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Distribution: weekly

  • Weighing in on India’s investment-led revival

    Context

    The Finance Minister, Nirmala Sitharaman, said recently that India’s long-term growth prospects are embedded in public capital expenditure programmes. She added that an increase in public investment would crowd in (or pull in) private investment, thus reviving the economy.

    Significance of public investment-led economic growth

    • Public investment-led economic growth forms a credible strand of explanation for India’s post-Independence economic growth. 
    • Revival after Asian financial crisis: When it was faced with a slow-down after the Asian financial crisis of 1997, the  government initiated public road building projects.
    • In the form of the Golden Quadrilateral and the Pradhan Mantri Gram Sadak Yojana, these initiatives sowed the seeds of economic revival, culminating in an investment and export-led boom in the 2000s; GDP grew at 8%-9% annually.
    • In comparison, the investment record during the 2010s has been dismal.
    • However, a recent uptick is evident in the real gross fixed capital formation (GFCF) rate — the fixed investment to GDP ratio (net of inflation).
    • The ratio recovered to 32.5% in 2019-20 from a low of 30.7% in 2015-16.

    Analysing the Investment distribution

    • As in the June edition of the Ministry of Finance’s Monthly Economic Review, the fixed investment to GDP ratio was 32% in 2021-22.
    • However, there is need for caution in reading the most recent data, as they are subject to revision.
    • Moreover, the budgetary definition of investment refers to financial investments (which include purchase of existing financial assets, or loans offered to States) and not just capital formation representing an expansion of the productive potential.
    • The National Accounts Statistics provides disaggregation of gross capital formation (GCF) by sectors, type of assets and modes of financing; over 90% of GCF consists of fixed investments.
    • No change in investment distribution: The investment distribution has hardly changed over the last decade, with the public sector’s share remaining 20%.
    • Fall in share of agriculture and industry: Between 2014-15 and 2019-20, the shares of agriculture and industry in fixed capital formation/GDP fell from 7.7% and 33.7% to 6.4% and 32.5%, respectively.
    • Services’ share rose to 52.3% in 2019-20 compared to 49% in 2014-15.
    • The rise in the services sector is almost entirely on transport and communications.
    • The share of transport has doubled from 6.1% to 12.9% during the same period.
    • Within transportation, it is mostly roads.
    • Decline in the share of investment: Its share in the investment ratio (column 2.1) fell from 19.2% in 2011-12 to 16.5% in 2019-20.
    • This indicates that ‘Make in India’ failed to take off, import dependence went up, and India became deindustrialised.
    • Import dependence on China is alarming for critical materials such as fertilizers, bulk drugs (active pharmaceutical ingredients or APIs) and capital goods.
    • Instead of boosting investment and domestic technological capabilities, the ‘Make in India’ campaign frittered away time and resources to raise India’s rank in the World Bank’s Ease of Doing Business Index.
    • Decline in foreign capital in GFC: The contribution of foreign capital to financing GCF fell to 2.5% in 2019-20 from 3.8% in 2014-15 (or 11.1% in 2011-12).
    • With declining investment share, industrial output growth rate fell from 13.1% in 2015-16 to a negative 2.4% in 2019-20, as per the National Accounts Statistics.

    Way forward

    • Need for balance: As roads and communications are classic public goods, investment in them is welcome.
    • However, for healthy domestic output growth, there is a need for balance between “directly productive investments” (in farms and factories) and infrastructure investments.
    • And this balance was missed.
    • The recent upturn in the aggregate fixed capital formation to GDP ratio is positive, though the rate is still lower than its mark in the early 2010s.

    Conclusion

    The claim that the investment revival is public sector driven is not borne out by facts. The budgetary figures refer to financial investment, not estimates of capital formation, indicating expansion of the economy’s productive capacity.

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    Back2Basics: Gross fixes capital formation

    • Gross fixed capital formation (GFCF), also called “investment”, is defined as the acquisition of produced assets (including purchases of second-hand assets), including the production of such assets by producers for their own use, minus disposals.
    • The relevant assets relate to assets that are intended for use in the production of other goods and services for a period of more than a year.
    • The term “produced assets” means that only those assets that come into existence as a result of a production process are included.
    • It therefore does not include, for example, the purchase of land and natural resources.
    • This indicator is available in different measures: GFCF at current prices and current PPPs in US dollars, and annual growth rates of GFCF at constant prices, as well as quarterly data for percentage change over previous period and percentage change over same period last year.
    • The indicator at current prices and current PPPs is less suited for comparisons over time, as developments are not only caused by real growth, but also by changes in prices and PPPs.

  • A new global standard for AI ethics

    Context

    Artificial intelligence (AI) is more present in our lives than ever. From predicting what we want to see as we scroll through social media to helping us understand weather patterns to manage agriculture, AI is ubiquitous.

    Issues with AI  and it why it matters to India

    • Bias and discrimination: The data used to feed into AI often aren’t representative of the diversity of our societies, producing outcomes that can be said to be biased or discriminatory.
    • Errors in facial recognition: There are problems emerging in facial recognition technologies, which are used to access our phones, bank accounts and apartments, and are increasingly employed by law-enforcement authorities, in identifying women and darker-skinned people.
    • For three such programs released by major technology companies, the error rate was 1% for light-skinned men, but 19% for dark-skinned men, and up to 35% for dark-skinned women.
    • Biases in facial recognition technologies have led to wrongful arrests.
    •  Indeed, if the business model of how these technologies are developed does not change to place human interests first, inequalities will grow to a magnitude never before experienced in history; access to the raw material that is data is key.
    • These issues are of particular importance to India, which is one of the world’s largest markets for AI-related technologies, valued at over $7.8 billion in 2021.
    •  The National Strategy on Artificial Intelligence released by NITI Aayog in 2018 highlights the massive potential of AI in solving complex social challenges faced by Indian citizens across areas such as agriculture, health, and education, in addition to the significant economic returns that AI-related technologies are already creating.

    UNESCO agreement

    • To ensure that the full potential of these technologies is reached, the right incentives for ethical AI governance need to be established in national and sub-national policy.
    • India has made great strides in the development of responsible and ethical AI governance, starting with NITI Aayog’s #AIForAll campaign to the many corporate strategies that have been adopted to ensure that AI is developed with common, humanistic values at its core.
    • UNESCO’s recommendations: Last November 193 countries reached a groundbreaking agreement at UNESCO on how AI should be designed and used by governments and tech companies.
    • UNESCO’s Recommendation on the Ethics of Artificial Intelligence took two years to put together and involved thousands of online consultations with people from a diverse range of social groups.
    •  It aims to fundamentally shift the balance of power between people, and the businesses and governments developing AI.
    • Countries which are members of UNESCO have agreed to implement this recommendation by enacting actions to regulate the entire AI system life cycle, ranging from research, design and development to deployment and use.
    • This means they must use affirmative action to make sure that women and minority groups are fairly represented on AI design teams.
    • The Recommendation also underscores the importance of the proper management of data, privacy and access to information.
    •  It establishes the need to keep control over data in the hands of users, allowing them to access and delete information as needed.
    • It also calls on member states to ensure that appropriate safeguards schemes are devised for the processing of sensitive data and effective accountability, and redress mechanisms are provided in the event of harm.
    • Socio-cultural impact: The broader socio-cultural impacts of AI-related technologies are also addressed, with the Recommendation taking a strong stance that-
    • 1] AI systems should not be used for social scoring or mass surveillance purposes;
    • 2] That particular attention must be paid to the psychological and cognitive impact that these systems can have on children and young people;
    • 3] Member states should invest in and promote not only digital, media and information literacy skills, but also socio-emotional and AI ethics skills to strengthen critical thinking and competencies in the digital era.
    • In a number of countries, the principles of the Recommendation are already being used in AI regulation and policy.
    • Finland provides an example of good practice of this regard, with its 2017 AI Strategy.

    Conclusion

    The new agreement is broad and ambitious. It is a recognition that AI-related technologies cannot continue to operate without a common rulebook. Over the coming months and years, the Recommendation will serve as a compass to guide governments and companies, to voluntarily develop and deploy AI technologies that conform with the commonly agreed principles it establishes.

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  • ICJ’s latest judgment on Rohingya Genocide

    Judges at the United Nations’ highest court have dismissed preliminary objections by Myanmar to a case alleging for genocide against the Rohingya ethnic minority.

    Who are the Rohingyas?

    • Rohingya Muslims comprise one million out of the 53 million people that live in Myanmar, forming the world’s largest stateless population in a single country.
    • Universally reviled by the country’s Buddhist majority, they have been oppressed by the government since the late 1970s when the government launched a campaign to identify ‘illegal immigrants’.
    • Serious abuses were committed, forcing as many as 250,000 Rohingya refugees to flee to Bangladesh.
    • The 1982 Citizenship Law in former Burma made the Rohingyas stateless people.
    • They have often been called the most persecuted minority in the world.
    • The 1.1 million Rohingya Muslims squeezed precariously into the northwest state of Rakhine, in mainly Buddhist Burma, bordering majority Muslim Bangladesh, are stateless and unwanted.

    Why are they persecuted by Myanmar?

    • To qualify for citizenship, Rohingya applicants had to renounce their identity And accept being labelled as ‘Bengalis’ on all official documents.
    • They also had to prove that they could trace the presence of their family in Rakhine back three generations, something which is extremely difficult as many Rohingya lack documents or had lost them in 2012.

    Why did the Rohingya Crisis happen?

    • Since World War II they have been treated increasingly by Burmese authorities as illegal, interloping Bengalis, facing apartheid-like conditions that deny them free movement or state education.
    • The army “clearing operations” sparked the mass exodus of Rohingyas in both October 2016.
    • In August 2017, were launched after insurgents known as the Arakan Rohingya Salvation Army (ARSA) attacked several paramilitary check posts.
    • Rohingya activists claim the insurgents are mainly young men who have been pushed to breaking point by relentless oppression.

    Security Implications

    • The Rohingya issue and its spill over impact on Myanmar`s western peripheral region and security implications figured in the discussions is not clear.
    • In all probability, the import of the ferment caused by the Rohingya migration, efforts of radical Islamists to influence some of the Rohingya youth, and the Pakistan ISI’s attempts to capitalise on the situation.
    • Rising anger in the Muslim world about the plight of the Rohingya has compounded fears of home-grown militancy as well as support from international jihadists.
    • Illegal movement of people, combined with human trafficking and cross-border migration, can weaken Myanmar’s relations with its neighbour Bangladesh and its ASEAN partners.

    What is the case against Myanmar?

    • Last year, the Republic of the Gambia moved the ICJ against Myanmar over alleged violations of the Convention on the Prevention and Punishment of the Crime of Genocide.
    • The Gambia urged the ICJ to direct Myanmar to stop the genocide, ensure that persons committing genocide are punished, and allow the “safe and dignified return of forcibly displaced Rohingya”.
    • The Gambia and Myanmar are parties to the Genocide Convention that allows a party to move the ICJ for violations.
    • Disputes between the Contracting Parties are settled according to Article 9 of the Genocide Convention.

    International support for Gambia’s case

    • The Netherlands and Canada are backing Gambia, saying in 2020 that the country took a laudable step towards ending impunity for those committing atrocities in Myanmar and upholding this pledge.
    • Canada and the Netherlands consider it their obligation to support these efforts which are of concern to all of humanity.

    What next?

    • The ICJ’s ruling sets the stage for court hearings, airing evidence of atrocities against the Rohingya that human rights groups and a UN probe say amount to breaches of the 1948 Genocide Convention.
    • The International Court of Justice rules on disputes between states.
    • It is not linked to the International Criminal Court, also based in The Hague, which holds individuals accountable for atrocities.
    • Prosecutors at the ICC are investigating crimes committed against the Rohingya who were forced to flee to Bangladesh.
    • The ruling of the ICJ is binding on Myanmar, and cannot be appealed. However, no means are available to the court to enforce it.

    Back2Basics:

    BASIS INTERNATIONAL CRIMINAL COURT (ICC) INTERNATIONAL COURT OF JUSTICE (ICJ)
    Relationship with the United Nations Independent; UN Security Council may refer matters to it Primary judicial branch of the UN.
    Members 105 members 193 members (all members of the United Nations).
    Derives authority from The Rome Statute Charter of the United Nations and the Statute of the International Court of Justice.
    Scope of work Criminal matters – investigating and prosecuting crimes of genocide, crimes against humanity, and war crimes Civil matters- settling legal disputes between the member-states and giving advisory opinions on international legal issues
    Jurisdiction Only the member nations of the ICC, which means around 105 countries. Can try individuals. All the member nations of the UN, which means 193 countries. Cannot try individuals and other private entities.
    Composition 1 prosecutor and 18 judges, who are elected for a 9-year term each by the member-states which make up the Assembly of State Parties with all being from different nations 15 judges who are elected for a 9-year term each and are all from different nations.
    Funding Funded by state parties to the Rome Statute and voluntary contributions from the United Nations, governments, individual corporations, etc. Funded by the UN.

     

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  • Monkeypox is ‘Public Health Emergency’

    The World Health Organization’s Director-General has declared monkeypox a public health emergency of international concern (PHEIC) July 23, 2022.

    What is PHEIC?

    Definition: Under the International Health Regulations (IHR), a public health emergency is defined as “an extraordinary event which is determined, as provided in these Regulations: to constitute a public health risk to other States through the international spread of disease; and to potentially require a coordinated international response”.

    What criteria does the WHO follow to declare PHEIC?

    • PHEIC is declared in the event of some “serious public health events” that may endanger international public health.
    • The responsibility of declaring an event as an emergency lies with the Director-General of the WHO and requires the convening of a committee of members.

    Implications of a PHEIC being declared

    The PHEIC is the highest level of alert the global health body can issue.

    • There are some implications of declaring a PHEIC for the host country.
    • Only polio and SARS-CoV-2 were ongoing PHEIC prior to monkeypox.
    • Declaring a PHEIC may lead to restrictions on travel and trade.

    Back2Basics: Monkeypox

    • The monkeypox virus is an orthopoxvirus, which is a genus of viruses that also includes the variola virus, which causes smallpox, and vaccinia virus, which was used in the smallpox vaccine.
    • It causes symptoms similar to smallpox, although they are less severe.
    • While vaccination eradicated smallpox worldwide in 1980, monkeypox continues to occur in a swathe of countries in Central and West Africa, and has on occasion showed up elsewhere.
    • According to the WHO, two distinct clade are identified: the West African clade and the Congo Basin clade, also known as the Central African clade.

     

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  • [pib] Anushilan Samiti

    Union Education and Skill Development Minister has urged NCERT and the Education fraternity to include enough information about Anushilan Samiti, especially in the upcoming National Curriculum Framework

    Anushilan Samiti

    • Anushilan Samiti was an Indian fitness club, which was actually used as an underground society for anti-British revolutionaries.
    • It was founded by Satish Chandra Pramatha Mitra, Aurobindo Ghose and Sarala Devi.
    • In the first quarter of the 20th century it supported revolutionary violence as the means for ending British rule in India.
    • The organisation arose from a conglomeration of local youth groups and gyms (akhara) in Bengal in 1902.
    • It had two prominent, somewhat independent, arms in East and West Bengal, Dhaka Anushilan Samiti (centred in Dhaka), and the Jugantar group (centred in Calcutta).
    • It challenged British rule in India by engaging in militant nationalism, including bombings, assassinations, and politically motivated violence.

    Revolutionary activities

    • The Samiti collaborated with other revolutionary organisations in India and abroad.
    • It was led by the nationalists Aurobindo Ghosh and his brother Barindra Ghosh, influenced by philosophies like Italian Nationalism, and the Pan-Asianism of Kakuzo Okakura.
    • The Samiti was involved in a number of noted incidents of revolutionary attacks against British interests and administration in India, including early attempts to assassinate British Raj officials.
    • These were followed by the 1912 attempt on the life of the Viceroy of India, and the Seditious conspiracy during World War I, led by Rash Behari Bose and Jatindranath Mukherjee respectively.

    Defiance from militant nationalism

    • The organisation moved away from its philosophy of violence in the 1920s due to the influence of the Indian National Congress and the Gandhian non-violent movement.
    • A section of the group, notably those associated with Sachindranath Sanyal, remained active in the revolutionary movement, founding the Hindustan Republican Association in north India.
    • A number of Congress leaders from Bengal, especially Subhash Chandra Bose, were accused by the British Government of having links with the organisation during this time.
    • The Samiti’s violent and radical philosophy revived in the 1930s, when it was involved in the Kakori conspiracy, the Chittagong armoury raid, and other actions against the administration in British-occupied India.

    Other personalities associated with Anushilan Samiti

    • Legends like, Deshabandhu Chittaranjan Das, Surendranath Tagore, Jatindranath Banerjee, Bagha Jatin were associated with Anushilan Samiti.
    • Dr Hedgewar who established the Rashtriya Swayamsevak Sangh (RSS) was also an alumnus of the Samity.

     

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  • Why is Karnataka opposing Centre’s draft Eco-Sensitive Area norms for Western Ghats?

    The Union Environment Ministry’s latest draft notification on Ecologically Sensitive Areas (ESA) in the Western Ghats is facing stiff opposition in Karnataka.

    What is the news?

    • The MoEFCC had issued a draft notification that demarcated large parts of Karnataka, Tamil Nadu, Gujarat and Maharashtra as eco-sensitive areas.
    • Among these states, Karnataka contains the largest geographical share of the notified areas in the Western Ghats, at 20,668 sq km.

    ESA in Western Ghats

    • In 2013, the Kasturirangan committee had submitted a report which recommended that 37% of the Western Ghats, covering an area of 59,940 sq km be classified as ESA.
    • On the basis of this, several drafts were introduced which were subsequently rejected by the surrounding states, including Karnataka.

    What is ESA?

    • Eco-Sensitive Zones (ESZs) or Ecologically Fragile Areas (EFAs) are areas notified by the MoEFCC around Protected Areas, National Parks and Wildlife Sanctuaries.
    • The purpose of declaring ESZs is to create some kind of “shock absorbers” to the protected areas by regulating and managing the activities around such areas.
    • They also act as a transition zone from areas of high protection to areas involving lesser protection.

    How are they demarcated?

    • The Environment (Protection) Act, 1986 does NOT mention the word “Eco-Sensitive Zones”.
    • However, Section 3(2)(v) of the Act, says that Central Government can restrict areas in which any industries, operations or processes or class of industries, operations or processes shall be carried out or shall not, subject to certain safeguards.
    • Besides Rule 5(1) of the Environment (Protection) Rules, 1986 states that central government can prohibit or restrict the location of industries and carrying on certain operations or processes on the basis of certain considerations.
    • The same criteria have been used by the government to declare No Development Zones (NDZs).

    Defining its boundaries

    • An ESZ could go up to 10 kilometres around a protected area as provided in the Wildlife Conservation Strategy, 2002.
    • Moreover, in the case where sensitive corridors, connectivity and ecologically important patches, crucial for landscape linkage, are beyond 10 km width, these should be included in the ESZs.
    • Further, even in the context of a particular Protected Area, the distribution of an area of ESZ and the extent of regulation may not be uniform all around and it could be of variable width and extent.

    Activities Permitted and Prohibited

    • Permitted: Ongoing agricultural or horticultural practices, rainwater harvesting, organic farming, use of renewable energy sources, and adoption of green technology for all activities.
    • Prohibited: Commercial mining, saw mills, industries causing pollution (air, water, soil, noise etc.), the establishment of major hydroelectric projects (HEP), commercial use of wood, Tourism activities like hot-air balloons over the National Park, discharge of effluents or any solid waste or production of hazardous substances.
    • Under regulation: Felling of trees, the establishment of hotels and resorts, commercial use of natural water, erection of electrical cables, drastic change of agriculture system, e.g. adoption of heavy technology, pesticides etc, widening of roads.

    What does the new draft notification for the Western Ghats say?

    • The draft notification demarcates 46,832 sq km in the five states Gujarat, Maharashtra, Karnataka, Goa and Tamil Nadu as ESA in the Western Ghats.
    • Kerala is excluded from the draft notification and it had earlier undertaken the exercise of demarcating ESA in the state by physical verification.
    • Among the five states, 20,668 sq km of the ESA lies in Karnataka, 1,461 sq km in Goa, 17,340 sq km in Maharashtra, 6,914 sq km in Tamil Nadu and 449 sq km in Gujarat.
    • According to the notification, the concerned state governments are responsible for monitoring and enforcing the provisions of the notification.

    What are the curbs that the state governments will have to implement?

    • The draft notification states there shall be a complete ban on mining, quarrying and sand mining in the ESA.
    • All existing mines are to be phased out within five years from the date of issue of the final notification or on the expiry of the existing mining lease.
    • It also bars setting up of new thermal power projects and expansion of existing plants in the sensitive area, and the banning of all new ‘Red’ category industries.
    • The construction of new townships and area development projects will also be prohibited in the areas.
    • ‘Orange’ category industries, with a pollution index score of 41-59, such as jute processing and ‘White’ industries that are considered non-polluting will also be allowed with strict compliance.

    What were the suggestions by the Kasturirangan panel?

    • The panel, formed in 2012, was tasked with the mandate of taking a “holistic view of the issue, and to bring synergy”.
    • It aimed to protecting the environment and biodiversity, while maintaining the needs and aspirations of the local and indigenous people, of sustainable development and environmental integrity of the region.
    • The report had recommended a blanket ban on mining, quarrying, red category industries and thermal power projects.
    • It also stated that the impact study of infrastructural projects on the forest and wildlife should be conducted before permission is given.

    What is Karnataka’s stand on the matter?

    • The Karnataka government has been firm in rejecting the implementation of the guidelines.
    • It has staunchly opposed to the Kasturirangan committee report on Western Ghats.
    • It urged that declaring Western Ghats as ESA would adversely affect the livelihood of people in the region.
    • Environmental experts consider the state government’s decision to be disastrous for the biodiversity of the Western Ghats.

     

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  • [Sansad TV] Mudda Aapla: Culture of Freebies

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    Context

    • With the poll season round the corner, political parties are busy planning to lure the electorate with their promises which also include freebies.
    • Over the years the politics of freebies has become an integral part of the electoral battles and the scenario is no different in the forthcoming assembly polls in five states.
    • There are arguments both in favour and against this practice. In this article, we shall learn analyse all aspects of this issue.

    Freebie Politics in India: A backgrounder

    • The term Freebies is not new; rather it is a prevalent culture in Indian politics (in the name of socialism).  
    • The political parties are always trying to outdo each other in luring the Indian voters with assorted freebies.
    • From free water to free smartphones the Indian politicians promise everything to attract prospective voters in favour.
    • This trend has gained more momentum in the recent times with the political parties being innovative in their offerings as the ‘traditional free water and electricity’ is no longer sufficient as election goodies.

    Examples of freebies

    1. Promise of Rs 15 lakh in our bank accounts 😀
    2. Free TV, Laptops
    3. Free electricity
    4. Loan waivers
    5. Offering free public transport ride to all women in Delhi

    Why are such policies popular among the public?

    • Failure of economic policies: The answer lies in the utter failure of our economic policies to create decent livelihood for a vast majority of Indians.
    • Quest for decent livelihood: The already low income had to be reoriented towards spending a disproportionately higher amount on education and health, from which, the state increasingly withdrew.
    • Prevailing unemployment:  Employment surveys have shown that employment growth initially slowed down from the 1990s, and then has turned negative over the past few years.
    • Increased cost of living: Real income growth of the marginal sections has actually slowed down since 1991 reforms.
    • Increased consumerism: The poor today also spend on things which appear to be luxuries; cellphones and data-packs are two such examples which are shown as signs of India’s increased affluence.
    • Necessity: For migrant workers, the mobile phone helps them keep in touch with their families back home, or do a quick video-call to see how their infant is learning to sit up or crawl.

    Can Freebies be compared with Welfare Politics?

    • These freebies are not bad. It is a part of social welfare.
    • Using freebies to lure voters is not good.
    • Voter’s greediness may lead to a problem in choosing a good leader.
    • When we don’t have a good leader then democracy will be a mockery.

    Impact of such policies

    • Never ending trail: The continuity of freebies is another major disadvantage as parties keep on coming up with lucrative offers to lure more number of votes to minimize the risk of losing in the elections.
    • Burden on exchequer: People forget that such benefits are been given at the cost of exchequer and from the tax paid.
    • Ultimate loss of poors: The politicians and middlemen wipe away the benefits and the poor have to suffer as they are deprived from their share of benefits which was to be achieved out of the money.
    • Inflationary practice: Such distribution freebie commodity largely disrupts demand-supply dynamics.
    • Lethargy in population: Freebies actually have the tendency to turn the nation’s population into: Lethargy and devoid of entrepreneurship.
    • Money becomes only remedy: Everyone at the slightest sign of distress starts demanding some kind of freebies from the Govt. 
    • Popular politics: This is psychology driving sections of the population expecting and the government promptly responds with immediate monetary relief or compensation.

    What cannot be accounted to a freebie?

    • MGNREGA scheme (rural employment guarantee scheme)
    • Right to Education (RTE)
    • Food Security through fair price shops ( under National Food Security Act)
    • Prime Minister Kisan Samman Yojana (PM-KISAN)

    Arguments in favour

    • Social investment: Aid to the poor is seen as a wasteful expenditure. But low interest rates for corporates to get cheap loans or the ‘sop’ of cutting corporate taxes are never criticized.
    • Socialistic policy: This attitude comes from decades of operating within the dominant discourse of market capitalism.
    • Election manifesto: Proponents of such policies would argue that poll promises are essential for voters to know what the party would do if it comes to power and have the chance to weigh options.
    • Welfare: Economists opine that as long as any State has the capacity and ability to finance freebies then its fine; if not then freebies are the burden on economy.
    • Other wasteful expenditure: When the Centre gives incentives like free land to big companies and announce multi-year tax holidays, questions are not asked as to where the money will come from.

    A rational analysis of freebies

    • Winning election and good governance are two different things. The role of freebies to avail good governance is definitely questionable.
    • The social, political and economic consequences of freebies are very short-lived in nature. 
    • There are many freebies and subsidies schemes available in many States but we still find starvation deaths, lack of electricity, poor education and health service. 
    • Hence the sorrow of the masses of India cannot be solved by freebies or by incentives.

    So are not freebies meant only to attract voters and swing voters by concentrating on a preferential group or community?

    Way forward

    • It can be agreed that a democracy requires popular support for its rule to continue. The sops and freebies to the poor buy it the requisite votes.
    • But the democratic process of election and election promises should be clear. It should not control voters thought. 
    • What some people term as ‘populism’ actually constitutes what real economics should be.
    • If you deprive people of what they really need, you will have to throw allurements at them.
    • This can only be stopped if political masters try to follow what economist EA Schumacher had conveyed through his seminal work Small is beautiful – “Treat economics as if people matter.”

    Conclusion

    • There is nothing wrong in having a policy-led elaborate social security programme that seeks to help the poor get out of poverty.
    • But such a programme needs well thought out preparation and cannot be conjured up just before an election.

    Perhaps the best observation has come from Y K Alagh, economist and educationist, that the electorate is nobody’s fool. It will take all the freebies already being distributed and then vote according to its carefully thought out assessment of performance. Much depends on whether the electorate can see through all this posturing.

  • What is Transition Tax Credit?

    Taxpayers who had missed out on getting the benefit of transitional tax credits during India’s switchover to the Goods and Services Tax (GST) regime five years ago, will now get a fresh window to avail them.

    What is Transitional Tax Credit?

    • A tax credit is a component of a company’s tax payment that can be applied to offset a subsequent tax obligation.
    • When India moved to the GST regime in 2017, companies had to transition the credit sitting on their books.
    • So, the closing balance in the old tax regime would become the opening credit balance under GST.
    • When India moved from the old indirect tax regime to GST, a one-time transition of credit was allowed.
    • That is, companies could set off part of the taxes paid during the old tax regime against future GST liabilities.
    • Many companies claimed that they had simply forgotten to claim the transitional credit.

    Why in news?

    • The Supreme Court has directed the revenue authorities to facilitate such credits.
    • The move is likely to benefit hundreds of GST assessees who had hitherto not been able to avail such credits.
    • They will be given two-month window to claim during September and October.

     

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  • Droupadi Murmu elected 15th President of India

    Former Jharkhand Governor Droupadi Murmu was elected the 15th President of India, the first (santhal) tribal woman to be appointed to the position and the youngest as well.

    Here’s a look at some interesting facts about the past Presidents of India:

    * Rajendra Prasad was the first President of India. He is also the only President to have served two consecutive terms.

    * Dr. Sarvepalli Radhakrishnan was the second President. He was the first to have served as Vice President before being elected to the top post.

    * Zakir Hussain was the third President of India, and the first Muslim President. He also was the first President to die in office. He was the shortest serving President of India (less than two years).

    * On his election, fourth President V.V. Giri became the first one to have also been an acting President.

    * Fakhruddin Ali Ahmed was the fifth President and the second Muslim to hold the post. The Emergency was declared during his tenure. He is the second President to have died in office.

    * Neelam Sanjiva Reddy was the sixth President. He became the youngest to take the post at the age of 64. He is also the only one to have been elected unopposed.

    * Giani Zail Singh was the seventh President of India and the first Sikh President.

    * Eighth President Ramaswamy Venkataraman was the first President to have worked with four Prime Ministers and appointed three: V. P. Singh, Chandra Shekhar and P. V. Narasimha Rao.

    * Shankar Dayal Sharma was the 9th President. He also worked with four PMs and appointed three of them in his last year: Atal Bihari Vajpayee, H. D. Deve Gowda, I. K. Gujral.

    * Kocheril Raman Narayanan was the 10th President of India and the first Dalit President. At 76 years and 271 days, he was the oldest President to be elected.

    * APJ Abdul Kalam was the 11th President and first Muslim President to serve an entire term.

    * Elected as the 12th President, Pratibha Patil was the first woman President of India.

    * Pranab Mukherjee, the 13th President, was the first Bengali to hold the post.

    * 14th President Ram Nath Kovind was the first BJP candidate to be elected to the post.

    * 11 Presidents have been members of a political party before being elected. 8 were from Congress, 2 from BJP, 1 from Janata Party, and the rest were Independents.

    The President of India

    • The President of India is recognized as the first citizen of the country and the head of the state.
    • The elected President of India is a part of the Union Executive along with several other members of the parliament including the Prime Minister, Attorney-General of India and the Vice – president.

    Electing the President

    • The provisions of the election of the President are laid down in Article 54 of the Constitution of India.
    • The Presidential and Vice-Presidential Election Act 1952 led to the establishment of this Constitutional provision.

    Qualifications to become the President of India

    The qualification of being the President of India are given below:

    • He/ She must be an Indian citizen
    • A person must have completed the age of 35.
    • A person must be qualified for election as a member of the House of the People.
    • Must not hold a government (central or state) office of profit
    • A person is eligible for election as President if he/she is holding the office of President or Vice-President.

    Actual course of election

    • The President of India is elected indirectly by an Electoral College following the system of proportional representation utilizing a single transferable vote system and secret ballots.
    • MPs and MLAs vote based on parity and uniformity values.

    Electoral College composition-

    (1) Legislative Assemblies of the States:

    • According to the provision of Article 333, every state’s Legislative Assembly must consist of not less than 60 members but not more than 500 members.

    (2) Council of States:

    • 12 members are nominated by the President of India based on skills or knowledge in literature, arts, science, and social service to act as the members of the Council of States.
    • In total, 238 represent act as representatives from both the States and Union Territories.

    (2) House of the People:

    • The composition of the House of People consists of 530 members (no exceeding) from the state territorial constituencies.
    • They are elected through direct election.
    • The President further elects 20 more members (no exceeding) from the Union Territories.

    Uniformity in the scale of representation of states

    To maintain the proportionality between the values of the votes, the following formula is used:

    Value of vote of an MLA= total no. of the population of the particular state/ number of elected MLAs of that state divided by 1000.

    Single vote system

    • During the presidential election, one voter can cast only one vote.
    • While the MLAs vote may vary state to state, the MPs vote always remain constant.

    MPs and MLAs vote balance

    • The number of the total value of the MPs votes must equal the total value of the MLAs to maintain the State and the Union balance.

    Quotas:

    • The candidate reaching the winning quota or exceeding it is the winner.
    • The formula sued is ‘Winning quota total number of poll/ no.of seats + 1’.

    Voters’ preference:

    • During the presidential election, the voter casts his vote in favor of his first preferred candidate.
    • However, in case the first preference candidate does not touch the winning quota, the vote automatically goes to the second preference.
    • The first preferred candidate with the lowest vote is eliminated and the votes in his/her favor are transferred to the remaining candidates.

    Why need Proportional representation?

    • The President of India is elected through proportional representation using the means of the single transferable vote (Article 55(3)).
    • It allows the independent candidates and minority parties to have the chance of representation.
    • It allows the practice of coalition with many voters under one government.
    • This system ensures that candidates who are elected don’t represent the majority of the electorate’s opinion.

    Why is President indirectly elected?

    If Presidents were to be elected directly, it would become very complicated.

    • It would, in fact, be a disaster because the public doesn’t have absolute clarity of how the president-ship runs or if the candidate fits the profile of a president.
    • Another reason why the direct election system isn’t favorable is that the candidate running for the president’s profile will have to campaign around the country with the aid of a political party.
    • And, this will result in massive political instability.
    • Moreover, it would be difficult and impossible for the government to hand out election machinery (given the vast population of India).
    • This will cost the government financially and may end up affecting the economy as well.
    • The indirect election system is a respectable system for the First Man of India (rightly deserving).
    • The system/method of indirect electing of the president also allows the states to maintain neutrality and minimize hostility.

     

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  • Women have Right to Safe Abortion: SC

    Denying an unmarried woman the right to a safe abortion violates her personal autonomy and freedom, the Supreme Court held in an order.

    What did the SC say?

    • A woman’s right to reproductive choice is an inseparable part of her personal liberty under Article 21 of the Constitution.
    • She has a sacrosanct right to bodily integrity, the court quoted from precedents.
    • The court said forcing a woman to continue with her pregnancy would not only be a violation of her bodily integrity but also aggravate her mental trauma.

    Indispensable clause of safety

    • The court ordered a medical board to be formed by the AIIMS to check whether it was safe to conduct an abortion on the woman and submit a report in a week.

    What is the case?

    • A Bench led by Justice D.Y. Chandrachud was hearing the appeal of a woman who wanted to abort her 24-week pregnancy after her relationship failed and her partner left her.
    • The lower court had taken an “unduly restrictive view” that her plea for a safe abortion was not covered under the Medical Termination of Pregnancy Act.
    • This was since the pregnancy arose from a consensual relationship outside wedlock.

    What was the last amendment?

    • The court noted that an amendment to the Act in 2021 had substituted the term ‘husband’ with ‘partner’, a clear signal that the law covered unmarried women within its ambit.

    Reiterating the live-in recognition

    • Chastising the lower court, the Bench said live-in relationships had already been recognised by the Supreme Court.
    • There were a significant number of people in social mainstream who see no wrong in engaging in pre-marital sex.
    • The law could not be used to quench “notions of social morality” and unduly interfere in their personal autonomy and bodily integrity.

    Back2Basics: Medical Termination of Pregnancy (MTP) Act

    • Abortion in India has been a legal right under various circumstances for the last 50 years since the introduction of the Medical Termination of Pregnancy (MTP) Act in 1971.
    • The Act was amended in 2003 to enable women’s access to safe and legal abortion services.
    • Abortion is covered 100% by the government’s public national health insurance funds, Ayushman Bharat and Employees’ State Insurance with the package rate for surgical abortion.

    The idea of terminating your pregnancy cannot originate by choice and is purely circumstantial. There are four situations under which a legal abortion is performed:

    1. If continuation of the pregnancy poses any risks to the life of the mother or mental health
    2. If the foetus has any severe abnormalities
    3. If pregnancy occurred as a result of failure of contraception (but this is only applicable to married women)
    4. If pregnancy is a result of sexual assault or rape

    These are the key changes that the Medical Termination of Pregnancy (Amendment) Act, 2021, has brought in:

    1. The gestation limit for abortions has been raised from the earlier ceiling of 20 weeks to 24 weeks, but only for special categories of pregnant women such as rape or incest survivors. But this termination would need the approval of two registered doctors.
    2. All pregnancies up to 20 weeks require one doctor’s approval. The earlier law, the MTP Act 1971, required one doctor’s approval for pregnancies upto 12 weeks and two doctors’ for pregnancies between 12 and 20 weeks.
    3. Women can now terminate unwanted pregnancies caused by contraceptive failure, regardless of their marital status. Earlier the law specified that only a “married woman and her husband” could do this.
    4. There is also no upper gestation limit for abortion in case of foetal disability if so decided by a medical board of specialist doctors, which state governments and union territories’ administrations would set up.

     

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