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GS Paper: GS3

  • [pib] Guidelines for Other Service Providers (OSP)

    The Union Minister for Electronics & Information Technology has further liberalized the guidelines for Other Service Providers (OSPs).

    Do you remember quaternary and quinary sectors of Economy from NCERTs?

    What are OSPs?

    • These entities are business process outsourcing (BPO) organizations giving Voice based services, in India and abroad.
    • The term Business Process Outsourcing or BPO as it is popularly known, refers to outsourcing in all fields.
    • A BPO service provider usually administers and manages a particular business process for another company.
    • BPOs either use new technology or apply an existing technology in a new way to improve a particular business process.
    • India is currently the number one destination for business process outsourcing, as most companies in the US and UK outsource IT-related business processes to Indian service providers.

    Main features of the liberalized guidelines

    • Distinction between Domestic and International OSPs has been removed. A BPO centre with common Telecom resources will now be able to serve customers located worldwide including in India.
    • EPABX (Electronic Private Automatic Branch Exchange) of the OSP can be located anywhere in the world. OSPs apart from utilising EPABX services of the Telecom Service Providers can also locate their EPABX at third Party Data Centres in India.
    • With the removal of the distinction between Domestic and International OSP centres, the interconnectivity between all types of OSP centres is now permitted.
    • Remote Agents of OSP can now connect directly with the Centralised EPABX/ EPABX of the OSP/ EPABX of the customer using any technology including Broadband over wireline/ wireless.
    • No restriction for data interconnectivity between any OSP centres of same company or group company or any unrelated company.

  • Population decline: Bane and Boon for the economy

    Deflation. A recent (2014) study found substantial deflationary pressures from Japan’s ageing populationThe article argues that a decline in population is not always as worrisome as it is made to be.

    Declining fertility rate

    • China’s fertility rate of 1.3 children per woman in 2020 is well below replacement level, but so, too, are fertility rates in every rich country.
    • In all developed economies, fertility rates fell below replacement in the 1970s or 1980s and have stayed there.
    • In India, more prosperous states have fertility rates below replacement level, with only the poorer states of Bihar and Uttar Pradesh still well above.
    • And while the national rate in 2018 was still 2.2, the Indian National Family Health Survey finds that Indian women would like to have, on average, 1.8 children.
    • In all prosperous countries where women are well educated and free to choose whether and when to have children, fertility rates fall significantly below replacement levels.
    • If those conditions spread across the world, the global population will eventually decline.

    Is the declining population good or bad for the economy

    • A pervasive conventional bias assumes that population decline must be a bad thing.
    • But while absolute economic growth is bound to fall as populations stabilise and then decline, it is the income per capita that matters for prosperity and economic opportunity.
    • It is true that when populations no longer grow, there are fewer workers per retiree, and healthcare costs rise as a percent of GDP.
    • But that is offset by the reduced need for infrastructure and housing investment to support a growing population.
    • A stable and eventually falling global population would make it easier to cut greenhouse-gas emissions to avoid climate change, and alleviate the pressure that growing populations inevitably place on biodiversity and fragile ecosystems.
    • And contracting workforces create stronger incentives for businesses to automate while driving up real wages, which, unlike absolute economic growth, are what really matter to ordinary citizen.
    • In a world where technology enables us to automate ever more jobs, the far bigger problem is too many potential workers, not too few.
    • Even when the Indian economy grows rapidly, its highly productive “organised sector” of about 80 million workers, fails to create additional jobs.
    • Growth in the potential workforce simply swells the huge “informal sector” army of unemployed and underemployed people.

    So, when declining populations turns to be a problem?

    •  Fertility rates far below replacement level create significant challenges, and China may well be heading in that direction.
    • At those rates, population decline will be precipitate rather than gradual.
    • If Korea’s (fertility rate 1.09) birth rate does not rise, its population could fall from 51 million today to 27 million by 2100, and the ratio of retirees to workers will reach levels that no amount of automation can offset.

    Conclusion

    The average fertility rates well below replacement level in all developed countries, and, over time, gradually falling populations. The sooner that is true worldwide, the better for everyone.

  • Why counting of poor matters?

    Counting the number of the poor

    • If the state of the Indian economy is to be repaired, we need to meticulously count the number of the poor and to prioritise them.
    • The World Bank $2-a-day poverty line might be inadequate but it would be a start and higher than the last line proposed by the C. Rangarajan committee.
    • A survey in 2013 had said India stood at 99 among 131 countries, and with a median income of $616 per annum, it was the lowest among BRICS and fell in the lower-middle-income country bracket.
    • Since 2013 three important data points have made it clear that the state of India’s poor needs to be acknowledged if India is to be lifted.
    • The first being, the fall in the monthly per capita consumption expenditure of 2017-18 for the first time since 1972-73.
    • Second is the fall of India in the Global Hunger Index to ‘serious hunger’ category.
    • Third,  health census data or the recently concluded National Family Health Survey or NFHS-5, which had worrying markers of increased malnutrition, infant mortality and maternal health.
    • A fourth statistic, Bangladesh bettering India’s average income statistics, must also be a reason for Indians to introspect.

    Increase in number of poor in India

    •  In 2019, the global Multidimensional Poverty Index reported that India lifted 271 million citizens out of poverty between 2006 and 2016. 
    • Since then, the International Monetary Fund, Hunger Watch, SWAN and several other surveys show a decided slide.
    • In March, the Pew Research Center with the World Bank data estimated that ‘the number of poor in India, on the basis of an income of $2 per day or less in purchasing power parity, has more than doubled to 134 million from 60 million in just a year due to the pandemic-induced recession’.
    • In 2020, India contributed 57.3% of the growth of the global poor.
    • This has thrown a spanner in the so far uninterrupted battle against poverty since the 1970s.
    • Urgent solutions are needed within, and the starting point of that would be only when we know how many are poor.

    Debate on the poverty line

    • In 2011, the Suresh Tendulkar Committee report at a ‘line’ of ₹816 per capita per month for rural India and ₹1,000 per capita per month for urban India, calculated the poor at 25.7% of the population.
    • The anger over the 2011 conclusions, led to the setting up of the C. Rangarajan Committee.
    • In 2014, C. Rangarajan Committee estimated that the number of poor were 29.6%, based on persons spending below ₹47 a day in cities and ₹32 in villages.
    • The National Commission for Enterprises in the Unorganised Sector in 2004, had concluded that 836 million Indians still remained marginalised.
    • The Commission’s conclusion was ignored — that 77% of India was marginalised — emphasising that it was a problem of a much bigger magnitude, than the figure of 25.7% conveyed.

    Why counting the poor matters?

    1) Helps in forming public opinion

    • Knowing the numbers and making them public makes it possible to get public opinion to support massive and urgent cash transfers.
    • The world outside India has moved onto propose high fiscal support, as economic rationale and not charity.
    •  In India too, a dramatic reorientation would get support only once numbers are honestly laid out.

    2) It helps in evaluating success of policies

    •  Recording the data helps to evaluate all policies on the basis of whether they meet the needs of the majority.
    • Is a policy such as bank write-offs of loans amounting to ₹1.53-lakh crore last year, which helped corporates overwhelmingly, beneficial to the vast majority?
    • This would be possible to transparently evaluate only when the numbers of the poor are known and established.

    3) Helps in addressing the concerns of real majority

    • If government data were to honestly account for the exact numbers of the poor, it may be more realistic to expect the public debate to be conducted on the concerns of the real majority.
    • Such data would also help in creating a climate that demands accountability from public representatives.

    4) To gauge the rising inequality

    • India has clocked a massive rise in the market capitalisation and the fortunes of the richest Indian corporates, even as millions of Indians have experienced a massive tumble into poverty.
    • To say that the stock market and the Indian economy are ‘not related’ is ingenuous.
    • Indians must have the right to question whether there is a connection and if the massive rise in riches is not coincidental, but at the back of the misery of millions of the poor.
    • If billionaire lists are evaluated in detail and reported upon, the country cannot shy away from counting its poor.

    Conclusion

    The massive slide into poverty in India that is clear in domestic and international surveys and anecdotal evidence must meet with an institutional response.

  • Compensation for Covid deaths

    The Supreme Court has reserved its verdict seeking compensation of Rs 4 lakh to the kin of those who have died of Covid-19 or related complications.  The Centre has stated that state governments cannot afford to pay this, and had argued in favor of a broader approach including health interventions.

    Provisions for Compensation

    • Last year, the Centre declared Covid-19 as a notified disaster under the Disaster Management Act.
    • Section 12(iii) of the Act says the National Authority shall recommend guidelines for the minimum standards of relief to be provided to persons affected by disaster.
    • It includes “ex gratia assistance on account of loss of life as also assistance on account of damage to houses and for restoration of means of livelihood”.
    • The Centre revises this amount from time to time.

    What is the latest amount?

    • On April 8, 2015, the Disaster Management Division of the Home Ministry wrote to all state governments and attached a revised list of “norms of assistance”.
    • Under “ex gratia payment to families of deceased persons”, it specified: Rs 4 lakh per deceased person including those involved in relief operations or associated in preparedness activities.
    • This is subjected to certification regarding cause of death from appropriate authority.

    So, what about compensation for Covid?

    • Last year the Home Ministry wrote to state governments that the central government has decided to treat it (Covid-19) as a notified disaster for the purpose of providing assistance under SDRF.
    • It attached a partially modified list of items and norms of assistance.
    • It did not specify payment of ex gratia to families of deceased.
    • Some states have decided to pay, but not for all deaths.

    How has the government responded to the petition?

    • The Centre has submitted that ex gratia of Rs 4 lakh is beyond the affordability of state governments.
    • It argued that if Rs 4 lakh is paid to the kin of each, it “may possibly” consume the entire amount of the State Disaster Relief Fund (SDRF).
    • This would leave states with insufficient funds for organizing a response to the pandemic, or to take care of other disasters.
    • The centre argued that the term ex gratia itself means the amount is not based on legal entitlement.

    Way ahead

    • A broader approach, which involves health interventions, social protection, and economic recovery for the affected communities would be a more prudent, responsible, and sustainable approach.

  • Why is China targeting Cryptocurrencies?

    China’s crackdown against cryptocurrencies, which are those that aren’t sanctioned by a centralized authority and are secured by cryptography, is said to have a lot to do with the crashing of the value of cryptocurrencies.

    Background

    • The price of the world’s most prominent cryptocurrency Bitcoin has more than halved in the last two months after hitting a peak in mid-April.
    • The second-most valuable cryptocurrency, Ether, has seen a similar fall from its peak last month.

    What is Cryptocurrency?

    • A cryptocurrency is a form of digital asset based on a network that is distributed across a large number of computers.
    • This decentralized structure allows them to exist outside the control of governments and central authorities.
    • The word “cryptocurrency” is derived from the encryption techniques which are used to secure the network.
    • Blockchains, which are organizational methods for ensuring the integrity of transactional data, are an essential component of many cryptocurrencies.
    • Many experts believe that blockchain and related technology will disrupt many industries, including finance and law.
    • Cryptocurrencies face criticism for a number of reasons, including their use for illegal activities, exchange rate volatility, and vulnerabilities of the infrastructure underlying them. However, they also have been praised for their portability, divisibility, inflation resistance, and transparency.

    What has China done?

    • In recent weeks, China has reportedly cracked down on crypto mining operations.
    • The country has over the years accounted for a large percentage of the total crypto mining activity that takes place.
    • In purpose, Bitcoin miners play a similar role to gold miners — they bring new Bitcoins into circulation.
    • They get these as a reward for validating transactions, which require the successful computation of a mathematical puzzle.
    • And these computations have become ever-increasingly complex, and therefore energy-intensive in recent years. Huge mining operations are now inevitable if one is to mine Bitcoins.

    Why is Crypto mining booming in China?

    • Access to cheap electricity has made mining lucrative in China.
    • According to the Cambridge Bitcoin Electricity Consumption Index, China accounted for nearly two-thirds of the total computational power last year.

    For an ‘unregulated’ market

    • Actually, there is little change in the policy as far as China is concerned. It first imposed restrictions on cryptocurrencies way back in 2013.
    • It then barred financial institutions from handling Bitcoin.
    • Four years later, it barred what are called initial coin offerings, under which firms raise money by selling their own new cryptocurrencies.
    • This is largely an unregulated market.

    What does China want?

    • An inter-ministerial committee report in India two years ago noted that in 2017, the government of China also banned trading between RMB (China’s currency renminbi) and cryptocurrencies.
    • Before the ban, RMB made up 90% of Bitcoin trades worldwide.
    • The fact that cryptocurrencies bypass official institutions has been a reason for unease in many governments.
    • Not just that. The anonymity that it offers aids in the flourishing of dark trades online.
    • While many countries have opted to regulate the world of cryptocurrencies, China has taken the strictest of measures over the years.
    • According to observers, the latest set of measures are to strengthen its monetary hold and also project its new official digital currency.

    For a digital Yuan

    • China launched tests for a digital yuan in March.
    • Its aim is to allow Beijing to conduct transactions in its own currency around the world, reducing dependency on the dollar which remains dominant internationally.

    Also read:

    Legalizing Bitcoin in El Salvador and takeaways for India

  • First-ever genetically modified rubber planted in Assam

    A Rubber Board research farm on the outskirts of Guwahati now sports the world’s first genetically modified (GM) rubber plant tailored for the climatic conditions in the Northeast.

    GM rubber

    • The GM rubber has additional copies of the gene MnSOD, or manganese-containing superoxide dismutase, inserted in the plant.
    • The plant was developed at the Kerala-based Rubber Research Institute of India (RRII).
    • It is expected to tide over the severe cold conditions during winter — a major factor affecting the growth of young rubber plants in the region.

    Why need GM rubber?

    • Natural rubber is a native of warm humid Amazon forests and is not naturally suited for the colder conditions in the Northeast, which is one of the largest producers of rubber in India.
    • Growth of young rubber plants remains suspended during the winter months, which are also characterized by progressive drying of the soil.
    • This is the reason for the long immaturity period of this crop in the region.

    What does MnSOD gene offer?

    • The MnSOD gene has the ability to protect plants from the adverse effects of severe environmental stresses such as cold and drought.
    • Laboratory studies conducted at the RRII showed the GM rubber plants overexpressed the MnSOD gene as expected, offering protection to the cells.
    • The plant is thus expected to establish well and grow fast in the region.
    • There was no risk of genes flowing from the GM rubber into any other native species, a concern often raised by environmental groups against GM plants in general.

  • Species in news: Pygmy Hogs

    Few captive-bred pygmy hogs, the world’s rarest and smallest wild pigs, were released in the Manas National Park of western Assam under the Pygmy Hog Conservation Programme (PHCP).

    Pygmy Hogs

    • The pygmy hog (Porcula salvania) is a native to alluvial grasslands in the foothills of the Himalayas at elevations of up to 300 m (980 ft).
    • Today, the only known population lives in Assam, India and possibly southern Bhutan.
    • As the population is estimated at less than 250 mature individuals, it is listed as Endangered on the IUCN Red List.
    • It is designated as a Schedule I species in India under the Wildlife Protection Act, 1972, and offences against them invite heavy penalties.

    About Pygmy Hog Conservation Programme (PHCP)

    • The PHCP is a collaboration among Durrell Wildlife Conservation Trust of UK, Assam Forest Department, Wild Pig Specialist Group of IUCN and Union Environment Ministry.
    • It is currently being implemented by NGOs Aaranyak and EcoSystems India.
    • Six hogs — two males and four females — were captured from the Bansbari range of the Manas National Park in 1996 for starting the breeding programme.
    • The reintroduction programme began in 2008 with the Sonai-Rupai Wildlife Sanctuary (35 hogs), Orang National Park (59) and Barnadi Wildlife Sanctuary (22).

    Now answer this PYQ in the comment box:

    Q.Consider the following :

    1. Star tortoise
    2. Monitor lizard
    3. Pygmy hog
    4. Spider monkey

    Which of the above found in India?

    (a) 1, 2 and 3 only

    (b) 2 and 3 only

    (c) 1 and 4 only

    (d) 1, 2, 3 and 4

  • A regulatory hurdles could stifle e-commerce

    The article highlights the risk of stifling the e-commerce sector due to the government’s propensity for its regulation to protect the local traders.

    Efforts to shield local retailers

    • India began to open up its economy three decades ago, but efforts to shield local retailers resulted in a retail sector fraught with a thicket of rules.
    • With the web’s reach expanding rapidly, online retail is expected to grab a fast-widening slice of a pie placed at above $880 billion last year and projected at $1.3 trillion in 2024.
    • Such a huge opportunity has set the stage for a grand e-com confrontation, with our two biggest business houses gearing up to take on a duopoly of US-based Amazon and Walmart-owned Flipkart.
    • The more fiercely e-com is contested, the tighter this sector’s straps seem to get.

    What are the new regulations?

    • The Centre put out proposals to tighten e-com regulations for consumer protection.
    • E-com firms must appoint resident officers to address grievances and monitor rule-compliance, and then be ready to share information sought by authorities within 72 hours.
    • For the sake of “free and fair competition”, they must label all wares on their websites by country-of-origin, offer local alternatives, keep search results unbiased, not sell anything to anyone registered as a ‘seller’ with them, not conduct deep-discount flash sales of cherry-picked products.
    • Restriction on aiding associated enterprises with any helpful data gleaned by their algorithms.
    • As another measure to assure small enterprises an even field, they must also ensure that their logistical systems support all sellers in the same category equally.
    • As it happens, this attempt to straitjacket e-com platforms coincides with an antitrust probe of ‘unfair practices’ ascribed to Amazon and Flipkart.

    Issues with regulations

    • Some of these sound too vague and subjective to adopt.
    • Even if clear criteria are specified for their adoption and they actually serve to curtail brand favouritism, they would leave e-com majors with too little autonomy to devise strategies of service differentiation for a competitive edge.
    • The perception of e-com majors being bullies, however, does not seem very widely shared among their customers, few of whom complain of either insufficient rivalry or choice deprivation online. 

    Conclusion

    What e-com users are now at risk of suffering, though, is a hobbled industry. If all e-com websites are forced into a statist mould meant for generic market platforms, these companies could lose their ability to set themselves apart, outperform rivals and serve the market’s ultimate cause.

  • BT Cotton adoption in Punjab has resulted in net economic, environmental benefits

    Amid the perpetual debate surrounding BT cotton’s positive and negative impacts, a recent study has said its adoption in Punjab in the past over a decade has resulted in net economic and environmental benefits.

    Background

    • BT (Bacillus thuringiensis) cotton has been commercially grown in India for the past 19 years.
    • The Genetic Engineering Approval Committee (GEAC) approved the release of BT cotton for commercial cultivation in 2002 in western and southern parts of the country.
    • In Punjab, BT cotton was released for cultivation in 2005.
    • Before the release, it was adopted by 72% farmers on 22% of the cotton area. However, a lot of questions have been raised recently on its impact.

    BT cotton in India

    • BT cotton is a genetically modified organism (GMO) or genetically modified pest resistant plant cotton variety, which produces an insecticide to combat bollworm.
    • Strains of the bacterium Bacillus thuringiensis produce over 200 different BT toxins, each harmful to different insects.
    • Most notably, BT toxins are insecticidal to the larvae of moths and butterflies, beetles, cotton bollworms and flies but are harmless to other forms of life.
    • In 2002, a joint venture between Monsanto and Mahyco introduced BT cotton to India.
    • In 2011, India grew the largest GM cotton crop at 10.6 million hectares.

    Issues with BT cotton

    • In India, BT cotton has been enveloped in controversies due to its supposed failure to reduce the need for pesticides and increase yield.
    • The link between the introduction of BT cotton to India and a surge in farmer suicides has been refuted by other studies with decreased farmer suicides since BT cotton was introduced.
    • BT cotton accounts for 93% of cotton grown in India.
    • Maharashtra banned the sale and distribution of BT cotton in 2012, to promote local Indian seeds, which demand less water, fertilizers and pesticide input.

    What is the new study about?

    Success of BT in Punjab

    • The research was funded by the Agricultural Extension Division of the Indian Council of Agricultural Research under extramural project “Impact evaluation of integrated pest management technologies”.
    • It found that since the commercialization of BT cotton:
    1. there has been reduction in insecticide use by volume and applications,
    2. decline in environmental and human health impact associated with insecticide use,
    3. more reduction in the use of highly hazardous and riskiest insecticides, and
    4. reduction in the expenses associated with insecticide use.
    5. Cotton yields in the past 13 years have been stable, the only exception being 2015

    Now its’ time to answer this PYQ in the comment box:

    Q.In India, the use of carbofuran, methyl parathion, phorate and triazophos is viewed with apprehension. These chemicals are used as: (CSP 2017)

    (a) Pesticides in agriculture

    (b) Preservatives in processed foods

    (c) Fruit-ripening agents

    (d) Moisturizing agents in cosmetics

  • [pib] Amendments to the Consumer Protection (E-commerce) Rules, 2020

    For the purposes of preventing unfair trade practices in e-commerce, the Central Government had notified the Consumer Protection (E-Commerce) Rules, 2020 with effect from 23 July 2020.

    Consumer Protection (E-commerce) Rules, 2020

    The proposed amendments aim to bring transparency in the e-commerce platforms and further strengthen the regulatory regime to curb the prevalent unfair trade practices.

    The proposed amendments are as follows:

    (a) Chief Compliance Officer

    • To ensure compliance of the rules, the appointment of Chief Compliance Officer, a nodal contact person for 24×7 coordination with law enforcement agencies, officers to ensure compliance to their orders and Resident Grievance Officer for redressing of the grievances of the consumers on the e-commerce platform, has been proposed.
    • This would ensure effective compliance with the provisions of the Act and Rules and also strengthen the grievance redressal mechanism on e-commerce entities.

    (b) Registration of e-coms

    • Putting in place a framework for registration of every e-commerce entity with the DPIIT for allotment of a registration number which shall be displayed prominently on the website as well as invoice of every order placed by the e-commerce entity.
    • This would help create a database of genuine e-commerce entities and ensure that the consumers are able to verify the genuineness of an e-commerce entity before transacting through their platform.

    (c) Prohibition of miss-selling

    • The goods and services entities selling goods or services by deliberate misrepresentation of information have been prohibited.

    (d) Expiry dates

    • This would ensure that consumers are aware of the expiry date of the products they are buying on the e-commerce platform.
    • It compels all sellers on marketplace e-commerce entities and all inventory e-commerce entities to provide the best before or use before the date to enable consumers to make an informed purchase decision.

    (e) Fair and equal treatment

    • It has been provided that where an e-commerce entity offers imported goods or services, it shall incorporate a filter mechanism to identify goods based on country of origin and suggest alternatives to ensure fair opportunity to domestic goods.

    (f) Fall-back liability

    • This would ensure that consumers are not adversely affected in the event where a seller fails to deliver the goods or services due to negligent conduct by such seller in fulfilling the duties and liabilities.

    Why need such an amendment?

    It was observed that there was an evident lack of regulatory oversight in e-commerce which required some urgent action.

    • Manipulating search results: Moreover, the rapid growth of e-commerce platforms has also brought into the purview the unfair trade practices of the marketplace e-commerce entities engaging in manipulating search result to promote certain sellers.
    • Preferential treatment: This includes preferential treatment to some sellers, indirectly operating the sellers on their platform, impinging the free choice of consumers, selling goods close to expiration etc.
    • Flash sales: Certain e-commerce entities are engaging in limiting consumer choice by indulging in “back to back” or “flash” sales. This prevents a level playing field and ultimately limits customer choice and increases prices.

    Check this PYQ from CSP 2012:

    Q. With reference to consumer’s rights / privileges under the provision of law in India which of the following statements correct?

    1. Consumer are empowered to take samples for food testing
    2. When consumer fi les a complaint in any consumer forum, no fee is required to be paid.
    3. In case of death of consumer, his/her legal heir can file a complaint in the consumer forum on his/her behalf.

    Select the correct answer using the codes given below:

    (a) Only 1

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) 1, 2 and 3