulse, respiration, change in sweat gland activity, blood flow, etc., are measured as questions are put to them.
- A numerical value is assigned to each response to conclude whether the person is telling the truth, is deceiving, or is uncertain.
(2) Narcoanalysis
- Narcoanalysis, by contrast, involves the injection of a drug, sodium pentothal, which induces a hypnotic or sedated state.
- In such a state, the subject’s imagination is neutralized, and they are expected to divulge information that is true.
- The drug, referred to as “truth serum” in this context, was used in larger doses as anaesthesia during surgery and is said to have been used during World War II for intelligence operations.
Why these tests are so (in)famous?
- Investigating agencies seek to employ these tests in the investigation, and are sometimes seen as being a “softer alternative” to torture or “third degree” to extract the truth from suspects.
- These tests put into consideration the international norms on human rights, the right to a fair trial, and the right against self-incrimination under Article 20(3) of the Constitution.
Legal status in India
- In ‘Selvi & Ors vs State of Karnataka & Anr’ (2010), a Supreme Court Bench comprising CJI ruled that no lie detector tests should be administered “except on the basis of the consent of the accused”.
- Those who volunteer must have access to a lawyer, and have the physical, emotional, and legal implications of the test explained to them by police and the lawyer, the Bench said.
- It said that the ‘Guidelines for the Administration of Polygraph Test on an Accused’ published by the National Human Rights Commission in 2000, must be strictly followed.
- The subject’s consent should be recorded before a judicial magistrate, the court said.
What was the latest Judgement?
- Involuntary administration of narco or lie detector tests is an “intrusion” into a person’s “mental privacy,” a Supreme Court judgment of 2010 has held.
- The consequences of such tests on “individuals from weaker sections of society who are unaware of their fundamental rights and unable to afford legal advice” can be devastating.
- It may involve future abuse, harassment and surveillance, even leakage of the video material to the Press for a “trial by media.”
- Such tests are an affront to human dignity and liberty and have long-lasting effects.
- “An individual’s decision to make a statement is the product of a private choice and there should be no scope for any other individual to interfere with such autonomy,” the apex court had held.
Legal status of its outcome
- The results of the tests cannot be considered to be “confessions”, because those in a drugged-induced state cannot exercise a choice in answering questions that are put to them.
- However, any information or material subsequently discovered with the help of such a voluntarily-taken test can be admitted as evidence, the court said.
- Thus, if an accused reveals the location of a murder weapon in the course of the test, and police later find the weapon at that location, the statement of the accused will not be evidence, but the weapon will be.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Net Zero
Mains level: Climate change commitments
Context- Speaking at the UN General Assembly, Chinese President Xi Jinping made two promises that came as a welcome surprise to climate change watchers.
What has China announced ?
- First, Xi said, China would become carbon net-zero by the year 2060.
- Net-zero is a state in which a country’s emissions are compensated by absorptions and removal of greenhouse gases from the atmosphere.
- Absorption can be increased by creating more carbon sinks such as forests, while removal involves application of technologies such as carbon capture and storage.
- Second, the Chinese President announced a small but important change in China’s already committed target for letting its emissions “peak”, from “by 2030” to “before 2030”.
- That means China would not allow its greenhouse gas emissions to grow beyond that point.
- Xi did not specify how soon “before 2030” means, but even this much is being seen as a very positive move from the world’s largest emitter.
How significant is China’s commitment?
- China is the world’s largest emitter of greenhouse gases. It accounts for almost 30% of global emissions, more than the combined emissions in the United States, the European Union and India, the three next biggest emitters.
- Getting China to commit itself to a net-zero target is a big breakthrough, especially since countries have been reluctant to pledge themselves to such long term commitments.
- So far, the European Union was the only big emitter to have committed itself to a net-zero emission status by 2050.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Research and development is medical science
Context- Earlier this week, late actor Irrfan Khan’s wife Sutapa Sikdar made an appeal to legalise CBD oil in India for its potential to treat cancer. Her appeal followed the criticism of actor Rhea Chakrabaorty after it was reported that she had administered CBD oil, used as a pain reliever for some, to Sushant Singh Rajput when he was alive.
About CBD oil ?
- CBD oil is an extract from the cannabis plant. The two main active substances in it are cannabidiol or CBD and delta-9 tetrahydrocannabinol, or THC.
- The high that is caused by the consumption of cannabis is due to THC. CBD, however, does not cause a “high” or any form of intoxication.
- CBD oil is made by extracting CBD from the cannabis plant, then diluting it with a carrier oil like coconut or hemp seed oil.
- Cannabidiol can reduce pain and anxiety. It also reduces psychotic symptoms associated with conditions such as schizophrenia as well as epilepsy.
- There is not enough robust scientific evidence to prove that CBD oil can safely and effectively treat cancer.
- CBD oil manufactured under a license issued by the Drugs and Cosmetics Act, 1940 can be legally used. However, the use of cannabis as a medicine is not much prevalent in India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Kanaklata Barua
Mains level: Role of women in Indian National Movement
A Fast Patrol Vessel (FPV) named ICGS Kanaklata Barua was commissioned in the Indian Coast Guard on Wednesday, in Kolkata. It is named after a teenage freedom fighter who was shot dead in Assam during the Quit India Movement.
Who was Kanaklata Barua ?
- One of the youngest martyrs of the Quit India Movement, Kanaklata Barua has iconic status in Assam. Barua.
- Then 17, led the Mukti Bahini, a procession of freedom fighters to unfurl the Tricolour at Gohpur police station on September 20, 1942. When police did not let them move forward, an altercation led to firing, killing Barua at the head of the procession.
- She had joined the Mrityu Bahini [a kind of a suicide squad] just two days before the incident. The squad strictly admitted members aged 18 and above but Kanaklata was an exception. She wanted to lead the procession and after much persuasion she was allowed to.
- Even as Barua fell to bullets, she did not let go of the flag. She did not want it to touch the ground. Another woman volunteer behind her — Mukunda Kakoty — came and held the flag, and she, too, was shot.
How important is her legacy ?
- 1940’s was a time where you saw a lot of women coming to the fore, leading processions, patriotic fervour was at its peak — and Kanaklata was a product of this time.
- There are schools named after her, there are two statues, there is a ship. While we see her as an icon now, people in her village hated her then — she was a rebel, who questioned patriarchy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Kelkar committee and defense offset
Mains level: Procurement of defense equipments
What are defence offsets ?
- In simplest terms, the offset is an obligation by an international player to boost India’s domestic defence industry if India is buying defence equipment from it.
- Since defence contracts are costly, the government wants part of that money either to benefit the Indian industry, or to allow the country to gain in terms of technology.
- The Comptroller and Auditor General (CAG) defined offsets as a “mechanism generally established with the triple objectives of: (a) partially compensating for a significant outflow of a buyer country’s resources in a large purchase of foreign goods (b) facilitating induction of technology and (c) adding capacities and capabilities of domestic industry”.
When was the policy introduced?
- The policy was adopted on the recommendations of the Vijay Kelkar Committee in 2005.
- The idea was that since India has been buying a lot of defence equipment from foreign countries, so that India can leverage its buying power by making them discharge offset obligations, which is the norm world over.
- The Sixth Standing Committee on Defence (2005-06) had recommended in December 2005 in its report on Defence Procurement Policy and Procedure that modalities for implementation of offset contracts should be worked out.
- The first offset contract was signed in 2007.
How can a foreign vendor fulfil its offset obligations?
- There are multiple routes. Until 2016, the vendor had to declare around the time of signing the contract the details about how it will go about it. In April 2016, the new policy amended it to allow it to provide it “either at the time of seeking offset credits or one year prior to discharge of offset obligations”.
- Investment in ‘kind’ in terms of transfer of technology (TOT) to Indian enterprises, through joint ventures or through the non-equity route for eligible products and services.
- Investment in ‘kind’ in Indian enterprises in terms of provision of equipment through the non-equity route for manufacture and/or maintenance of products and services.
- Provision of equipment and/or TOT to government institutions and establishments engaged in the manufacture and/or maintenance of eligible products, and provision of eligible services, including DRDO (as distinct from Indian enterprises).
- Technology acquisition by DRDO in areas of high technology.
Will no defence contracts have offset clauses now ?
- Only government-to-government agreements (G2G), ab initio single vendor contracts or inter-governmental agreements (IGA) will not have offset clauses anymore. For example, the deal to buy 36 Rafale fighter jets, signed between the Indian and French governments in 2016, was an IGA.
- IGA is an agreement between two countries, and could be an umbrella contract, under which you can go on signing individual contracts. G2G is transaction specific, or an acquisition specific agreement.
Why was the clause removed?
- Vendors would “load” extra cost in the contract to balance the costs, and doing away with the offsets can bring down the costs in such contracts.
Conclusion- The CAG is not very hopeful of the obligations being met by 2024. It said the audit “found that the foreign vendors made various offset commitments to qualify for the main supply contract but later, were not earnest about fulfilling these commitments”.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Doctrine of colorable legislation
Mains level: Federalism issue raised by the Agricultural Bills
The President has finally given assent to the controversial farm Bills passed by Parliament last week. Amid protests by farmers’ organisations across the country, questions are being raised about the anti-federal nature of these ‘Acts’.
Here we shall only discuss its constitutionality and federal nature. Tap to read more about the theme at:
What is the question over the constitutionality of these laws?
- These are some of the questions that will be raised in the petitions challenging the constitutionality of the Acts.
- As per Union of India v H.S.Dhillon (1972), the constitutionality of parliamentary laws can be challenged only on two grounds — that the subject is in the State List, or that it violates fundamental rights.
- As per Ram Krishna Dalmia v Justice S R Tendolkar (1958) and other judgments, the Supreme Court will begin hearings after presuming the constitutionality of these laws.
- The bills (now Acts as they have got the President’s assent) do not mention, in the Statement of Objects & Reasons, the constitutional provisions under which Parliament has the power to legislate on the subjects covered.
Where does the question of federalism come in?
What is federalism, first?
- Federalism is the system of government in which sovereignty is constitutionally divided between a central governing authority and constituent political units.
- It is based upon democratic rules and institutions in which the power to govern is shared between national and state governments, creating a federation.
- It essentially means both the Centre and states have the freedom to operate in their allotted spheres of power, in coordination with each other.
Try this PYQ:
Q.Which of the following federal principles are not found in Indian federation?
- Bifurcation of the judiciary between the Federal and State Governments
- Equality of representation of the states in the upper house of the Federal Legislature
- The Union cannot be destroyed by any state seceding from the Union at its will
- Federal Government can redraw the map of the Indian Union by forming new States
Select the correct answer using the codes given below:
a) 1, 2 and 3
b) 2, 3 and 4
c) 1 and 2
d) 3 and 4
Federalism in India
- The Seventh Schedule of the Constitution contains three lists that distribute power between the Centre and states.
- There are 97 subjects in the Union List, on which Parliament has exclusive power to legislate (Article 246); the State List has 66 items on which states alone can legislate.
- The Concurrent List has 47 subjects on which both the Centre and states can legislate, but in case of a conflict, the law made by Parliament prevails (Article 254).
- Parliament can legislate on an item in the State List under certain specific circumstances laid down in the Constitution.
Concretization of the idea
- Federalism, like constitutionalism and separation of powers, is not mentioned in the Constitution. But it is the very essence of our constitutional scheme.
- In the State of West Bengal v Union of India (1962), the Supreme Court held that the Indian Constitution is not federal.
- But in SR Bommai v Union of India (1994), a nine-judge Bench held federalism as part of the basic structure of the Constitution.
- Neither the relative importance of the legislative entries in Schedule VII, Lists I and II of the Constitution, nor the fiscal control by the Union per se is decisive to conclude the Constitution is unitary.
- The respective legislative powers are traceable to Articles 245 to 254… The State qua the Constitution is federal in structure and independent in its exercise of legislative and executive power,” it said.
Where is agriculture in the scheme of legislative powers?
Terms relating to agriculture occur at 15 places in the Seventh Schedule.
- Entries 82, 86, 87, and 88 in the Union List mention taxes and duties on income and assets, specifically excluding those in respect of agriculture.
- In the State List, eight entries contain terms relating to agriculture: Entry 14 (agricultural education and research, pests, plant diseases); 18 (rights in or over land, land tenures, rents, transfer agricultural land, agricultural loans, etc.); 28 (markets and fairs); 30 (agricultural indebtedness); 45 (land revenue, land records, etc.); 46 (taxes on agricultural income); 47 (succession of agricultural land); and 48 (estate duty in respect of agricultural land).
- In the Concurrent List, Entry 6 mentions the transfer of property other than agricultural land; 7 is about various contracts not relating to agricultural land; and 41 deals with evacuee property, including agricultural land.
- It is clear that the Union List and Concurrent List put matters relating to agriculture outside Parliament’s jurisdiction, and give state legislatures exclusive power.
- No entry in respect of agriculture in the State List is subject to any entry in the Union or Concurrent Lists.
What about Entry 27 of the State List that is subject to Entry 33 of List III (Concurrent)?
- Entry 33 of the Concurrent List mentions trade and commerce, production, supply and distribution of domestic and imported products of an industry over which Parliament has control in the public interest.
- This includes foodstuffs, including oilseeds and oils; cattle fodder; raw cotton and jute.
- The Centre could, therefore, argue that it is within its powers to pass laws on contract farming and intra- and inter-state trade, and prohibit states from imposing fees/cesses outside APMC areas.
- However, like education, farming is an occupation, not trade or commerce.
- If foodstuffs are considered synonymous with agriculture, then all the powers of states in respect of agriculture, listed so elaborately in the Constitution, shall become redundant.
So what happens in case of legislation that covers entries in two Lists?
- In cases such as State of Rajasthan v G Chawla (1959), courts have used the doctrine of “pith and substance” to determine the character of legislation that overlaps between entries.
- The constitutionality of legislation is upheld if it is largely covered by one list and touches upon the other list only incidentally.
- But the two new farm Acts go beyond that — they impinge on entries in the State List.
- In interpreting the lists, the Supreme Court in State of Bihar v Kameshwar Singh (1952) invoked the doctrine of colourable legislation, which means you cannot do indirectly what you cannot do directly.
What is the Doctrine of Colorable Legislation?
- This doctrine refers to the question of competency of the legislature while enacting a provision of law.
- If a legislature is prohibited from doing something, it may not be permitted to do this under the guise or pretence of doing something while acting within its lawful jurisdiction and this prohibition is an implied result of the maxim “what cannot be done directly, cannot be done indirectly”
- This doctrine is a tool used to determine the legislative competence of laws enacted by various legislatures.
- Therefore, it is a means to implement the separation of powers and impose judicial accountability.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Cess, Office of the CAG
Mains level: Cess deposits
The Comptroller and Auditor General (CAG) of India, in its latest audit report of government accounts, has observed that the government withheld in the Consolidated Fund of India (CFI) more than ₹1.1 lakh crore out of the almost ₹2.75 lakh crore collected through various cesses in 2018-19.
Try this PYQ:
Q.Consider the following items:
- Cereal grains hulled
- Chicken eggs cooked
- Fish processed and canned
- Newspapers containing advertising material
Which of the above items is/are exempted under GST (Goods and Services Tax)? (CSP 2018)
(a) 1 only
(b) 2 and 3 only
(c) 1, 2 and 4 only
(d) 1, 2, 3 and 4
Issues with the cess deposits
- The CAG found this objectionable since cess collections are supposed to be transferred to specified Reserve Funds that Parliament has approved for each of these levies.
- The nation’s highest auditor also found that over ₹1.24 lakh crore collected as Cess on Crude Oil over the last decade had not been transferred to the designated Reserve Fund — the Oil Industry Development Board.
- Similarly, the Goods and Services Tax (GST) Compensation Cess was also “short-credited” to the relevant reserve fund.
What is Cess?
- The Union government is empowered to raise revenue through a gamut of levies, including taxes (both direct and indirect), surcharges, fees and cess.
- While direct taxes, including income tax, and indirect taxes such as GST are taxes where the revenue received can be spent by the government for any public purpose in any manner it deems appropriate for the nation’s good, a cess is an earmarked tax that is collected for a specific purpose and ought to be spent only for that.
- Every cess is collected after Parliament has authorised its creation through enabling legislation that specifies the purpose for which the funds are being raised.
- Article 270 of the Constitution allows cess to be excluded from the purview of the divisible pool of taxes that the Union government must share with the States.
How many cesses does government levy?
- A report submitted to the Fifteenth Finance Commission listed 42 cesses that have been levied at various points in time since 1944.
- The very first cess was levied on matches, according to this report.
- Post Independence, the cess taxes were linked initially to the development of a particular industry, including a salt cess and a tea cess in 1953.
- Subsequently, the introduction of cess was motivated by the aim of ensuring labour welfare.
- Some cesses that exemplified this thrust were the iron ore mines labour welfare cess in 1961, the limestone and dolomite mines labour welfare cess of 1972 and the cine workers welfare cess introduced in 1981.
Cesses after GST
- The introduction of the GST in 2017 led to most cesses being done away with and as of August 2018, there were only seven cesses that continued to be levied.
- These were Cess on Exports, Cess on Crude Oil, Health and Education Cess, Road and Infrastructure Cess, Building and Other Construction Workers Welfare Cess, National Calamity Contingent Duty on Tobacco and Tobacco Products and the GST Compensation Cess.
- And in February, Finance Minister Nirmala Sitharaman introduced a new cess — a Health Cess of 5% on imported medical devices — in the Finance Bill for 2020-2021.
Why is the issue in the news currently?
- For one, most crucially, the express purpose of this particular cess is to help recompense States for the loss of revenue on account of their having joined the GST regime by voluntarily giving up almost all the power to levy local indirect taxes on goods and services.
- Also, the share of revenue to the Centre’s annual tax kitty from cess had risen to 11.88% of the estimated gross tax receipts in 2018-19, from 6.88% in 2012-13.
- Given that cess does not need to be a part of the divisible pool of resources, this increasing share of cess in the Union government’s tax receipts has a direct impact on fiscal devolution.
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From UPSC perspective, the following things are important :
Prelims level: Not Much
Mains level: Debate over profitability of farming in India
The government’s push to reform India’s agriculture sector has divided opinions and triggered a debate about the state of Indian agriculture.
Try this PYQ:
Q.In view of the declining average size of land holdings in India which has made agriculture nonviable for a majority of farmers, should contract farming and land leasing be promoted in agriculture? Critically evaluate the pros and cons. (UPSC 2015)
Features of Indian Agriculture
In the context of this debate, two long-standing characteristics of Indian agriculture are noteworthy:
- Indian agriculture is highly unremunerative
- It has been heavily regulated by the government and protected from the free play of market forces
Why are the new legislation introduced?
- According to the government, the new Bills passed by Parliament attempt to make it easier for farmers to sell to and produce for the private sector.
- The hope is that liberalizing the sector and allowing greater play for market forces will make Indian agriculture more efficient and more remunerative for the farmers.
- In this context, it is important to understand some of the basics of Indian agriculture.
Basics of Indian agriculture
(1) Workforce engaged
- At the time of Independence, about 70% of India’s workforce (a little less than 100 million) was employed in the agriculture sector.
- Even at that time, agriculture and allied activities accounted for around 54% of India’s national income.
- Over the years, agriculture’s contribution to national output declined sharply. As of 2019-20, it was less than 17% (in gross value added terms).
- And yet, the proportion of Indians engaged in agriculture has fallen from 70% to just 55% (Chart 1).
- As the Committee on Doubling Farmers’ Income (2017) observes, “the dependence of the rural workforce on agriculture for employment has not declined in proportion to the falling contribution of agriculture to GDP”.
(2) Land holdings
- While the number of people dependent on agriculture has been burgeoning over the years, the average size of landholdings has become reduced sharply — even to the extent of being unviable for efficient production.
- Data shows that 86% of all landholdings in India are small (between 1 and 2 hectares) and marginal (less than 1 hectare — roughly half a football field).
- The average size among marginal holdings is just 0.37 ha which hardly provides enough income to stay above the poverty line.
(3) Debts
- The combined result of several such inefficiencies is that most Indian farmers are heavily indebted (Chart 2).
- The data shows that 40% of the 24 lakh households that operate on landholdings smaller than 0.01 ha are indebted. The average amount is Rs 31,000.
- A good reason why such a high proportion of farmers is so indebted is that Indian agriculture — for the most part — is unremunerative.
- Chart 3 provides the monthly income estimates for an agriculture household in four very different states as well as the all-India number.
- Some of the most populous states like Bihar, West Bengal and Uttar Pradesh have very low levels of income and very high proportions of indebtedness.
(4) Buying & selling
- Another way of understanding the plight of the farmers relative to the rest of the economy is to look at the Terms of Trade between farmers and non-farmers.
- Terms of Trade is the ratio between the prices paid by the farmers for their inputs and the prices received by the farmers for their output.
- As such, 100 is the benchmark. If the ToT is less than 100, it means farmers are worse off.
- As Chart 4 shows, ToT rapidly improved between 2004-05 and 2010-11 to breach the 100-mark but since then it has worsened for farmers.
(5) MSP
- A key variable in the debate is the role of minimum support prices. Many protesters fear governments will roll back the system of MSPs.
- MSPs provide “guaranteed prices” and an “assured market” to farmers, and save them from price fluctuations. This is crucial because most farmers are not adequately informed.
- But although MSPs are announced for around 23 crops, actual procurement happens for very few crops such as wheat and rice.
- Moreover, the percentage of procurement varies sharply across states (Chart 5). As a result, actual market prices — what the farmers get — are often below MSPs.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: United Nations, Atlantic Charter
Mains level: Success and failures of United Nations
The United Nations completed 75 years this year. In order to commemorate the historic moment, world leaders have come together, at a one-day high-level meeting of the UN General Assembly.
Try this:
Q.Discuss the various success and failures of the United Nations. (150W)
Birth of United Nations
- The United Nations was born out of the horrors of World War II.
- At the time of its foundation, it was primarily tasked with the goal of maintaining world peace and saving future generations from the evils of war.
A historical backgrounder
- The UN was born out of the ashes of yet another international organisation created with the intention of keeping war away.
- The League of Nations was created in June 1919, after World War I, as part of the Treaty of Versailles.
- However, when the Second World War broke out in 1939, the League closed down and its headquarters in Geneva remained empty throughout the war.
- Consequently, in August 1941, American President Franklin D. Roosevelt and British PM Winston Churchill held a secret meeting aboard naval ships in Placenta Bay, located in the southeast coast of Newfoundland, Canada.
The Atlantic Charter
- The heads of the two countries discussed the possibility of creating a body for international peace effort and a range of issues related to the war.
- Together they issued a statement that came to be called the Atlantic Charter. It was not a treaty, but only an affirmation that paved the way for the creation of the UN.
- It declared the realization of “certain common principles in the national policies of their respective countries on which they based their hopes for a better future for the world.”
The name ‘UN’
- The United States joined the war in December 1941, and for the first time the term ‘United Nations’ was coined by president Roosevelt to identify those countries which were allied against the axis powers.
- On January 1, 1942, representatives of 26 allied nations met in Washington DC to sign the declaration of the United Nations, which basically spelt out the war objectives of the Allied powers.
- Over the next couple of years, several meetings took place among the Allied big four — The USA, the Soviet Union, the UK and China — to decide on the post-war charter that would describe the precise role of the UN.
Coming to existence
- The UN finally came into existence on October 24, 1945, after being ratified by 51 nations, which included five permanent members (France, the Republic of China, the Soviet Union, the UK and the US) and 46 other signatories.
- The first meeting of the General Assembly took place on January 10, 1946.
Its achievements
- While at the time of its formation, the UN consisted of only 51 member states, independence movements and decolonization in the subsequent years led to an expansion of its membership.
- At present, 193 countries are members of the UN.
- It has also expanded its scope to resolve over a large number of global issues such as health, environment, and women empowerment among others.
- Soon after its formation, it passed a resolution to commit to the elimination of nuclear weapons in 1946. In 1948, it created the World Health Organisation (WHO) to deal with communicable diseases like smallpox, malaria, HIV.
- In 1950, the UN created the High Commissioner for Refugees to take care of the millions who had been displaced due to World War II.
- More recently in 2002, the UN established the UN criminal court to try those who have committed war crimes, genocide, and other atrocities.
Various criticisms
- The UN has also met with its share of criticisms. In 1994, for instance, the organisation failed to stop the Rwandan genocide.
- In 2005, UN peacekeeping missions were accused of sexual misconduct in the Republic of Congo, and similar allegations have also come from Cambodia and Haiti.
- In 2011, the UN peacekeeping mission in South Sudan was unsuccessful in eliminating the bloodshed caused in the civil war that broke out in 2013.
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