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  • Import Ban on Drones

    The Government has banned the import of drones barring for R&D, defense, and security purposes.

    Why in news?

    • To promote Make-in-India drones.
    • Before this order, the import of drones was “restricted” and needed prior clearance of the Directorate General of Civil Aviation (DGCA) and an import license from DGFT.

    India’s sources of Imports

    • For its defense needs, India imports from Israel and the US.
    • Consumer drones such as those used for wedding photography come from China and drones for light shows also come from China apart from Russia.

    Why need drones?

    • Indian drone manufacturers and service providers arrange drones for a variety of use cases such as survey and mapping, security and surveillance, inspection, construction progress monitoring, and drone delivery.

    What does the order say?

    • The Directorate General of Foreign Trade (DGFT) issued an order prohibiting with immediate effect the import of drones in Completely-Built-Up (CBU), Semi-knocked-down (SKD), or Completely-Knocked-down (CKD) forms.
    • Import of drones by government entities, educational institutions recognized by the Central or State governments, government-recognized R&D entities, and drone manufacturers for R&D purposes as well as for defense and security purposes will be allowed.
    • For this, there has to be an import authorization obtained from the DGFT.
    • The import of drone components is “free”, implying that no permission is needed from the DGFT allowing local manufacturers to import parts like diodes, chips, motors, lithium-ion batteries, etc.

    Steps taken to promote indigenous drone manufacturing

    • In August last year, the Government brought out liberalized Drone Rules, 2021 which reduced the number of forms to be filled to seek authorization from 25 to five.
    • They also dispensed with the need for security clearance before any registration or issuance of the license.
    • R&D entities too have been provided blanket exemption from all kinds of permissions, and restrictions on foreign-owned companies registered in India have also been removed.
    • The Government has also announced a production-linked incentive scheme for drones and drone components with the aim to make India a “global drone hub by 2030”.
    • Foreign manufacturers will be encouraged to set up assembly lines in India.

    Why such a blanket ban?

    • Most drone manufacturers in India assemble imported components in India, and there is less manufacturing.
    • The import ban will ensure that an Indian manufacturer has control of the IP, design, and software which gives him or her a total understanding and control of the product.
    • Over a period of time, this can enable further indigenization.

    Possible repercussions of the ban

    • The ban is likely to hurt those who use drones for photography and videography for weddings and events.
    • These drones primarily come from China because they are cheaper and easy to use and India still has a lot of catching up to do in manufacturing them.

    Also read

    [Sansad TV] Perspective: Keeping Drones in Check

     

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  • Capital Gains Tax

    The capital gains tax structure in India is complicated, and it is time for a relook since the union budget has provisions for 30% tax on cryptocurrency.

    What is Capital Gains Tax?

    • Capital gains tax is levied on the profits made on investments.
    • It covers real estate, gold, stocks, mutual funds, and various other financial and non-financial assets.

    Types

    • It is divided into long-term capital gains tax (LTCG) and short-term capital gains tax (STCG) depending on how long you have held the investment in question.
    • Unlike income tax, the percentage of tax does not change on the basis of your overall tax slab.
    • The LTCG tax, excluding surcharge, on equity is the same for gains of ₹10 lakh or ₹10 crore.
    • There is also a separate set of deductions that apply to LTCG, which do not apply to ordinary income.

    Why is it so complicated?

    Capital gains tax is complicated for a few primary reasons.

    • First, the rate changes from asset to asset. LTCG tax on stocks and equity mutual funds is 10% but on debt mutual funds is 20% with indexation.
    • Second, holding period changes from asset to asset. The holding period for LTCG tax is two years in real estate, one year for stocks, and three years for debt mutual funds and gold.
    • Third, exemptions available against it come with their own complex conditions. For instance, buying a house after selling one can get you an exemption, but the new house must be bought in two years or built in three years of the sale.

    Is cryptocurrency taxed as capital gains?

    • The 2022 budget has proposed a 30% tax on cryptocurrency, which is higher than capital gains tax in many cases.
    • Besides, under capital gains tax, investors can adjust profits and losses on different investments against each other or against profits/losses in the future.
    • However, this cannot be done with cryptocurrency.

    What distortions does it create?

    • As capital gains tax is the same regardless of your overall income it can compound inequality.
    • For instance, a person with a salary of ₹40 lakh will pay 30% tax on it but just 10% LTCG tax on gains from stock trading.
    • A person with a salary of ₹5 lakh will pay a 5% tax on it but the same 10% LTCG tax on stock trading.
    • Second, the smaller one-year qualifying period for LTCG in stocks compared to three years in debt mutual funds may encourage short-term trading in equity.

    What can be done to fix these anomalies?

    • The government can bring about uniformity in rates and holding periods for various assets to ensure that the tax for one asset is not more attractive than another.
    • A uniform and long holding period to qualify for LTCG can also discourage short-term trading and speculative  behavior  in assets  such as  stocks.
    • The exemptions for LTCG such as reinvestment in another house property or capital gains bonds can also be made simpler, with fewer conditions.
    • Small investors can also be given relief by reducing rates of capital gains.

     

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  • What are Earth Observation Satellites (EOS)?

    After a disappointing 2021 which saw just one successful launch, ISRO is getting back to business with the EOS-04, an earth observation satellite.

    What are EOS?

    • An EOS or Earth remote sensing satellite is a satellite used or designed for Earth observation (EO) from orbit.
    • It includes spy satellites and similar ones intended for non-military uses such as environmental monitoring, meteorology, cartography, and others.
    • The most common type is Earth-imaging satellites that take satellite images, analogous to aerial photographs.
    • Some EOS may perform remote sensing without forming pictures, such as in GNSS radio occultation.

    What is EOS-04 all about?

    • The EOS-04 is fourth in a series of earth observation satellites that are being launched under a new generic name.
    • It is designed to provide high-quality images for applications such as agriculture, forestry, and plantations, flood mapping, soil moisture, and hydrology.
    • It will complement the data from Resourcesat, Cartosat and RISAT-2B series of satellites that are already in orbit.

    Why such different nomenclature?

    • Two years ago, ISRO had moved to a new naming system for its earth observation satellites which till then had been named thematically, according to the purpose they were meant for.
    • The Cartosat series of satellites were meant to provide data for land topography and mapping, while the Oceansat satellites were meant for observations overseas.
    • Some INSAT-series, Resourcesat series, GISAT, Scatsat, and a few other earth observation satellites were named differently for the specific jobs they were assigned to do, or the different instruments that they.
    • All these would now become part of the new EOS series of satellites.

    What other satellites are being launched?

    • Besides EOS-04, two other small satellites —INSPIREsat-1 and INS-2TD — will ride on the heaviest version of the PSLV rocket in the early hours from the Sriharikota launch range.
    • The other co-passenger, INS-2TD, is a technology demonstrator for the first India-Bhutan joint satellite that is scheduled to be launched next month.
    • The two countries had signed a space agreement last year, and its first outcome would be the launch of Bhutan-Sat, or INS-2B, on a PSLV rocket.

    How many satellites does India have in space?

    • India currently has 53 operational satellites, of which 21 are earth observation ones and another 21 are communication-based.
    • EOS-4 launch would be the 54th flight of the PSLV rocket, and the 23rd of its most powerful XL-version that has six strap-on boosters.

     

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  • Taking a byte out of cyber threats

    Context

    Cyber-attacks may be a relatively new phenomenon, but in a short timeframe have come to be assessed as dangerous as terrorism.

    A cyber attack is a type of attack that targets computer systems, infrastructures, networks, or personal computer devices using various methods at hand. India is ranked 10th (among 194 countries) in the Global Cybersecurity Index (GCI) 2020 ahead of China and
    Pakistan.

    The increasing threat of cyber attacks

    • Stuxnet Worm in 2010: Resulted in large-scale damage to Iran’s centrifuge capabilities.
    • Natanz nuclear facility (Iran) in 2021: Targeted the industrial control systems and destroyed the power supply to centrifuges used to create enriched uranium
    • Chinese cyberattack on the power system in Mumbai brought the entire city to a halt.
    • Ransomware as a Service (RaaS) — a business model for ransomware developers — is no mere idle threat.
    • Advanced Persistent Threats (APT) attacks are set to increase, with criminal networks working overtime and the Dark web allowing criminals to access even sensitive corporate networks.

    Tools of Cyberattacks

    • Malware: Malicious software to disrupt computers. It can include Viruses, Spyware, Trojans, etc.
    • Phishing: It is the method of trying to gather personal information using deceptive e-mails and websites.
    • Denial of Service attacks: A Denial-of-Service (DoS) attack is an attack meant to shut down a machine or network, making it inaccessible to its intended users.
    • Hacktivism:  Misusing a computer system or network for a socially or politically motivated reason. For example, hacktivists can block access to Government’s website, deface the government’s website or unblock the sites which have been blocked by the Government.
    • Social Engineering: Entice users to provide confidential information. For example, these days u must have come across some of the fake Facebook accounts which are opened in the name of your close friends. First, the cyber attackers send you the friend request in the name of your close friend. Once u accept it, they will ask to request you to transfer some money.

    Consequences of Cyberattacks

    • Impact on data: Confidentiality, Integrity and Availability of information.
    • Impact on Critical Information Infrastructure: Presently, most of the sectors are critically dependent on the use of ICT to carry on their operations. These sectors are Banking and Finance, Power systems, Transport sector, Telecommunication, etc. Cyber attacks on these critical information infrastructures can bring the entire country to a grinding halt. For example, the recent Chinese cyber attack on the power system in Mumbai brought the entire city to a halt.
    • Creates Distrust: A cyber-attack on a specific component exposes vulnerabilities in the entire system which may negatively impact relations with allies and adversaries and questions our nuclear reliability.
    • Financial loss: Estimates of the cost to the world in 2021 from cyberattacks are still being computed, but if the cost of cybercrimes in 2020 (believed to be more than $1 trillion) is any guide, it is likely to range between $3trillion-$4 trillion.
    • Threat to National Security and peace and stability in a country.

    Steps taken by India to improve Cyber Security

    • Section 66F of ITA: Specific provision dealing with the issue of cyber terrorism that covers denial of access, unauthorized access, introduction of computer contaminant leading to harm to persons, property, critical infrastructure, disruption of supplies, ‘sensitive data’ thefts. Provides for punishment which may extend to life imprisonment.
    • National Cyber Security Policy 2013: Policy document drafted by the Department of Electronics and Information Technology. Established National Critical Information Infrastructure Protection Centre (NCIIPC) to improve the protection and resilience of the country’s critical infrastructure information; Create a workforce of 5 lakh professionals skilled in cybersecurity in the next 5 years.
    • National Critical Information Infrastructure Protection Centre (NCIIPC): It has been setup to enhance the protection and resilience of Nation’s Critical information infrastructure. It functions under the National Technical Research Organization (NTRO).
    • CERT-IN: Organization under the Ministry of Electronics and Information Technology with an objective of securing Indian cyberspace. The purpose of CERT-In is to respond to computer security incidents, report on vulnerabilities, and promote effective IT security practices throughout the country. According to the provisions of the Information Technology Amendment Act 2008, CERT-In is responsible for overseeing the administration of the Act.
    • Cyber Surakshit Bharat Initiative: It was launched in 2018 with an aim to spread awareness about cybercrime and build capacity for safety measures for Chief Information Security Officers (CISOs) and frontline IT staff across all government departments.
    • Cyber Crisis Management Plan (CCMP): It aims at countering cyber threats and cyber-terrorism.
    • National Cyber Coordination Centre (NCCC): It seeks to generate necessary situational awareness of existing and potential cyber security threats and enable timely information sharing for proactive, preventive and protective actions by individual entities.
    • National Cyber Security Coordinator (NCSC) under National Security Council Secretariat (NSCS) coordinates with different agencies at the national level for cyber security matters.
    • Cyber Swachhta Kendra: This platform was introduced for internet users to clean their computers and devices by wiping out viruses and malware.
    • Information Security Education and Awareness Project (ISEA): Training of personnel to raise awareness and to provide research, education, and training in the field of Information Security.

    Challenges

    • Structural:
      a)Absence of any geographical constraints.
      b)Lack of uniformity in devices used for internet access.
    • Administrative:
      a) Lack of national-level architecture for cybersecurity
      b) Security audit does not occur periodically, nor does it adhere to the international standards.
      c) The appointment of the National Cyber Security Coordinator in 2014 has not been supplemented by creating liaison officers in states.
    • Procedural
      a) Lack of awareness in local police of various provisions of IT Act, 2000, and also of IPSC related to cybercrime.
      b) Lack of data protection regime.
    • Human Resource Related
      a) Inadequate awareness among people about the security of devices and online transactions.

    Way forward

    • International Convention: Presently, Budapest Convention is the first international treaty that promotes greater cooperation between countries in fighting cybercrimes. India should accede to Budapest Convention at the earliest. It would reduce India’s capacity to combat cybercrimes at a global level.
    • PPP Framework for Cyber Security: Presently, most of the cyber security operations are carried out by the Government agencies such as CERT-In. Given the fast-changing nature and intensity of cyber threats, there is a need to leverage private sector expertise in combating cyber crimes through the PPP framework.
    • Capacity building and skill development- Recently, according to a report published by NASSCOM, India needs around 10 lakh, cyber security experts. However, presently there are only around 64,000 professionals. One of the main reasons for the lower number of cyber security professionals is due to lack of an adequate number of specialized courses in cyber security, poor training Infrastructure, lack of availability of trainers, etc. Hence, accordingly, the Government has to recognize the lacunae and increase the number of Skilled professionals.
    • Promoting Startups in the field of Cybersecurity.
    • Investment in R&D to improve Cyber Security- Big data, AI
    • Learning from best practices such as the Tallinn manual of the US.

    Conclusion

    Failure to build resilience — at both the ‘technical and human level — will mean that the cycle of cyber attacks and the distrust they give rise to will continue to threaten the foundations of a democratic society. Preventing erosion of trust is critical in this day and age.

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  • In news: Exercise Milan 2022

    Exercise Milan as well as the Fleet Review by President is scheduled to be held this month for which 46 countries have been invited.

    Exercise Milan

    • Milan began in 1995 and is held biennially and brings together Navies of all the countries in the region.
    • It has so far been held at Port Blair in Andaman and Nicobar but is now being shifted to Visakhapatnam which offers more infrastructure as well as sea space for the exercise.
    • It has several themes such as anti-submarine warfare among others along with deliberations, including by subject matter experts.

    What is Fleet Review?

    • A Fleet Review is usually conducted once during the tenure of the President.
    • The first PFR was held in 1953 for the first President Dr. Rajendra Prasad.
    • Since Independence 11 PFRs have been conducted by the Navy, of which two have been International Fleet Reviews in 2011 and 2016.
    • In terms of significance, the Navy’s Presidential review is second only to the Republic Day Parade.

     

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  • Australia lists Koalas as Endangered Species

    Once found in abundance, Australia’s much-loved koalas have now been officially classified as ‘endangered’ after widespread bushfires, drought and land clearing destroyed much of their eucalyptus-rich habitat.

    Koalas

    IUCN Status: Vulnerable

    • According to fossil records, Koala species have inhabited parts of Australia for at least 25 million years, a WWF report states.
    • But today, only one species remains — the Phascolarctos cinereus.
    • They are found in the wild in the southeast and eastern sides of Australia — in coastal Queensland, New South Wales, South Australia and Victoria.

    Threats to Koalas

    • Since Europeans first settled in the region, the Koala population has faced widespread habitat loss, particularly due to agriculture and the construction of urban settlements.
    • They survive on a strict diet of up to a kilogram of eucalyptus leaves every day.
    • Due to the low nutritional value of these leaves, koalas tend to sleep for extended periods, often up to 18 hours a day, to conserve energy.

     

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  • How to expand India’s forest cover

    Context

    The recently released India State of Forest Report (ISFR) 2021 shows the total forest and tree cover in India is 80.9 million hectares, which is 24.62 per cent of the geographical area of the country.

    Definition of forest in India

    • India’s definition of forest cover is in sync with that of the Kyoto Protocol.
    • A “forest” has a minimum area of 0.05 to 1 ha (India has 1.0 ha minimum), with the tree crown cover percentage being more than 10 to 30 per cent (India has 10 per cent) and with trees having the potential to reach a minimum height of 2 to 5 m at maturity in situ (in India, it’s 2 m).
    • The definition thus arrived at by India assesses forests as all lands, more than 1 hectare in area, with a tree canopy density of more than 10 per cent irrespective of ownership and legal status.
    • Such lands may not necessarily be a recorded forest area.
    • It also includes orchards, bamboo, palm etc.

    Assessment of forest cover

    • The assessment of forest cover is done based on the interpretation of satellite data, which basically identifies umbrella-shaped canopies from the sky.
    • The forest cover is also estimated from field inventory data, which corroborates the figures of forest cover obtained from the satellite-based interpretation.
    • The environment ministry is even considering providing forest cover maps through the Web Map Service to make the analyses of researchers and agencies easier.
    • Importance of plantations: The importance of plantations needs to be understood.
    • For example, cashew plantations, which mainly grow along the coast, serve as the first line of defence against cyclones, which are hitting with greater frequency and ferocity.
    • Mixed plantations, especially of native species, meet all the ecological functions of natural forests.
    • A lot of wildlife inhabits these plantations.
    • While we do not advocate equating natural forests with plantations, let us recognise their ecological functions.

    Afforestation efforts

    • India is on track to achieve its national commitment to land degradation neutrality.
    • India is working towards restoring 26 million hectares of degraded land by 2030.
    • Our afforestation efforts are also aligned with our wildlife conservation efforts.
    • Project Tiger was launched in 1973.
    • From nine tiger reserves initially, we now have 51 tiger reserves.
    • These are the cornerstones of wildlife conservation and preserve natural ecosystems which support ecological processes responsible for providing various goods and services that are vital for human well-being.

    Way forward

    • Notwithstanding these gains, the goal of 33 per cent area under forest and tree cover as per the National Forest Policy, 1988, remains to be achieved.
    • Focus on TOF: The balance of 9 per cent can be achieved through taking up plantation/afforestation outside the forests and restocking/plantation in degraded and scrub forests.
    • According to the ISFR 2021, the Trees outside forest (TOF) extent comprises 36.18 per cent of the total forest and tree cover of the country.
    • Given this fact, the draft NFP 2021 has focused on the promotion of TOF by including it among its objectives.
    • NFP 2021: Given this fact, the draft NFP 2021 has focused on the promotion of TOF by including it among its objectives.
    • The provisions in draft NFP 2021 include substantially increasing the tree cover outside forests by incentivising and promoting agro-forestry and farm forestry; managing and expanding green spaces in urban and peri-urban areas to enhance citizens’ well-being; plantation of trees outside forests in partnership with local communities, land-owning agencies, and private enterprises; creation, sustainable management and promotion of urban forests; afforestation/reforestation in public-private partnership (PPP) mode; promotion of urban forests.

    Conclusion

    It is with this holistic approach that India is moving towards restoring the ecological balance of the planet and ensuring sustainable development.

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  • An MSP scheme to transform Indian agriculture

    Context

    The MSP must look especially into the requirements of farmers and the landless.

    Background of price stabilisation for food grain

    • The Essential Commodities Act in 1955 sought to counter price rise due to speculative private trading and then MSP in the 1960s.
    • A buffer stock policy was developed over time to involve different kinds of mechanisms such as:
      a) setting cost-based minimum procurement price, paying the difference between procurement price and market price.
      b) storing the procured surplus for sale through the Public Distribution System (PDS) at issue price, and market intervention to stabilise price when deemed necessary.
    • This task required interlinking procurement, storage and distribution with more centralised investment and control of each of these tasks.

    3 Purposes MSP could serve

    MSP could serve, in principle, three purposes:

    • Price stabilisation in the food grains market.
    • Income support to farmers, and
    • As a mechanism for coping with the indebtedness of farmers.

    Advantages of wide coverage

    • Fulfilling three objectives: In this way, the objectives of income support to farmers, price stabilization, food security, and inducing more climate-friendly cropping patterns can be combined to an extent.
    • Solution to debt problem: A real breakthrough in the recurring problem of agricultural debt can be made by the linking of selling of grains under MSP to the provision of bank credit particularly for small farmers.
    • The farmer can get a certificate selling grains at MSP which would be credit points proportional to the amount sold; this will entitle them to a bank loan as their right, and calibrate the fluctuations between good and bad harvest years by storing the certificates for later use.

    Issues with MSP in current form

    • Low accessibility and awareness of the MSP regime: A survey highlighted that 81% of the cultivators were aware of MSP fixed by the Government for different crops and out of them only 10% knew about MSP before the sowing season.
    • Arrears in payments: More than 50% of the farmers receive their payments of MSP after one week.
    • Poor marketing arrangements: Almost 67% of the farmers sell their produce at MSP rate through their own arrangement and 21% through brokers.
    • Partial coverage resulting in skewed cropping pattern: This partial MSP coverage skewed the cropping pattern against several coarse grains and millets particularly in rain-fed areas.

    Way forward

    • Flexible arrangement of MSP: Each crop within a band of maximum and a minimum price depending on harvest conditions i.e. higher price in a bad and lower price in a good harvest year in general will have its price set in the band.
    • High MSP for coarse grains: The price of some selected coarse grains can be fixed at the upper end of its band to encourage their production in rain-fed areas.

    Conclusion

    Greater coverage of all 23 crops under MSP is a way of improving both food security and income support to the poorest farmers in rain-fed regions.

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  • What is a Ratings Agency and why do they matter?

    Finance Secretary has accused rating agencies of “double standards” when assessing emerging markets and developing economies.

    What is the news?

    • Fitch, a rating agency, has termed India as the most indebted emerging market.
    • It claimed that the latest budget did not provide clarity on fiscal consolidation plans.

    What is a Rating Agency?

    • Rating agencies assess the creditworthiness or potential of an equity, debt or country.
    • Their reports are read by investors to make an informed decision on whether or not to invest in a particular country or companies in that geography.
    • They assess if a country, equity or debt is financially stable and whether it at a low/high default risk.
    • In simpler terms, these reports help investors gauge if they would get a return on their investment.

    What do they do?

    • The agencies periodically re-evaluate previously assigned ratings after new developments geopolitical events or a significant economic announcement by the concerned entity.
    • Their reports are sold and published in financial and daily newspapers.

    What grading pattern do they follow?

    • The three prominent ratings agencies, viz., Standard & Poor’s, Moody’s and Fitch subscribe to largely similar grading patterns.
    • Standard & Poor’s accord their highest grade, that is, AAA, to countries, equity or debt with the exceedingly high capacity to meet their financial commitments.
    • Its grading slab includes letters A, B and C with an addition a single or double letter denoting a higher grade.
    • Moody’s separates ratings into short and long-term definitions. Its longer-term grading ranges from Aaa to C, with Aaa being the highest.
    • Fitch, too, rates from AAA to D, with D being the lowest. It follows the same succession scheme as Moody’s and Fitch.

    Criticism of rating agencies

    • Popular ratings agencies publicly reveal their methodology, which is based on macroeconomic data publicly made available by a country, to lend credibility to their inferences.
    • However, credit rating agencies were subjected to severe criticism for allegedly spurring the financial crisis in the United States, which began in 2017.
    • The agencies underestimated the credit risk associated with structured credit products and failed to adjust their ratings quickly enough to deteriorating market conditions.
    • They were charged for methodological errors and conflict of interest on multiple counts.

    Do countries pay attention to ratings agencies?

    • Lowered rating of a country can potentially cause panic selling or offloading of investment by a foreign investor.
    • In 2013, the European Union opted for regulating the agencies.
    • Over reliance on credit ratings may reduce incentives for investor to develop their own capacity for credit risk assessment.
    • Ratings Agencies in the EU are now permitted to issue ratings for a country only thrice a year, and after close of trade in the entire Union.

     

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  • Species in news: White-Cheeked Macaque

    In an important discovery, scientists have recorded presence of White-Cheeked Macaque (Macaca leucogenys) from central Arunachal Pradesh.

    White-Cheeked Macaque

    • White- Cheeked Macaques are distinct from other macaques found in the region by displaying white cheeks, long and thick hairs on the neck area, and a longer tail.
    • The species was discovered in 2015 by a group of Chinese scientists from the Modog region in southeastern Tibet.
    • This discovery was considered a significant breakthrough as far as primates are concerned.

    Existence in India

    • From India, the species has not been sighted or reported after a single incidence of photographic capture from Anjaw district, Arunachal Pradesh in 2015.
    • The number of these mammals reported from India stands at 434.
    • The significance of the discovery is that it marks a new addition to mammals of India.

    Protection status

    • It has NOT been yet included in the Wildlife (Protection) Act, 1972 of India.
    • The potential threat to all species of macaques in the landscape is due to hunting by locals for consumption and habitat degradation due to urbanization and infrastructure development.

     

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