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  • Kisan Credit Cards (KCC) for 1.5 crore dairy farmers

    The Union Govt. is set to provide Kisan Credit Card (KCC) to 1.5 crore dairy farmers belonging to Milk Unions and Milk producing Companies within the next two months under a special drive.

    We can expect multiple statements based prelim question here. Note the following features of the KCC from the newscard:

    1. Year of its introduction (in rarest case)

    2. Types of banks issuing KCC

    3. Credit types extended under KCC

    4. Sectors covered under KCC

    What is Kisan Credit Card (KCC)?

    • KCC is a credit scheme introduced in August 1998 by banks to extend credit facilities to farmers.
    • This model scheme was prepared by the NABARD on the recommendations of R.V. GUPTA committee to provide term loans for agricultural needs
    • Participating institutions include all commercial banks, Regional Rural Banks, and state co-operative banks. The scheme has short term credit limits for crops and term loans.
    • KCC offering credit to the farmers is of two types: 1. Cash Credit 2. Term Credit (for allied activities such as pump sets, land development, plantation, drip irrigations).

    Facilities under KCC

    • Credit card and passbook or credit card cum passbook provided to eligible farmers facilitate revolving cash credit facility.
    • Any number of withdrawals and repayments within a limit, which is fixed on the basis of operational land holding, cropping pattern and scale of finance can be made.
    • Each withdrawal has to be repaid within a maximum period of 12 months and the Card is valid for 3 to 5 years subject to annual review.
    • Conversion/reschedulement of loans is permissible in case of damage to crops due to natural calamities.
    • Crop loans disbursed under KCC Scheme for notified crops are covered under Rashtriya Krishi Bima Yojana, to protect farmers against loss of crop yield caused by natural calamities, pest attacks etc.

    What’s’ in the bucket for Dairy Farmers?

    • Under the dairy cooperative movement, approximately 1.7 crore farmers are associated with 230 Milk Unions in the country.
    • In the first phase of this campaign, the target is to cover all farmers who are members of dairy cooperative societies and associated with different Milk Unions and who do not have KCC.
    • Although the general limit for KCC credit without collateral is Rs. 1.6 lakh, but for dairy farmers, it can be upto Rs.3 lakh.
    • This will ensure more credit availability for dairy farmers associated with Milk Unions as well as assuring repayment of loans to banks.

  • What is Antifa Movement?

    As massive protests following the death of a person in racial discrimination continued to rock the US, President Donald Trump has announced that the alleged far-left group Antifa would be designated as a terrorist organisation by his government.

    One can expect a similar prelims question:

    Q. The Antifa movement recently seen in news is an: Free trade movement/Anti-terror movement etc.

    Why the US seeks to ban Antifa?

    • Trump has blamed for the protests that have convulsed cities across the US,
    • Antifa is considered the loosely affiliated group of far-left anti-fascist activists.

    Antifa: The group

    • Antifa is an acronym for ‘Anti-Fascist’. It is not an organisation with a leader nor does it have a defined structure or membership roles.
    • Antifa has been around for several decades, though accounts vary on its exact beginnings.
    • The term dates the term as far back as Nazi Germany, describing the etymology of ‘Antifa’ as “borrowed from German Antifa, short for antifaschistische ‘anti-fascist’.
    • Rather, Antifa is more of a movement of activists whose followers share a philosophy and tactics.
    • They have made their presence known at protests, including the “Unite the Right” rally in Charlottesville, Virginia, in 2017.

    Its members

    • It is impossible to know how many people count themselves as members.
    • Its followers acknowledge that the movement is secretive, has no official leaders and is organised into autonomous local cells.
    • It is also only one in a constellation of activist movements that have come together in the past few years to oppose the far right.
    • Antifa members campaign against actions they view as authoritarian, homophobic, racist or xenophobic.

    Activism over years

    • Antifa members typically dress in black and often wear a mask at their demonstrations, and follow far-left ideologies such as anti-capitalism.
    • The movement has been known to have a presence in the US in the 1980s.
    • It shot into prominence following the election of President Trump in 2016, with violence marking some of its protests and demonstrations.
    • Criticizing mainstream liberal politicians for not doing enough, Antifa members have often physically confronted their conservative opponents on the streets.
    • The group also participates in non-violent protests. Apart from public counter-protests, Antifa members run websites that track white extremist and ultra-right groups.

    Criticisms

    • The movement has been widely criticised among the mainstream left and right.
    • Conservative publications and politicians routinely rail against supporters of Antifa, who they say are seeking to shut down peaceful expression of conservative views.

  • Using COVID crisis to reorient India towards reforms

    Following the announcement of relief and stimulus package, the debate began over its various aspects. This article assesses the various aspects of the package and draws comparison with the package announced by the other countries. So, how does India fare compared with other countries?

    Fiscal component of  stimulus package

    • According to the IMF-PT (policy tracker), the fiscal component of the Indian package is estimated to be at least 3.5 per cent of GDP as expenditure for poor households, migrant workers and agriculture.
    • There is an additional 0.5 per cent of GDP for states to spend unconditionally, bringing the fiscal package excluding loans to businesses to at least 4 per cent of GDP.
    • The support for businesses (MSMEs) is estimated to be 2.7 per cent of GDP.
    • Of this, at least 2 per cent of GDP is in the form of 100 per cent credit guarantees and equity infusion.

    Comparison with major emerging economies

    • Among major developing economies, only Brazil -8 per cent of GDP– and Peru -7 per cent of GDP– have a fiscal stimulus higher than the 5 per cent level for India.
    • The Brazil estimate includes about 3 per cent of GDP as working capital loans to businesses and households.
    • The fiscal support level for some important emerging economies is — China 2.5 per cent of GDP and Indonesia 3.5 per cent.

    Why it is difficult to segregate the stimulus package?

    • While comparing the fiscal stimulus packages across countries, it is important to understand that such packages are in the nature of additional spending and tax reliefs.
    • Which can work directly through aggregate demand or indirectly by mitigating risk and enhancing access to fund.
    • Access to fund is ensured in the nature of credit guarantees to financial institutions and non-financial enterprises
    • A large number of fiscal stimulus packages announced by different countries contain credit guarantees to financial institutions, SMEs, and agriculture.
    • Hence, it is difficult to segregate fiscal stimulus into its pure and impure components.
    • Most economists, and international organisations, recognise that fiscal stimulus consists of both the pure and impure.
    • And includes three broad items — a direct “above-the-line” component, a “below-the-line” component and guarantees of various forms primarily credit.
    • The choice of using only one component of the fiscal stimulus is selective and highly inappropriate.

    India as a positive fiscal stimulus outlier

    • To put the packages into perspective, the average of all fiscal measures in the G24 developing economies is equal to 3.6 per cent.
    • No matter how the calculation is done, India is a positive fiscal stimulus outlier; by IMF-PT calculations.
    • The stimulus is close to the largest among major emerging market economies.

    So, how much rich countries are spending?

    • The rich nations are spending more — they can afford to. Japan announced what may be the upper limit to the expansion — 21.1 per cent of GDP.
    • However, this does include large elements of loans and credit guarantees.
    • Through a combination of several fiscal measures (tax deferrals, credit guarantees, etc.) the US has pledged close to 13 per cent of GDP.
    • The European Union, on average, has pledged 4 per cent of GDP.
    • The average for advanced countries is around 6 per cent of GDP.

    Significance of monetary policy change made by RBI

    • The monetary policy change in India is quite significant.
    • The change paves the way for internationally competitive monetary policy.
    •  That is, real interest rates comparable to those prevalent in competitor economies.
    • The repo rate now stands at 4 per cent, with inflation well contained.
    • This is substantially a much different, and much-improved RBI response than that what occurred in 2008-09.
    • At that time, as a monetary counter to the financial crisis, the RBI reduced the repo rate by 425 basis points to 4.75 per cent.
    • This was done over seven months and the prevailing CPI inflation rate was 10 per cent.

    Economic reforms as a part of stimulus package

    • India has announced several economic reforms as a part of the stimulus package.
    • These are long-awaited — freeing up of the labour market, allowing farmers to sell their produce and land to who they choose, removal of archaic laws like the Essential Commodities Act, with the promise of more to come.
    • This is not an empty promise — the Centre will advance another 1.5 per cent of GDP to states to expand spending.
    • This advance will be conditional on them for undertaking long-pending reforms.
    • The Indian fiscal package is reformist, well-disciplined and provides focused support; and if needed, there is still room for additional measures.

    Conclusion

    The Indian fiscal package is reformist, well-disciplined and provides focused support; and if needed, there is still room for additional measures. We should use the crisis to re-orient India towards its long-awaited destiny.

  • What is the National Numbering Plan?

    The Telecom Regulatory Authority of India (TRAI) has recommended that a new National Numbering Plan be issued at the earliest so that a uniquely identifiable number can be provided to every subscriber in India.

    The TRAI and Telecom Disputes Settlement and Appellate Tribunal are quite often seen in the news.  Most recent was the dispute risen due to AGR dues.

    TRAI has a wide range of jurisdiction over Telecoms. Keep a track on all such news.

    National Numbering Plan

    • The management of numbering resources is governed by the National Numbering Plan.
    • The Department of Telecom administers the numbers for fixed and the mobile networks based on the ITU’s Telecommunication Standardization Sector (ITU-T) recommendations.
    • TRAI has recommended automated allocation of numbering resources be done using number management system software to speed up the process

    Broadly, the TRAI has recommended:

    • switching to an 11-digit mobile number,
    • reallocation of mobile numbering resources surrendered by operators who have shut shop and
    • prefixing zero for all mobile calls made from fixed line

    Issues with 11 digit number

    • TRAI said that some serious problems are anticipated with a change in the mobile number from 10 to 11 digits.
    • Migrating to 11 digits would require widespread modifications in the configuration of switches involving cost.
    • This would also cause inconvenience to the customers in the form of dialling extra digits and updating phone memory.
    • This could lead to more dialling errors, traffic, and loss of revenue to telecom operators.

    Still, why need a plan as such?

    • The total number of telephone subscribers in India stands at 1,177.02 million with a teledensity of 87.45% at the end of January 2020.
    • This increasing digitization would pave the way towards the dream of digital India and mobile economy.
    • Thus, it has become necessary to review the utilization of numbering resources in the country.
    • Considering the above scenario the implementation of the TRAI’s recommendation with solutions to possible issues would help for sustainable growth of the telecommunication services.
    • Hence TRAI needs to review the utilization of the numbering resources and make some policy decisions to ensure that adequate resources are available for sustainable growth of the telecom services.

    Back2Basics: Telecom Regulatory Authority of India (TRAI)

    • The TRAI is a statutory body set up under section 3 of the Telecom Regulatory Authority of India Act, 1997.
    • It is the regulator of the telecommunications and its tariffs in India.
    • The TRAI Act was amended by an ordinance, effective from 24 January 2000, establishing a Telecom Disputes Settlement and Appellate Tribunal (TDSAT) to take over the adjudicatory and disputes functions from TRAI.
    • TRAI regularly issues orders and directions on various subjects such as tariffs, interconnections, quality of service, DTH services and mobile number portability.

  • THAAD defence system

    China has issued a statement reiterating its long-standing objections to the presence of the US THAAD missile defence system in South Korea.

    Try this question from CSP 2018:

    Q. What is “Terminal High Altitude Area Defense (THAAD)”, sometimes seen in the news?

    (a) An Israeli radar system

    (b) India’s indigenous anti-missile programme

    (c) An American anti-missile system

    (d) A defence collaboration between Japan and South Korea

    What is THAAD?

    • THAAD is an acronym for Terminal High Altitude Area Defense, a transportable, ground-based missile defence system.
    • It is coupled with space-based and ground-based surveillance stations, which transfer data about the incoming missile and informs the THAAD interceptor missile of the threat type classification.
    • THAAD is alarmed about incoming missiles by space-based satellites with infrared sensors.
    • This anti-ballistic missile defence system has been designed and manufactured by the US company Lockheed Martin. South Korea is not the only country with the THAAD missile defence system.
    • It has been previously deployed in the UAE, Guam, Israel and Romania.

    The South Korea-China controversy over THAAD

    • In South Korea, the THAAD missile defence system is operated by the US army stationed in the country.
    • The US had previously announced that the deployment of this missile defence system was a countermeasure against potential attacks by North Korea, particularly after the country had engaged in testing ballistic missiles.
    • In 2017, matters escalated in the Korean Peninsula after North Korea test-fired a few missiles in the direction of US bases in Japan.
    • Following this incident, the US amended its plans and moved the systems to its army base in Osan, South Korea while the final deployment site was being prepared.
    • These moves by the US and by extension, South Korea, particularly angered China.

    China’s reservations against THAAD

    • China’s opposition has little to do with the missiles itself and is more about the system’s inbuilt advanced radar systems that could track China’s actions.
    • The controversy also has much to do with the geopolitics and complex conflicts in East Asia, with the US having a presence in the region particularly through its many military bases in Japan and South Korea.
    • According to some observers of East Asia, China believes the US exerts influence over South Korea and Japan and may interfere with Beijing’s long-term military, diplomatic and economic interests in the region.
    • The US and South Korea have consistently maintained that these missiles are only to counter potential threats by North Korea.
    • South Korea also issued a statement saying the number of missiles had not increased but had only been replaced with newer versions.

  • The 5G Club ‘D10’

    Britain said that it was pushing the U.S. to form a club of 10 nations that could develop its own 5G technology and reduce dependence on Huawei.

    We can expect prelims question asking the purpose of the D10 group like-

    Q. The D10 Club recently seen in news is a- Environment NGO/ Group of Democracies/ etc.

    The D10 Club

    • The Britain is proposing a ‘D10’ club of democratic partners that groups the G7 nations with Australia and the Asian technology leaders South Korea and India.
    • It would include G7 countries – UK, US, Italy, Germany, France, Japan and Canada – plus Australia, South Korea and India.
    • It is aimed for channelling investments into existing telecommunication companies within the 10 member states.
    • The group aim to create alternative suppliers of 5G equipment and other technologies to avoid relying on China.

    Ruling out Huawei

    • Britain has allowed the Chinese global leader in 5G technology to build up to 35% of the infrastructure necessary to roll out its new speedy data network.
    • But their PM Boris Johnson was reported to have instructed officials to draw up plans to cut Huawei out of the network by 2023 as relations with China sour.

  • In news: Dibru-Saikhowa National Park (DSNP)

    The Oil India Ltd (OIL) leak in Assam has contaminated water bodies that flow into the Maguri Motapung Beel, a large wetland, and the Dibru-Saikhowa National Park (DSNP).

    Try this PYQ from CSP 2019:

    Q. Which of the following are in Agasthyamala Biosphere Reserve?

    (a) Neyyar, Peppara and Shendurney Wildlife Sanctuaries; and Kalakad Mundanthurai Tiger Reserve

    (b) Mudumalai, Sathyamangalam and Wayanad Wildlife Sanctuaries; and Silent Valley National Park

    (c) Kaundinya, Gundla Brahme-swaram and Papikonda Wildlife Sanctuaries; and Mukurthi National Park

    (d) Kawal and Sri Venkateswara Wildlife Sanctuaries; and Nagarjunasagar-Srisailam Tiger Reserve

    About Dibru-Saikhowa National Park

    • DSNP is a national park in Assam located in Dibrugarh and Tinsukia districts.
    • It was designated a Biosphere Reserve in July 1997 with an area of 765 sq.km.
    • The park is bounded by the Brahmaputra and Lohit Rivers in the north and Dibru river in the south.
    • It mainly consists of moist mixed semi-evergreen forests, moist mixed deciduous forests, canebrakes and grasslands.
    • It is the largest Salix swamp forest in north-eastern India, with a tropical monsoon climate with a hot and wet summer and cool and usually dry winter.

  • Species in news: Band-tail Scorpionfish

    A rare band-tail scorpionfish was recently found in the Gulf of Mannar.

    A stand-alone species being mentioned in the news for the first time (and that too from Southern India) find their way into the prelims. Make special note here. Usually, note the species and its habitat location (IUCN status if available), in the purview of a generic prelims question.

    Band-tail scorpionfish

    • The band-tail scorpionfish (Scorpaenospsis neglecta) camouflages within the seagrass meadows.
    • It is well-known for its stinging venomous spines and ability to change colour.
    • The fish has the ability to change colour and blend with its surrounding environment to escape from predators and while preying.
    • The fish is called ‘scorpionfish’ because its spines contain neurotoxic venom.

  • Three thresholds in Industrial Disputes Act that need revision

    Sometimes the measures we come up with end up doing exactly the opposite of what they were supposed to do. This might be the case with some provisions in the Industrial Dispute Act. This article deals with 3 such provisions in the IDA. So, what are these provisions? How the issues caused by these provisions could be resolved? Read to know more…

    How provisions of IDA could be detrimental?

    • What made so many migrants suddenly long for their village after lockdown?
    • The answer lies in our Industrial Disputes Act (IDA), the motherboard of our labour laws.
    • IDA has encouraged short-term employment, low skills and zero security.
    • It did this by setting up thresholds which disincentivised long-term commitment of workers to entrepreneurs and vice versa.
    • It also kept firms informal and unwilling to invest in human capital.
    • This is why when the lockdown happened, it turned into a migrant crisis.

    Let’s look at  3 thresholds in IDA that are causing harm

    • 1) Hire more than 99 workers, and you will have to notify the government before you can fire any one of them.
    • 2) Hire more than 20 and you open yourself up to provident fund commitments and bonus payments.
    • 3) If you want to deny workers severance pay, never keep them continuously employed for more than 240 days.

    So, how IDA ends up discouraging formalisation?

    • Given these provisions in the IDA, entrepreneurs are reluctant to hire more than 99 workers for over 240 days.
    • The employers are naturally tempted to observe these thresholds and duck under the radar.
    • This is made easier by the fact that these thresholds mesh well with the fear that the middle-class — and upwards — have of a working-class takeover.
    • As a result, these thresholds have only encouraged the informal sector, where both unregistered labour and unregistered entrepreneurs dominate.
    • It has led to the proliferation of informal enterprises and low-skill workers.
    • In the first 15 years of this century itself, over half the increase in total employment has been that of contract workers.
    • This has also led to a phenomenal rise in MSMEs as the IDA has discouraged entrepreneurs from harbouring any ambitions to grow big and formal.
    • The MSMEs have, consequently, increased in number from 3.6 crore units in 2012 to about 6 crore today.
    • Since there are constraints on both the workforce size and duration of employment, upskilling and R&D naturally become early casualties.
    • India spends only 0.7 per cent of its GDP in R&D, one of the lowest in the world, while South Korea spends 4.2 per cent.

    Contribution of MSME in GDP is not increasing

    • Over 94 per cent of MSMEs are in the Micro sector and their contribution to GDP is just not measuring up.
    • In 2012, MSMEs produced 37.54 per cent of our GDP.
    • But this number fell to 30.7 per cent in 2015, and in 2019 it decreased further to 29.7 per cent, though they are still working full throttle.
    • Yet, the lure to stay on the good side of the IDA thresholds is so compelling that even formal units are today outsourcing from the informal ones.
    • Over time, the IDA has succeeded in converting a large number of organised sector companies into strange, hybrid economic creatures, both fishy and foul.

    But, how removal of the 3 thresholds will change the situation?

    • If the 3 mentioned thresholds are removed, every worker — regardless of factory size — is entitled to the same rights.
    • Likewise, every employer, regardless of factory size, can hire and fire workers.
    • There is greater freedom on both sides, but this freedom comes with a price that does not discourage either size or skills in an enterprise.
    • The worker can now be fired without notifying the government, but must be compensated with severance wages, regardless of the size of the firm.
    • Also, unlike the IDA, all the firms must have a formal dispute resolution board.
    • Now that the enterprises have been freed of the size threshold, entrepreneurs get no advantage in dwarfing their firms.
    • Other reforms can soon follow, such as allowing for workers’ representation in a firm’s supervisory board, as it happens in Germany.
    • Measures such as these create trust between employees and employers, and also remove the threatening spectre of a working-class strike.

    Consider the question “Various provision of the Industrial Disputes Act which were enacted but with a different purpose now seems to place both the workers and employers in a disadvantageous position. In light of this statement, examine the issues with the threshold limits of the number of employees and number of employment days in the Industrial Disputes Act.”

    Conclusion

    In the ultimate analysis, the IDA does not produce winners, only losers. The workers remain skill-stunted and insecure, and the entrepreneurs, too, pull back from releasing their much-vaunted “animal spirits”. So, the IDA thresholds must go and not be merely fiddled with, as some states have done.

    Back2Basics: Industrial Disputes Act 1947

    • The main purpose of the Industrial Disputes Act, 1947 is to ensure fair terms between employers and employees, workmen and workmen as well as workmen and employers.T
    • The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providing machinery and procedure for the investigation and settlement of industrial disputes by negotiations.

  • How would Direct Benefit Transfer (DBT) of power subsidy work?

    Context

    • Punjab has been providing free power to the agriculture sector.
    • The new Electricity Amendment Bill 2020 has proposed providing subsidy on power to farmers through DBT, which is contrary to the prevailing ‘free power’ system in Punjab.

    Free or subsidised power is being provided to millions of consumers in almost every state. Punjab is no exception but its free power scheme is. Other states can learn from the example of Punjab, here.

    Practice questions for mains:

    Q. Discuss the efficacy of Direct Benefit Transfer in power subsidy for farmers.

    Punjab on knees

    • Before it submits suggestions regarding the Electricity Amendment Bill 2020, recently drafted by the Union Power Ministry to amend the Electricity Act 2003, a big challenge lies ahead for the Punjab government.
    • Under the garb of DBT, it is a move to stop the free power supply to them.

    What is the current system of power subsidy for farmers in Punjab?

    • At present, Punjab is supplying free power to 14.16 lakh electricity-run tubewells of the agriculture sector which are getting power through 5,900 Agricultural Pumpset Feeders (APFs).
    • These APFs are metered and the Punjab Power Corporation charges the state government for consumed units recorded in metered APFs.

    The Free Power Scheme

    • Farmers are getting power supply for their Kharif and Rabi crops from these feeders as per the recommendations of the Punjab Agriculture University (PAU), Ludhiana.
    • It is supplied for around eight hours every day in Kharif season and four hours on alternate days during Rabi crop season.
    • The state government pays around Rs 6,000 crore power subsidy bill to Power Corporation every year under the scheme to the farming sector.

    What would change under the DBT allowed under the new Electricity Bill 2020?

    • Under DBT, farmers will have to pay the bill for the power consumed for agriculture purposes.
    • After that, they will get the subsidy in their bank accounts through DBT.
    • A meter would be installed on every individual tubewell.

    Issues with Punjab farmer

    • Approximately the annual power bill will come to around Rs 46,000 to Rs 48,000, and farmers are required to pay a bill of Rs 4,000 per month.
    • In Punjab, 67 per cent of farmers come under the small and marginal categories with 1-2 hectares land.
    • Paying bills in advance is not possible for them due to debt.
    • If farmers don’t pay their bills, the department will disconnect their connection, which could lead to farmers’ agitation.

    Can it work like DBT on LPG gas cylinders?

    • The bill suggests the subsidy be paid directly to consumers in cash on the pattern of LPG subsidy.
    • This proposal should be tried in a pilot project and if results are encouraging, only then it should be included in the amendment bill.
    • It is not feasible to provide meters on every pump set up across the country and then give cash subsidy every month after the consumer has paid the bill.

    Punjab government’s own DBT scheme titled ‘Paani Bachao Paisa Kamao’ is also working here. How it is different from DBT under the new Bill?

    • The Punjab government’s scheme is a voluntary one.
    • The farmers who have adopted it need to get install a power meter on their tubewell but are not required to pay any power bill.
    • The main purpose of PBPK is to save groundwater by using it judiciously because, under the traditional system, several farmers are misusing the water by over-irrigating the crops due to free power available to them.

    What do farmers’ organisations think of this?

    • Farmers’ organisations say that if the Punjab government agrees to this bill, they will fight it tooth and nail.
    • From where will poor farmers pay such heavy bills when they get an income after six months following the sale of their crop, they ask.
    • Anywhere in the world, the agrarian sector cannot run without the support of the government as it is the base of every human being who is dependent on farmers’ produce from his/her morning tea to dinner.

    Back2Basics

    [pib] Draft Electricity Act (Amendment) Bill, 2020