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GS Paper: GS3

  • Pusa Bio-Decomposer

    Delhi CM has said that the “Pusa bio-decomposer” is a success in Delhi and he will inform the Supreme Court that it is an effective way to prevent stubble burning.

    Pusa Bio-decomposer provides a unique alternative against the stubble burning practices.

    Pusa Bio-decomposer

    • It is a solution developed by the scientists at the Indian Agricultural Research Institute, Pusa, which can turn crop residue into manure in 15 to 20 days and therefore, can prevent stubble burning.
    • It involves making a liquid formulation using Pusa decomposer capsules and readily available inputs, fermenting it over 8-10 days, and then spraying the mixture on fields.
    • It is a mix of seven fungi that produce enzymes to digest cellulose, lignin and pectin in paddy straw.
    • The fungi thrive at 30-32 degree Celsius, which is the temperature prevailing when paddy is harvested and wheat is sown.

    Back2Basics: Decomposition

    • Decomposition refers to a biological process of breaking down organic material into smaller constituent parts.
    • The decomposition of organic substances is ecologically significant. It plays a part in the nutrient cycle. It is an essential process of recycling matter in the biosphere.
    • A decomposer is an organism whose ecological function involves the recycling of nutrients by performing the natural process of decomposition as it feeds on decaying organisms.
    • Examples of decomposers are fungi and bacteria that obtain their nutrients from a dead plant or animal material.
    • They break down cells of dead plants and animals into simpler substances, which become organic nutrients available to the ecosystem.

  • Fixing the rules of economy

    The article discusses the three fundamentals which need an examination to fix the issues faced by the economy. 

    Re-examining the fundamentals

    • India has an incomes crisis: incomes of people in the lower half of the pyramid are too low.
    • The solutions economists propose are: free up markets, improve productivity, and apply technology.
    • These fundamentals of economics must be re-examined when applied to human work.

    Three solutions and issues with them

    1) Freeing up the markets

    • It is suggested that markets should be freed up for agricultural products so that farmers can get higher prices; and freed up for labour to attract investments.
    • Without adequate incomes, people cannot be a good market for businesses.
    • In fact, it is the inadequate growth of incomes that has caused a slump in investments.
    • Ironically, the purpose of freeing up markets for labour is to reduce the burden of wage costs on investors just when wages and the size of markets must be increased.

    2) Increasing productivity

    • Productivity is a ratio of an input in the denominator and an output in the numerator.
    • The larger the output that is produced with a unit of input, the higher the productivity of the system.
    • Improvement of ‘productivity’ is key to economic progress.
    • Economists generally use labour productivity as a universal measure of the productivity of an economy.
    • Humans are the only ‘appreciating assets’ an enterprise has. They can improve their own abilities.
    • The values of machines and buildings depreciate over time, as any accountant knows.
    • Whereas human beings develop when they are treated with respect, and are provided with environments to learn.
    • For capital-scarce and human resource-abundant countries, such as many developing countries, the correct ratio of productivity is output per unit of capital.
    • This must be the driver of business as well as national strategies.
    • This was the strategy of ‘Japan Inc.’ to make Japan an industrial powerhouse.
    • This was E.F. Schumacher’s insight also.

    3) Use of technology

    • Schumacher, best known for his seminal idea ‘small is beautiful’ understood where capitalism powered with technology would be heading.
    • In his essay he wrote: “If we define the level of technology in terms of ‘equipment cost per work-place’, we can call the indigenous technology of a typical developing country (symbolically speaking) a £1-technology, while that of the modern West could be called a £1,000-technology.
    • The current attempt of the ‘developing ‘countries, supported by foreign aid, to infiltrate the £1,000-technology into their economies inevitably kills off the £1-technolgy at an alarming rate.
    • This results in destroying traditional workplaces at a much faster rate than modern workplaces can be created and producing the ‘dual economy’ with its attendant evils of mass unemployment and mass migration.
    • Schumacher had warned there was a malaise brewing beneath the drive to ‘Westernise’ and ‘technologise’ economies.

    Way forward: Social contract between society and workers

    • Workers provide the economy with the products and services it needs.
    • In return, society and the economy must create conditions whereby workers are treated with dignity and can earn adequate incomes.
    • Good jobs require good contracts between workers and their employers.
    • Therefore, the government should create a good society for all citizens, must regulate contracts between those who engage people to do work for their enterprises, even in the gig economy.
    • Goverment should push innovation in socially more beneficial directions to augment rather than replace less skilled workers.

    Conclusion

    The power balance must shift. Small enterprises and workers must combine into larger associations, in new forms, using technology, to tilt reforms towards their needs and their rights.

  • Weakening financial capacity of States

    The financial health of the States has been declining in the last several years. The article explains the reasons and its implications for the States.

    Role of States in development

    • State governments drive a majority of the country’s development programmes.
    • Greater numbers of people depend on these programmes for their livelihood, development, welfare and security.
    • States need resources to deliver these responsibilities and aspirations.

    Factors responsible for declining discal capacity of the States

    1) Declining devolution to State

    • Finance Commissions recommend the share of States in the taxes raised by the Union government and recommendations are normally adhered to.
    • The year 2014-15 commenced with a shock: actual devolution was 14% less than the Finance Commission’s projection.
    • Between 2014-15 and 2019-20, the States got ₹7,97,549 crore less than what was projected by the Finance Commission.

    2) Cess and surcharge

    • Various cesses and surcharges levied by the Union government are retained fully by it, they do not go into the divisible pool.
    • This allows the Centre to raise revenues, yet not share them with the States.
    • Hence, the Union government imposes or increases cesses and surcharges instead of taxes wherever possible and, in some cases, even replaces taxes with cesses and surcharges.
    • As a result, the States lose out on their share.
    • Between 2014-15 and 2019-20, cesses and surcharges soared from 9.3% to 15% of the gross tax revenue of the Union government.
    • This systematic rise ensures that the revenue that is fully retained by the Union government increases at the cost of the revenue that is shared with the States.
    • This government has exploited this route to reduce the size of the divisible pool.

    3) GST shortfall

    • Shortfalls have been persistent and growing from the inception of GST.
    • Compensations have been paid from the GST cess revenue.
    • GST cesses are levied on luxury or sin goods on top of the GST.
    • GST compensation will end with 2021-22. But cesses will continue.
    • With the abnormal exception of this year, the years ahead will generate similar or more cess revenue.
    • Hence, many States have been insisting outside and inside the GST Council that the Union government should borrow this year’s GST shortfall in full and release it to the States.
    • The Union government will not have to pay a rupee of this debt or interest.
    • The entire loan can be repaid out of the assured cess revenue that will continue to accrue beyond 2022.
    • Of the nearly ₹3 lakh crore GST shortfall to the States, the Centre will only compensate ₹1.8 lakh crore.
    • The States will not get the remaining ₹1.2 lakh crore this year.
    • In fact, it flies against the need of the hour to revive the economy.
    • Governments ought to spend money this year to stimulate demand.

    4) Declining grants from the Centre

    • Central grants are also likely to drop significantly this year.
    • For instance,₹31,570 crore was allocated as annual grants to Karnataka.
    • Actual grants may be down to ₹17,372 crore.

    Implications for the States

    • To overcome such extreme blows to their finances and discharge their welfare and development responsibilities, the States are now forced to resort to colossal borrowings.
    • Repayment burden will overwhelm State budgets for several years.
    • The fall in funds for development and welfare programmes will adversely impact the livelihoods of crores of Indians.
    • The economic growth potential cannot be fully realised.
    • Adverse consequences will be felt in per capita income, human resource development and poverty.
    • This is a negative sum game.

    5) Loss of financial autonomy due to GST

    Consider the question “What are the reasons for the declining financial health of the States in India? What are the implications for the States? Suggest the ways to deal with the issue.”

    Conclusion

    States are at the forefront of development and generation of opportunities and growth. Strong States lead to a stronger India. The systematic weakening of States serves neither federalism nor national interest.

  • What is the Purchasing Managers’ Index (PMI)?

    The services sector has PMI has signalled first expansion since February this year.

    Try this PYQ:

    Q.Which of the following brings out the ‘Consumer Price Index Number for Industrial Workers?

    (a) The Reserve Bank of India

    (b) The Department of Economic Affairs

    (c) The Labour Bureau

    (d) The Department of Personnel and Training

    Purchasing Managers’ Index

    • PMI is an indicator of business activity — both in the manufacturing and services sectors.
    • It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month before.
    • It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.

    How is the PMI derived?

    • The PMI is derived from a series of qualitative questions.
    • Executives from a reasonably big sample, running into hundreds of firms, are asked whether key indicators such as output, new orders, business expectations and employment were stronger than the month before and are asked to rate them.

    How does one read the PMI?

    • A figure above 50 denotes expansion in business activity. Anything below 50 denotes contraction.
    • Higher the difference from this mid-point greater the expansion or contraction. The rate of expansion can also be judged by comparing the PMI with that of the previous month data.
    • If the figure is higher than the previous month’s then the economy is expanding at a faster rate. If it is lower than the previous month then it is growing at a lower rate.

    What are its implications for the economy?

    • The PMI is usually released at the start of the month, much before most of the official data on industrial output, manufacturing and GDP growth becomes available.
    • It is, therefore, considered a good leading indicator of economic activity.
    • Economists consider the manufacturing growth measured by the PMI as a good indicator of industrial output, for which official statistics are released later.
    • Central banks of many countries also use the index to help make decisions on interest rates.

  • Reinforcing the RBI’s accountability

    Inflation targeting and legal provisions

    • The inflation target, notified in August 2016, is 4%.
    • The upper tolerance level was set at 6% and the lower tolerance level at 2%.
    • Inflation was 6.7% in the January-March quarter, 6.6% in the April-June quarter and 6.9% in the July-September quarter.
    • Breaching limits for any three consecutive quarters constitutes a failure to achieve the inflation target.
    • In such an event, the Reserve Bank of India (RBI) is required to send a report to the Centre, stating the reasons for the failure to achieve the inflation target, the remedial actions it proposes to initiate, and an estimate of the time-period within which it expects to achieve the inflation target through the corrective steps proposed.
    • Through amendments passed by Parliament in 2016, these new provisions were written into the RBI Act.
    • They are aimed at ensuring enhanced transparency and accountability of the central bank.

    Reason given by the RBI for missing the target

    • The normal data collection exercise of the National Statistics Office was disrupted during the lockdown imposed due to the COVID-19 pandemic.
    • The minutes of the Monetary Policy Committee (MPC) meeting after its August policy review suggest that the RBI’s defence for the breach of the 4% inflation target and 6% upper tolerance limit was the handicap of data limitations.

    Issues with the reason given by the RBI

    • The range around the inflation target that the Ministry provided to the RBI is for accommodating constraints and challenges like data limitations.
    • The whole point of the range around the target, the statement emphasised, is that it “accommodates data limitations, projection errors, short-run supply gaps and fluctuations in the agriculture production”.

    Way forward

    • RBI should be made to explain what it plans to do to control inflation.
    • The central bank should be allowed to state expressly what support by way of government policy it needs to meet the inflation target.
    • This can only strengthen the RBI’s hand; it should not let go of the opportunity to reinforce the MPC framework.

    Conclusion

    Transparency can enable more informed decision-making within the government, greater public scrutiny of the RBI’s performance, and an improved inflation-targeting regime. To slack off on it would be to compromise with the credibility, transparency and predictability of monetary policy.

  • Explained: Malabar Exercise

    Phase 1 of the Malabar Naval Exercise has kicked begun with the participation of Australian navy for the first time since 2007.

    Go through the list for once. UPSC may ask a match the pair type question asking exercise name and countries involved.

    [Prelims Spotlight] Defence Exercises

    What is Malabar Exercise?

    • It is a multilateral naval exercise that includes simulated war games and combat manoeuvres.
    • It started in 1992 as a bilateral exercise between the Indian and US navies. Japan joined in 2015.
    • This year the exercise will be held in two phases, the first from Tuesday off the coast near Visakhapatnam, and the second in the Arabian Sea in mid-November. Last year it was held in early September off the coast of Japan.

    Major highlight: Quad Participation

    • For the first time in over a decade, the exercise will see the participation of all four Quad countries.
    • This will be the second time Australia will participate. In 2007, there were two Malabar Exercises.
    • The first was held off Okinawa island of Japan in the Western Pacific — the first time the exercise was held away from Indian shores — and the second in September 2007.
    • The following year, Australia stopped participating. Japan became a regular participant only in 2015, making it a trilateral annual exercise since then.

    Why is Australia’s participation important?

    • The 2+2 dialogue ended with an agreement to uphold the rules-based international order, respect for the rule of law and freedom of navigation in the international seas and upholding the territorial integrity and sovereignty of all states.
    • As the standoff in eastern Ladakh continues, the participation of four large navies from the Indo-Pacific region will send a message to China.
    • It was the possibility of riling up China that had prevented India from expanding the Malabar Exercise, and from Australia joining it.

    Quad is an exception

    • Over the last few months, the Indian Navy has conducted a number of Passage Exercises (PASSEX) with navies from Japan, Australia and the US.
    • But those were basic exercises to increase operability between the navies, while Malabar involves simulated war games.

  • What is Army Aviation Corps?

    The Army Aviation Corps (AAC), the youngest Corps of the Indian Army, has celebrated its 35th Corps Day.

    Try this question for mains:

    Q. Discuss why high-altitude warfare is challenging. Also, discuss India’s preparedness for a long-term war.

    The Army Aviation Corps

    • The origin of the AAC can be traced back to the raising of the Army Aviation wing of the Royal Air Force in India in 1942, and the subsequent formation of the first Indian Air Observation Post in August 1947.
    • The Air Observation Post units primarily acted as artillery spotters – which are the elements that help the artillery in directing the fire and also giving air support to ground forces.
    • In the wars of 1965 and 1971, the Air Observation Post helicopters played a key role in the battlefields by flying close to the enemy lines and helping ground assets spot targets.
    • The Corps was raised as a separate formation on November 1 in 1986. The AAC now draws its officers and men from all arms of the Army, including a significant number from the artillery.

    Significant battles

    • Immediately after raising, the units of the Corps were pressed into action in Operation Pawan by the Indian Peacekeeping Forces, in the mostly jungle areas of Sri Lanka.
    • Ever since AAC helicopters have been an inseparable part of fighting formations in all major conflict scenarios and a life-saving asset in peace times.

  • Kawasaki Disease

    Children in the world over have shown to be affected by either Kawasaki Disease (KD) since the reopening of schools.

    Try this PYQ:

    Q.H1N1 virus is sometimes mentioned in the news with reference to which one of the following diseases?

    (a) AIDS

    (b) Bird flu

    (c) Dengue

    (d) Swine flu

    What is Kawasaki Disease?

    • Kawasaki disease is an illness that causes blood vessels to become inflamed, almost always in young children.
    • Its cause is yet unknown. It is one of the leading causes of heart disease in kids.
    • But doctors can treat it if they find it early. Most children recover without any problems.

    Symptoms

    Kawasaki disease comes on fast, and symptoms show up in phases. Signs of the first phase of Kawasaki disease include:

    • High fever that lasts more than 5 days
    • Swelling and redness in hands and bottoms of feet
    • Red eyes
    • Swollen glands, especially in the neck
    • Irritated throat, mouth, and lips

    In the second phase, symptoms include:

    • Joint pain
    • Stomach trouble, such as diarrhoea and vomiting
    • Peeling skin on hands and feet

  • What are Bulk Drugs Parks?

    Himachal Pradesh is one of the states vying for the allotment of a bulk drug park under a central government scheme announced earlier this year for setting up three such parks across the country.

    Try this question:

    Q.The drug pricing system in India is an indirect outcome of the growing dependence on China for APIs. Discuss.

    What are Bulk Drugs or APIs?

    • A bulk drug also called an active pharmaceutical ingredient (API), is the key ingredient of a drug or medicine, which lends it the desired therapeutic effect or produces the intended pharmacological activity.
    • For example, paracetamol is a bulk drug, which acts against pain.
    • It is mixed with binding agents or solvents to prepare the finished pharmaceutical product, ie a paracetamol tablet, capsule or syrup, which is consumed by the patient.
    • APIs are prepared from multiple reactions involving chemicals and solvents.
    • The primary chemical or the basic raw material which undergoes reactions to form an API is called the key starting material, or KSM.
    • Chemical compounds formed during the intermediate stages during these reactions are called drug intermediates or DIs.

    Why is India promoting bulk drug parks?

    • India has one of the largest pharmaceutical industries in the world (third largest by volume) but this industry largely depends on other countries, particularly China, for importing APIs, DIs and KSMs.
    • This year, drug manufacturers in India suffered repeated setbacks due to disruption in imports.
    • Factories in China shut down when the country went into a lockdown, and later, international supply chains were affected as the Covid pandemic gripped the entire world.
    • The border conflict between India and China exacerbated the situation.

    What is the Centre’s scheme?

    • The Centre’s scheme will support three selected parks in the country by providing a one-time grant-in-aid for the creation of common infrastructure facilities.
    • The grant-in-aid will be 70 per cent of the cost of the common facilities but in the case of Himachal Pradesh and other hill states, it will be 90 per cent.
    • The Centre will provide a maximum of Rs 1,000 crore per park.
    • A state can only propose one site, which is not less than a thousand acres in area, or not less than 700 acres in the case of hill states.

    What does a bulk park offer?

    • A bulk drug park will have a designated contiguous area of land with common infrastructure facilities for the exclusive manufacture of APIs, DIs or KSMs, and also a common waste management system.
    • These parks are expected to bring down manufacturing costs of bulk drugs in the country and increase competitiveness in the domestic bulk drug industry.

    Why Himachal?

    • Himachal already has Asia’s largest pharma manufacturing hub, that is the Baddi-Barotiwala-Nalagarh industrial belt, and the state produces around half of India’s total drug formulations.
    • Himachal offers power and water at the lowest tariffs in the country, and the state also has an industrial gas pipeline.
    • It jumped nine places in this year’s ease-of-doing-business rankings declared by the Centre last month, securing the seventh position in the country.

  • What is the D614G mutation in coronavirus?

    While novel coronavirus is undergoing many mutations, one particular mutation called D614G, according to a study, has become the dominant variant in the global COVID-19 pandemic.

    Try this PYQ:

    Q.Which one of the following statements is not correct?

    (a) Hepatitis B virus is transmitted much like HIV.

    (b) Hepatitis B, unlike Hepatitis C, does not have a vaccine.

    (c) Globally, the number of people infected with Hepatitis B and C viruses is several times more than those infected with HIV.

    (d) Some of those infected with Hepatitis B and C viruses do not show the symptoms for many years.

    D614G mutation

    • When the virus enters an individual’s body, it aims at creating copies of itself. When it makes an error in this copying process, we get a mutation.
    • In this case, the virus replaced the aspartic acid (D) in the 614th position of the amino acid with glycine (G). Hence the mutation is called the D614G.
    • This mutated form of the virus was first identified in China and then in Europe. Later it spread to other countries like the U.S. and Canada and was eventually reported in India.

    Threats posed

    • This particular mutation aids the virus in attaching more efficiently with the ACE2 receptor in the human host, thereby making it more successful in entering a human body than its predecessors.
    • D614G show increased infectivity but it also displayed greater ability at attaching itself to the cell walls inside an individual’s nose and throat, increasing the viral load.

    How prevalent is it in India?

    • A study (reveals that the D614G was one of the most prevalent spike mutations even during the initial phase of the pandemic.
    • Since then, D614G mutation’s ‘relative abundance’ has increased over time to 70% and above, in most states except Delhi.