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GS Paper: GS3

  • Species in news: Caracal

    The National Board for Wildlife (NBWL) and MoEFCC last month included the caracal, a medium-sized wildcat found in parts of Rajasthan and Gujarat, in the list of critically endangered species under the Species Recovery Programme.

    Caracal in India

    IUCN status: Least Concerned

    • The wildcat has long legs, a short face, long canine teeth, and distinctive ears — long and pointy, with tufts of black hair at their tips.
    • The iconic ears are what give the animal its name — caracal comes from the Turkish karakulak, meaning ‘black ears’.
    • In India, it is called siya gosh, a Persian name that translates as ‘black Ear’.
    • A Sanskrit fable exists about a small wild cat named deergha-karn or ‘long-eared’.
    • While it flourishes in parts of Africa, its numbers in Asia are declining.

    Try this PYQ:

    Q.Consider the following pairs:

    Wildlife:  Naturally found in

    1. Blue-finned Mahseer: Cauvery River
    2. Irrawaddy Dolphin: Chambal River
    3. Rusty-spotted Cat: Eastern Ghats

    Which of the pairs given above are correctly matched? (CSP 2018)

    (a) 1 and 2 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

    In history and myth

    • The earliest evidence of the caracal in the subcontinent comes from a fossil dating back to the civilization of the Indus Valley c. 3000-2000 BC.
    • The caracal has traditionally been valued for its litheness and extraordinary ability to catch birds in flight; it was a favourite coursing or hunting animal in medieval India.
    • Firuz Shah Tughlaq (1351-88) had siyah-goshdar khana, stables that housed large numbers of coursing caracal.
    • It finds mention in Abul Fazl’s Akbarnama, like a hunting animal in the time of Akbar (1556-1605).
    • Descriptions and illustrations of the caracal can be found in medieval texts such as the Anvar-i-Suhayli, Tutinama, Khamsa-e-Nizami, and Shahnameh.
    • The East India Company’s Robert Clive is said to have been presented with a caracal after he defeated Siraj-ud-daullah in the Battle of Plassey (1757).

    Back2Basics: Species Recovery Programme of NBWL

    • The programme is one of the three components of the centrally funded scheme, Integrated Development of Wildlife Habitats (IDWH).
    • Started in 2008-09, IDWH is meant for providing support to protected areas, protection of wildlife outside protected areas and recovery programmes for saving critically endangered species and habitats.
    • So far, the recovery programme for critically endangered species in India now includes 22 wildlife species.
    • The NBWL in 2018 has added four species- the Northern River Terrapin, Clouded Leopard, Arabian Sea Humpback Whale, Red Panda- to the list.
    • Other species include the Snow Leopard, Bustard (including Floricans), Dolphin, Hangul, Nilgiri Tahr, Marine Turtles, Dugongs, Edible Nest Swiftlet, Asian Wild Buffalo, Nicobar Megapode, Manipur Brow-antlered Deer, Vultures, Malabar Civet, Indian Rhinoceros, Asiatic Lion, Swamp Deer and Jerdon’s Courser.

  • In Centre’s IT rules, there is accountability with costs

    The article examines the issues with  Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.

    Change in the immunity for social media platforms

    • With the social media platforms amassing tremendous power, the Government of India and has over time sought to devise a core framework to governs social media.
    • This framework known as the “intermediary liability” has been made legally through Section 79 of the Information Technology Act, 2000.
    • This framework has been supplemented by operational rules, and the Supreme Court judgment in Shreya Singhal v. Union of India.
    • All this legalese essentially provides large technology companies immunity for the content that is transmitted and stored by them.
    • Recently, the Government of India announced drastic changes to it through the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.

    Issues with the Rules

    1) Privacy concern

    • The regulations do contain some features that bring accountability to social media platforms.
    • For instance, they require that prior to a content takedown, a user should be provided adequate notice.
    • However, there are several provisions in the rules that raise privacy concerns.
    • Take traceability, where instant messaging platforms which deploy end-to-end encryption that helps keep our conversations private will now effectively be broken.
    • This is because now the government may require that each message sent through WhatsApp or any other similar application be tied to the identity of the user.
    • When put in the larger context of an environment that is rife with cybersecurity threats, an inconsistent rule of law and the absence of any surveillance oversight, this inspires fear and self-censorship among users.
    • The core of the traceability requirement undermines the core value of private conversations.

    2) Regulation without clear legal backing

    • The rules seek to regulate digital news media portals as well as online video streaming platforms.
    • Rules will perform functions similar to those played by the Ministry of Information and Broadcasting for TV regulation.
    • For instance, as per Rule 13(4), this also now includes powers of censorship such as apology scrolls, but also blocking of content.
    • All of this is being planned to be done without any legislative backing or a clear law made by Parliament.
    • A similar problem exists with digital news media portals.
    • The purview of the Information Technology Act, 2000, is limited.
    • It only extends to the blocking of websites and intermediary liabilities framework, but does not extend to content authors and creators.
    • Hence, the Act does not extend to news media despite which it is being stretched to do so by executive fiat.
    • The oversight function will be played by a body that is not an autonomous regulator but one composed of high ranking bureaucrats.
    • This provides for the discretionary exercise of government powers of censorship over these sectors.

    Way forward

    • This could have ideally been achieved through more deliberative, parliamentary processes and by examining bodies in other democracies, which face similar challenges.
    • For instance, OFCOM, a regulator in the United Kingdom, has been studying and enforcing regulations that promise higher levels of protection for citizens’ rights and consistency in enforcement.
    • Instead, the present formulation increases government control that suffers from legality and core design faults.
    • It will only increase political control.

    Consider the question “What is the purpose of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, and what are the concerns with these rules?”

    Conclusion

    While every internet user in India needs oversight and accountability from big tech, it should not be at the cost of increasing political control, chilling our voices online and hurting individual privacy.

  • Pakistan to remain on FATF ‘Greylist’

    The Financial Action Task Force (FATF) has decided to retain Pakistan on the “greylist” till the next review of its performance.

    Practice question for mains:

    Q.What is FATF? Discuss its role in combating global financial crimes and terror financing.

    What is the FATF?

    • FATF is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering.
    • The FATF Secretariat is housed at the OECD headquarters in Paris.
    • It holds three Plenary meetings in the course of each of its 12-month rotating presidencies.
    • As of 2019, FATF consisted of 37 member jurisdictions.
    • India became an Observer at FATF in 2006. Since then, it had been working towards full-fledged membership. On June 25, 2010, India was taken in as the 34th country member of FATF.

    What is the role of FATF?

    • The rise of the global economy and international trade has given rise to financial crimes such as money laundering.
    • The FATF makes recommendations for combating financial crime, reviews members’ policies and procedures, and seeks to increase acceptance of anti-money laundering regulations across the globe.
    • Because money launderers and others alter their techniques to avoid apprehension, the FATF updates its recommendations every few years.

    What is the Black List and the Grey List?

    • Black List: The blacklist, now called the “Call for action” was the common shorthand description for the FATF list of “Non-Cooperative Countries or Territories” (NCCTs).
    • Grey List: Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list. This inclusion serves as a warning to the country that it may enter the blacklist.

    Consequences of being in the FATF grey list:

    • Economic sanctions from IMF, World Bank, ADB
    • Problem in getting loans from IMF, World Bank, ADB and other countries
    • Reduction in international trade
    • International boycott

    Pakistan and FATF

    • Pakistan, which continues to remain on the “grey list” of FATF, had earlier been given the deadline till the June to ensure compliance with the 27-point action plan against terror funding networks.
    • It has been under the FATF’s scanner since June 2018, when it was put on the Grey List for terror financing and money laundering risks.
    • FATF and its partners such as the Asia Pacific Group (APG) are reviewing Pakistan’s processes, systems, and weaknesses on the basis of a standard matrix for anti-money laundering (AML) and combating the financing of terrorism (CFT) regime.

  • [pib] Sun’s Rotation over the Century

    Scientists at Kodaikanal Solar Observatory have estimated how the Sun has rotated over a century from data extracted from old films and photographs that have been digitized.

    Try this PYQ:

    Q.Consider the following phenomena:

    1. Size of the sun at dusk
    2. Colour of the sun at dawn
    3. Moon being visible at dawn
    4. Twinkle of stars in the sky
    5. Polestar being visible in the sky

    Which of the above are optical illusions?

    (a) 1, 2 and 3

    (b) 3, 4 and 5

    (c) 1, 2 and 4

    (d) 2, 3 and 5

    Sun’s Rotation

    • The Sun rotates around an axis that is roughly perpendicular to the plane of the ecliptic; the Sun’s rotational axis is tilted by 7.25° from perpendicular to the ecliptic.
    • It rotates in the counterclockwise direction (when viewed from the north), the same direction that the planets rotate (and orbit around the Sun).
    • The Sun’s rotation period varies with latitude on the Sun since it is made of gas.
    • Equatorial regions rotate faster than Polar Regions.
    • The equatorial regions (latitude = 0 degrees) rotate in about 25.6 days. The regions at 60 degrees latitude rotate in about 30.9 days. Polar Regions rotate in about 36 days.

    Key observations of the study

    • The Sun rotates more quickly at its equator than at its poles.
    • Over time, the Sun’s differential rotation rates cause its magnetic field to become twisted and tangled.
    • The tangles in the magnetic field lines can produce strong localized magnetic fields.
    • When the Sun’s magnetic field gets twisted, there are lots of sunspots.
    • The sunspots which form at the surface with an 11-year periodicity are the only route to probe the solar dynamo or solar magnetism inside the Sun and hence measure the variation in solar rotation.

    Benefits offered

    • This estimation would help study the magnetic field generated in the interior of the Sun, which causes sunspots and results in extreme situations like the historical mini-ice age on Earth (absence of sunspots).
    • It could also help predict solar cycles and their variations in the future.

  • Respecting wealth creators

    The article deals with the recent acknowledgement of the private sector by the Prime Minister in the development of the country.

    Respecting wealth creators

    • In his recent speech in Parliament, the Prime Minister openly acknowledged the contribution and role of the private sector as an important engine of growth and employment in India.
    • The creation of wealth is essential for growth, employment and the reduction of poverty.
    • India’s successes in many fields in the last three decades are linked to the private sector.
    • The industries that have created growth, jobs, buzz and hope in the last three decades, the vast majority have been driven by private enterprise.

    Steps taken to promote business

    • India has been making commendable strides in the “Ease of Doing Business”.
    • It is easier to start a business in India than it was a decade ago.
    • We seem to have broken the shackles of a chained belief that business is bad.
    • The success of the Mudra Yojana and Start-up India are living testimony to this fact.
    • And that India is daring to look at sectors we were otherwise hesitant to — space, defence, aeronautics.
    • Some areas need work, but a government willing to listen gives a good head start to solving those problems.
    • Work on faceless tax assessment and PLI schemes are moves that have received encouraging responses far and wide.
    • The India stack has revolutionised the fintech sector.
    • The digital health stack will likely do the same for healthtech.

    Conclusion

    The recent Union budget has made clear the intent of this government to pursue economic reform and go for growth — whether it is the willingness to live with a higher fiscal deficit or to aggressively pursue divestment of public sector enterprises. Large spending on infrastructure is good news too.

  • Being petroleum independent

    The article discusses the steps taken by the government to improve fuel efficiency standards and the for the transition to clean sources of energy.

    Reducing energy import dependence

    • Speaking on the increase in petrol and diesel prices, Prime Minister emphasised the need for clean sources of energy.
    • Expanding and diversifying energy supply is good, but if India is to reduce its energy import dependence, it must look towards first managing the demand for petroleum products.
    • It is worthwhile to reflect on measures taken by the previous governments as well as this government in this context.

    Steps taken

    National Electric Mobility Mission Plan

    • The UPA-2 administration formulated fuel efficiency standards for passenger vehicles that are now in effect.
    • It also constituted the National Electric Mobility Mission Plan (NEMMP).
    • While well-intended, both these actions fell short in terms of ambition.
    • India’s 2022 fuel efficiency standards for passenger cars are nearly 20% less stringent than the European Union’s standards.
    • The NEMMP primarily focused on hybrid electric vehicles.
    • Most of the incentives under the NEMMP went towards subsidising mild hybrids instead of electric vehicles.

    Multiple fuel pathways

    • Recently, the government has encouraged multiple fuel pathways in the transport sector including natural gas.
    • The Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme now focuses largely on electric vehicles.
    • The government has also provided several additional fiscal and non-fiscal incentives to encourage a transition to electric vehicles.

    Steps need to be taken

    • There are many things that the government can and should do to
    • First, the government should formulate a zero-emissions vehicle (ZEV) programme that would require vehicle manufacturers to produce a certain number of electric vehicles.
    • At present, the electric mobility initiative in India is driven largely by new entrants in the two- and three-wheeler space.
    • A ZEV programme would require all manufacturers to start producing electric vehicles across all market segments.
    • The government should also strengthen fuel efficiency requirements for new passenger cars and commercial vehicles.
    • Two-wheelers, which consume nearly two-third of the petrol used in India, are not subject to any fuel efficiency standards.
    •  Adopting stringent fuel efficiency standards and a ZEV programme by 2024 can result in India’s petroleum demand peaking by 2030.
    • The FAME should be extended not only to all passenger cars and commercial vehicles but also to agricultural tractors.

    Conclusion

    As the economy recovers from the pandemic, the demand for petroleum products will rise, as will prices. But the government can save money for the consumer while enhancing long-term energy security by wielding the regulatory tools at its disposal.

     

  • A changing fiscal framework

    The article examines the changes in government’s fiscal policy stance which supports the debt-financing and apparent contradiction displayed by increased excise duty.

    Increase in excise duty

    • Well before India began to globalise there was a time when each Union Budget announced sales tax increases on tobacco products.
    • The rise in tax was expected to be a shot in the arm for the revenue-starved government of our poor country.
    • India is less poor now, having risen to the rank of an emerging market economy.
    • Yet, COVID-19 has wreaked havoc.
    • As opposed to a Budget estimate of 3.5% for fiscal deficit, the revised estimates show a 2.7 times larger deficit of 9.5% for FY 2020-21. 
    • A comparison of the government’s revised Budget estimates with the original Budget estimates reveals a fall in receipts from every source of taxation except excise.
    • The revised Budget shows a rise of â‚č94,000 crore on account of excise duties alone.
    • Presumably, the increase comes from the much-debated excise duty increases on petroleum and diesel.
    • The excise duty rise will hardly compensate for the huge falls in other tax revenues.
    • The larger excise duty collection is not large enough to have significantly reduced the inflated fiscal deficit figure.

    Implications of hike in excise duty

    • Given the nature of the products on which the excise duty has gone up, prices of commodities will rise in general.
    • With annual output shrinking by an estimated 7.7%, it is straightforward to conclude that unemployment has risen significantly.
    • The accompanying price rise will be the unemployed persons’ worst nightmare.
    • The result will be severe inequality.

    Change in economic policy framework

    • The Economic Survey 2020-21 considers Olivier Blanchard’s prescription that a fiscal deficit automatically transformed to government debt.
    • Such debts along with their servicing liabilities have a tendency to magnify over the years where present borrowings keep increasing to repay past borrowings and service charges.
    • This leaves little room for growth-enhancing expenditure and reduces a government’s creditworthiness in the eyes of lenders.
    • Debt-financed fiscal spending could well be a driver of growth.
    • It can improve the standard of living of the entire population, without necessarily removing inequality.
    • A government’s fiscal expenditure, Professor Blanchard points out, has stronger multiplier effects during recessions than during booms
    • The inequality, however, could well be benignant, for even though the rich will grow richer, the poor will escape out of poverty.

    Condition for debt-financed fiscal spending

    • Debt or the fiscal deficit constitutes the government’s spendable resources.
    • What will prevent the government from sinking into a debt trap?
    • Professor Blanchard shows that the debt-to-GDP ratio can be prevented from exploding if the rate of growth of GDP happens to be higher than the sovereign rate of interest.
    • This is the case in developed economies.
    • In such economies, debt financed government expenditure will create a positive primary surplus out of which interest payments can be made to keep the debt-GDP ratio under control.
    • There will, of course, be a maximum value that this ratio can attain, a value that is higher the larger is the excess of the growth rate over the interest rate.

    Contradiction in fiscal policy and fiscal regime

    • According to the Economic Survey, India’s average interest rate and growth rate over the last 25 years (leaving out FY 2020-21) have been 8.8% and 12.8% respectively.
    • Hence, Professor Blanchard’s condition is satisfied.
    • This, of course, is not to support excise duty increases, for it goes against the very principle of the Blanchard argument.
    • Therefore, there appears to be a contradiction between the government’s announced fiscal policy stance and the fiscal regime it is actually running.

    Consider the question”The Economic Survey 2020-2021 calls for the debt-financed fiscal spending. Do you think that this view is suitable for India economy? What are the risks involved?”

    Conclusion

    The government must consider the implications of increased excise on the economy and should focus on removing the contradiction in its fiscal policy and fiscal regime.

  • Animal Husbandry Infrastructure Development Fund (AHIDF)

    Importance of animal husbandary and dairy sector

    • As an allied industry of agriculture, the animal husbandry and dairy sector collectively employs more than 100 million people.
    • Since the bulk of establishments in this sector is concentrated in rural India, the socio-economic relevance of this sector cannot be overstated.
    • the Central government unveiled a string of measures to cushion the economy, as a part of which the Animal Husbandry Infrastructure Development Fund (AHIDF) was announced.

    More about AHIDF

    • The AHIDF has been set up with an outlay of â‚č15,000 crore.
    • As per the provisions of AHIDF, a project will be eligible for a loan amount that covers up to 90% of the estimated cost –
    • There will be interest subvention of 3% for all eligible entities.
    • Applicants can submit the proposal with a complete Detailed Project Report through the Udyami Mitra Portal.
    • The fund includes a diverse set of stakeholders such as FPOs, private dairy players, individual entrepreneurs, and non-profits within its ambit.

    Strengthening dairy value chain

    • There is a pressing need to enhance chilling infrastructure at collection centres by setting up bulk milk coolers.
    • If the infrastructure needs for milk processing and distribution are included, then the overall potential investment opportunity is to the tune of â‚č1,40,000 crore across the dairy value chain.
    • There is also considerable potential to increase the productivity of cattle, especially by enhancing the quality of animal feed.
    • With this in mind, the AHIDF has been designed to support the establishment of animal feed plants of varying capacities.
    • The infrastructure gap of 10-18 MMT in the production and supply of affordable compound cattle feed translates into an investment potential of around â‚č5,000 crore.

    Boosting the poultry industry

    • There are not only economic but nutritional benefits to boosting the poultry segment’s output, efficiency and quality.
    • India is the fourth largest chicken meat producer and the second largest egg producer in the world.
    • India is well-positioned to help mitigate rampant malnutrition given that chicken meat provides the cheapest source of protein per unit.
    • With eggs being introduced as part of the mid-day meal within several anganwadis in the country, an upgradation in poultry infrastructure would be closely intertwined with social justice outcomes too.
    • Macro benefits regarding climate change and employment are linked to this sector.
    • Enhanced infrastructure can make processing units more energy-efficient and help mitigate their carbon footprint.

    Consider the question ” As an allied industry of agriculture, the animal husbandry and dairy sector are important for rural area and the socio-economic relevance of this sector cannot be overstated. In light of this, examine the role Animal Husbandry Infrastructure Development Fund (AHIDF) could play in transforming rural economy.”

    Conclusion

    The AHIDF also has the potential to create over 30 lakh jobs, even as it overhauls domestic infrastructure towards giving greater prominence to India’s dairy and livestock products in the global value chain.

     

  • [pib] SFURTI Scheme

    Union Minister for MSME has inaugurated 50 artisan-based SFURTI clusters, spread over 18 States.

    SFURTI is an off-track scheme compared to other HRD schemes with Hindi acronyms. Similar is the SPARSH scheme for philately.

    SFURTI Scheme

    • Scheme of Fund for Regeneration of Traditional Industries (SFURTI) is an initiative by the Ministry of MSME to promote Cluster development.
    • Khadi and Village Industries Commission (KVIC) is the Nodal Agency for the promotion of Cluster development for Khadi.
    • Under the Scheme, the MSME Ministry supports various interventions including the setting up of infrastructure through Common Facility Centers (CFCs), procurement of new machinery, design intervention, improved packaging and marketing etc.

    Types of clusters

    • SFURTI clusters are of two types i.e., Regular Cluster (500 artisans) with Government assistance of up to Rs.2.5 crore and Major Cluster (more than 500 artisans) with Government assistance up to Rs.5 crore.
    • The scheme focuses on strengthening the cluster governance systems with the active participation of the stakeholders so that they are able to gauge the emerging challenges and opportunities and respond to them.

  • PSBs should operate like proper banks if they can’t be privatized

    The article deals with the stark differences in the performance of the public sector banks (PSBs) and private banks and suggests ways to deal with the issues.

    Comparing PSBs with private banks

    • The performance of PSBs over the years hasn’t been worth the money that the government has invested in them.
    • As the Economic Survey of 2019-20 pointed out that over â‚č4.3 trillion of taxpayer money is invested as government’s equity in PSBs.
    • In 2019, every rupee of taxpayer money invested in PSBs, on average, lost 23 paise.
    • In contrast, every rupee of investor money invested in New Private Banks—banks licensed after India’s 1991 liberalization—on average gained 9.6 paise.
    • The combined market value of HDFC Bank’s shares is â‚č8.56 trillion (as of 18 February), whereas the market capitalization of all PSBs is around â‚č6.41 trillion (excluding IDBI Bank, which is now categorized as a private bank).
    • Of course, if we add up the assets of PSBs, they are a lot bigger than HDFC Bank’s.

    Dual regulation

    • The private banks are regulated by the Reserve Bank of India (RBI).
    • PSBs are regulated both by RBI and the department of financial services under the finance ministry.
    • The P.J. Nayak Committee report of May 2014 had pointed out this issue of dual regulation.
    • This is primarily because PSBs are used by the government to fulfil its social obligations and pump-prime the economy when it’s not doing well.
    • The stock market discounts these factors while valuing them.

    Way forward

    • The policies for regulating and promoting industrial growth do not have any social content in them.
    • Hence, PSBs should be run as proper banks irrespective of whether they are privatized or not.
    • If they are not privatized, the government’s stake in these banks needs to come down to 33%, something which would help them raise more capital.
    • Once investors see PSBs being run as proper banks their market capitalization will start to go up.
    • Once PSBs are properly valued by the stock market, the government can sell some of its stake in them every year, and use that money to fund its social objectives.
    • It can also use some of that money to incentivize all banks, not just PSBs, to deliver some of its social objectives.

    Conclusion

    The government should take these steps to let the PSBs realise their potential. At the end of the day, nothing improves service delivery more than some good competition.