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Distribution: weekly

  • On reservations for disempowered Dalit Christians and Muslims, a question of government’s intent

    dalitContext

    • Union government intends to appoint a national commission to study the status of Dalits (ex “untouchable” castes) belonging to the Muslim and Christian communities. Aim of study to check the socio-economic condition of Muslims and Christian Dalits on par with Hindu, Sikh, Buddhist Dalits.

    Current reservation policy

    • At present, scheduled caste reservation is applicable only to schedule caste (Dalit) belongs to Hindu, Sikh, Buddhist. Currently it is unavailable for schedule caste belongs to Muslims and Christians.

    Why Muslim and Christian Dalit needs reservation?

    • In 2008 review-study commissioned by the National Commission of Minorities (NCM) and housed in the Sociology Department of Delhi The remit of the study was to conduct a comprehensive review of already existing social-scientific evidence that might offer answers to three questions.
    1. What is the contemporary status of Dalit Muslims (DMs) and Dalit Christians (DCs) in terms of their material well-being and social status?
    2. How does their situation compare with that of: a) non-Dalits of their own communities, and b) Dalits of other communities?
    3. Do the caste disabilities suffered by these groups justify state intervention?

    dalitWhat were the findings of study?

    • The study reviewed two main kinds of available evidence, ethnographic-descriptive and macro-statistical, in addition to semi-academic NGO reports and publications.
    • The survey of ethnographic materials began with the finding that the existence of caste divisions – including the presence of ex-untouchable castes recognised as such – among both Muslims and Christians – was beyond dispute.
    • DMs and DCs were identified and segregated much like their counterparts in the Hindu or Sikh communities.
    • Evidence was tabulated on five forms of caste-based social discrimination – the practice untouchability; enforced ban on inter-marriage; occupational segregation; social and cultural segregation and finally, economic discrimination.
    • The most common instances were separate mosques or churches (or hierarchically segregated seating); separate burial grounds; strict prohibition on inter-marriage with very severe punishments (sometimes extending to murder) for breaking this taboo; and general avoidance of social interaction and cooperation.
    • The main findings were that DMs are clearly the worst off among all Dalits, while DCs are somewhat better off than other Dalits except Sikh Dalits (who are by far the best off, especially in the rural sector).

    Why DMs and DCs doesn’t have reservation?

    • The courts accept that “caste survives conversion” but complain about the lack of reliable data. No recognition, no data; no data, no recognition.
    • Informal guesstimates (based on the 2001 Census and the 2004-05 NSSO survey) place the proportion of DMs at 1 per cent or less of the Muslim population, and DCs as anything between 40-50 per cent of the Christian population of India.
    • As per the 2011 Census, Muslims are 14.2 per cent and Christians 2.3 per cent of our population. Taken together, DMs and DCs are likely to form less than 2 per cent of the total Dalit population of India, more than 90 per cent of which is Hindu.
    • According to experts Adding DMs and DCs will not rock the boat of reservation, since the increment will be roughly one-fifth of the 10 per cent reservation readily granted to the upper castes as the Economically Weaker Sections.

    What efforts have been made to include Muslims and Christians of Dalit origin among SCs?

    • After 1990, a number of Private Member’s Bills were brought in Parliament for this purpose.
    • In 1996, a government Bill called The Constitution (Scheduled Castes) Orders (Amendment) Bill was drafted, but in view of a divergence of opinions, the Bill was not introduced in Parliament.
    • Then government headed by PM Manmohan Singh set up two important panels:
    1. Ranganath Misra Commission: The National Commission for Religious and Linguistic Minorities, popularly known as the Ranganath Misra Commission, in October 2004 and
    2. Sachar Committee: A seven-member high-level committee headed by former Chief Justice of Delhi High Court Rajinder Sachar to study the social, economic, and educational condition of Muslims in March 2005.

    What did they recommend?

    • The Sachar Committee Report observed that the social and economic situation of Dalit Muslims and Dalit Christians did not improve after conversion.
    • The Ranganath Misra Commission, which submitted its report in May 2007, recommended that SC status should be completely de-linked from religion and Scheduled Castes should be made fully religion-neutral like Scheduled Tribes.

    dalitReception to these recommendations

    • The report was tabled in Parliament in 2009, but its recommendation was not accepted in view of inadequate field data and corroboration with the actual situation on the ground.
    • Few studies, commissioned by the National Commission for Minorities, was also not considered reliable due to insufficient data.

    Conclusion

    • Schedule caste community from all religion India suffers from same fate of untouchability. Change of religion unfortunately, have change their social status. If 70+ year of reservation of Dalit in Hindu haven’t substantially change their social destiny, we have to think beyond reservation for social dignity and economic empowerment of schedule castes in India.

    Mains question

    Q. Reservation policy in India is religion based and not based on overall social discrimination. Comment in the context of demand for Dalit reservation extension to Christians and Muslims Dalits.

     

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  • Pre-Pack IBC resolution

    pre-pack

    India introduced the pre-packaged insolvency resolution process (PPIRP) in April 2021, as an alternative resolution process for micro, small and medium enterprises (MSMEs). However, it has only two cases admitted under it so far.

    What is the Insolvency and Bankruptcy Code (IBC)?

    • The IBC was enacted in 2016 to simplify insolvency and bankruptcy proceedings, safeguard interests of all stakeholders (the firm, employees, debtors and especially creditors), and resolve non-performing assets.
    • From a ‘debtor in possession’ regime, it was a shift to a ‘creditor in control’ one.
    • IBC provides for a time-bound process for resolving insolvencies.
    • The Insolvency and Bankruptcy Board of India (IBBI) is the regulator implementing the code and overseeing the functioning of stakeholders.
    • The IBBI last week allowed payment of performance-linked incentives to resolution professionals.

    What are Pre-packs?

    • A pre-pack is the resolution of the debt of a distressed company through an agreement between secured creditors and investors instead of a public bidding process.
    • This system of insolvency proceedings has become an increasingly popular mechanism for insolvency resolution in the UK and Europe over the past decade.
    • Under the pre-pack system, financial creditors will agree to terms with a potential investor and seek approval of the resolution plan from the National Company Law Tribunal (NCLT).
    • The approval of a minimum of 66 percent of financial creditors that are unrelated to the corporate debtor would be required before a resolution plan is submitted to the NCLT.
    • Further NCLTs are also required to either accept or reject any application for a pre-pack insolvency proceeding before considering a petition for a corporate insolvency resolution process (CIRP).

    How does it work?

    • Unlike the CIRP, an informal understanding is reached with creditors before the application is filed.
    • PPIRP begins only after 66% of financial creditors approve the proposal and the name of resolution professional.
    • Debt resolution agreement between financial creditor and a potential investor is arrived at in consultation with the corporate debtor for which subsequent approval of the resolution plan is sought from the NCLT.

    What were the objectives behind introducing PPIRP?

    • MSMEs greatly contribute to the economy, and employ a wide section of the population.
    • The pandemic severely impacted their operations.
    • This alternative insolvency resolution process was designed to ensure quicker, cost-effective and value-maximizing outcomes for all.

    What is the progress in PPIRP so far?

    • Only two insolvency cases have been initiated under PPIRP since it was introduced.
    • The poor response has been attributed to the hesitancy on the part of financial institutions.
    • In the case of CIRP, the haircut involved is a last resort, against a voluntary one in case of PPIRP.
    • Data shows that between December 2016 and June 2022, a total of 5,636 CIRPs commenced, of which 3,637 have been closed.

    Does PPIRP defeat the purpose of IBC?

    • The IBC’s objective is to facilitate exit from failed units so that capital can be reallocated to better ones.
    • However, banks are not comfortable initiating PPIRP due to voluntary haircuts.
    • There is a fear that such a decision might be scrutinized later.
    • This means capital will remain locked up in failed units, defeating the purpose of IBC.
    • Voluntary haircuts mean fewer resources from the winding-up process and greater scope for corrupt practices.

     

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  • Explained: Lumpy Skin Disease in India

    lumpy

    The Mumbai Police have ordered the prohibition of cattle transportation in the city to prevent the spread of the lumpy skin disease (LSD).

    What is the Lumpy Skin Disease?

    • Lumpy skin disease is caused by the lumpy skin disease virus (LSDV), which belongs to the genus capripoxvirus, a part of the poxviridae family.
    • Smallpox and monkeypox viruses are also a part of the same family.
    • The LSDV shares antigenic similarities with the sheeppox virus (SPPV) and the goatpox virus (GTPV) or is similar in the immune response to those viruses.

    How does it spread?

    • It is not a zoonotic virus, meaning the disease cannot spread to humans.
    • It is a contagious vector-borne disease spread by vectors like mosquitoes, some biting flies, and ticks and usually affects host animals like cows and water buffaloes.
    • Infected animals shed the virus through oral and nasal secretions which may contaminate common feeding and water troughs.
    • Thus, the disease can either spread through direct contact with the vectors or through contaminated fodder and water.
    • Studies have also shown that it can spread through animal semen during artificial insemination.

    How does it affect the animal?

    • LSD affects the lymph nodes of the infected animal, causing the nodes to enlarge and appear like lumps on the skin, which is where it derives its name from.
    • The cutaneous nodules, 2–5 cm in diameter, appear on the infected cattle’s head, neck, limbs, udder, genitalia, and perineum.
    • The nodules may later turn into ulcers and eventually develop scabs over the skin.
    • The other symptoms include high fever, sharp drop in milk yield, discharge from the eyes and nose, salivation, loss of appetite, depression, damaged hides, wasting of animals, infertility and abortions.

    Do it kills the animal?

    • The incubation period or the time between infection and symptoms is about 28 days according to the FAO, and 4 to 14 days according to some other estimates.
    • The morbidity of the disease varies between two to 45% and mortality or rate of date is less than 10%.
    • However, the reported mortality of the current outbreak in India is up to 15%, particularly in cases being reported in the western part (Rajasthan) of the country.

    What is the geographical distribution and how did it spread to India?

    • The disease was first observed in Zambia in 1929.
    • Subsequently it got spread to most African countries, followed by West Asia, Southeastern Europe, and Central Asia, and more recently spreading to South Asia and China in 2019.
    • As per the FAO, the LSD disease is currently endemic in several countries across Africa, parts of the West Asia (Iraq, Saudi Arabia, Syrian Arab Republic), and Turkey.

    Lumpy in India

    • The spread in South Asia first affected Bangladesh in July 2019 and then reached India in August that year, with initial cases being detected in Odisha and West Bengal.
    • The long porous borders between India, Nepal and Bangladesh allow for a significant amount of bilateral and informal animal trade, including cattle and buffaloes.
    • This may have contributed to the spread of LSD in July-August 2019 between Bangladesh and India.
    • While the 2019 outbreak later subsided, the recent spread in India began in June this year.

    Is it safe to consume the milk of affected cattle?

    • Studies say that it has not been possible to ascertain the presence of viable and infectious LSDV virus in milk derived from the infected animal.
    • However, that a large portion of the milk in Asia is processed after collection and is either pasteurised or boiled or dried in order to make milk powder.
    • This process ensures that the virus is inactivated or destroyed.

    Economic implications of Lumpy on Dairy Sector

    • Milk reduction: Lumpy leads to reduced milk production as the animal becomes weak and also loses appetite due to mouth ulceration.
    • Animal wasting: The income losses can also be due to poor growth, reduced draught power capacity and reproductive problems associated with abortions, infertility and lack of semen for artificial insemination.
    • Impact of trade ban: Movement and trade bans after infection also put an economic strain on the whole value chain.

    Why India is at higher risk?

    • India is the world’s largest milk producer at about 210 million tonnes annually.
    • India also has the largest headcount of bovines
    • In Rajasthan, which is witnessing the worst impact of LSD, it has led to reduced milk production, which lessened by about three to six lakh litres a day.
    • Reports indicate that milk production has also gone down in Punjab owing to the spread of the disease.
    • According to FAO, the disease threatens the livelihoods of smaller poultry farmers significantly.
    • Notably, farmers in Uttar Pradesh and Punjab have incurred losses due to cattle deaths and are seeking compensation from their State governments.

    How bad is the current spread in India?

    • Lumpy has infected over 16 lakh cattle in 197 districts as of September 11.
    • Of the nearly 75,000 cattle that the disease has killed, more than 50,000 deaths, mostly cows, have been reported from Rajasthan.

    Remedies available in India

    • The Union Ministry of Fisheries, Animal Husbandry and Dairying informed that the ‘Goat Pox Vaccine’ is very effective against LSD.
    • It is being used across affected States to contain the spread.

    Way forward

    The FAO has suggested a set of spread-control measures for LSD, which involves:

    • Vaccination of susceptible populations with more than 80% coverage
    • Movement control of bovine animals and quarantining
    • Implementing biosecurity through vector control by sanitising sheds and spraying insecticides
    • Strengthening active and passive surveillance
    • Spreading awareness on risk mitigation among all stakeholders involved, and
    • Creating large protection and surveillance zones and vaccination zones

     

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  • What is a Triple-Dip La Nina?

    nina

    Parts of the world are expected to experience severe weather for the rest of the year and into 2023, as part of a rare “triple dip La Nina” event, according to the World Meteorological Organization (WMO).

     What is the “Triple-Dip” La Nina?

    • A “triple-dip” La Nina is a multiyear cooling of the surface temperature of the equatorial Pacific Ocean, which can cause droughts, fierce winds and heavy rainfall.
    • According to WMO, the current La Nina is projected to span three consecutive northern hemisphere winters. It began in September 2020.
    • If it continues for the next six months, it will be the first “triple-dip” La Nina event of the 21st century, WMO says.

    How rare is this triple-dip?

    • It is exceptional to have three consecutive years with a la Nina event.
    • Its cooling influence is temporarily slowing the rise in global temperatures – but it will not halt or reverse the long-term warming trend.
    • La Nina’s are usually preceded by El Nino, a weather pattern that warms the surface of the eastern tropical Pacific Ocean.
    • However, an El Nino event did not occur before the current La Nina.

    Has it happened before? Will it happen again?

    • La Nina’s occurred several times between 1903 to 2010 and 2010 to 2012.
    • This would be the first “triple-dip” La Nina this century.
    • However, it is not unprecedented for the weather pattern to last more than nine months to a year, which is typical for a La Nina.

    Evaluating the likely impact

    • In the Indian context, La Nina is associated with good rainfall during the monsoon season.
    • This is the opposite of El Nino which is known to suppress monsoon rainfall.
    • Thus, a continued spell of La Nina could lead to expectation of another year of good, or normal, rainfall during the monsoon.
    • Until now, the monsoon season this year has produced 7% more rain compared to normal. Last year, the seasonal rainfall was almost 100%.
    • But, even though powerful, ENSO condition is only one of the several factors affecting monsoon rainfall in India.

    Impact on rainfall

    • There is no one-on-one correlation between the ENSO condition and the amount of rainfall.
    • Also, the influence of ENSO is at a macro level.
    • There are wide variations in rainfall at the local level, which are getting exacerbated by climate change.

    Differential impacts of this triple-dip event

    • The continuance of La Nina further into 2023 is not bad news from the Indian standpoint. But it is not the same for many other regions where La Nina has very different impacts.
    • In most parts of the United States, for example, La Nina is associated with very dry winters.
    • In Australia and Indonesia, and generally in the tropical region, La Nina is expected to bring more rainfall.
    • The excessive rainfall in Pakistan, which is experiencing its worst flooding disaster, can also be blamed in part on La Nina.
    • It said that the persistence of La Nina was most likely to result in a worsening of the drought in Africa.

    What is its climate change link?

    • Every unusual weather event these days is attributed to climate change, but science is not conclusive right now.
    • The occurrences of El Nino or La Nina are not very regular.
    • Sometimes they emerge every two years, at other times there has been a gap of even seven years.
    • Historical records do not go very far in the past.
    • As a result, the natural variability of ENSO is not understood very clearly.
    • And when the natural variability itself is not clear, the influence of global warming is difficult to quantify.
    • But there is clearer evidence of another kind of linkage with global warming.
    • During La Nina years, the colder surfaces allow the oceans to absorb more heat from the atmosphere.
    • Consequently, the air temperatures tend to go down, producing a cooling effect.

     

     

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  • Global digital governance

    digital governanceContext

    • In an interview earlier this month, Telecom Minister Ashwini Vaishnaw spoke about a comprehensive policy roadmap for India’s digital economy and digital governance.

    What is digital governance ?

    • Electronic governance or e-governance can be defined as the usage of Information and Communication Technology (ICT) by the government to provide and facilitate government services, exchange of information, communication transactions and integration of various standalone systems and services.

    What is “global digital governance”?

    • Global digital governance encompasses the norms, institutions, and standards that shape the regulation around the development and use of these technologies. Digital governance has long-term commercial and political implications.

    Why is it important?

    • The main objective of e-governance is to provide a friendly, affordable, and efficient interface between a government and its people. It is about ensuring greater transparency, accountability and objectivity, resulting in cost-effective and high-quality public service.

    What are the three domains of e-governance?

    • E-administration: improving government processes
    • E-services: connecting individual citizens with their government
    • E-society: building interactions with and within civil society.

    digital governanceIs there a historical parallel to governing key economic sectors globally?

    • Digital economy is not unprecedented: Sectors critical to the global economy are subject to international cooperation frameworks and pacts. Therefore, the idea of setting up a single multilateral organization with a mandate to govern the digital economy is not unprecedented.
    • The International Commission for Air Navigation (ICAN): Global aviation has been regulated since 1903 when the International Commission for Air Navigation (ICAN) first met, subsequently replaced by the International Civil Aviation Organization (ICAO) in 1947.
    • Bank for International Settlements (BIS): Similarly, the modern international banking system is governed by the Bank for International Settlements (BIS), an institution initially set up in the interwar period in 1930 to oversee Germany’s reparations to the Allies under the Treaty of Versailles. The BIS acquired a more global mandate beginning in the 1950s and is now partially responsible for global financial stability.

    Who are the key players in the global contest for digital governance?

    • China seeks to champion the concept of cyber sovereignty: An authoritarian vision drives the first model. Most notably, China is emerging as the standard-bearer for this model with its desire to “reinvent the internet.” China seeks to champion the concept of “cyber sovereignty,” allowing countries to control access to the internet, censor content, and institute data localization requirements, as a pretext to protecting individual national interests.
    • European Union’s General Data Protection Regulation (GDPR): Which provides a more democratic concept for digital governance. This model primarily seeks to protect the privacy and rights of internet users and online content consumers. Adopted with the overwhelming support of the European Parliament in 2014, the GDPR came into effect in May 2018, giving firms that rely on digital technologies the opportunity to modify their data usage and privacy policies. The adoption of the GDPR has been a turning point for global internet governance as consumers gained unprecedented control over their data in a manner that preserved freedom and openness online.

    digital governanceWhy global digital governance is important?

    • Minimum rights and protections for platform workers: Under the G20, the International Labour Organisation has already placed a proposal in the employment working group for digital labour platforms to develop an international governance system determining minimum rights and protections for platform workers.
    • Implementation of central bank digital currency projects: Similarly, on digital money, a reincarnated Bretton Woods is being advocated to address the distrust in private currencies and to coordinate the implementation of central bank digital currency projects.
    • Digital taxation: Finally, in the deeply contested area of digital taxation, the OECD facilitated Base Erosion and Profit Shifting (BEPS) negotiations and helped arrive at a global solution.
    • Digital sovereignty: The internet is splintering and digital sovereignty is now commonplace; yet, there is no better time for countries to come together and build a framework for global digital governance.

    digital governanceWhat are the big 5 tech companies called?

    • The Big Five tech giants—Apple, Amazon, Google (Alphabet), Meta, and Microsoft.

    Conclusion

    • The rapid digitalisation of the world along with a new focus on trust in the global supply chains for digital products and services presents tremendous opportunities for India and its youth.  It is now up to all of us to engage in a collective “sabka prayas” to realise New India’s economic potential.

    Mains question

    Q. The rapid digitalisation of the world along with a new focus on trust in the global supply chains for digital products and services presents tremendous opportunities for India. Comment.

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  • What is the Plant Treaty?

     

    The ninth session of the governing body of the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA) has recently begun in New Delhi.

    Theme of this years event

    • The theme of the meeting is ‘Celebrating the Guardians of Crop Diversity: Towards an Inclusive Post-2020 Global Biodiversity Framework’.

    What is the Plant Treaty?

    • The International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA) was adopted by the Food and Agriculture Organization of the United Nations November 3, 2001.
    • It was signed in 2001 in Madrid, and entered into force on 29 June 2004.
    • It is the first legally-binding international instrument to formally acknowledge the enormous contribution of indigenous people and small-holder farmers as traditional custodians of the world’s food crops.
    • It also calls on nations to protect and promote their rights to save and use the seeds they have taken care of for millennia.
    • The parties to this treaty have come together after nearly three years to discuss governance of agricultural biodiversity and global food security.

    Objectives of the treaty

    The treaty aims at:

    1. Guaranteeing food security through the conservation
    2. Exchange and sustainable use of the world’s plant genetic resources for food and agriculture (PGRFA)
    3. Fair and equitable benefit sharing arising from its use, as well as
    4. Recognition of farmers’ rights.

    Key feature: Annex 1 Crops

    • The treaty has implemented a Multilateral System (MLS) of access and benefit sharing, among those countries that ratify the treaty, for a list of 64 of some of the most important food and forage crops essential for food security and interdependence.
    • The genera and species are listed in Annex 1 to the treaty. The treaty facilitates the continued open exchange of food crops and their genetic materials.
    • The list of plant genetic material included in the Multilateral System of the Treaty is made of major food crops and forages.
    • The Forages are also divided in legume forages and grass forages.
    • They were selected taking into account the criteria of food security and country interdependence

     

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  • What is the PM PRANAM Scheme?

    In order to reduce the use of chemical fertilisers by incentivising states, the Union government plans to introduce a new scheme – PM PRANAM, which stands for PM Promotion of Alternate Nutrients for Agriculture Management Yojana.

    What is the PM PRANAM scheme?

    • The proposed scheme intends to reduce the subsidy burden on chemical fertilisers.
    • This burden if uneased, is expected to increase to Rs 2.25 lakh crore in 2022-2023, which is 39% higher than the previous year’s figure of Rs 1.62 lakh crore.
    • The scheme will not have a separate budget and will be financed by the “savings of existing fertiliser subsidy” under schemes run by the Department of fertilisers.

    Subsidies under the PRANAM

    • Further, 50% subsidy savings will be passed on as a grant to the state that saves the money and that 70% of the grant provided under the scheme can be used for asset creation related to technological adoption of alternate fertilisers.
    • It would create alternate fertiliser production units at village, block and district levels.
    • The remaining 30% grant money can be used for incentivising farmers, panchayats, farmer producer organisations and self-help groups that are involved in the reduction of fertiliser use and awareness generation.
    • The government will compare a state’s increase or reduction in urea in a year, to its average consumption of urea during the last three years.

    How much fertiliser does India require?

    • The kharif season (June-October) is critical for India’s food security, accounting for nearly half the year’s production of foodgrains, one-third of pulses and approximately two-thirds of oilseeds.
    • A sizable amount of fertiliser is required for this season.
    • The Department of Agriculture and Farmers Welfare assesses the requirement of fertilisers each year before the start of the cropping season, and informs the Ministry of Chemical and fertilisers to ensure the supply.
    • The amount of fertiliser required varies each month according to demand, which is based on the time of crop sowing, which also varies from region to region.
    • For example, the demand for urea peaks during June-August period, but is relatively low in March and April, and the government uses these two months to prepare for an adequate amount of fertiliser for the kharif season.

    Why is the scheme being introduced?

    • Due to increased demand for fertiliser in the country over the past 5 years, the overall expenditure by the government on subsidy has also increased.
    • The final figure of fertiliser subsidy touched Rs 1.62 lakh crore in 2021-22.
    • The total requirement of four fertilisers — Urea, DAP (Di-ammonium Phosphate), MOP (Muriate of potash), NPKS (Nitrogen, Phosphorus and Potassium) — increased by 21% between 2017-2018 and 2021-2022, from 528.86 lakh metric tonnes (LMT) to 640.27 LMT.
    • PM PRANAM, which seeks to reduce the use of chemical fertiliser, will likely reduce the burden on the exchequer.
    • The proposed scheme is also in line with the government’s focus on promoting the balanced use of fertilisers or alternative fertilisers in the last few years.

    Try this PYQ:

    Q.What are the advantages of fertigation in agriculture? (CSP 2020)

    1.Controlling the alkalinity of irrigation water is possible.
    2.Efficient application of Rock Phosphate and all other phosphatic fertilizers is possible.
    3.Increased availability of nutrients to plants is possible.
    4.Reduction in the leaching of chemical nutrients is possible.

    Select the correct answer using the code given below:
    (a) 1, 2 and 3 only

    (b) 1,2 and 4 only

    (c) 1,3 and 4 only

    (d) 2, 3 and 4 only

     

    [wpdiscuz-feedback id=”5sbme0lwks” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

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  • High Inflation in India

    inflation Context

    • It seems that inflation may hover around 7 per cent despite RBI’s tightening of monetary policy in the months to come.

    What is a simple definition for inflation?

    • Inflation is an increase in the level of prices of the goods and services that households buy. It is measured as the rate of change of those prices. Typically, prices rise over time, but prices can also fall (a situation called deflation).

    Inflation Rate

    • Inflation Rate is the percentage change in the price level from the previous period. If a normal basket of goods was priced at Rupee 100 last year and the same basket of goods now cost Rupee 120, then the rate of inflation this year is 20%.
    • Inflation Rate= {(Price in year 2 – Price in year 1)/ Price in year 1} *100

    inflationTypes of Inflation

    Creeping Inflation

    • Creeping or mild inflation is when prices rise 3% a year or less. This kind of mild inflation makes consumers expect that prices will keep going up. That boosts demand. Consumers buy now to beat higher future prices. That’s how mild inflation drives economic expansion.

    Walking Inflation

    • This type of strong, or pernicious, inflation is between 3-10% a year. It is harmful to the economy because it heats up economic growth too fast. People start to buy more than they need, just to avoid tomorrow’s much higher prices. This drives demand even further so that suppliers can’t keep up. More important, neither can wages. As a result, common goods and services are priced out of the reach of most people.

    Galloping Inflation

    • When inflation rises to 10% or more, it wreaks absolute havoc on the economy. Money loses value so fast that business and employee income can’t keep up with costs and prices. Foreign investors avoid the country, depriving it of needed capital. The economy becomes unstable, and government leaders lose credibility. Galloping inflation must be prevented at all costs.

    Hyperinflation

    • Hyperinflation is when prices skyrocket more than 50% a month. It is very rare. In fact, most examples of hyperinflation have occurred only when governments printed money to pay for wars. Examples of hyperinflation include Germanyin the 1920s, Zimbabwe in the 2000s, and Venezuela in the 2010s. The last time America experienced hyperinflation was during its civil war.

    Core Inflation

    • The core inflation rate measures rising prices in everything except food and energy. That’s because gas prices tend to escalate now and then. Higher gas costs increase the price of food and anything else that has large transportation costs.

     

    Consumer Price Index

    • CPI is used to monitor changes in the cost of living over time. When the CPI rises, the average Indian family has to spend more on goods and services to maintain the same standard of living. The economic term used to define such a rising prices of goods and services is Inflation.

    Whole sale Price Index

    • WPI is used to monitor the cost of goods and services bought by producer and firms rather than final consumers. The WPI inflation captures price changes at the factory/wholesale level.

    GDP Deflator

    • Another important measure of calculating standard of living of people is GDP Deflator. GDP Deflator is the ratio of nominal GDP to real GDP. The nominal GDP is measured at the current prices whereas the real GDP is measured at the base year prices. Therefore, GDP Deflator reflects the current level of prices relative to prices in a base year. Example, In India the base year of calculating deflator is 2011-12.

    inflationFactors fuelling inflation in India

    • Falling rupee: Inflation is here to stay because it has much to do with the decline in value of the rupee that has fallen to its lowest, which makes imports of oil and gas more expensive.
    • Ukraine crisis: The war in Ukraine has the same effect and pushes the price of some food items upward.
    • Poor inflation management: With inflation, as measured by the consumer price index, in August going back to 7 per cent, and the wholesale price index coming in at 12.4 per cent, one thing is clear India is not out of the woods on inflation management.

    Rising inflation have these implications

    • Impact on the poor: This upsurge of inflation is affecting the poor more because some of the commodities whose prices are increasing the most represent a larger fraction of the budget of the most vulnerable sections of society.
    • Rising inequality: As a result, inequalities which were already on the rise are increasing further. Recently, the State of Inequality in India report showed that an Indian making Rs 3 lakh a year belonged to the top 10 per cent of the country’s wage earners. 
    • Inequality in healthcare: India’s spending on healthcare is among the lowest in the world. Decent level of healthcare is available only to the ones who can afford it because of increasing out-of-pocket expenditure the payment made directly by individuals for the health service, not covered under any financial protection scheme. Overall, these out-of-pocket expenses on healthcare are 60 per cent of the total expenditure on public health in India, which is one of the highest in the world.

     

    inflationNeed for bold steps on three fronts to tackle inflation

    • Unless bold and innovative steps are taken at least on three fronts, GDP growth and inflation both are likely to be in the range of 6.5 to 7.5 per cent in 2022-23.

    1] Tightening of loose monetary policy: The Reserve Bank of India (RBI) is mandated to keep inflation at 4 per cent, plus-minus 2 per cent.

    • The RBI has already started the process of tightening monetary policy by raising the repo rate, albeit a bit late.
    • It is expected that by the end of 2022-3, the repo rate will be at least 5.5 per cent, if not more.
    • It will still stay below the likely inflation rate and therefore depositors will still lose the real value of their money in banks with negative real interest rates.
    • That only reflects an inbuilt bias in the system — in favour of entrepreneurs in the name of growth and against depositors, which ultimately results in increasing inequality in the system.

    2] Prudent fiscal policy: Fiscal policy has been running loose in the wake of Covid-19 that saw the fiscal deficit of the Union government soar to more than 9 per cent in 2020-21 and 6.7 per cent in 2021-22, but now needs to be tightened.

    • Government needs to reduce its fiscal deficit to less than 5 per cent, never mind the FRMB Act’s advice to bring it to 3 per cent of GDP.
    • However, it is difficult to achieve when enhanced food and fertiliser subsidies, and cuts in duties of petrol and diesel will cost the government at least Rs 3 trillion more than what was provisioned in the budget.

    3] Rational trade policy: Export restrictions/bans go beyond agri-commodities, even to iron ore and steel, etc. in the name of taming inflation.

    • But abrupt export bans are poor trade policy and reflect only the panic-stricken face of the government.
    • A more mature approach to filter exports would be through a gradual process of minimum export prices and transparent export duties for short periods of time, rather than abrupt bans, if at all these are desperately needed to favour consumers.

    Conclusion

    • Though the government is opting for market-based economics, currently, India needs a mixed solution that comprises price stability via government channels and subsidies.

    Mains question

    Q.What are the fuelling factors for inflation? Discuss what steps should be taken to tackle inflation.

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  • AP approaches SC over Three Capitals Issue

    capitals

    After much discontent on the High Court (HC) verdict in the three capitals case, the Andhra Pradesh government has finally challenged it in the Supreme Court through a special leave petition (SLP).

    AP’s move for three capitals

    • AP had introduced a ‘Three Capitals Act’ titled Andhra Pradesh Decentralisation and Inclusive Development of All Regions Act, 2020.
    • Thus, it was decided that:
    1. Amaravati was to be the Legislative capital
    2. Visakhapatnam the Executive capital and
    3. Kurnool the Judicial capital
    • However, the Andhra Pradesh High Court repealed this Act citing that the legislature has no competence to enact any law for shifting the three organs of the capital.

    Concerns raised by AP government

    • AP contended that the judgement was in violation of the basic structure of the Constitution as the HC cannot hold that the State does not have the powers to decide on its capital.
    • The judgement was against the doctrine of separation of powers as it sought to preempt the legislature from taking up the issue (of three capitals).
    • Further, it is argued that under the federal structure of the Constitution, every State has an inherent right to determine where it should carry out its capital functions from.

    Reasons for AP’s consideration

    (1) Viable option of Visakhapatnam

    • Vizag always had been the biggest city, after Hyderabad, even in the combined State.
    • It has all the settings to become a good living space.

    (2) Sri Krishna panel recommendations

    • The advantages and qualities of Visakhapatnam to become the capital was elaborately deliberated by the Sri Krishna Committee to study the alternatives for a new capital for the State of Andhra Pradesh.
    • Coming to suggestion for the alternative capital, the Committee primarily took up three things for consideration — creation of single city or super city in greenfield location, expanding existing cities and distributed development.

    (3) Decentralisation

    • This idea was elaborately described in the Sri Bagh pact.
    • The pact clearly defined decentralisation, for the benefit of all three main regions such as Coastal AP, Godavari and Krishna districts and Rayalaseema.

    Major practical problems

    • Continuum of work: The government argues that the Assembly meets only after gaps of several months, and government Ministers, officers, and staff can simply go to Amaravati when required.
    • Logistics nightmare: coordinating between seats of legislature and executive in separate cities will be easier said than done.
    • Time and costs of travel: The distances in Andhra Pradesh are not inconsiderable. Executive capital Visakhapatnam is 700 km from judicial capital Kurnool, and 400 km from legislative capital Amaravati.

    Examples of multi-capital states in India

    • Among Indian states, Maharashtra has two capitals– Mumbai and Nagpur (which holds the winter session of the state assembly).
    • Himachal Pradesh has capitals at Shimla and Dharamshala (winter).
    • The former state of Jammu & Kashmir had Srinagar and Jammu (winter) as capitals where Darbar Move is carried out.

    Back2Basics: Special Leave Petition

    • SLP hold a prime place in the Indian judicial system.
    • It provides the aggrieved party a special permission to be heard in Apex court in appeal against any judgment or order of any Court/tribunal in the territory of India.
    • It has been provided as a “residual power” in the hands of Supreme Court of India to be exercised only in cases when any substantial question of law is involved, or gross injustice has been done.
    • Article 136 vests the Supreme Court of India with a special power to grant special leave, to appeal against any judgment or order or decree.
    • It is discretionary power vested in the Supreme Court of India and the court may in its discretion refuse to grant leave to appeal.
    • The aggrieved party cannot claim special leave to appeal under Article 136 as a right, but it is privilege vested in the Supreme Court to grant leave to appeal or not.

     

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  • Vacant offices, unaware office-bearers: curious case of delisted parties

    The EC has been on a mission to clean up the list of registered unrecognized political parties, deleting 284 since May for either being untraceable during a physical check or not responding to communications.

    Why de-list political parties?

    • The news highlights the tale of a Bharatiya xyz Party.
    • Its registered address, the ground floor of a Delhi Development Authority flat, has been home to a family since they purchased the house in 2008.

    When is a party de-registered?

    • The EC’s recent order has highlighted that a party must contest an election within five years of its registration, and should continue to contest thereafter.
    • If the party does not contest elections continuously for six years, the party shall be taken off the list of registered parties.

    Registering a Political Party

    • The registration of all political parties is governed by the provisions of the Representation of the People Act, 1951.
    • According to the Election Commission (EC), any party seeking registration has to submit an application to the Commission within a period of 30 days.
    • This is done as per guidelines prescribed by the EC in exercise of the powers conferred by Article 324 of the Constitution and Section 29A of the RP Act, 1951.

    Note: There is no procedure available for de-registration of dormant political parties.

    Process of registration

    • The applicant is asked to publish a proposed party name in two national daily newspapers and two local daily newspapers, and provide two days for submitting objections, if any.
    • The notice for publication is also displayed on the website of the Election Commission.

    Why registering with the EC is important?

    • It is not mandatory to register with the Election Commission.
    • However, registering as a political party with the EC has its advantage in terms of intending to avail itself of the provisions of the RP Act, 1951.
    • The candidates set up by a political party registered with the EC will get preference in the matter of allotment of free symbols vis-à-vis purely independent candidates.
    • More importantly, these registered political parties, over course of time, can get expanded recognition as a ‘state party’ or a ‘national party’.

    How EC recognises a political party as a state or national party?

    For recognition as a NATIONAL PARTY, the conditions specified are:

    1. a 6% vote share in the last Assembly polls in each of any four states, as well as four seats in the last Lok Sabha polls; or
    2. 2% of all Lok Sabha seats in the last such election, with MPs elected from at least three states; or
    3. recognition as a state party in at least four states.

    For recognition as a STATE PARTY, any one of five conditions needs to be satisfied:

    1. two seats plus a 6% vote share in the last Assembly election in that state; or
    2. one seat plus a 6% vote share in the last Lok Sabha election from that state; or
    3. 3% of the total Assembly seats or 3 seats, whichever is more; or
    4. one of every 25 Lok Sabha seats (or an equivalent fraction) from a state; or
    5. an 8% state-wide vote share in either the last Lok Sabha or the last Assembly polls.

    Benefits for recognized parties

    • This is subject to the fulfilment of the conditions prescribed by the Commission in the Election Symbols (Reservation and Allotment) Order, 1968.

    (a) Reserved Sybol

    • If a party is recognised as a ‘state party’, it is entitled for exclusive allotment of its reserved symbol to the candidates set up by it in the state in which it is so recognised.
    • If a party is recognised as a ‘national party’ it is entitled for exclusive allotment of its reserved symbol to the candidates set up by it throughout India.

    (b) Proposer for nomination

    • Recognised ‘state’ and ‘national’ parties need only one proposer for filing the nomination.

    (c) Campaigning benefits

    • They are also entitled for two sets of electoral rolls free of cost and broadcast/telecast facilities over state-owned Akashvani/Doordarshan during the general elections.

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