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  • For India, a lesson in food security from Sri Lanka

    Context

     India needs to have a strategy of self-reliance in basic foods, including edible oils.

    Contrasting cases of Sri Lanka and Saudi Arabia

    • Sri Lanka, a country with 21.5 million population imported dairy products valued at $333.8 million in 2020 and $317.7 million in 2021.
    • The island nation’s imports of whole milk powder (WMP) alone were 89,000 tonnes and 72,000 tonnes in these two years.
    •  The 89,000 tonnes of powder imported in 2020 would have, thus, “produced” almost 2.1 million litres per day (MLPD) equivalent of milk.
    • This is as against the 1.3 MLPD that Sri Lanka produces from its own cows and buffaloes.
    • It translates into an import dependence of over 60 per cent.
    • At the other end, we have Saudi Arabia, home to over 35 million inhabitants (including immigrants) and also the world’s largest vertically integrated dairy company.
    • Almarai Company has six dairy farms producing more than 3.5 MLPD of milk.
    • The animals are sourced from the US and Europe.
    • The entire feed and also forage given to them are procured from abroad.
    • Why is Saudi Arabia taking such pains to produce its own milk?
    • The answer is food security.
    • The Saudis — other Persian Gulf countries have also copied the Almarai model — are prepared to pay any price when it comes to ensuring the availability of basic food like milk.

    Lessons for India: Reducing import dependence on edible oil

    • India annually imports 13.5-14.5 million tonnes of vegetable oils, again roughly 60 per cent of its total consumption.
    •  Low international prices meant that the import bill, though high, fell from $9.85 billion in 2012-13 to $9.67 billion in 2019-20.
    • However, in the last couple of years, retail prices of most oils more than doubled
    • The value of India’s vegetable oil imports surged to a record $19 billion in 2021-22.

    Conclusion

    As a country with a population many times that of Sri Lanka and Saudi Arabia, India needs to have a strategy of self-reliance in basic foods.

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  • Anti-microbial resistance needs urgent attention

    Context

    Ever since the pandemic struck, concerns have been raised about the improper use of antimicrobials amongst Covid-19 patients.

    Concern over anti-microbial resistance

    • The “Global burden of bacterial antimicrobial resistance in 204 countries and territories in 2019 (GRAM)” report, released last month, 4.95 million people died from drug-resistant bacterial infections in 2019, with 3,89,000 deaths in South Asia alone.
    • AMR directly caused at least 1.27 million of those deaths.
    • Lower respiratory infections accounted for more than 1.5 million deaths associated with resistance in 2019, making it the most burdensome infectious syndrome.
    • Amongst pathogens, E coli was responsible for the most deaths in 2019, followed by K pneumoniae, S aureus, A baumannii, S pneumoniae, and M tuberculosis.

    Concern for India

    • As per the yearly trends reported by the Indian Council of Medical Research since 2015, India reports a high level of resistance in all these pathogens, especially E coli and K pneumoniae.
    • Only a fraction of the Indian data, available through the WHO-GLASS portal, has been included in the GRAM report.
    • India has been reporting high levels of resistance to fluoroquinolones, cephalosporins and carbapenems across the Gram-negative pathogens that cause almost 70 per cent of infections in communities and hospitals.
    • Therefore, the Indian data on the AMR burden may not look very different from the estimates published in the report.
    • Now that we know that AMR’s burden surpasses that of TB and HIV, a sense of urgency in containing such resistance is called for.
    • With no new drugs in the pipeline for drug-resistant infections, time is running out for patients.

    Addressing AMR through a multipronged and multisectoral approach

    • Use existing antimicrobials judiciously: The urgency to develop new drugs should not discourage us from instituting measures to use the existing antimicrobials judiciously.
    • Improved infection control in communities and hospitals, availability and utilisation of quality diagnostics and laboratories and educating people about antimicrobials have proved effective in reducing antimicrobial pressure — a precursor to resistance.
    • The National Action Plan for AMR, approved in 2017, completes its official duration this year. The progress under the plan has been far from satisfactory.
    • There is enough evidence that interventions like infection control, improved diagnosis and antimicrobial stewardship are effective in the containment of AMR.

    Conclusion

    The GRAM report has underlined that postponing action could prove costly.

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  • What is WHO’s Pandemic Treaty?

    Members of the World Health Organisation (WHO) held the first round of negotiations towards the pandemic treaty on February 24, 2022.

    What is the Pandemic Treaty?

    • In December 2021, the World Health Assembly agreed to start a global process to draft the pandemic treaty.
    • The need for an updated set of rules was felt after the COVID-19 pandemic exposed the shortcomings of global health systems.
    • The Health Assembly adopted a decision titled “The World Together” at its second special session since it was founded in 1948.
    • Under the decision, the health organization established an intergovernmental negotiating body (INB) to draft and negotiate the contents of the pandemic treaty in compliance with Article 19 of the WHO Constitution.

    What is it likely to entail?

    • The pandemic treaty is expected to cover aspects like data sharing and genome sequencing of emerging viruses and equitable distribution of vaccines and drugs and related research.
    • Solutions to the COVID-19 pandemic have seen an inequitable distribution of vaccines so far, with poorer countries at the mercy of others to receive preventive medication.

    Why need such treaty?

    • Most countries have followed the “me-first” approach which is not an effective way to deal with a global pandemic.
    • A widely-accepted theory points that the novel coronavirus may have jumped from animals to humans in a wildlife market of China.
    • Many nations want a ban on wildlife markets.

    Issues in negotiations

    • While the EU wants the treaty to be legally binding, the U.S., Brazil and India have expressed reservations about the same.
    • The legal nature of the treaty is yet to be defined.

     What is Article 19 of the WHO Constitution?

    • Article 19 of the WHO Constitution gives the World Health Assembly the authority to adopt conventions or agreements on matters of health.
    • A two-third majority is needed to adopt such conventions or agreements.
    • The WHO Framework Convention on Tobacco Control was set up under Article 19 and it came into force in 2005.

     

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  • Budget falls short on green ambitions

    Context

    One can analyse the budget from three standpoints: Direct allocations for the environment sector, allocations for environment in non-environment sectors, and allocations for other sectors with environmental impacts.

    Analysing the Budget from an environmental standpoint

    1] Allocation for MoEFCC

    • There is a slight increase in the budget of the Ministry for Environment, Forests and Climate Change (MoEFCC) from 2021-22’s revised estimate of Rs 2,870 crore to Rs 3,030 crore.
    • This is a meagre 0.08 per cent of the total budgetary outlay.
    • While some sectors like forestry and wildlife have seen a healthy rise in allocation, the outlay for others like the National River Conservation Plan has declined.

    2] Focus on natural and organic farming

    • There is a welcome stated focus on natural and organic farming, and on promoting millets.
    • No details on allocation: There are no details on the allocations, including for linkages necessary to make such farming viable, such as manure and markets.
    • Also, given the major push for food processing in the budget, without making reservations for community-run businesses, there is a danger of big corporations capturing the organic space.
    • Missing focus on rainfed farming: Completely missing is a focus on rainfed farming that involves 60 per cent of the farming population and is ecologically more sustainable than artificially irrigated agriculture.
    • The FM announced the government’s support to “chemical-free farming throughout the country,” but she has also allocated a massive chemical fertiliser subsidy of Rs 1,05,222 crore.
    • A recent announcement that palm plantations are proposed in Northeast India and the Andaman Islands, both ecologically fragile, makes this a worrying prospect.

    3] Positive provisions on the climate front

    • On the climate front, there are several positive provisions — use of biomass for power stations, boost to batteries, energy-efficiency measures in large commercial buildings, and sovereign green bonds.
    • Renewable and “clean” energy has received substantially higher allocations.
    • But the focus remains on mega-parks in solar/wind energy, nuclear power, and large hydro that have serious ecological impacts. 
    • The additional budget for farm-level solar pumps and rooftop solar generation is welcome, but it’s minuscule compared to mega-projects.
    • Missed opportunity for decentralised renewable energy: Another chance to shift towards decentralised renewable energy with less ecological impacts and greater community access has been missed.
    • The budget does promise greater support for public transport, something demanded by citizens’ groups for decades.
    • Unfortunately, most of the allocation in this will go to metros that are extremely carbon-intensive in terms of construction.
    • The National Climate Action Plan gets an abysmally inadequate Rs 30 crore — the same as in 2021-22.
    • And there is no focus on a “just transition” that could help workers in fossil fuel sectors, like coal, to transition to jobs in cleaner, greener sectors.

    4] Concerns with focus on infrastructure in Budget

    • As highlighted by the FM, this is predominantly an “infrastructure budget”.
    • While investments in infrastructure for small towns and villages are urgently needed, much of what is proposed are mega-projects.
    • The proposed 25,000 km increase in highways will further fragment forests, wetlands, mountains, grasslands, agricultural lands and bypass most villages.
    • A shift in paradigm to decentralised, sustainable, and community-oriented infrastructure is missing.
    • Several specific allocations are of further concern. For instance, the Ken-Betwa river-linking project, given over Rs 40,000 crore, will submerge valuable tiger habitat.
    • The Deep Ocean Mission and the Blue Revolution allocations are oriented towards commercial exploitation rather than conservation and sustainable use. 

    5] Missed opportunity on green jobs

    •  The budget misses out on a major shift to “green jobs”.
    • This includes support to decentralised (including handmade) production of textiles, footwear, and other products.
    • Even the MGNREGS, which could have been used for regenerating two-thirds of India’s landmass that is ecologically degraded, has got reduced allocation.

    Conclusion

    Another chance to turn the economy towards real sustainability and equity — a real “Amrit Kaal” as India heads to a centenary of Independence — has been missed.

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  • What is Q-Commerce Model?

    Online grocer Grofers has rebranded itself “Blinkit”, in line with its new focus on “quick commerce”, which essentially involves delivering customer orders much faster than it does currently.

    Q-Commerce Model

    • Q-commerce (‘quick commerce’) – sometimes used interchangeably with ‘on-demand delivery’ and ‘e-grocery’ – is e-commerce in a new, faster form.
    • It combines the merits of traditional e-commerce with innovations in last-mile delivery.
    • The premise is largely the same, with speed of delivery being the main differentiator. Delivery is not in days but minutes – 30 or less, to be competitive.
    • This has in turn expanded the breadth of what individuals can order, with perishable goods – like groceries – being a large niche q-commerce companies speak to.
    • It tends to focus on the micro – smaller quantities of fewer goods.

    Features of this model

    • Countering pandemic: The supply chain disruptions triggered by the Covid-19 pandemic led to the emergence of a new sub-vertical in the online grocery segment.
    • Quickest delivery: It is the unique selling proposition (USP) of which was the promise of delivery within 10-30 minutes of ordering.
    • Micro-warehousing : The focus of most of these ventures is on setting up micro-warehouses located closer to the point of delivery, and of restricting stocks of high-demand items.

    Back2Basics:  Marketplace and Inventory-Based Model

    (1) Marketplace Model

    • It provides an IT platform by an e-commerce entity on a digital & electronic network to act as a facilitator between the buyer and seller. Ex. India Mart, Amazon, Flipkart.
    • The e-commerce firm does not directly or indirectly influence the sale price of goods or services and is required to offer a level playing field to all vendors.

    (2) Inventory-Based Model

    • Inventory based model of e-commerce means an e-commerce activity where the inventory of goods and services is owned by an e-commerce entity and is sold to the consumers directly.
    • Ex. Alibaba

     

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  • In news: Two principles of Justice

    This newscard is an excerpt of the original article published in TH.

    Note: This article is of extreme theoretical nature. But it leaves scope for many vague questions for prelims as well as mains where most of us go clueless.

    Two principles of Justice

    • The concept, so-called, of “two principles of justice”, is synonymous with the name of John Rawls, a highly influential American liberal political philosopher of the last century.
    • The concept of two principles forms an encapsulation of the core principles of:
    • Freedom and equality embodied in the constitutions of any contemporary liberal democratic society
    • As such, they have acquired pre-eminence in a wide range of academic disciplines and in the arena of public policymaking.

    What are the two principles?

    • The first of Rawls’ two principles says that every citizen has the same claim to a scheme of equal basic liberties, which must also be compatible with those of every other citizen.
    • It enumerates an extensive list of basic civil and political rights, including a person’s freedom of conscience, expression and association; the right to a basic income; and the right to exercise the franchise.
    • Their resonance with the practical world of politics needs no emphasis; consider the chapter on fundamental rights in any constitution.
    • The second of Rawls’ two principles grapples with the underlying inequalities of social and economic institutions.

    How can these be reasonably justified to free and equal citizens?

    • In order to be morally defensible, the institutions must satisfy two conditions.
    1. First, they must guarantee fair equality of opportunities for competition to positions of public office and employment.
    2. Second, social and economic inequalities must be arranged in a manner that they work to the greatest benefit of the least advantaged members of society.
    • This latter postulate is Rawls’ famous “difference principle”.

    Significance of this principle

    • The political significance of Rawls’ two principles of justice obtains equally in the relative weight and primacy he assigns to their different components.
    • Between them, the first principle is accorded absolute priority over the second.
    • That is to say, the primacy of the equal basic liberties of citizens is non-negotiable in a democratic society.
    • The entitlement of each to the various liberties is as critical as they are universal and non-discriminatory.
    • Within the second principle, the first part takes precedence over the second.
    • In other words, public institutions could not appear legitimate in the eyes of citizens unless everybody could reasonably expect to enjoy the fruits of fair equality of opportunities.

     

    Try this question from CSP 2020:

    Q. One common agreement between Gandhism and Marxism is

    (a) The final goal of a stateless society

    (b) Class struggle

    (c) Abolition of private property

    (d) Economic determinism

     

    [wpdiscuz-feedback id=”yuea3fd1vc” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

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  • Explained: Global Minimum Tax Deal

    A global deal to ensure big companies pay a minimum tax rate of 15% and make it harder for them to avoid taxation has been agreed by 136 countries.

    What is the news?

    • The OECD said four countries – Kenya, Nigeria, Pakistan and Sri Lanka – had not yet joined the agreement.
    • However, the countries behind the accord together accounted for over 90% of the global economy.

    Why a global minimum tax?

    • With budgets strained after the COVID-19 crisis, many governments want more than ever to discourage multinationals from shifting profits – and tax revenues – to low-tax countries.
    • Increasingly, income from intangible sources such as drug patents, software and royalties on intellectual property has migrated to these jurisdictions.
    • This has allowed companies to avoid paying higher taxes in their traditional home countries.
    • The minimum tax and other provisions aim to put an end to decades of tax competition between governments to attract foreign investment.

    How would a deal work?

    • The global minimum tax rate would apply to overseas profits of multinational firms with 750 million euros ($868 million) in sales globally.
    • Govts could still set whatever local corporate tax rate they want.
    • However, buif companies pay lower rates in a particular country, their home governments could “top up” their taxes to the 15% minimum, eliminating the advantage of shifting profits.
    • A second track of the overhaul would allow countries where revenues are earned to tax 25% of the largest multinationals’ so-called excess profit – defined as profit in excess of 10% of revenue.

    What happens next?

    • The next step is for finance ministers from the Group of 20 economic powers to formally endorse the deal, paving the way for adoption by G20 leaders at an end October summit.
    • Nonetheless, questions remain about the US position which hangs in part on a domestic tax reform the Biden administration wants to push through the US Congress.
    • The agreement calls for countries to bring it into law in 2022 so that it can take effect by 2023, an extremely tight timeframe given that previous international tax deals took years to implement.
    • Countries that have in recent years created national digital services taxes will have to repeal them.

    What will be the economic impact?

    • The OECD, which has steered the negotiations, estimates the minimum tax will generate $150 billion in additional global tax revenues annually.
    • Taxing rights on more than $125 billion of profit will be additionally shifted to the countries were they are earned from the low tax countries where they are currently booked.
    • Economists expect that the deal will encourage multinationals to repatriate capital to their country of headquarters, giving a boost to those economies.
    • However, various deductions and exceptions baked into the deal are at the same time designed to limit the impact on low tax countries like Ireland, where many US groups base their European operations.

    Back2Basics: Base Erosion and Profit Shifting (BEPS)

    • BEPS refers to corporate tax planning strategies used by multinationals to “shift” profits from higher-tax jurisdictions to lower-tax jurisdictions.
    • It thus “erodes” the “tax base” of the higher-tax jurisdictions.
    • Corporate tax havens offer BEPS tools to “shift” profits to the haven, and additional BEPS tools to avoid paying taxes within the haven.
    • It is alleged that BEPS is associated mostly with American technology and life science multinationals.

    Try this:

     

    Q.3) What are the factors that led to the demand of global minimum corporate tax? What will be its implications for India? (10 Marks)

     

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