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GS Paper: GS3

  • Species in news: Swamp Deer

    The population of the vulnerable eastern swamp deer, extinct elsewhere in South Asia, has dipped (from 907 in 2018 to 868 in 2020 ) in the Kaziranga National Park and Tiger Reserve.

    Swamp Deer

    • The swamp deer also called as barasingha is a deer species distributed in the Indian subcontinent.
    • Populations in northern and central India are fragmented, and two isolated populations occur in southwestern Nepal.
    • It has been locally extinct in Pakistan and Bangladesh, and its presence is uncertain in Bhutan.
    • In Assamese, barasingha is called dolhorina; dol meaning swamp.

    Note: Swamp deers do occur in the Kanha National Park of Madhya Pradesh, in two localities in Assam, and in only 6 localities in Uttar Pradesh.

    Conservation status

    • IUCN Red List: Endangered
    • CITES: Appendix I
    • Wildlife Protection Act of 1972: Schedule I

     

    Try this PYQ:

    Q. Consider the following fauna of India:

    1. Gharial
    2. Leatherback turtle
    3. Swamp deer

    Which of the above is/are endangered?

    (a) 1 and 2 only

    (b) 3 only

    (c) 1, 2 and 3

    (d) None

     

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  • Species in news: Miss Kerala

    A section of aquarists and ornamental fish breeders are surprised that the Denison barb (Miss Kerala), a native freshwater fish species commonly found in parts of Karnataka and Kerala, has been included in Schedule I of the Wild Life Protection Act, 1982 (amendment bill).

    Miss Kerala

    • Miss Kerala is also known as Denison barb, red-line torpedo barb and roseline shark.
    • Its scientific name is Sahyadria denisonii.
    • The fish is featured with red and black stripes on its body.
    • It is found in the States of Kerala and Karnataka.
    • It has been listed on the IUCN Redlist as Vulnerable, in 2010.
    • This species is known to inhabit fast-flowing hill streams and is often found in rocky pools with thick vegetation along river banks.

    Why included in Schedule I of WPA?

    • Ironically, its beauty is the biggest threat to its survival, as it is highly sought-after in the international aquarium trade, constituting 60 – 65% of the total live ornamental fish exported from India.
    • Its numbers are also decreasing owing to habitat degradation due to deforestation, mining, agriculture, urban expansion and hydro-electric projects.

     

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  • What the budget needs to do

    Context

    We need to insure the most vulnerable against shocks such as Covid, but even more, we need to create good job opportunities for the unskilled. What can the budget do?

    Impact on informal economy

    • The last two quarters have seen a substantive recovery in the Indian economy.
    • Corporate profitability of our largest firms has hit a new record this year.
    • So have GST collections, another indicator of the formal economy, with an average monthly collection of Rs 1.2 trillion in the second and third quarters.
    • The glass though is half full, the informal economy was particularly badly hit by Covid and its associated lockdowns.
    • Small enterprises, retail, hospitality, and construction were all hammered.
    • These were our main source of recent employment growth.
    •  Agricultural employment has risen in the last year-and-a-half, while manufacturing and services employment has fallen — this is the opposite of development.
    •  Informal service sector jobs may not seem like great jobs to us, but they are greatly prized relative to eking out a marginal existence in agriculture.
    • We need to insure the most vulnerable against such shocks, but even more, we need to create good job opportunities for the unskilled, equip people at all levels to participate more fully in the modern economy, and systemically promote wider policies of inclusion.

    What can the budget do?

    • Create good jobs for unskilled: The way it can do so directly is through accelerating spending on infrastructure.
    • The National Infrastructure Pipeline has identified a good set of projects.
    • The government should be complimented for its intention and ambition; what we need now is implementation.
    • Labour-intensive manufacturing: Most countries developed by putting millions to work in labour-intensive manufacturing.
    • We do not have the huge firms in export-oriented labour-intensive sectors that employ millions in China, Vietnam, and Bangladesh.
    •  Bangladesh has thrived by putting millions to work in manufacturing.
    • A booming garment sector employs 4.4 million.
    • As 80 per cent of those employed in garment factories are women, Bangladesh has twice the female labour force participation ratio of India.
    • Implement labour laws: In June and September 2020, the government passed four labour laws.
    • These laws have since been left dormant.
    • The budget should announce a time frame for implementation, notification by the Union government and then by the states.
    • Investment in education and skilling:  India has among the least skilled workforces in the world.
    • Under 5 per cent of our workforce is formally skilled, compared to 96 per cent in South Korea, 75 per cent in Germany and 52 per cent in the US.
    • That is why the work of the National Skills Development Corporation is so important.
    • Can the budget specify it as an independent entity controlled and run by the private sector that is then held accountable for delivering on our skilling targets.
    • Education is even more important, especially primary education.
    • Pratham’s education reports make for sobering reading.
    • The New Education Policy has a proposal that every second standard child should be able to read and do arithmetic at the second standard level as a foundation for further education.
    • This welcome initiative must receive greater dedication and focus from both government and industry.
    • School education is a state subject, so the Union budget can at best incentivise states to do the right things, say by linking the flow of additional funds to those that demonstrate improved second standard learning outcomes.
    • As a part of CSR, many companies work actively with schools.
    • Education is already the largest single area for CSR spending, accounting for one-third of the Rs 9,000 crore spent by the top 100 companies.

    Conclusion

    Other policies for economic inclusion must go beyond social inclusion. These include measures like reducing tariffs to benefit millions of consumers instead of thousands of firms. Industrial policies that help all firms such as the ease of doing business, instead of incentivising a selected few.

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  • What is World Economic Forum’s Davos Agenda ’22?

    PM Modi has made a special address ahead of the theme-setting World Economic Forum (WEF) Agenda on the ‘State of the World’ at Davos.

    About World Economic Forum (WEF)

    • WEF is an international non-governmental and lobbying organisation based in Cologny, canton of Geneva, Switzerland.
    • It was founded on 24 January 1971 by German engineer and economist Klaus Schwab.
    • The foundation, which is mostly funded by its 1,000 member companies – typically global enterprises with more than five billion US dollars in turnover – as well as public subsidies.
    • It aims at improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas.

    Major reports released:

    • Engaging Tomorrow Consumer Report
    • Inclusive growth & Development Report
    • Environmental Performance Index
    • Global Competitive Index
    • Global Energy Architecture Performance Index Report
    • Global Gender Gap Report
    • Global Information Technology Report
    • Human Capital Report
    • Inclusive growth & Development Report
    • Global Risk Report
    • Travel and Tourism Competitiveness Report by WEF

    Important agenda: Davos meeting

    • The WEF is mostly known for its annual meeting at the end of January in Davos, a mountain resort in the eastern Alps region of Switzerland.
    • The meeting brings together some 3,000 paying members and selected participants – among which are investors, business leaders, political leaders, economists, celebrities and journalists.

    Why is WEF important?

    • Common platform: The WEF summit brings together the who’s-who of the political and corporate world, including heads of state, policymakers, top executives, industrialists, media personalities, and technocrats.
    • Influence global decision-making: Deliberations at the WEF influence public sector and corporate decision-making.
    • Discusses global challenges: It especially emphasizes on the issues of global importance such as poverty, social challenges, climate change, and global economic recovery.
    • Brings in all stakeholders: The heady mix of economic, corporate, and political leadership provides an ideal opportunity for finding solutions to global challenges that may emerge from time to time.

    What are the main initiatives?

    • Agenda 2022 will see the launch of other WEF initiatives meant for:
    1. Accelerating the mission to net-zero emissions
    2. Economic opportunity of nature-positive solutions
    3. Cyber resilience

    Criticisms of WEF

    • WEF has been criticized for being more of a networking hub than a nebula of intellect or a forum to find effective solutions to global issues.
    • It is also criticized for the lack of representation from varied sections of the civil society and for falling short of delivering effective solutions.

    Way forward

    • WEF sees large-scale participation of top industry, business leaders, civil society, and international organizations every year.
    • This collaboration is necessary for addressing global concerns such as climate change and pandemic management.
    • It is one of such few platform, that provides an opportunity for collaboration through comprehensive dialogue.

     

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  • Houthi Attack on United Arab Emirates

    A suspected drone attack on Monday in Abu Dhabi, the capital of UAE, caused multiple explosions in which three Indians were reportedly killed.

    Who is behind the attack?

    • The Shia Houthi rebels of Yemen have claimed responsibility for the attack.

    Who are the Houthis?

    • The roots of the Houthi movement can be traced to “Believing Youth” (Muntada al-Shahabal-Mu’min).
    • It is a Zaydi revivalist group founded by Hussein al-Houthi and his father, Badr al-Din al-Houthi, in the early 1990s.
    • Badr al-Din was an influential Zaydi cleric in northern Yemen.
    • This group is inspired by the Iranian revolution of 1979 and the rise of Hezbollah in southern Lebanon in the 1980s.
    • Badr al-Din and his sons started building vast social and religious networks among the Zaydis of Yemen, who make up roughly one-third of the Sunni-majority country’s population.

    What led to the Houthis’ rise?

    • When protests broke out in Yemen in 2011 as part of the Arab Spring protests that felled Tunisian and Egyptian dictators.
    • The Houthis, now confident from their military victories and the support they enjoyed in Sadah, backed the agitation.

    Why did Saudi Arabia attack Yemen?

    • The rapid rise of the Houthis in Yemen set off alarm bells in Riyadh which saw them as Iranian proxies.
    • Saudi Arabia, under Mohammed Bin Salman, started a military campaign in March 2015, hoping for a quick victory against the Houthis.
    • But the Houthis had dug in, refusing to leave despite Saudi Arabia’s aerial blitzkrieg.
    • With no effective allies on the ground and no way-out plan, the Saudi-led campaign went on with no tangible result.
    • In the past six years, the Houthis have launched multiple attacks on Saudi cities from northern Yemen in retaliation for Saudi air strikes.

    Not a one-way proxy war

    • There are serious allegations against both the Saudis and the Houthis in the war.
    • While the Saudi bombings caused a large number of civilian deaths, the Houthis were accused, by rights groups and Governments, of preventing aid, deploying forces in densely populated areas.
    • Houthis have been using excessive force against civilians and peaceful protesters.

    Why did the Houthis target the UAE?

    • This is not the first time the Houthis attacked the UAE. In 2018, when the UAE-backed forces were making advances in Yemen, the Houthis claimed attacks against the Emirates.
    • They stayed focussed entirely on Saudi Arabia and Saudi-backed forces inside Yemen.

    Try this PYQ:

    Consider the following pairs:

    Towns sometimes mentioned in news: Countries

    1. Aleppo: Syria
    2. Kirkuk: Yemen
    3. Mosul: Palestine
    4. Mazar-i-sharif: Afghanistan

    Which of the pairs given above are correctly matched?

    (a) 1 and 2 only

    (b) 1 and 4 only

    (c) 2 and 3 only

    (d) 3 and 4 only

     

     

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  • What are Smog Towers?

    Some researchers in New Delhi have observed paradoxical phenomena near the smog towers. The air closest to the tower should be cleanest, but the device recorded the opposite in several instances.

    What are Smog Towers?

    • Smog towers are structures designed to work as large-scale air purifiers. They are fitted with multiple layers of air filters and fans at the base to suck the air.
    • After the polluted air enters the smog tower, it is purified by multiple layers before being re-circulated into the atmosphere.

    Structure of the Delhi smog tower

    • The structure is 24 m high, about as much as an 8-storey building — an 18-metre concrete tower, topped by a 6-metre-high canopy. At its base are 40 fans, 10 on each side.
    • Each fan can discharge 25 cubic metres per second of air, adding up to 1,000 cubic metres per second for the tower as a whole. Inside the tower in two layers are 5,000 filters.
    • The filters and fans have been imported from the United States.

    How does it work?

    • The tower uses a ‘downdraft air cleaning system’ developed by the University of Minnesota.
    • Polluted air is sucked in at a height of 24 m, and filtered air is released at the bottom of the tower, at a height of about 10 m from the ground.
    • When the fans at the bottom of the tower operate, the negative pressure created sucks in air from the top.
    • The ‘macro’ layer in the filter traps particles of 10 microns and larger, while the ‘micro’ layer filters smaller particles of around 0.3 microns.
    • The downdraft method is different from the system used in China, where a tower uses an ‘updraft’ system — air is sucked in from near the ground, and is propelled upwards by heating and convection.
    • Filtered air is released at the top of the tower.

    Likely impact

    • Computational fluid dynamics modelling suggests the tower could have an impact on the air quality up to 1 km from the tower.
    • The actual impact will also determine how the tower functions under different weather conditions, and how levels of PM2.5 vary with the flow of air.

    Issues with smog towers

    • Many experts say that the smog towers are not a viable method to clean city’s air.
    • The government had talked about 80% pollution reduction at inlet and outlet of the tower but never mentioned about the effect of distance from the tower.
    • Instead of spending ₹40 crore on two towers, the government could have spent the funds on several other options such as replacing the small and polluting industrial boilers or chimneys etc.

     

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  • World Employment and Social Outlook – Trends, 2022

    Global unemployment is projected to stand at 207 million in 2022 (21 million more than in 2019 before the COVID-19 pandemic began) says ILO World Employment and Social Outlook – Trends 2022.

    World Employment and Social Outlook – Trends 2022

    • The report examines the impacts of the crisis on global and regional trends in employment, unemployment and labour force participation, as well as on job quality, informal employment and working poverty.
    • It also offers an extensive analysis of trends in temporary employment both before and during the COVID-19 crisis.

    Key highlights

    (1) Job Losses in 2022

    • It is estimated that in 2022 around 40 million people will no longer be participating in the global labour force.
    • The downgrade in the 2022 forecast reflects the impact of ever new variants of COVID-19 on the world of work.
    • Global working hours in 2022 will be almost two per cent below their pre-pandemic level.
    • This is equivalent to the loss of 52 million full-time jobs.

    (2) Pauperization

    • The pandemic has pushed millions of children into poverty.
    • It is estimated that in 2020, an additional 30 million adults fell into extreme poverty (living on less than $1.90 per day in purchasing power parity) while being out of paid work.
    • The number of extreme working poor — workers who do not earn enough through their work to keep themselves and their families above the poverty line — rose by eight million.

    (3) Impact on women

    • Women have been worse hit by the labour market crisis than men and this is likely to continue.
    • The closing of education and training institutions will have long-term implications for young people, particularly those without internet access.

    Key suggestions

    • There is the need for a broad-based labour market recovery — the recovery must be human-centred, inclusive, sustainable and resilient.
    • The recovery must be based on the principles of decent work — including health and safety, equity, social protection and social dialogue.

    Back2Basics: International Labour Organization (ILO)

    • The ILO is a UN agency whose mandate is to advance social and economic justice through setting international labour standards.
    • Founded in 1919 under the League of Nations, it is the first and oldest specialised agency of the UN.
    • The ILO has 187 member states: 186 out of 193 UN member states plus the Cook Islands.
    • The ILO’s international labour standards are broadly aimed at ensuring accessible, productive, and sustainable work worldwide in conditions of freedom, equity, security and dignity.

    Its Governing Body

    • The Governing body is the apex executive body of the ILO which decides policies, programmes, agenda, budget and elects the Director-General.
    • It meets three times a year, in March, June and November.

    Major reports released:

    1. World Employment and Social Outlook
    2. World Social Protection Report
    3. Global Wage Report

     

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  • Highlights of the Inequality Kills Report

    The COVID-19 pandemic has heightened economic inequalities across the world says the Inequality Kills Report.

    Try substantiating this:

     

    Q. Extreme inequality is a form of ‘economic violence’—where structural and systemic policy and political choices are skewed in favor of the richest and the most powerful people. Critically examine.

    What is the “Inequality Kills” Report?

    • “Inequality Kills: The unparalleled action needed to combat unprecedented inequality in the wake of COVID-19” is a report released in January 2022 by Oxfam, a U.K.-based consortium.
    • The report argues for sustained and immediate action to end the pandemic, address global inequality and initiate concerted measures to tackle the climate emergency.
    • The central argument of the report is that inequality is a death sentence for people that are marginalized by social and economic structures and removed from political decision-making.

    Key highlights

    • Billionaire variants: Identifying this process as “the billionaire variant”, the report says that this vertical aggregation of global wealth into the hands of a few is “profoundly dangerous for our world”.
    • Pauperization: 160 million people were rendered poor during the pandemic, while the ten richest people doubled their fortunes since the start of the pandemic.
    • Vaccine apartheid: Holding governments to account the report identifies “vaccine apartheid” (unequal access to vaccines between countries) and the lack of universal vaccination programs in many countries.
    • Inflation: It also demonstrates how emergency government expenditure (estimated at $16 trillion) that was meant to keep economies afloat during this crisis, inflated stock prices.
    • Collective: This resulted in billionaires’ collective wealth increasing by $5 trillion during the pandemic.

    Why does the report say that inequality kills?

    • For the writers of the report inequality is not an abstract theory.
    • Instead, they see it as institutionalized violence against poorer people.
    • Extreme inequality is a form of ‘economic violence’—where structural and systemic policy and political choices that are skewed in favor of the richest and the most powerful people.
    • This results in direct harm to the vast majority of ordinary people worldwide.

    Implications of inequality

    • Crime and violence: The report identifies higher inequality with more crime and violence and less social trust.
    • Impact on marginalized: The brunt of inequality and the violence is borne, for instance, by women across the world, Dalits in India, Black, Native American and Latin persons in the US and indigenous groups in many countries.
    • Victimization of women: Pointing to the example of women, the problem runs a lot deeper as 13 million women have not returned to the workforce and 20 million girls are at risk of losing access to education.

    Way ahead

    The “Inequality Kills” report proposes far-reaching changes to structures of government, economy and policy-making to fight inequality.

    • Vaccine sharing: It urgently asks for “vaccine recipes” to be made open-source so that every qualified vaccine manufacturer can manufacture them.
    • Taxing the opportunists: The report then asks for governments to claw back the wealth from billionaires by administering solidarity taxes higher than 90% especially on the billionaires that have profited during pandemic.
    • Taxation reforms: The report asks for permanent cancellation of tax havens, progressive taxation on corporations and an end to tax dodging by corporations.
    • Welfare: The report then suggests that this regained wealth be redirected towards building income safety nets, universalizing healthcare for everyone, investing in green technologies and democratizing them, and, investing in protecting women from violence.

     

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  • How  do  SDRs  help maintain Balance of Payments (BoP)?

    A recent report by the RBI shows that India received support of $17.86 billion in August 2021 by way of Special Drawing Rights (SDRs) has helped cushion the worsening current account deficit.

    What are Special Drawing Rights (SDRs)?

    • SDRs, created by the IMF in 1969, are an international reserve asset and are meant to supplement countries’ reserves.
    • Adding SDRs to the country’s international reserves makes it more financially resilient.
    • Providing liquidity support to developing and low-income countries allows them to tide over the balance of payments (BOP) situations like the one India has been experiencing due to the pandemic and the one it faced earlier in 1991.
    • SDRs being one of the components of foreign exchange reserves (FER) of a country, an increase in its holdings is reflected in the BOP.

    What are the key components of BOP?

    The BOP divides transactions of a country with the rest of the world into two accounts:

    1. Current Account: It consists of net trade of exports and imports of products and services, net earnings on cross-border investments and net transfer payments.
    2. Capital Account: It constitutes a country’s transactions in financial instruments i.e. assets and liabilities constituting of direct investment, portfolio investment, loans, banking capital, and other capital.

    What does the SDR support signify?

    • Pandemic impact: Countries worldwide are going through one of the worst health and economic crises, and India has been no exception.
    • Domestic business underperformance: It is also indicative of the fact that the domestic business environment is failing to attract foreign direct investment.

    Is dependence on SDR a matter of concern?

    A BOP dependent on an SDR-dependent capital account surplus to cushion the country’s widening current account deficit is not a comfortable position to be in.

    • Compulsion for reforms: Importantly, IMF support comes with a baggage of conditions as was the case in 1991—the support came with the condition that India initiates big-ticket economic reforms.
    • Sovereign decisions: Any democratic country would be more comfortable with sovereign rights to design its policy strategy.

    Back2Basics:  Foreign Exchange Reserve

    • Foreign exchange reserves are important assets held by the central bank in foreign currencies as reserves.
    • They are commonly used to support the exchange rate and set monetary policy.
    • In India’s case, foreign reserves include Gold, Dollars, and the IMF’s quota for Special Drawing Rights.
    • Most of the reserves are usually held in US dollars, given the currency’s importance in the international financial and trading system.
    • Some central banks keep reserves in Euros, British pounds, Japanese yen, or Chinese yuan, in addition to their US dollar reserves.

    India’s forex reserves cover:

    1. Foreign Currency Assets (FCAs)
    2. Special Drawing Rights (SDRs)
    3. Gold Reserves
    4. Reserve position with the International Monetary Fund (IMF)

    Significance of these reserves

    • Import support: Holding liquid foreign currency provides a cushion against such effects and provides confidence that there will still be enough foreign exchange to help the country with crucial imports in case of external shocks.
    • USD reserves: All international transactions are settled in US dollars and, therefore, required to support India’s imports.
    • Exchange rate regulation: More importantly, they need to maintain support and confidence for central bank action, whether monetary policy action or any exchange rate intervention to support the domestic currency.
    • Cushion against inflation: It also helps to limit any vulnerability due to sudden disturbances in foreign capital flows, which may arise during a crisis.

    Initiatives taken by the government to increase forex

    • Self reliance: To increase the foreign exchange reserves, the GoI has taken many initiatives like Atmanirbhar Bharat, in which India has to be made a self-reliant nation so that India does not have to import things that India can produce.
    • Duty remission: The government has started schemes like Duty Exemption Scheme, Remission of Duty or Taxes on Export Product (RoDTEP), Nirvik (Niryat Rin Vikas Yojana) scheme, etc.
    • FDI and EoDB: Apart from these schemes, India is one of the top countries that attracted the highest amount of Foreign Direct Investment, thereby improving India’s foreign exchange reserves.

     

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  • How predatory pricing is affecting distributors and traders

    Context

    Consumer goods distributors in Maharashtra has been protesting against Colgate’s alleged unfair treatment of traditional distributors vis-à-vis B2B (Business-to-Business) technology companies such as Reliance’s JioMart, Udaan and others.

    The disruption caused by B2B companies

    • Nearly half-a-million of India’s distributors pick up goods from consumer companies such as Colgate and deliver them to 13 million small local stores located in 7,00,000 villages and towns across the country through a web of millions of traders and other intermediaries.
    • Enter the new age technology B2B companies.
    • They have developed technologies to connect directly to the kirana store through a mobile phone app, bypassing the intermediaries.
    • They supply goods to the local store for lower prices than the charged by the distributor.
    • Unable to match such prices and facing the peril of losing business, India’s distributors claim these are unfair practices and want manufacturers such as to stop supplying goods to the technology companies.

    Issue of disruption caused by the pricing power and predatory pricing

    • Creative destruction: New innovations disrupting an existing process and rendering incumbents futile is generally a healthy process of ‘creative destruction’, as the Austrian economist, Joseph Schumpeter, postulated.
    • But this disruption in India is driven not entirely by technology innovation but also through pricing power.
    • These technology companies bear the loss on the products they sell to the local store.
    • Further, they offer extensive credit terms and working capital to the local stores.
    • In other words, these technology companies rely not just on their mobile phone app innovation but also steep price discounting and cheaper financing to win customers.
    • Evidently, these companies use the money to not only build new technologies but also to undercut competitors and steal market share. 
    • This practice, called predatory pricing, is illegal in most countries including India.
    • These companies are supplied with funds from foreign venture capital firms, which in turn are largely funded by American pension funds and university endowments.
    • The flip side is that India’s millions of distributors and intermediaries have no access to such finance.
    • These small companies are cut off from the endless stream of free foreign money that gushes into new age ‘startups’ and established large corporates.

    Problems created by predatory pricing

    • While consumers may benefit from lower prices, the livelihoods of millions of distributors, traders and their families suffer.
    • To be sure, this is not just an India problem but a global one.
    •  Social media companies such as Facebook give away their products for free and e-commerce companies such as Amazon sell at lower prices, benefiting consumers enormously, but also causing immense social strife and disharmony.
    • But in India’s case, there is an added complexity of foreign capital flows.
    • Access to this capital is only available to a tiny proportion of Indian businesses but threatens the livelihoods of millions of Indian families, as in the case of distributors, causing massive income and social disparities.
    • This unequal access to capital creates leads to anti-competitive behaviour.

    Consider the question “What is predatory pricing? What are the issues created by predatory pricing?”

    Conclusion

    To be clear, this is not a Luddite argument against e-commerce or technological innovations. The issue is about illegal predatory pricing and abuse of pricing power by startups and big corporates through preferential access to easy foreign money.

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