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  • Back in news: Pegasus Spyware

    Telephone numbers of some noted Indian journalists were successfully snooped upon by an unidentified agency using Pegasus software.

    Pegasus Spyware

    • All spyware do what the name suggests — they spy on people through their phones.
    • Pegasus works by sending an exploit link, and if the target user clicks on the link, the malware or the code that allows the surveillance is installed on the user’s phone.
    • A presumably newer version of the malware does not even require a target user to click a link.
    • Once Pegasus is installed, the attacker has complete access to the target user’s phone.
    • The first reports on Pegasus’s spyware operations emerged in 2016, when Ahmed Mansoor, a human rights activist in the UAE, was targeted with an SMS link on his iPhone 6.

    What is the new threat?

    • Pegasus has evolved from its earlier spear-phishing methods using text links or messages to ‘zero-click’ attacks which do not require any action from the phone’s user.
    • This had made what was without a doubt the most powerful spyware out there, more potent and almost impossible to detect or stop.

    How do zero-click attacks work?

    • A zero-click attack helps spyware like Pegasus gain control over a device without human interaction or human error.
    • Zero-click attacks are hard to detect given their nature and hence even harder to prevent.
    • Detection becomes even harder in encrypted environments where there is no visibility on the data packets being sent or received.
    • Most of these attacks exploit software that receive data even before it can determine whether what is coming in is trustworthy or not, like an email client.

    Answer this PYQ from CSP 2018:

    Q.The terms ‘WannaCry, Petya, Eternal Blue’ sometimes mentioned news recently are related to

    (a) Exoplanets

    (b) Crypto currency

    (c) Cyber attacks

    (d) Mini satellites

  • A panoramic look at our three decades of economic reforms

    Context

    This month marks the 30th anniversary of the economic reforms launched by our then finance minister Manmohan Singh in his budget speech of 24 July 1991.

    After and before reform comparison

    •  The average annual growth over the past three decades has been 5.8% per annum.
    • It is slightly higher than 5.6% in the decade before 1991.
    • Clearly, our growth acceleration was not sustained, despite a pick-up in the pace of reforms.
    • However, on a long-term comparison, the economy did better than its 4.1% average of the first 40 years of independence.
    • But if we compare our first four decades with the pre-1947 phase, and on that score, we saw a massive growth improvement.

    Impact of reforms

    • Their biggest contribution was a change in India’s economic paradigm.
    • Every government after 1991 has embraced the philosophy of liberalization and privatization that those reforms initiated and has tried to outdo the previous regimes on that.
    • Still, 30 years on, the situation for most of our population remains unchanged.
    • The reforms created a class of rich entrepreneurs and a small but vocal middle class in urban areas.
    • But it also contributed to widening inequality, which has worsened after 1991 and is now at its worst level since 1947 on almost all dimensions.
    • The widening of disparities also occurred between urban and rural areas, between laggard states and developed ones.
    • Disparities have increased even further in terms of access to health and education and several other human- development indicators.
    • On most of these, be it education, health, women’s workforce participation and hunger, we remain at the bottom of any global chart of comparison.
    • The logic of reforms meant that expenditure on welfare and investment in human development were not a policy priority.
    • The situation is no different on employment, with data suggesting an absolute decline on this count and a historic rise in unemployment rates.
    • An official consumption survey that was not accepted about two years ago by the Centre had shown, a decline in real consumption and a rise in poverty.
    • Rising informalization and contractualization of the country’s workforce has been a factor in the worsening of most workers’ working conditions.

    Why reforms failed to deliver

    • In many ways, they are no different from our pre-reform economic policies, all of which were supply- side responses.
    • The reforms attempted to use the private sector for the task through a liberalized regulatory framework and business-friendly fiscal and monetary policies.
    • But an absence of concern for distributional inequities and aggregate-demand management has continued as the defining feature of our economic policymaking.
    • The consequences of supply-side- biased reforms will show up in a further worsening of income distribution and eventually slow growth down.

    Conclusion

    Things have taken a turn for the worse with the pandemic. The problem this time is not like the 1991 crisis. What is needed at this point is a fundamental shift in the way economic policy is designed, keeping people and workers at the centre of the exercise.

  • Can India invoke state sovereignty in Cairn Energy case?

    Context

    Last year, an arbitration tribunal indicted India for breaching its obligations by imposing taxes retrospectively on Cairn. As a result, Cairn Energy has been attempting to seize Indian assets in several jurisdictions to recover $1.7 billion due from India.

    How asset seizure order affects India?

    • This episode projects India as an unfriendly country for investors at a time when it wishes to project itself as a prime destination for foreign investment.
    • This episode puts India in the league of countries like Pakistan, Congo, Venezuela, Russia and Argentina, who have been part of attachment proceedings overseas due to their failure to comply with international arbitral awards.
    • Fighting cases will consume an enormous amount of time, money, and resources, in addition to attracting bad press internationally.

    Understanding the doctrine of state immunity

    • State immunity is a well-recognised doctrine in international law.
    • It safeguards a state and its property against the jurisdiction of another country’s domestic courts.
    • Despite the universal acceptance of this doctrine, there is no international legal instrument in force administering its implementation.
    • Attempts are underway to create binding international law on the application of the rules of state immunity such as the United Nations Convention on Jurisdictional Immunities of States and Their Property (UNSCI).
    • However, this convention is yet to be ratified by 30 countries — the minimum number required to bring it in force, as per Article 30(1) of UNSCI.
    • India has signed the convention, but not ratified it.
    • The doctrine of state immunity has progressed from absolute immunity to restrictive immunity in which immunity is only for the sovereign functions of the state.

    Can India invoke state immunity?

    • Most prominent jurisdictions follow the concept of restrictive immunity.
    • State immunity can be invoked to resist the seizure of sovereign assets, but not commercial properties. 
    • In the context of the execution of the investment treaty arbitration awards, properties serving commercial functions are available for seizure.
    • In the case of India, the most popular commercial property that foreign investors would target for attachment are the global assets of India’s public sector undertakings such as Air India.

    Way forward

    • If India wishes to continue the case, it needs to carefully study the laws on state immunity in different jurisdictions where attachment proceedings are likely to come up.
    • A better option would be to admit that amending the tax law retrospectively was a mistake and comply with the international ruling.

    Conclusion

    At the time when India seeks to project itself as an attractive investment destination, such cases could be a setback. India needs to avoid such disputes in the future.

  • [pib] Kisan Sarathi Platform

    In order to facilitate farmers to get ‘right information at right time’ in their desired language, a digital platform namely ‘Kisan Sarathi’ was launched by the Ministry of Agriculture and Farmers Welfare.

    Kisan Sarathi

    • This digital platform empowers farmers with the technological interventions to reach farmers in remote areas.
    • Through this platform, the farmers can interact and avail personalized advisories on agriculture and allied areas directly from the respective scientists of Krishi Vigyan Kendra (KVKs).
    • Using this platform, farmers can get information about crop and crop production, among other things that will help them in improving the quantity of their produce.
    • Farmers will be able to get information about good crop practices, the right amount of products and many other basic things.

  • What are Doppler Radars?

    The India Meteorological Department’s (IMD) Doppler Radar in Mumbai, which surveys weather patterns and forecasts, stopped working after heavy rainfalls.

    How does a Doppler radar work?

    • In radars, a beam of energy– called radio waves– is emitted from an antenna.
    • When this beam strikes an object in the atmosphere, the energy scatters in all directions, with some reflecting directly back to the radar.
    • The larger the object deflecting the beam, the greater is the amount of energy that the radar receives in return.
    • Observing the time required for the beam to be transmitted and returned to the radar allows weather forecasting departments to “see” raindrops in the atmosphere, and measure their distance from the radar.

    What makes a Doppler radar special?

    • It can provide information on both the position of targets as well as their movement.
    • It does this by tracking the ‘phase’ of transmitted radio wave pulses; phase meaning the shape, position, and form of those pulses.
    • As computers measure the shift in phase between the original pulse and the received echo, the movement of raindrops can be calculated.
    • Thus it is possible to tell whether the precipitation is moving toward or away from the radar.

    Types of Doppler radar

    • In India, Doppler radars of varying frequencies — S-band, C-band and X-band — are commonly used.
    • They help track the movement of weather systems and cloud bands and gauge rainfall over its coverage area of about 500 km.
    • The radars guide meteorologists, particularly in times of extreme weather events like cyclones and associated heavy rainfall.
    • An X-band radar is used to detect thunderstorms and lightning whereas C-band guides in cyclone tracking.

    Why are they called ‘Doppler’ radars?

    • The phase shift in these radars works on the same lines as the “Doppler effect” observed in sound waves.
    • It tells that the sound pitch of an object approaching the observer is higher due to the compression of sound waves (a change in their phase).
    • As this object moves away from the observer, the sound waves stretch, resulting in lower frequency.
    • This effect explains why an approaching train’s whistle sounds louder than the whistle when the train moves away.
    • The discovery of the phenomenon is attributed to Christian Doppler, a 19th-century Austrian physicist.

  • The proposed e-commerce rules shield vested interests

    Context

    The proposed Consumer Protection (E-Commerce) Rules, 2020, have been drafted ostensibly in the name of the consumer.  The rules are driven more by the desire to shield the traditional brick-and-mortar stores, and handicap e-commerce firms, especially the foreign ones.

    Issues with the provisions of draft Consumer Protection (E-Commerce) Rules, 2020

    1) Fall-back liability clause is unfair for those operating through marketplace model

    • Under this provision, e-commerce entities will be liable in case suppliers on the platform fail to deliver the goods to consumers, causing them a loss.
    • E-commerce firms in India operate through either the inventory model or the marketplace model.
    • As FDI is permitted only in the marketplace model.
    • Under the marketplace model, e-commerce platforms don’t hold inventory, but simply connect buyers and sellers.
    • Foreign players typically operate through this model. 
    • Considering that these platforms exercise little or no control over the inventory under this model, how can they be held liable for the sellers’ actions.

    2) Identifying goods based on country of origin and providing fair opportunity to domestic sellers

    • The draft rules also require e-commerce platforms to identify goods based on their country of origin.
    • And when goods are being viewed for purchase by consumers, the rules also mandate platforms to provide suggestions to ensure “fair opportunity” for domestic sellers.
    • This raises the question as to why the Make in India campaign is being pushed through the Consumer Protection Act.
    • Surely, if domestic manufacturers are competitive, consumers will automatically gravitate towards them.
    • Interests of consumers, not domestic manufacturers, should be at the core of the consumer protection framework.

    3) Overlapping/competing jurisdictions

    • Data protection: The draft rules have sought to safeguard consumer data by restraining e-commerce firms from sharing consumer data without consent.
    • But the data protection should be governed by the provisions under the Personal Data Protection Bill and not the Consumer Protection Act.
    • Considering the graded approach that is likely to be adopted under the Data Protection Bill, an e-commerce user’s data could be classified as per its vulnerability and be left under the jurisdiction of the data protection authority.
    • Dominant position: The rules also state that e-commerce entities are prohibited from abusing their dominant positions in the market. 
    • The “abuse of dominant position” has been given the same meaning as that prescribed under Section 4 of the Competition Act, 2002.
    • This will open the scope for new consumer protection authority to enter into issues of abuse of dominant position — the domain of the Competition Commission of India.

    Consider the question “Over-regulation tends to curb competition and create monopolies instead of ensuring its holistic growth dovetailed with fair competition. In light of this, examine the issues with the draft Consumer Protection (E-Commerce) Rules, 2020?”

    Conclusion

    The lines of demarcation that have been drawn up in the retail landscape — single brand vs multi-brand, online vs offline, domestic vs foreign — serve only to protect powerful vested interests, not benefit the consumer as is often proclaimed.

  • Amnesty Scheme for violators of Environment Norms

    The union environment ministry has put together an amnesty scheme for infrastructure and industrial projects that have violated environmental clearance (EC) norms for Environment Impact Assessment.

    What is the Scheme?

    The new amnesty scheme empowers regulatory institutions at both central and state levels:

    (1) To identify and report cases of violation

    • It refers to identify, examine and appraise violation projects, refraining from causing further environmental damage and also compensating for causing damage to the environment.

    (2) To take action against violators in terms of closure or demolition of a project

    • It defines three different actions to be taken for the violation projects depending upon their EC status.
    • In case the project has not obtained EC, it will be ordered to close its operations.
    • If the project has undergone expansion without obtaining EC for the expanded portion, it will be ordered to revert the activity/production to the limit granted in the existing EC.

    (3) To levy penalty on them that is akin to the scale of the project

    • It entitles the regulatory authorities to levy penalties on the proponent, in addition to the bank guarantee.

    Issues with the scheme

    • There is also no established procedure to ensure that the complaints made against the violator are not dismissed without hearing.
    • This ambiguity in the memorandum leaves scope for a less transparent redressal mechanism.
    • The penalties suggested could be termed as legitimating non-compliance.

    Criticisms

    • Environmental experts argue that such a move to regularise projects, irrespective of size, scale or impact, is purely a political move.
    • They regarded this move as weakening the EIA process.
    • This will be the largest regularization scheme for projects that have operated illegally in India and added to our total environmental and social burdens.
    • Thousands of projects operate in different states without any environmental approval.

    Way forward

    • Looking at the plethora of violation cases it is imperative to develop such a mechanism.
    • However, we should not compromise the existing environmental regulations and adopt a ‘zero tolerance for violation’.

    Back2Basics: Environment Impact Assessment

    • Environment impact assessment is a process under the Environment (Protection) Act, 1986, which prevents industrial and infrastructural projects from being approved without proper oversight.
    • This process ensures that every project should go through the EIA process for obtaining prior environmental clearance.
    • EIA covers projects such as mining of coal or other minerals, infrastructure development, thermal, nuclear and hydropower projects, real estate and other industrial projects.
    • The projects are assessed based on their potential impact on the environment. Based on the assessments, they are granted or denied environmental clearance by a panel of experts.

    Loopholes in draft EIA 2020

    • The EIA new draft 2020 allows post-facto clearance.
    • This means that even if a project has come up without environmental safeguards or without getting environment clearances, it could carry out operation under the provision of the new draft EIA 2020.
    • This is disastrous because we already have several projects that are running without EIA clearances.

  • Growth matters but income levels matter more

    Context

    But the quest for sustained higher growth has been elusive for India for the last five years. The pandemic seems to make it more elusive.

    The magnitude of contraction in the economy

    • There is nothing encouraging in the provisional estimates of annual national income (2020-21), released by the National Statistical Office.
    • The agriculture sector continued its impressive growth performance, reiterating that it still remains as the vital sector of the economy, especially at times of crisis.
    • The manufacturing sector continued its subdued growth performance, failing to emerge as the growth driver.
    •  The contraction in trade (-18.2%), construction (-8.6%), mining (-8.5%) and manufacturing (-7.2%) is a matter of concern as these sectors account for the bulk of low-skilled jobs.
    • Gross Domestic Product (GDP) at Constant (2011-12) Prices in Q4 of 2020-21 is showing a growth of 1.6%.
    • The magnitude of contraction in the economy and the policy responses towards it raises an important issue of growth prospects for the next year.

    Contextualising the current growth rates in terms of following three macroeconomic data would provide us a better perspective on growth recovery.

    1) Rising unemployment

    • The unemployment data released by the Centre for Monitoring Indian Economy (CMIE) says, that in May 2021, India’s labour participation rate at 40 per cent was the same as it was in April 2021.
    • But, the unemployment rate shot up to 11.9 per cent from 8 per cent in April.
    • A stable labour participation rate combined with a higher unemployment rate implies a loss of jobs and a fall in the employment rate.
    • The employment rate fell to 35.3 per cent in May 2021 from 36.8 per cent in April 2021.
    • According to CMIE, over 15 million jobs were lost in May 2021.
    • May 2021 was therefore a particularly stressful month on the jobs front.

    Takeaway

    • Employment and aggregate demand in an economy are related via the channel of disposable incomes of workers.
    • Aggregate demand and output growth have a positive correlation.
    • Hence, the prospects of growth revival in the next year look bleak at the moment and from employment perspective.

    2) Low business confidence

    • It is the second important data point that needs to examined.
    • Business confidence index (BCI), from the survey by the industry body FICCI, plummeted to 51.5 from 74.2 in the previous round.
    • The survey also highlights the weak demand conditions in the economy.
    • Compounding this is the uncertainty arising out of the imposition of localised curbs due to the second wave of infections and a muddled vaccine policy in the country.

    3) Low PMI

    • Manufacturing Purchasing Managers’ Index (PMI) has slipped to a 10-month low indicating that the manufacturing sector is showing signs of strain with growth projections being revised lower.
    • Both BCI and PMI slipping down indicates that the overall optimism towards 2021-22 is low, which could impact investments and cause further job losses.

    Why focusing on supply-side will not work

    • Since last year, the policy responses have been to rely on credit easing, focusing more on supply side measures.
    • This policy stance is unlikely to prop up growth for three reasons.
    • First, the bulk of the policy measures, including the most recent, are supply side measures and not on the demand side.
    • Second, large parts of all the stimulus packages announced till now would work only in the medium term.
    • Third, the use of credit backstops as the main plank of policy has limits compared to any direct measure on the demand side as this could result in poor growth performance if private investments do not pick up.
    • Further, the credit easing approach would take a longer time to multiply incomes as lending involves a lender’s discretion and borrower’s obligation.

    Way forward

    • Growth recovery depends on demand recovery.
    • The combined increase in exports of April and May 2021 is over 12% indicating that global demand rebound is much faster than the domestic demand. 
    • What needs to be addressed immediately is the crisis of low domestic demand.
    • A tight-fisted fiscal policy approach comes at a time when conventional fiscal stimulus packages might not be enough as supply side issues arising out of episodic lockdowns need to be addressed simultaneously.
    • Focusing on short-term magnified growth rates resting on low bases might be erroneous, as income levels matter more than growth rates at this juncture.

    Conclusion

    India needs a sharp revival of demand for which higher per capita incomes are necessary.

  • SEBI needs to adopt dual approval system for independent directors

    Context

    While the regulators have taken giant strides to enhance board independence in India, one significant conundrum persists about appoint and removal process of the independent directors.

    How appointment and removal process affects the independence of independent directors?

    • Independent directors are appointed just like other directors through shareholder voting by a simple majority.
    • This confers a significant power in the hands of significant shareholders to handpick the independents.
    • In case of family-owned companies, it is not uncommon to appoint “friendly” independent directors.
    • As for public sector undertakings, there is a demonstrable affiliation between independent directors and the ruling political parties.

    Dual Approval System: Way forward

    • The above trends suggest that unless independent directors owe their allegiance to the shareholder body as a whole, independence is likely to remain largely in form and not function.
    • In its consultation paper, SEBI proposed a “dual approval” system.
    • Under this system, the appointment of an independent director required the satisfaction of two conditions:
    • First, the approval by a majority of all shareholders.
    • Second, the approval of a “majority of the minority”, namely the approval of shareholders other than the promoters.
    • SEBI recommended the same “dual approval” system for the removal of independent directors as well.
    • SEBI drew inspiration from Israel and the premium-listed segment of the United Kingdom, which confers greater power to minority shareholders in installing or dethroning independent directors.
    • SEBI has not yet made any mention of implementing the dual approval system.

    Issues with Dual Approval System

    • The first issue is that it militates against the majority rule principle that is intrinsic in a corporate democracy.
    • While understandable, that is hardly an immutable rule as corporate law does make exceptions in cases involving oppression of minority shareholders.
    • The second concern is that placing too much power in the hands of minority shareholders would be counterproductive, as it could result in a tyranny of the minority.
    • However, the dual approval system instead represents the best of both worlds. It does not negate the promoter’s involvement in the process of appointing or removing independent directors.
    •  Only consensus candidates would end up becoming independent directors.
    • The third issue is one of shareholder apathy: Will minority shareholders be motivated to exercise an informed and meaningful choice?
    • Minority shareholders tend to be passive when they are unable to influence the outcome of shareholding voting.
    • However, where they do have a significant say, like in the “majority of the minority” process, they are likely to be more active in exercising their franchise.

    Consider the question “How far has the provision of appointing independent directors to safeguard the interest of minority shareholders succeeded in its objectives? Suggest the changes to improve the challenges faced by the independent directors.”

    Conclusion

    In all, the appointment and removal system continues to undermine the independence and efficacy of corporate boards. The SEBI needs to implement the dual approval system at the earliest.

  • Re-wilding of wild animals and the challenges involved

    The recent attempt of Periyar Tiger Reserve (PTR) to reintroduce into the wild tiger cub named Mangala after rearing it in ‘captivity’ has once again brought the controversial concept of ‘re-wilding’ of abandoned or injured animals under the lens.

    What is the intervention known as ‘re-wilding’?

    • As per the Standard Operating Procedures/Guidelines laid down by the National Tiger Conservation Authority (NTCA) under the Wildlife Protection Act, 1972, there are three ways to deal with orphaned or abandoned tiger cubs.
    1. The first is to make an effort to reunite the abandoned cubs with their mother.
    2. Second, if a reunion of the cub with its mother is not possible, then shift the cub to a suitable zoo.
    3. Third, reintroduction of the cub into the wild after a certain time when it appears that the cub is capable of surviving in the wild independently.
    • This is what is known as ‘re-wilding.

    NTCA guidelines

    • NTCA stresses that the tiger cub should be reared in an in situ enclosure for a minimum of two years, and during this time, each cub should have a successful record of at least 50 ‘kills’.
    • Within the enclosure, the persons responsible for handling cubs must approach them by putting a tiger mask along with workday clothes of a tiger stripe pattern smeared with tiger urine and faeces.
    • Various conditions must be complied with at the time of releasing the cub in the wild.
    • The tiger cubs should be in prime health, and of dispersing age (three/four years).
    • There should be no abnormality/incapacitation.

    How have attempts at re-wilding of carnivores gone in India?

    • The tiger conservationist Billy Arjan Singh was credited with the re-introduction of re-welding the Dudhwa forest area in the 1970s.
    • The attempt, however, ran into controversy after several incidents of the killing of humans were reported.
    • The re-wilding in Panna Tiger Reserve of two abandoned tigress cubs that were brought up at Kanha Tiger Reserve is considered to be a success in tiger conservation.

    Re-wilding as a concept

    • There are 50-50 chances of success and failure of re-wilding of hand-reared carnivores in the wild.
    • Conservationists, however, maintain that the chances of success are far less than that — less than even 1 per cent.
    • Tigers in India are already occurring at naturally attainable densities.
    • Almost all translocations of captive-raised tigers have failed so far, with only rare successes such as in Panna after a tiger extinction, and some re-introductions in Russia into empty habitats with plenty of prey.

    Way forward

    • The real need is to protect more habitat strictly so that the prey densities rise and more tigers can thrive.
    • Putting individual hand-reared tigers into the wild cannot certainly be called re-wilding says some wildlife activists.

    Answer this PYQ in the comment box:

    Q.Among the following Tiger Reserves, which one has the largest area under “Critical Tiger Habitat”? (CSP 2020)

    (a) Corbett

    (b) Ranthambore

    (c) Nagarjunsagar-Srisailam

    (d) Sunderbans