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  • [pib] 20 years of Himalayan Chandra Telescope (HCT)

    In the cold, dry desert of Ladakh, 4500 meters above the mean sea level, for two decades, the 2-m diameter optical-infrared Himalayan Chandra Telescope (HCT) at the Indian Astronomical Observatory (IAO) has been scanning the night sky for 20 years in search of stellar explosions, comets, asteroids, and exo-planets.

    Chandra X-Ray observatory and now, it is Himalayan Chandra Telescope. Do you the key difference? The former is a NASA project while the HCT is the Indian one.

    Himalayan Chandra Telescope

    • The HCT is a 2.01 meters (6.5 feet) diameter optical-infrared telescope named after India-born Nobel laureate Subrahmanyam Chandrasekhar.
    • It contains a modified Ritchey-Chretien system with a primary mirror made of ULE ceramic which is designed to withstand low temperatures it experiences.
    • The telescope was manufactured by Electo-Optical System Technologies Inc. at Tucson, Arizona, USA.
    • It is mounted with 3 science instruments called Himalaya Faint Object Spectrograph (HFOSC), the near-IR imager and the optical CCD imager.
    • It is remotely operated from Hosakote, about 35 km northeast of Bangalore via an INSAT-3B satellite link which allows operation even in sub-zero temperatures in winter.

    Significant feats

    • The telescope has been used in many coordinated international campaigns to monitor stellar explosions, comets, and exo-planets, and has contributed significantly to these studies.
    • Some of the thrust research areas are the study of solar system bodies like; comets, asteroids, the study of star formation processes and young stellar objects, the study of open and globular clusters and variable stars in them.
    • It has helped in analysis of elements in the atmosphere of evolved stars, star formation in external galaxies, Active Galactic Nuclei, stellar explosions like novae, supernovae, gamma-ray bursts and so on.

  • [pib] UVIT: Indiaā€™s first multi-wavelength astronomical observatory

    The satellite that detected the first extreme-UV rays in the Universe from the cosmic noon celebrated its 5th birthday today.

    Try this PYQ:

    Q.ā€œEvent Horizonā€ is related to:

    (a) Telescope

    (b) Black hole

    (c) Solar glares

    (d) None of the above

    Ultra-Violet Imaging Telescope (UVIT)

    • The UVIT is a remarkable 3-in-1 imaging telescope.
    • Weighing all of 230 kg, the UVIT can simultaneously observe in the visible, the near-ultraviolet (NUV) and the far-ultraviolet (FUV).
    • UVIT comprises of two separate telescopes. One of them works in the visible (320-550 nm) and the NUV (200-300 nm).
    • The second works only in the FUV (130-180 nm).

    Its achievement

    • It has carried out 1166 observations of 800 unique celestial sources proposed by scientists both from India and abroad.
    • It has explored stars, star clusters, mapping of the large and small satellite galaxies nearby to our own Milky Way galaxy called the Magellanic Clouds.
    • It is an energetic phenomenon in the Universe such as the ultra-violet counterparts to gamma-ray bursts, supernovae, active galactic nuclei, and so on.
    • Its superior spatial resolution capability has enabled astronomers to probe star formation in galaxies as well as resolve the cores of star clusters (3 times better than the last NASA mission, GALEX).
    • Observations from UVIT has recently led to the discovery of a galaxy located at a distance of about 10 billion light-years from Earth and emitting extreme ultraviolet radiation that can ionize the intergalactic medium.

  • Reform is about giving farmers choice

    The article analyses the regional variation in the problems and issues of the farmer and how it has implications for the reforms in agriculture.

    An issue of estimating the number of farmers in India

    • Almost 111 million are registered for the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan).
    • Other than some categories being barred from PM-Kisan benefits, not every eligible farmer has necessarily registered for PM-Kisan.
    • The last Agriculture Census in 2015-16 gave us 146 million holdings.
    • If the agricultural landholding is conditional on being a farmer, apart from a possible further increase since 2015-16, 146 million is possibly the upper bound.
    • Every definition of ā€œfarmerā€ is not contingent on the ownership of land.
    • The Protection of Plant Varieties and Farmersā€™ Rights Act of 2001 is an example where status as a farmer depends on cultivating land (or supervising cultivation), not owning it.
    • That issue was also flagged by the National Commission on Farmers, such as in the Draft National Policy for Farmers (2006), where ā€œfarmersā€ included agricultural labourers, sharecroppers, tenants and so on.

    Issues with making landholding prerequisite for being a farmer

    • The Committee on State Agrarian Relations and the Unfinished Task in Land Reforms (2009) noted that ā€œthe Survey and Settlement Operations in the Permanently Settled Areas have not been taken up and where they have been taken up, for instance in Bihar, they tend to never conclude”
    • The last extensive survey and settlement in India was conducted two to three decades prior to Independence.
    • Post-Independence, some states have not undertaken a revisional survey and settlement so far.
    • There have been improvements since 2009 and the Department of Land Resources has a Digital India Land Records Modernisation Programme (DILRMP).
    • Punjab and Haryana rank 16th and 18th respectively in Records and Services Index (LRSI).
    • Gujarat, West Bengal and Tripura score high on this Index (over 90 per cent).

    Variation across the States

    • If land records are in this condition, some farmers will conceivably be excluded from the farmer definition.
    • With diverse and heterogenous agriculture, all farmers will not have identical views.
    • Ā 2015-16 Agricultural Census tells us that most operational holdings are in UP, Bihar, Maharashtra and MP, in that order.
    • The highest operated areas are in Rajasthan, Maharashtra, UP and MP, in that order.
    • 86.1 per cent of holdings are small and marginal (less than 2 hectares) and only 0.6 per cent are large (more than 10 hectares).

    Conclusion

    The face of Indian agriculture has changed and is no longer what it was in the Green Revolution days, centred on Punjab, Haryana and western UP. Farmers, and governments, in Bihar and Kerala, donā€™t want APMCs, nor do UP, MP, Gujarat and Karnataka. There is no evidence that this has made those farmers worse off.

  • Growth compulsion, fiscal arithmetic

    The government faces the challenge of high fiscal deficit and declining revenue. This article discusses the challenge and suggests the way forward to deal with the situation.

    Dismal growth prospects

    • At (-)23.9% contraction for the first quarter of 2020-21, India’s growth showed one of the highest contraction globally.
    • What is most surprising in the Q1 data is that the sector ā€˜Public Administration, Defence and other Servicesā€™ contracted at (-) 10.3%.
    • This means that there was no fiscal stimulus.
    • The 2020-21 real GDP growth for India is forecast in the range of (-) 5.8% (RBI) to (-) 14.8% (Goldman Sachs).
    • The OECD in its September 2020 Interim Economic Outlook has projected a contraction of (-) 10.2% in FY21 for India.

    Challenge of decline in revenue

    • Due to a sharp contraction in nominal GDP growth, central and State tax revenue, both may contract.
    • . In the first quarter of 2020-21, the Centreā€™s gross tax revenues contracted by (-) 32.6%.
    • The CAG-based data pertaining to 19 States show a contraction of (-) 45% in their own tax revenues.
    • Given the adverse impact of the lockdown, even the budgeted non-tax revenues are not likely to be realised.
    • The revenue calculations of the Budget were made on the assumption that the nominal income of the country would grow at 10%.
    • Some estimates indicate that the tax and non-tax revenue and non-debt capital receipts in the current fiscal may fall well short of the budget estimates by an amount higher than ā‚¹5-lakh crore.
    • The combined fiscal deficit of the Centre and the States will have to make up for the shortfall in tax and non-tax revenues, if the level of budgeted expenditures is to be maintained.

    Challenge of widening of fiscal deficit

    • In order for the central government to maintain the level of budgeted expenditure and also provide for additional stimulus, its fiscal deficit may have to be increased to close to an estimated 8.8% of GDP.
    • If one adds the Centreā€™s and Statesā€™ fiscal deficit, the combined fiscal deficit amounts to 13.8% of GDP.
    • If the nominal GDP actually contracts in 2020-21, the fiscal deficit as the percent of GDP would go up further.

    Role of the RBI

    • The International Monetary Fund, in its June 2020 update of the World Economic Outlook, estimated the fiscal deficit of India and China at 12.1% of GDP.
    • India doesn’t have adequate resources to support a fiscal deficit of nearly 14% of GDP.
    • All this will therefore require substantial support from the Reserve Bank of India which will have to take on itself, either directly or indirectly, a part of the central government debt.
    • In the direct mode, the RBI takes on the debt directly from government at an agreed rate.
    • It took India long to move away from the automatic monetisation of debt.
    • Even if the RBI wants to support the borrowing programmes, it should not do so directly.
    • The indirect method is preferable as the market still sends out the signals on interest rate.
    • In both cases, the RBI is the provider of liquidity.
    • The question ultimately relates to the extent of debt monetisation that may be undertaken.
    • The country has also to guard against high inflation.

    Role of government

    • The economic situation warrants enhanced government expenditure.
    • It appears that governments are withholding expenditure. That is not the right approach.
    • At the same time, there is a limit to monetisation of debt.

    Conclusion

    Perhaps the best course of action would be to keep the combined fiscal deficit at around 14% of GDP in the current year and find ways to finance it. This will have to be brought down gradually. It may take several years of normalisation.

  • Where are the funds collected through cess parked?

    The Comptroller and Auditor General (CAG) of India, in its latest audit report of government accounts, has observed that the government withheld in the Consolidated Fund of India (CFI) more than ā‚¹1.1 lakh crore out of the almost ā‚¹2.75 lakh crore collected through various cesses in 2018-19.

    Try this PYQ:

    Q.Consider the following items:

    1. Cereal grains hulled
    2. Chicken eggs cooked
    3. Fish processed and canned
    4. Newspapers containing advertising material

    Which of the above items is/are exempted under GST (Goods and Services Tax)? (CSP 2018)

    (a) 1 only

    (b) 2 and 3 only

    (c) 1, 2 and 4 only

    (d) 1, 2, 3 and 4

    Issues with the cess deposits

    • The CAG found this objectionable since cess collections are supposed to be transferred to specified Reserve Funds that Parliament has approved for each of these levies.
    • The nationā€™s highest auditor also found that over ā‚¹1.24 lakh crore collected as Cess on Crude Oil over the last decade had not been transferred to the designated Reserve Fund ā€” the Oil Industry Development Board.
    • Similarly, the Goods and Services Tax (GST) Compensation Cess was also ā€œshort-creditedā€ to the relevant reserve fund.

    What is Cess?

    • The Union government is empowered to raise revenue through a gamut of levies, including taxes (both direct and indirect), surcharges, fees and cess.
    • While direct taxes, including income tax, and indirect taxes such as GST are taxes where the revenue received can be spent by the government for any public purpose in any manner it deems appropriate for the nationā€™s good, a cess is an earmarked tax that is collected for a specific purpose and ought to be spent only for that.
    • Every cess is collected after Parliament has authorised its creation through enabling legislation that specifies the purpose for which the funds are being raised.
    • Article 270 of the Constitution allows cess to be excluded from the purview of the divisible pool of taxes that the Union government must share with the States.

    How many cesses does government levy?

    • A report submitted to the Fifteenth Finance Commission listed 42 cesses that have been levied at various points in time since 1944.
    • The very first cess was levied on matches, according to this report.
    • Post Independence, the cess taxes were linked initially to the development of a particular industry, including a salt cess and a tea cess in 1953.
    • Subsequently, the introduction of cess was motivated by the aim of ensuring labour welfare.
    • Some cesses that exemplified this thrust were the iron ore mines labour welfare cess in 1961, the limestone and dolomite mines labour welfare cess of 1972 and the cine workers welfare cess introduced in 1981.

    Cesses after GST

    • The introduction of the GST in 2017 led to most cesses being done away with and as of August 2018, there were only seven cesses that continued to be levied.
    • These were Cess on Exports, Cess on Crude Oil, Health and Education Cess, Road and Infrastructure Cess, Building and Other Construction Workers Welfare Cess, National Calamity Contingent Duty on Tobacco and Tobacco Products and the GST Compensation Cess.
    • And in February, Finance Minister Nirmala Sitharaman introduced a new cess ā€” a Health Cess of 5% on imported medical devices ā€” in the Finance Bill for 2020-2021.

    Why is the issue in the news currently?

    • For one, most crucially, the express purpose of this particular cess is to help recompense States for the loss of revenue on account of their having joined the GST regime by voluntarily giving up almost all the power to levy local indirect taxes on goods and services.
    • Also, the share of revenue to the Centreā€™s annual tax kitty from cess had risen to 11.88% of the estimated gross tax receipts in 2018-19, from 6.88% in 2012-13.
    • Given that cess does not need to be a part of the divisible pool of resources, this increasing share of cess in the Union governmentā€™s tax receipts has a direct impact on fiscal devolution.

  • Case for principles of sound public policy

    Context

    • Due to extreme uncertainty, several adventurous prescriptions have been put forth.

    Following are 4 unconventional measures and issues with them are discussed here.

    1) Shoud we change the Inflation targeting regime?

    • Monetary policy committee (MPC) concluding that elevated inflation has constrained it from easing policy rates further.
    • One way out of this is for the government to relax the inflation-targeting framework.
    • This would involve greater tolerance for higher levels of inflation or by extending the period over which the MPC has to meet its inflation target.
    • Others have suggested shifting from headline to core-inflation as the nominal anchor of monetary policy or incorporating other indicators such as nominal GDP explicitly into the framework.
    • The more extreme ones talk about doing away with the inflation targeting framework altogether.

    Why changing the inflation targeting regime will not be helpful

    • There is a strong argument for the MPC to look beyond the current spike in inflation and ease rates further.
    • But disagreements with either the rationale or the stance of the committee members must not be construed as disagreements with the framework.
    • Raising the tolerance threshold may sound appealing now, but it will inject a degree of uncertainty and unpredictability in monetary policy.
    • Considering that anchoring expectations around the inflation target takes time, frequent revisions are unlikely to help stabilise household expectations.
    • While explicitly signallingĀ  will be one of deviating from a rule-based framework.

    2) What we shift to Multiple Indicator Structure?

    • Such a move would bring back the situation ofĀ the pre-MPC days.
    • In pre-MPC days there was far greater uncertainty over monetary policy.
    • In pre-MPC days there was no clarity over the indicator that was dictating the stance of the RBI governor or which indicator would be given preference, and when.
    • Such proposals go against the rationale for shifting to such a framework in the first place ā€” an inflation targeting regime.
    • Inflationg targeting regime is a well-defined anchor, is meant to facilitate greater transparency and accountability from the central bank.

    Way forward

    • There must be a concerted attempt to push for more external voices in the MPC.
    • In the UK, a non-voting treasury representative sits with the MPC to discuss policy issues.

    3) Should central bank effectively financing the Centreā€™s capital expenditure on a regular basis?

    • Ā This is problematic at many levels.
    • First, notwithstanding problems in estimating potential output, monetisation, even in the rarest of rare cases, should be the last resort.
    • Such an arrangement, risks tilting the balance of power in favour of the government.
    • Any government, owing to its short-term political imperatives, is likely to be seduced by the apparent simplicity of this idea.
    • Second, giving a central bank a degree of control over the governmentā€™s expenditure priorities is not a prudent approach.
    • Whatever be their policy inclinations and expenditure priorities, elected representatives have to face voters.
    • Why should unelected technocrats be in charge of determining the expenditure priorities of the government?
    • Such proposals blur the lines between fiscal and monetary policy and may lead to what some call the fiscalisation of monetary policy.

    4) Should government pledge its shares in companies?

    • This raises questions. Should a sovereign pledge assets to borrow in the local currency?
    • In 1991, India had pledged gold for a foreign currency-denominated loan not a local currency loan.
    • So why the collateral? And what happens if the value of the shares pledged falls below that of the loan?

    Conclusion

    Some unconventional measures may well be needed at the current juncture. But discarding the principles of sound public policy, though it sounds appealing, could end up doing more harm than good.

  • [pib] Delhiā€“Meerut Regional Rapid Transit System (RRTS)

    The first look of Indiaā€™s first RRTS train on Delhi-Ghaziabad-Meerut corridor has been unveiled.

    Try this PYQ:

    Q.Consider the following pairs:

    National Highway: Cities connected

    1. NH 4: Chennai and Hyderabad
    2. NH 6: Mumbai and Kolkata
    3. NH 15: Ahmedabad and Jodhpur

    Which of the above pairs is/are correctly matched?

    (a) 1 and 2 only

    (b) 3 only

    (c) 1, 2 and 3

    (d) None

    About the RRTS train

    • The Delhiā€“Meerut RRTS is an 82.15 km long, under-construction, semi-high speed rail corridor connecting Delhi-Ghaziabad-Meerut.
    • It is one of the three rapid-rail corridors planned under Phase-I of Regional Rapid Transport System (RRTS) project of National Capital Region Transport Corporation (NCRTC).
    • With a maximum speed of 160 km/h (99.42 mph), the distance between Delhi and Meerut will be covered in around 62 min (1.03 h).
    • With radiating stainless steel outer body, these aerodynamic RRTS trains will be lightweight and fully air-conditioned.
    • Each car will have six automatic plug-in type wide doors, three on each side for ease of access and exit.

  • [pib] JIMEX 20

    The 4th edition of India – Japan Maritime bilateral exercise JIMEX will be held in the North Arabian Sea from 26 to 28 September 2020.

    JIMEX 20

    • It is conducted biennially between the Indian Navy and Japanese Maritime Self-Defense Force (JMSDF)
    • This series of exercises was commenced in January 2012 with a special focus on maritime security cooperation.
    • The last edition of JIMEX was conducted in October 2018 off Visakhapatnam, India.
    • JIMEX 20 will showcase a high degree of inter-operability and joint operational skills through the conduct of a multitude of advanced exercises, across the spectrum of maritime operations.
    • Multi-faceted tactical exercises involving weapon firings cross deck helicopter operations and complex surface, anti-submarine and air warfare drills will consolidate coordination developed by the two navies.
    • JIMEX 20 will further enhance the cooperation and mutual confidence between the two navies and fortify the long-standing bond of friendship between the two countries.

  • Lessons from Biharā€™s abolition of its APMC system for farmers

    The article analyses the results of complete abolition of APMC in Bihar in the context of current protest against the agri bills.

    Context

    • Farmersā€™ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 has been a source of anger among farmers.
    • By allowing unregulated trading areas beyond APMC mandis, the law seeks to remove intermediaries from agricultural trade and raise price realization for farmers.

    Excessive politicization of APMCs

    • APMC’s excessive politicization has resulted in cartelization and price-fixing.
    • For this reason, there have been several attempts at reforming their functioning.
    • Easier licensing norms, the removal of entry and exit barriers and computerization and transparency have been introduced in most APMC markets.
    • However, the Bihar government decided to abolish the APMC system altogether in 2006.

    Analysing the impact of abolition of APMC in Bihar

    • It was hoped that abolition would ensure better prices for farmers of the state and attract large sums of private investment.
    • Before their abolition, Bihar had 95 market yards, of which 54 had infrastructure such as covered yards, godowns and administrative buildings, weighbridges, and processing as well as grading units.
    • Ā With no revenue to maintain it, that infrastructure is now in a dilapidated condition.
    • Ā A study by the National Council for Applied Economic Research reported increased volatility in grain prices after 2006.
    • Most of the farmers surveyed reported high storage costs at private warehouses.
    • Farmers this year in Bihar received lower price for maize compared to the farmers in states with APMC.

    Lessons from Bihar

    • The Bihar experiment has important lessons for future marketing reforms in agriculture.
    • The benefits of these reforms will only accrue to farmers if they are accompanied by private investment in creating the physical infrastructure and institutional mechanisms needed to allow for greater participation of farmers.
    • The record of states on attracting private investment isnā€™t much better.

    Conclusion

    By only attempting to shift trade away from APMC to non-APMC areas, without a regulatory framework, the new law is unlikely to ensure better price realization for farmers.

  • Environmentalism at the core

    The article explains the importance of focusing on the green supply chain for ensuring sustainability along with the progress of the organisations.

    Sustainability as an essential issue

    • The U.N’s. Millennium Development Goals and the World Bank Groupā€™s global practices have recognised sustainability as an essential issue of global importance.
    • Economic, social and other forms of sustainability have evolved over the years, but it is environmental sustainability that has gained significant popularity.

    Economy and sustainability

    • Some firms have positioned environmental practices at the forefront due to legislation, and industry and government commitments.
    • Several firms have prioritised environmental practices due to compelling regulatory norms, and a potential to manage costs, risks and optimise eco-friendly practices.
    • However, organisations in the manufacturing sector focus on waste reduction and energy efficiency improvements excessively and fail to see the big picture of environmentalism.

    Adopting green supply chains for long-lasting benefits

    • Only through organisational learning can people be urged to work towards long-lasting benefits.
    • In this context, green supply chain practices are useful.
    • These include green procurement, green manufacturing, green distribution, and reverse logistics.
    • With practices starting from acquisition of eco-friendly raw material to disposal/ reuse/ recycle of used products, employees, suppliers, distributors, retailers and customers will be able to integrate environmental concerns in the daily operations of a firm.
    • Thus, green supply chain practices enable organisational learning in environmental sustainability.
    • Ā Research shows that the positive impacts of environmentalism can only be felt in the long term when they get embedded into organisational learning systems through green supply chain practices.
    • The resultant learning system smoothens the knowledge flow in the organisation.

    Focusing on linkages

    • Linkages between green supply chain practices, corporate environmental performance, corporate economic performance is necessary for an organisationā€™s progress and environmental protection.
    • When the different players of a manufacturing supply chain realise the inherent benefits associated with organisational learning dimensions, their drive towards environmentalism increases.

    Conclusion

    Policymakers should support this thinking by not merely imposing environmental practices as regulatory norms but by emphasising on the creation of green supply chain-based learning systems in manufacturing.