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GS Paper: GS3

  • ASTROSAT Satellite

    ASTROSAT, India’s first multi-wavelength satellite observatory, has detected an extreme ultraviolet (UV) light from a galaxy which is 9.3 billion light-years away from Earth.

    Try out:

     

    Consider the following statements regarding the AstroSat:

    1)AstroSat is India’s multi-wavelength space telescope.
    2)ASTROSAT mission is that enables the simultaneous multi-wavelength observations of various astronomical objects with a single satellite.
    3)ASTROSAT observes the universe in the optical and high energy X-ray regions of the electromagnetic spectrum.

    Which of the following above statements is true?

    a.1 and 2
    b.2 and 3
    c.1 and 3
    d.1, 2 and 3

    AUDFs01

    • AstroSat has detected extreme-UV light from a galaxy, called AUDFs01, 9.3 billion light-years away from Earth.
    • The galaxy is located in the Hubble Extreme Deep field, through AstroSat.
    • This is a very important clue to how the dark ages of the universe ended and there was light in the universe.

    About ASTROSAT

    • AstroSat is India’s first dedicated multi-wavelength space telescope. It was launched on a PSLV-XL on 28 September 2015.

    It is the first dedicated Indian astronomy mission aimed at studying celestial sources in X-ray, optical and UV spectral bands simultaneously.

    ————–//—————-

    Find some time to scroll through recent ISRO missions and discoveries.

    ISRO Missions and Discoveries

  • Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme

    The outlay for the RoDTEP scheme is expected to be “much higher” than the NITI Aayog’s much-curtailed estimate of Rs 10,000 crore a year.

    Overt allocation

    • The central government had envisaged an annual allocation of about Rs 50,000 crore under the RoDTEP scheme to make exports zero-rated.

    Try this PYQ:

    Q. Among the following, which one is the largest exporter of rice in the world in the last five years? (CSP 2019)

    (a) China

    (b) India

    (c) Myanmar

    (d) Vietnam

    RoDTEP Scheme

    • RoDTEP is a scheme for the Exporters to make Indian products cost-competitive and create a level playing field for them in the Global Market.
    • It has replaced the current Merchandise Exports from India Scheme, which is not in compliance with WTO norms and rules.
    • The new RoDTEP Scheme is fully WTO compliant scheme.
    • It will reimburse all the taxes/duties/levies being charged at the Central/State/Local level which are not currently refunded under any of the existing schemes but are incurred at the manufacturing and distribution process.

    Back2Basics: Merchandise Exports from India Scheme (MEIS)

    • MEIS was launched with an objective to enhance the export of notified goods manufactured in a country.
    • This scheme came into effect on 1 April 2015 through the Foreign Trade Policy and will be in existence till 2020.
    • MEIS intends to incentivise exports of goods manufactured in India or produced in India.
    • The incentives are for goods widely exported from India, industries producing or manufacturing such goods with a view to making Indian exports competitive.
    • The MEIS covers almost 5000 goods notified for the purpose of the scheme.

  • River Ropeway over Brahmaputra

     India’s ‘longest’ river ropeway across the Brahmaputra River was unveiled in Guwahati.

    Navigate to this page for more readings on Brahmaputra River systems:

    Brahmaputra River System

    Brahmaputra Ropeway

    • The 1.82 km bi-cable jig-back ropeway connects the southern bank of the Brahmaputra and a hillock behind the Doul Govinda temple in North Guwahati on the other.
    • It passes over the mid-river Peacock Island that houses Umananda, a medieval Shiva temple.
    • It thus cuts travel time between the two banks to 8 minutes.
    • The current travel options between the two banks are by ferry (30 minutes or more, depending on current and season) or by road through a bridge that usually takes over an hour in the traffic.

  • The missing large in MSMEs

    MSMEs in India has huge untapped potential. This article suggest the ways to tap it and make the MSMEs major contributor to India’s growth.

    What is an issue with MSMEs

    • Despite MSME contributing 20% of the GDP and employing about 110 million workers,  we have failed to make bold policy-moves to make it more productive and competitive.
    •  MSMEs are not becoming ‘larger’ and more dynamic, with 99% of the estimated 60 million being micro-enterprises with limited aspirations.
    • At the core of this lack of competitiveness is a structural issue.

    Addressing the structural challenges

    Size

    • Consider  India’s largest textile cluster vs Bangladesh’s largest.
    • More than 70% of the units in Tirupur are micro-enterprises with less than 10 employees while only 20% of the units in Narayanganj in Bangladesh have less than 10 employees.
    • This factor makes the cluster in Bangladesh more competitive and helping Bangladesh’s exports grow faster than India’s.
    • Though  Bangladesh has other advantages also, but this structural difference is critical.

    Relation between size and productivity

    • Productivity data from manufacturing MSMEs in OECD show that the productivity of medium firms (50-250 people) could be as much as 80-100% higher than that of micro firms (<9 employees).
    • Growth in scale allows them to invest in people to improve skills, in better technology & processes, and in innovation.
    • The most-competitive of them grow from their small beginnings to become world-beaters.
    • This push to grow and improve capabilities and productivity is central to dynamism of any country’s industrial structure.
    • This dynamism of micro-enterprises has been one of the less-reported policy levers behind China’s rise as an industrial powerhouse.

    What stops MSMEs in India from growing?

    • Our policy-legacy of highly restrictive asset-based definition which has only recently been relaxed, coupled with a mindset, and, policies, to support the ‘small is beautiful’ narrative.
    • Overly complex regulatory regime doesn’t differentiate enterprises on their scale, other than the really tiny ones, in terms of compliance needs.
    • For example, if a unit has more than six employees, the trade union law becomes applicable, If a unit has more than 10 employees, the Factories Act is applicable.
    • Small enterprises thus face the same multitude of regulatory requirements as larger ones, and end up having compliance costs account for a higher percentage of revenue.
    • For the tiny/micro units, there is simply no incentive to grow and enter the formal economy.

    Policy intervention needed

    1) Getting MSMEs into formal credit system

    • To do this, we need to adopt an approaches that can help banks and NBFCs move away from asset-backed lending, towards some form of cash-flow-based lending.
    • Small retailers are outside the formal credit system, unable to invest, modernise and grow, given they lack fixed ‘assets’.
    • But, all of them are linked to, and sell, brands of well-known, large companies.
    • If banks and NBFCs work with these companies and use anonymised data on sales and credit-performance to develop credit-scores for lending to them?
    • Similar innovative ways could help cover other micro-unit segments.

    2) Simplified tax and regulatory regime

    • The second policy intervention needed is to de-average and implement a simplified tax and regulatory regime for MSMEs.
    • This would also reduce the cost of compliance.

    3) Development of digital platform

    • The third intervention, appropriate for digital era, is to develop a comprehensive ‘digital platform’ for the sector.
    • This will call for a mandatory, unique identifier for all.
    • The platform will have to be linked to different relevant databases.

    Consider the question “MSMEs in India continues to play an important role in India’s development yet it suffers from structural challenges which hinders it from fueling India’s growth. In light of this, examine the challenges MSMEs faces and suggest the policy interventions.” 

    Conclusion

    As India launches the Atmanirbhar Bharat Abhiyan to reignite growth of the economy for a post-COVID world, building such a globally-competitive MSME has to become one of the initiative’s core pillars. Only then can our industry improve and sustain its global competitiveness.

    Source-

    https://www.financialexpress.com/opinion/the-missing-large-in-msmes-a-globally-competitive-indian-mittelstand-is-the-need-of-the-hour/2063155/

  • How GST created single market

    The article analyses the instrumental role played by the GST in transforming nation into a single market dismantling the barriers across the states.

    Reduced tax burden on consumers

    • In the pre-GST era, the total of VAT, excise, CST and their cascading effect led to 31 per cent as tax payable, on an average, for a consumer.
    • In its first two years, as the collections improved, the GST Council kept reducing the tax burden on consumers.
    • Most items have been brought in the 18 per cent, 12 per cent or even 5 per cent category.
    •  Most items of daily common use are in the zero to 5 per cent slab.
    • An analysis by the Reserve Bank of India (RBI) observes that since the roll out of GST, the rate changes have brought down the GST incidence from 14 per cent to 11.6 per cent.
    • This explains the revenue loss stated above. The consumer pays less tax now under the GST.

    Flexibility and increased compliance

    • Taxation threshold for goods was increased to Rs 40 lakh.
    • The composition limit was increased from Rs 75 lakh to Rs 1.5 crore.
    • For manufacturers, composition tax rate was lowered from 2 per cent to 1 per cent.
    • The composition scheme was extended to services as well.
    • Special lower rates without Input Tax Credit (ITC) were prescribed for construction and restaurants.
    • As per an RBI calculation, the weighted GST rate at present is 11.6 per cent.
    • The revenue-neutral rate determined at the time of GST introduction by its own committee was 15.3 per cent.

    Widened tax base

    • Today, there are 1.2 crore GST assessees compared to 65 lakh at the time of introduction of the tax regime.
    • The average revenue collected per month for the nine months (July-March) in 2017-18 was Rs 89,700 crore in  2018-19 it rose by 10 per cent to Rs 97,100 crore.
    • In FY 2019-20, the revenue per month was Rs 1,02,000 crore.
    • This steady increase was despite the various concessions and rate reductions mentioned above.

     Simplification

    • GST is an IT-enabled platform.
    • Accounting and billing software is provided free to the small taxpayers.
    • Those with nil return to file can do so with an SMS.
    • Since the registration is completely online, the refund process is also fully automated.
    • The Centre is the only refund disbursal authority and no physical interface is required.

    Agriculture sector under GST

    • Concessions are extended to the agriculture sector under GST, agricultural inputs such as fertilisers, machinery have seen a considerable reduction in rates.
    • Other inputs such as cattle/poultry/aquatic feeds are kept at the nil rate.
    • Agricultural produce such as vegetables, fruits, flowers and foodgrains are exempt from GST.
    • Dairy products — milk, curd, lassi, buttermilk and minor forest produce such as lac, shellac and sisal leaves are also exempt.
    • Silk cocoon, raw silk, wool, jute fibre are nil rated.
    • In the pre-GST era, many of these were in the 5 per cent slab.
    • Service inputs to agriculture are similarly treated.
    • Before the introduction of GST, many such items were taxed at a standard rate of 15 per cent.

    MSME  under GST

    • Micro, small and medium enterprises (MSMEs) have consistently received sensitive treatment under the GST regime.
    • Items that have large employment creating activities, rough diamond/precious stone sorting and polishing for example, have seen a GST reduction from 3 per cent to 0.25 per cent.
    • Services rendered by MSMEs have also received such sensitive treatment.

    Concerns

    • Tax reduction in some cases has led to an inversion of duty structure.
    • Manufactured goods in lower slabs have suffered due to inversion in the duty structure.
    • With lockdowns and consequential deferrals in tax payments, compensation payments to the states is a concern that the Council has taken cognisance of.

    Consider the question “Elaborate on how the GST has been benefiting the various stakeholders and helped in transforming India into a single market?” 

    Conclusion

    The states have shown maturity and understanding. The spirit of collective responsibility and statesman-like thinking have kept mutual trust and confidence high. The much talked about cooperative federalism is actually in action in the GST Council.

  • BIS’ draft standard for drinking water supply

    The Bureau of Indian Standards (BIS) has prepared a draft standard for the supply system of piped drinking water.

    Try this question for mains:

    Q.Climate change, scarcity, population growth, demographic changes and urbanization pose challenges for water supply systems in India. Analyse.

    About the Draft

    • Labelled ‘Drinking water supply quality management system — requirements for piped drinking water supply service’, the draft has been prepared by the BIS’ Public Drinking Water Supply Services Sectional Committee.
    • It outlines the process of water supply, from raw water sources to household taps.
    • It has been developed keeping in view the Centre’s Jal Jeevan Mission for providing safe and adequate drinking water to all rural households by 2024 through tap connections.
    • It is expected to make the process of piped water supply more uniform, especially in rural and underdeveloped areas of the country where the system runs on various government orders and circulars.
    • At present, the standard is expected not to be made mandatory.

    Highlights of the draft

    • The draft outlines the requirements for a water supplier or a water utility on how they should establish, operate, maintain and improve their piped drinking water supply service.
    • The process begins with the identification of a water source, which can either be groundwater or surface water sources such as rivers, streams or reservoirs.
    • It doesn’t mention how water utilities should treat the water, but states that the process should be planned in such a manner that after treatment it should conform to the Indian Standard (IS) 10500 developed by the BIS.
    • The IS 10500 outlines the acceptable limits of heavy metals such as arsenic, and other parameters like the pH value of water, its turbidity, the total dissolved solids in it, and the colour and odour.

    What is the water supply process?

    • The supply system as outlined in the draft should begin with the identification of a raw water source.
    • Water should then be pumped into the treatment plant and treated to achieve acceptable drinking standards.
    • After the water is released from the plant, there should be reservoirs in the distribution system for storage of this water, and disinfection facilities to get rid of contamination at any stage of distribution.
    • Pumping stations or boosters, if necessary, should be provided to maintain adequate pressure throughout the distribution system.

    District Metering Area (DMA) concept

    • The document also states that the concept of district metering area (DMA) should be adopted where possible.
    • DMA is a concept for controlling leakages in the water network, which is essentially divided into a number of sectors, called the DMAs, and where flow meters are installed to detect leaks.
    • The water supplier/utility may provide bulk water meters in the water distribution system to ensure water audit, however, the provisions should be made for domestic meters also.

    What’s there in the draft in addition to the water supply process?

    • There are guidelines on water audit, which is a calculation of the amount of water put into distribution against the amount that is consumed.
    • The draft states that a water audit should be conducted on a quarterly basis.
    • Effort should be made by the water agency to bring down the water loss up to 15% of the total water supplied in the system.
    • The water utilities are also required to conduct surveys among consumers and obtain feedback on their service as per the draft.
    • Guidelines on internal audit, management review, documenting performance indicators for improvement, and timely action against non-conformity issues also find mention.

  • Differential impact of COVID and the lockdown

    Though pandemic has been called as the great leveller, closer look at the impact of Covid on the marginalised section indicate otherwise. This article examines the impact of pandemic with respect to responsible factors.

    The marginalised at risk

    • Preliminary data and early indirect evidence from several parts of the world indicate that the incidence of the disease is not class-neutral.
    • Poorer and economically vulnerable populations are more likely to contract the virus as well as to die from it.
    • Economic consequences of the current pandemic are likely to be most concentrated among the low wage earners.
    • Disaggregated data on COVID-19 incidence and mortality are not available for India.
    • Thus, we cannot comment on whether certain caste groups are more vulnerable to the virus than others.

    Cast factor: Let’s look into CMIE survey

    • India’s lockdown was among the most stringent.
    • The first month of the severe lockdown, April 2020, witnessed a sharp rise in unemployment.
    • Let’s examine shifts in employment and unemployment rates using data from the Centre for Monitoring Indian Economy (CMIE)’s Consumer Pyramids Household Survey (CPHS) database.
    • That the proportion of employed upper castes dropped from 39% to 32% between December 2019 and April 2020, a fall of seven percentage points.
    • The corresponding fall for Scheduled Castes (SCs) was from 44% to 24%, i.e. a fall of 20 percentage points.
    • Other Backward Classes and Scheduled Tribes (STs) the fall was from 42% to 34%, 40% to 26% and 48% to 33%.
    • Thus, the fall in employment for SCs and STs was far greater in magnitude than that for upper castes.

    Education factor

    • The global evidence suggests that job losses associated with COVID-19 are much more concentrated among individuals with low levels of education.
    • Those with more than 12 years of education, were much less likely to be unemployed in April 2020 than those with less than 12 years of education.
    •  Data from the India Human Development Survey for 2011-12 (IHDS-II) show that 51% of SC households have adult women who have zero years of education, i.e. are illiterate, and 27% have an illiterate adult male member.
    •  Thus, in the face of current school closures, parents of SC children would be much less equipped to assist their children with any form of home learning.

    Access to technology and other factors

    • The proportion of households with access to the Internet is 20% and 10% for UC and SC households, respectively.
    •  Only 49% of SCs have bank savings, as compared to 62% of Upper Caste households.
    • Differential access to information technology, as well as disparities in the ability to invest in technology, will be critical in shaping access to online education.

    Consider the question “Examine the impact of Covid on the vulnerable section of society. Suggest the measures to mitigate the impact.”

    Conclusion

    Early impacts of the pandemic-induced lockdown indicate that the resultant economic distress is exacerbating pre-existing structures of disadvantage based on social identity, and investments in education and health.

  • Gorumara National Park

    A bison (Indian Gaur) was allegedly poached in Gorumara National Park.

    Try this PYQ:

    Which one of the following National Parks lies completely in the temperate alpine zone?(CSP 2019)

    (a) Manas National Park

    (b) Namdapha National Park

    (c) Neora Valley National Park

    (d) Valley of Flowers National Park

    Gorumara NP

    • It is located in the Eastern Himalayas’ submontane Terai belt.
    • This region has rolling forests and riverine grasslands, and is known as the Dooars in West Bengal.
    • The park is located on the flood plains of the Murti River and Raidak River. The major river of the park is the Jaldhaka river, a tributary of the Brahmaputra river system.
    • In this regard, Gorumara is a significant watershed area between the Ganges and Brahmaputra river systems.
    • The park is rich in large herbivores including Indian rhinoceros, gaur, Asian elephant, sloth bear, chital, and sambar deer. Small herbivores include barking deer, hog deer and wild boar.

    About Gaur

    • The Gaur called the Indian bison, is native to South and Southeast Asia and has been listed as Vulnerable on the IUCN Red List since 1986.
    • It is the largest species among the wild cattle.
    • The domesticated form of the gaur is called gayal (Bos frontalis) or mithun.

  • In news: Srisailam Dam

    The major fire accident at the Srisailam hydroelectric power station has resulted in heavy loss of lives.

    Try this PYQ:

    What is common to the places known as Aliyar, Isapur and Kangsabati? (CSP 2019)

    (a) Recently discovered uranium deposits

    (b) Tropical rain forests

    (c) Underground cave systems

    (d) Water reservoirs

    About Srisailam Dam

    • The Srisailam Dam is constructed across the Krishna River in Kurnool district, AP near Srisailam temple town.
    • It is the 2nd largest capacity working hydroelectric station in the country.
    • The dam was constructed in a deep gorge in the Nallamala Hills in between Kurnool and Mahabubnagar districts, 300 m (980 ft) above sea level.
    • It has a reservoir of 616 square kilometres.

  • Three areas to work on to put India on the path to growth

    The article suggests the three areas on which country should work on to make it resilient in the future. These three areas include the labour laws for informal employment, conditions of our cities and the strength of our rural economy.

    Background

    • The Prime Minister, while addressing the Confederation of Indian Industry (CII) annual meeting urged to think big and partner with the government in putting India on the path to growth.
    • There is much that we can be achieved if government and industry work towards the same objective, and in a spirit of mutual trust.

    Let’s look into some areas

    1) Employment

    • Over 85 per cent of employment in India is in the informal sector.
    • The Centre for Monitoring the Indian Economy (CMIE) estimates that between mid-March and mid-April, 120 million people lost their jobs.
    • With this unemployment rise to an all-time high of 27 per cent.
    • There was reverse migration on an unprecedented scale — some 10 million people abandoned cities to return to their native villages.
    • As economic activity has restarted in cities, CMIE reports that unemployment is now down to around 9 per cent.

    3 Problems we must address

    1) Need for labour regulation

    • We have stringent labour laws to protect workers, but this covers only the 15 per cent formal sector employment.
    • The 85 per cent of our workforce who are informally employed have almost no protection, and employers have almost complete flexibility.
    • We need to address both the formal and informal labour spectrum to get the balance right between flexibility and protection for all labour.

    Way forward

    • Everyone must have a minimum level of protection, and every employer a minimum level of flexibility.
    • This calls for a new social contract to define a well-calibrated social security system.
    • This huge project demands good faith and strong leadership by industry, labour and government.

    2) Living conditions of our cities

    • We need a massive private home-building programme.
    • It probably needs much more liberal land-use regulations — our cities have among the least generous floor-space indices (FSI) in the world.
    • New York, Hong Kong, and Tokyo have an FSI five times Mumbai’s.
    • Again, this is a multi-year project, and it involves state and city governments partnering with private developers.
    • India is unique in having 70 per cent of our population still residing in rural areas.
    • We must encourage the migration of people to higher productivity occupations in our cities.
    • And we must ensure that clean, affordable and accessible housing is available for all in our cities.

    3) Strength of our rural economy

    • Reverse migration is also an opportunity to collaborate in spreading the geography of development.
    • We need a three-pronged approach:
    • 1) As Ashok Gulati has often argued, the easiest way to grow farmer incomes is by having them grow more value-added crops.
    • Exports of fruits and vegetables must be consistently encouraged.
    • The cultivation of palm plantations with potential for huge import substitution, we need corporate farming as the gestation period of seven years for the first crop is too much for the average farmer to handle.
    • The Atmanirbhar agricultural reforms, which permit contract farming, and open up agricultural markets, are major medium-term reforms. Implemented right, they can transform agricultural markets.
    • 2) We need to encourage agro-processing near the source.
    • Fostering entrepreneurship in rural and semi-urban areas would combine nicely with local processing.
    • 3) We need to invest even more massively in rural connectivity.
    • Today, we would add digital connectivity to road connectivity to level the playing field for all regardless of where they live.

    Consider the question “What are the vulnerabilities in our economic structure that were highlighted by the covid pandemic? Also suggest the measures to make our rural economy strong and resilient to such shocks.”

    Conclusion

    The task is huge, and only collaboration between all levels of government (Union, state, and city) and our dynamic private sector can hope to make substantial progress.