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RBI Notifications

How the RBI unconventionally innovated policy to fight the pandemic

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Liquidity corrridor

Mains level : Paper 3- RBI innovative approach during pandemic

Context

Recently, the RBI has been at the receiving end for mission the inflation target.

Understanding the RBI’s rationale

  • Supply side shock: Inflation has been largely the result of supply side shocks from vegetable prices, caused by crop damages due to unseasonal rains (tomato, onion and potato) in late 2019 and widespread supply-side disruptions after the outbreak of the pandemic.
  • A narrow-minded focus on inflation caused by supply shocks would have constrained the MPC from supporting growth amidst the unprecedented loss of life and livelihood.
  • Focusing on recovery: Therefore, it was necessary to provide a lifeline to the economy at that juncture by focusing on the recovery.
  • Moreover, the wide tolerance band of 200bps +/- in the inflation targeting framework was specifically designed to accommodate such supply shocks, which provided the flexibility in the flexible targeting (FIT) framework.
  • Taking into account objective of growth: In contrast to a pure inflation targeting framework (inflation nutters), the amended mandate of the RBI under FIT reads as “price stability, taking into account the objective of growth”.
  • Therefore, the MPC was justified in looking through the higher inflation print during the pandemic while trying to resurrect growth.

No contradiction between Governor’s statement and MPC resolution

  • Recently, the MPC highlighted inflation concerns and voted to raise the policy repo rate.
  • The governor’s statement of the same day noted that the RBI will ensure an orderly completion of the government’s borrowing programme.
  • Contradictory objectives: It is said that the above two actions created confusion as lowering inflation and lowering government bond yields are contradictory objectives.
  • This justification is redundant as an orderly completion of the borrowing programme does not imply lowering yields.
  • It basically ensures that the borrowing programme is completed seamlessly at low costs (ensured through auctions).
  • Moreover, from a theoretical perspective, this is not inconsistent because controlling inflation and lowering inflation expectations bodes well for the term premia of bond yields — which moderate once expectations are anchored.
  • Therefore, if inflation is reined in, the government stands to gain in terms of lower interest costs.
  • Was width of corridor lost during pandemic? It is argued that  the MPC kept repo rates unchanged while the RBI changed the reverse repo rate during the pandemic, meaning that the fixed width of the corridor was lost and the MPC lost its role in setting interest rates and so, its credibility.
  • This argument does not stand scrutiny.
  • During the pandemic, the policy repo rate was cumulatively reduced by an unprecedented 115 bps and the interest rate on the overnight fixed-rate reverse repo was reduced cumulatively by 155 bps.
  • Assymetric corridor justified in crises: This measure was not incongruous with contemporary wisdom as an asymmetric corridor has been justified, particularly during crisis times (Goodhart, 2010).
  • Given that elevated inflation concerns precluded the possibility of any further repo rate cuts (cumulatively reduced by 250 basis points since February 2019), financial conditions were eased substantially by reducing the reverse repo rate, which lowered the floor rate of interest in the economy.
  • Since the mandate of the MPC is to control inflation for which the policy instrument is the repo rate, the RBI had used the LAF through changes in the reverse repo rate to alter liquidity conditions.

Trade offs involved in inflation targeting for emerging economies

  • Inflation-targeting countries, because of their sole focus on inflation, experience lower inflation volatility but higher output volatility.
  • Higher output volatility entails a higher sacrifice ratio — the proportion of output foregone for lowering inflation.
  • For an emerging economy, the costs of higher output foregone against the benefits of lower inflation must always be balanced as potential output keeps on changing given the shift of the production function.
  • Developed countries, on the other hand, operate near full employment — therefore, sacrifice ratios are lower.
  • As a result, smoothening inflation volatility is relatively costless for them.

Conclusion

The RBI has innovated admirably under its current stewards during the pandemic, keeping in mind the task of reinvigorating the economy. Despite the existing targeting framework, it did not get fixated on a one-point agenda, daring to look beyond the inflation print.

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Back2Basics: Liquidity corridor

  • The Corridor in monetary policy of the RBI refers to the area between the reverse repo rate and the MSF rate.
  • Reverse repo rate will be the lowest of the policy rates whereas Marginal Standing Facility is something like an upper ceiling with a higher rate than the repo rate.
  • The MSF rate and reverse repo rate determine the corridor for the daily movement in the weighted average call money rate.

Renewable Energy – Wind, Tidal, Geothermal, etc.

A five-point plan to boost renewable energy

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 3- Transition to renewable

Context

As the fallout of Russia’s invasion of Ukraine ripples across the globe, the response of some nations to the growing energy crisis has been to double down on fossil fuels, pouring billions more dollars into the coal, oil and gas that are deepening the climate emergency.

Need for transition to renewable energy

  • Fossil fuels are the cause of the climate crisis.
  • Renewable energy can limit climate disruption and boost energy security. Renewables are the peace plan of the 21st century.
  • But the battle for a rapid and just energy transition is not being fought on a level field.
  • Investors are still backing fossil fuels, and governments still hand out billions in subsidies for coal, oil and gas — about $11 million every minute.
  • The only true path to energy security, stable power prices, prosperity and a livable planet lies in abandoning polluting fossil fuels and accelerating the renewables-based energy transition.
  • We must reduce emissions by 45 per cent by 2030 and reach net-zero emissions by mid-century.
  • But current national commitments will lead to an increase of almost 14 per cent this decade.
  • Reducing cost:  The cost of solar energy and batteries has plummeted 85 per cent over the past decade.
  • The cost of wind power fell by 55 per cent. And investment in renewables creates three times more jobs than fossil fuels.
  • Nature-based solutions: Of course, renewables are not the only answer to the climate crisis.
  • Nature-based solutions, such as reversing deforestation and land degradation, are essential.
  • So too are efforts to promote energy efficiency.
  • But a rapid renewable energy transition must be our ambition.

Five point plan to boost renewable

  • 1] Renewable energy technology as global good: We must make renewable energy technology a global public good, including removing intellectual property barriers to technology transfer.
  • 2] Improve global access: We must improve global access to supply chains for renewable energy technologies, components and raw materials.
  • In 2020, the world installed five gigawatts of battery storage.
  • We need 600 gigawatts of storage capacity by 2030.
  • Shipping bottlenecks and supply-chain constraints, as well as higher costs for lithium and other battery metals, are hurting the deployment of such technologies and materials.
  • 3] Fast-tracking : We must cut the red tape that holds up solar and wind projects.
  • We need fast-track approvals and more effort to modernise electricity grids.
  • 4] Shifting energy subsidies: The world must shift energy subsidies from fossil fuels to protect vulnerable people from energy shocks and invest in a just transition to a sustainable future.
  • Increase investment in renewables: We need to triple investments in renewables.
  • This includes multilateral development banks and development finance institutions, as well as commercial banks.

Conclusion

When energy prices rise, so do the costs of food and all the goods we rely on. So, let us all agree that a rapid renewables revolution is necessary and stop fiddling while our future burns.

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Capital Markets: Challenges and Developments

What are G-Sec Yields?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : G-Secs

Mains level : Read the attached story

Government Securities (G-Secs) yields are at an all-time high.

What are G-Secs?

  • These are debt instruments issued by the government to borrow money.
  • The two key categories are:
  1. Treasury bills (T-Bills) – short-term instruments which mature in 91 days, 182 days, or 364 days, and
  2. Dated securities – long-term instruments, which mature anywhere between 5 years and 40 years

Note: T-Bills are issued only by the central government, and the interest on them is determined by market forces.

Why G-Secs?

  • Like bank fixed deposits, g-secs are not tax-free.
  • They are generally considered the safest form of investment because they are backed by the government. So, the risk of default is almost nil.
  • However, they are not completely risk-free, since they are subject to fluctuations in interest rates.
  • Bank fixed deposits, on the other hand, are guaranteed only to the extent of Rs 5 lakh by the Deposit Insurance and Credit Guarantee Corporation (DICGC).

How are G-sec yields calculated?

  • G-sec yields change over time; often several times during a single day.
  • This happens because of the manner in which G-secs are structured.
  • Every G-sec has a face value, a coupon payment and price.
  • The price of the bond may or may not be equal to the face value of the bond.
  • Here’s an example: Suppose the government floats a 10-year G-sec with a face value of Rs 100 and a coupon payment of Rs 5.
  • If one were to buy this single G-sec from the government, it would mean that one will give Rs 100 to the government today and the government will promises to 1) return the sum of Rs 100 at the end of tenure (10 years), and 2) pay Rs 5 each year until the end of this tenure.
  • At this point, the face value of this G-sec is equal to its price, and its yield (or the effective interest rate) is 5%.

How do G-sec yields go up and down?

  • Imagine a scenario in which the government floats just one G-sec, and two people want to buy it.
  • Competitive bidding will ensue, and the price of the bond may rise from Rs 100 (its face value) to Rs 105.
  • Now imagine another lender in the picture, which pushes the price further up to Rs 110.

What do G-sec yields show?

  • If G-sec yields (say for a 10-year bond) are going up, it would imply that lenders are demanding even more from private sector firms or individuals; that’s because anyone else is riskier when compared to the government.
  • It is also known that when it comes to lending, interest rates rise with the rise in risk profile.
  • As such, if G-sec yields start going up, it means lending to the government is becoming riskier.
  • If you read that the G-sec yields are going up, it suggests that the bond prices are falling. But the prices are falling because fewer people want to lend to the government.
  • And that in turn happens when people are worried about the government’s finances (or its ability to pay back).
  • The government’s finances may be in trouble because the economy is faltering and it is unlikely that the government will meet its expenses.
  • By the reverse logic, if a government’s finances are sorted, more and more people want to lend money to such a G-sec.
  • This in turn, leads to bond prices going up and yields coming down.

Try this PYQ:

Consider the following statements:

  1. The Reserve Bank of India manages and services the Government of India Securities but not any State Government Securities.
  2. Treasury bills are issued by the Government of India and there are no treasury bills issued by the State Governments.
  3. Treasury bills offer are issued at a discount from the par value.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 3 Only

(c) 2 and 3 only

(d) 1, 2 and 3

 

Post your answers here.

 

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Goods and Services Tax (GST)

GST revenues surpass ₹1.44 lakh crore

Note4Students

From UPSC perspective, the following things are important :

Prelims level : GST, Major sources of revenue

Mains level : Success and limitations of the GST regime

India recorded its second-highest monthly gross GST revenues in June at ₹1,44,616 crore, 56% more than a year earlier when the second COVID wave had hit economic activity.

What is GST?

  • GST is an indirect tax that has replaced many indirect taxes in India such as excise duty, VAT, services tax, etc.
  • The Goods and Service Tax Act was passed in Parliament on 29th March 2017 and came into effect on 1st July 2017. It is a single domestic indirect tax law for the entire country.
  • It is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.
  • Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales, Central GST and State GST are charged. All the inter-state sales are chargeable to the Integrated GST.

Answer this PYQ in the comment box:

Q.All revenues received by the Union. Government by way of taxes and other receipts for the conduct of Government business are credited to the (CSP 2015):

(a) Contingency Fund of India

(b) Public Account

(c) Consolidated Fund of India

(d) Deposits and Advances Fund

 

Post your answers here.

What are the components of GST?

There are three taxes applicable under this system:

  1. CGST: It is the tax collected by the Central Government on an intra-state sale (e.g., a transaction happening within Maharashtra)
  2. SGST: It is the tax collected by the state government on an intra-state sale (e.g., a transaction happening within Maharashtra)
  3. IGST: It is a tax collected by the Central Government for an inter-state sale (e.g., Maharashtra to Tamil Nadu)

Advantages Of GST

  • GST has mainly removed the cascading effect on the sale of goods and services.
  • Removal of the cascading effect has impacted the cost of goods.
  • Since the GST regime eliminates the tax on tax, the cost of goods decreases.
  • Also, GST is mainly technologically driven.
  • All the activities like registration, return filing, application for refund and response to notice needs to be done online on the GST portal, which accelerates the processes.

Issues with GST

  • High operational cost
  • GST has given rise to complexity for many business owners across the nation.
  • GST has received criticism for being called a ‘Disability Tax’ as it now taxes articles such as braille paper, wheelchairs, hearing aid etc.
  • Petrol is not under GST, which goes against the ideals of the unification of commodities.

Take a look at the share of GST in government earnings for the previous fiscal:

UPSC can ask about the majority component of the Revenue Receipts of the govt. See how Corporate tax is nearing the GST revenues.

Do you think it will surpass GST revenue when the economy is fully recovered?

 

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Defence Sector – DPP, Missions, Schemes, Security Forces, etc.

DRDO tests Autonomous Flying Wing Technology Demonstrator

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Autonomous Flying Wing Technology Demonstrator

Mains level : India's defence exports, Atmanirbharta in defence

The Defence Research and Development Organisation (DRDO) has successfully carried out the maiden test flight of a new Unmanned Aerial Vehicle (UAV), an autonomous Flying Wing Technology Demonstrator, from the Aeronautical Test Range, Chitradurga, Karnataka.

About the Indigenous Drone

  • The Unmanned Aerial Vehicle (UAV) is powered by a small turbofan engine.
  • It is developed under unmanned combat aerial vehicle (UCAV) programme.
  • It is designed and developed by Aeronautical Development Establishment (ADE), Bengaluru, a premier research laboratory of DRDO.
  • The engine is Russian TRDD-50MT originally designed for cruise missiles.
  • A small turbo fan engine is being developed indigenously for meeting the requirement.

Various initiatives by DRDO

  • DRDO is in the process of developing UAVs of different classes to met the requirements of the armed forces.
  • Rustom-2, the indigenous Medium Altitude Long Endurance (MALE) UAV under development, had crossed a milestone by reaching an altitude of 25,000 feet and an endurance of 10 hours.
  • It is now being designed to reach an altitude of 30,000 feet and 18 hours endurance.
  • An Unmanned Combat Aerial Vehicle is also on the drawing board.

Significance of the development

  • Operating in a fully autonomous mode, the aircraft exhibited a perfect flight, including take-off, way point navigation and a smooth touchdown.
  • This flight marks a major milestone in terms of proving critical technologies towards the development of future unmanned aircraft.
  • This is a significant step towards self-reliance in strategic defence technologies.

 

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Disasters and Disaster Management – Sendai Framework, Floods, Cyclones, etc.

[pib] Coalition for Disaster Resilient Infrastructure (CDRI)

Note4Students

From UPSC perspective, the following things are important :

Prelims level : CDRI

Mains level : Disaster management

The Union Cabinet has approved the categorization of the Coalition for Disaster Resilient Infrastructure (CDRI) as an ‘International Organization’.

What is the news?

  • The cabinet also signed as the Headquarters Agreement (HQA) with CDRI for granting it the exemptions, immunities and privileges as contemplated under the United Nations (Privileges & Immunities) Act, 1947.
  • This will provide CDRI an independent and international legal persona so that it can efficiently and effectively carry out its functions internationally.

What is CDRI?

  • The CDRI is an international coalition of countries, UN agencies, multilateral development banks, the private sector, and academic institutions that aim to promote disaster-resilient infrastructure.
  • Its objective is to promote research and knowledge sharing in the fields of infrastructure risk management, standards, financing, and recovery mechanisms.
  • It was launched by the Indian PM Narendra Modi at the 2019 UN Climate Action Summit in September 2019.
  • CDRI’s initial focus is on developing disaster-resilience in ecological, social, and economic infrastructure.
  • It aims to achieve substantial changes in member countries’ policy frameworks and future infrastructure investments, along with a major decrease in the economic losses suffered due to disasters.

Its inception

  • PM Modi’s experience in dealing with the aftermath of the 2001 Gujarat earthquake” as the chief minister led him to the idea.
  • The CDRI was later conceptualized in the first and second edition of the International Workshop on Disaster Resilient Infrastructure (IWDRI) in 2018-19.
  • It was organized by the National Disaster Management Authority (NDMA), in partnership with the UN Office for Disaster Risk Reduction (UNDRR), the UN Development Programme, the World Bank, and the Global Commission on Adaptation.

Its diplomatic significance

  • The CDRI is the second major coalition launched by India outside of the UN, the first being the International Solar Alliance.
  • Both of them are seen as India’s attempts to obtain a global leadership role in climate change matters and were termed as part of India’s stronger branding.
  • India can use the CDRI to provide a safer alternative to China’s Belt and Road Initiative (BRI) as well.

Why designated as International Organization?

  • Deputing experts to other countries
  • Deploying funds globally and receive contributions from member countries
  • Making available technical expertise to assist countries
  • Imparting assistance to countries in adopting appropriate risk governance arrangements and strategies for resilient infrastructure
  • Aligning with the Sustainable Development Goals (SDGs), the Paris Climate Agreement and the Sendai Framework for Disaster Risk Reduction
  • Leveraging international engagement to foster disaster-resilient infrastructure at home; and,
  • Providing Indian scientific and technical institution as well as infrastructure developers an opportunity to interact with global experts.

Try this PYQ:

Q.Consider the following statements:

  1. Climate and Clean Air Coalition (CCAC) to Reduce Short Lived Climate Pollutants is a unique initiative of G20 group of countries
  2. The CCAC focuses on methane, black carbon and hydrofluorocarbons.

Which of the above statements is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

 

Post your answers here.

 

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Festivals, Dances, Theatre, Literature, Art in News

Festivals in news: Puri Rath Yatra

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Rath Yatra

Mains level : NA

Lakhs of devotees thronged the coastal town of Puri town to witness the annual Rath Yatra with three decorated chariots of sibling deities Lord Balabhadra, Lord Jagannath and Devi Subhadra towed in front of the 12th century Shree Jagannath Temple.

About Jagannath Rath Yatra

  • Ratha Jatra, the Festival of Chariots of Lord Jagannatha is celebrated every year at Puri, the temple town in Orissa, on the east coast of India.
  • It involves a public procession with a chariot with deities Jagannath (Vishnu avatar), BalaBhadra (his brother), Subhadra (his sister) and Sudarshana Chakra (his weapon) on a ratha, a wooden deula-shaped chariot.
  • The huge, colourfully decorated chariots, are drawn by hundreds and thousands of devotees on the bada danda, the grand avenue to the Gundicha temple, some two miles away to the North.
  • It attracts over a million Hindu pilgrims who join the procession each year.

Back2Basics: Puri Temple Architecture

  • Jagannath Temple is a very big temple and covers an area of 37000m2. The height of the outer wall is 6.1m.
  • It is surrounded by a high fortified wall 6.1 m high is known as Meghanada Pacheri.
  • The main portion of the temple is also surrounded by a wall known as Kurma Bheda.
  • The temple is built in Rekha Deula style and has four distinct sectional structures, namely –
  1. Deula, Vimana or Garba griha (Sanctum sanctorum) where the triad deities are lodged on the ratnavedi (Throne of Pearls)
  2. Mukhashala (Frontal porch)
  3. Nata mandir/Natamandapa, which is also known as the Jagamohan (Audience Hall/Dancing Hall), and
  4. Bhoga Mandapa (Offerings Hall)

Try this question from CSP 2019:

Q.Building ‘Kalyaana Mandapas’ was a notable feature in the temple construction in the kingdom of-

(a) Chalukya (b) Chandela (c) Rashtrakuta (d) Vijayanagara

 

Post your answers here.

 

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Anti Defection Law

Do not weaken the anti-defection law

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Schedules of the Constitution

Mains level : Paper 2- Strengthening anti-defection law

Context

The political developments in Maharashtra throw up troubling questions about how the political class is weakening the anti-defection law.

Background of the anti-defection law

  •  It was enacted as the Tenth Schedule of the Constitution of India, in 1985, under Rajiv Gandhi’s premiership.
  • The law as it was enacted provided for the disqualification of a legislator belonging to a political party if he voluntarily gave up his membership of his party or if he defied the whip of his party by voting contrary to its directions in the legislative house.
  • Two exceptions: Initially, there were two exceptions provided in the schedule which would exempt a legislator from disqualification.
  • 1] Split: The first exception was a split in their original political party resulting in the formation of a group of legislators.
  • If the group consisted of one third of such legislators of that party, they were exempted from disqualification.
  • This exception was deleted from the schedule through a Constitution Amendment Act of 2003 because of frequent misuse.
  • 2] Merger: The second exception was ‘merger’ which can be invoked when the original political party of a legislator merges with another party and not less than two thirds of its legislators agree to such a merger.

Interpretation of term ‘merger’ and issues with it

  • It is this second exception contained in paragraph four of the schedule which has been taken recourse to by a large number of legislators across States and even in Parliament to defect to the ruling party.
  • These legislators interpreted for themselves the term ‘merger’ to mean the merger of two thirds of legislators.
  • Now, the same is being repeated in Maharashtra.
  • But there is a little difference here.
  • It appears that the dissidents of Shiv Sena believed that if they get the two third number they can form a separate group and topple the government and then form a government with the help of the Bharatiya Janata Party.
  • The law imposes the condition of merger of the original political party.
  • However, a recent judgment of the Goa Bench of the Bombay High Court ( Girish Chodankar vs The Speaker, Goa State Legislative) that held that the merger of two thirds of Members of the Legislative Assembly is deemed to be the merger of the original party seems to have given them a ray of hope.
  • So, the legal position is if the dissidents do not merge with another party they will be disqualified now or later.

Question of disqualification

  • Disqualification petitions have been filed by the Shiv Sena against 16 of the dissidents under paragraph 2(1)(a) on the ground that they have voluntarily given up the membership of the party.
  • The question of whether they have voluntarily given up the membership of the party is decided on the basis of the conduct of a member.
  • In Ravi S. Naik vs Union of India (1994), the Supreme Court had said “an inference can be drawn from the conduct of a member that he has voluntarily given up the membership of the party.

Weakening the anti-defection law

  • Unprincipled defection: The ongoing developments in Maharashtra have once again brought before the country the reality of what the Supreme Court also described as the political evil of unprincipled defection.
  • But the order of the Supreme Court, on June 27, on petitions from the dissidents in the Shiv Sena, gives undue advantage to the dissident legislators.
  • The Court has granted them a longer time to submit replies than the rules mandate.
  • This order is going to set in motion certain political developments which will resurrect in a big way what the Supreme Court characterised as political evil.
  • The intervention by the Supreme Court too has thrown up some crucial question.
  • Kihoto Hollohan case: The first question is whether the Court can intervene at a stage prior to the decision by the Deputy Speaker.
  • A Constitution Bench of the Supreme Court had held in Kihoto Hollohan (1993) that judicial review cannot be available prior to the making of a decision by the Speaker nor at an interlocutory stage of the proceeding.
  •  The notice of no-confidence against the Deputy Speaker has added another piece to the jigsaw puzzle.
  • Nabam Rebia case: The Supreme Court had held in Nabam Rebia (2016) that the Speaker shall not decide the disqualification cases till the no-confidence motion against him is disposed of.
  • The House rules clearly say that the notice of no-confidence against the Speaker/Deputy Speaker needs to be admitted in the first place which is done only by the Speaker.
  • But it is the House which takes the final decision on the motion. If the notice of no-confidence does not contain specific charges, it can be disallowed by the Speaker. 
  • Further, the notice can be given only if the House is summoned.
  • When the notice was given, the Assembly was not convened. So, the notice against the Deputy Speaker can have no validity under the rules.

Conclusion

The law, though not perfect, is a serious attempt to strengthen the moral content of democracy. There will be shortcomings in this Bill but as we see and identify those shortcomings we should try to overcome them.

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Mother and Child Health – Immunization Program, BPBB, PMJSY, PMMSY, etc.

Is India really ahead of the West in terms of reproductive rights?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2- Reproductive rights in India

Context

Contrary to the grandstanding since the overturning of the landmark Roe V. Wade judgment, the truth is that India is not ahead of the West in terms of reproductive rights.

Medical Termination of Pregnancy (MTP) Act

  • Abortion in India has been a legal right under various circumstances for the last 50 years with the introduction of Medical Termination of Pregnancy (MTP) Act in 1971.
  • The Act was amended in 2003 to enable women’s accessibility to safe and legal abortion services.
  • Abortion is covered 100% by the government’s public national health insurance funds, Ayushman Bharat and Employees’ State Insurance with the package rate for surgical abortion.

The idea of terminating your pregnancy cannot originate by choice and is purely circumstantial. There are four situations under which a legal abortion is performed:

  1. If continuation of the pregnancy poses any risks to the life of the mother or mental health
  2. If the foetus has any severe abnormalities
  3. If pregnancy occurred as a result of failure of contraception (but this is only applicable to married women)
  4. If pregnancy is a result of sexual assault or rape

These are the key changes that the Medical Termination of Pregnancy (Amendment) Act, 2021, has brought in:

  • The gestation limit for abortions has been raised from the earlier ceiling of 20 weeks to 24 weeks, but only for special categories of pregnant women such as rape or incest survivors. But this termination would need the approval of two registered doctors.
  • All pregnancies up to 20 weeks require one doctor’s approval. The earlier law, the MTP Act 1971, required one doctor’s approval for pregnancies upto 12 weeks and two doctors’ for pregnancies between 12 and 20 weeks.
  • Women can now terminate unwanted pregnancies caused by contraceptive failure, regardless of their marital status. Earlier the law specified that only a “married woman and her husband” could do this.
  • There is also no upper gestation limit for abortion in case of foetal disability if so decided by a medical board of specialist doctors, which state governments and union territories’ administrations would set up.

Issues with legal provisions related to reproductive rights in India

  • Lack of rights based approach: The Medical Termination of Pregnancy (Amendment) Act 2021 is far from ideal and has been criticised for not taking a rights-based approach.
  • According to the Act, a pregnancy can be terminated on the following conditions: Grave danger to the physical/mental health of the pregnant woman; foetal abnormalities; rape/coercion; and contraceptive failure.
  • A woman’s right to choose to end the pregnancy even in the first few weeks is still not recognised in India.
  • Systemic barriers: It doesn’t give the pregnant person complete autonomy in ending the pregnancy, instead making them go through various systemic barriers.
  • The final decision falls not on the pregnant person, but on registered medical practitioners (RMP).
  • The constitution of a medical board, a requirement by the Act, is considered a barrier by the World Health Organisation.
  • Excludes transgenders and non-binary persons: Additionally, it uses the word “woman”, thereby leaving out pregnant transgender and non-binary persons who are biologically capable of bearing children.
  • It forces them to identify themselves in the gender-binary ignoring their gender identity.

Social factors and lack of medical facilities

  • It is important to look through an intersectional lens, and factor in class and caste privilege.
  • Abortion facilities in private medical centres are expensive, available only for those who have the resources.
  • Lack of access: Not all public health centres, especially in rural India, provide abortion facilities.
  • Most unmarried women end up resorting to unsafe abortions in illegal clinics or at home.
  • According to the latest National Family Health Survey 2019-2021, 27 percent of the abortions were carried out by the woman herself at home.
  • According to United Nations’ Population Fund’s (UNFPA) State of the World Population Report 2022, around 8 women die each day in India due to unsafe abortions.
  • It also found that between 2007-2011, 67 percent of the abortions were classified as unsafe.
  • Unsafe abortion was one of the top three causes of maternal deaths.

Discussion on reproductive rights in India are incomplete without mentioning surrogacy.

Issues in the Surrogacy (Regulation) Act 2021

  • While well-intentioned, leaves much to be desired.
  • The plethora of regulations one must undergo is antithetical to a dignified standard of living.
  • Exclusionary in nature: Experts have pointed out that the Act is exclusionary in nature, disregards privacy, and also exploits women’s reproductive labour.
  • Only a heterosexual married couple (with certain preconditions) can be the intending parents.
  • It strips the reproductive autonomy of LGBTQ+ persons and single, divorced, and widowed intending parents. It can be seen as a violation to the fundamental right to equality.
  • Experts also believe that regulations, rather than a complete ban on commercial surrogacy, should have been the way forward.
  • Violates right to privacy: The Act requires the intending couple to declare their infertility and reveals the identity of the surrogate, both of which violate the right to privacy.
  • The landmark Puttaswamy judgment discusses bodily privacy – the right over one’s body and “the freedom of being able to prevent others from violating one’s body.”
  • The current reproductive rights regulatory framework falls short in guaranteeing bodily privacy.

Conclusion

The situation in India is far from perfect and we should take this moment to reflect and learn from progressive practices around the world. We should strive for inclusivity, complete bodily autonomy, and reproductive equity.

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Road and Highway Safety – National Road Safety Policy, Good Samaritans, etc.

Bharat New Car Assessment Programme (BNCAP)

Note4Students

From UPSC perspective, the following things are important :

Prelims level : BNAP, GNAP

Mains level : Read the attached story

The government is planning a new car assessment programme (NCAP) in India, to be called the Bharat NCAP or BNCAP.

What is Bharat NCAP?

  • Bharat NCAP is a new car safety assessment programme which proposes a mechanism of awarding ‘Star Ratings’ to automobiles based upon their performance in crash tests.
  • BNCAP standard is aligned with global benchmarks and it is beyond minimum regulatory requirements.
  • The proposed Bharat NCAP assessment will allocate Star Ratings from 1 to 5 stars.
  • The testing of vehicles for this programme will be carried out at testing agencies, with the necessary infrastructure.

Its implementation

  • BNCAP will be rolled out from April 1, 2023.
  • It will be applicable on type-approved motor vehicles of category M1 with gross vehicle weight less than 3.5 tonnes, manufactured or imported in the country.
  • M1 category motor vehicles are used for the carriage of passengers, comprising eight seats, in addition to driver’s seat.

Significance of Bharat NCAP

  • BNCAP rating will provide consumers an indication of the level of protection offered to occupants by evaluating the vehicle in the areas of:
  1. Adult occupant protection
  2. Child occupant protection
  3. Safety assist technologies
  • It will serve as a consumer-centric platform, allowing customers to opt for safer cars based upon their Star-Ratings.
  • It will also promote a healthy competition among original equipment manufacturers (OEMs) in India to manufacture safer vehicles.
  • It will ensure structural and passenger safety in cars, along with increasing the export-worthiness of Indian automobiles.
  • It will prove to be a critical instrument in making our automobile industry Aatmanirbhar.

Why does India need to crash-test vehicles?

  • Indian vehicles have historically not been crash-tested in the country.
  • Despite being home to only 1% of the world’s vehicles, India shoulders 11% of the global road crash fatality burden.

What about existing testing standards?

  • India’s Central Motor Vehicle Rules (CMVR) mandate a safety and performance assessment, including a basic conformity crash test by agencies like the ARAI and ICAT when vehicles go in for type approvals.
  • However, this does not involve a crash test rating.
  • Many international automakers have been found to sell products in India which score much lower on safety and structural performance parameters.
  • This is done to reduce costs in the price-sensitive Indian market.
  • However, safety is moving up nowadays the list of key purchase criteria in India as well.

How will a homegrown NCAP help?

  • Global NCAP (GNCAP) crash tests for many best-selling Indian vehicles have dismal ratings, many of them rated zero in a bias.
  • The government hopes that by facilitating these tests by in-house agencies, more automakers will voluntarily undergo safety assessments and build vehicles that hold up to global standards.

How will it compare with GNCAP?

  • The government wants the two tests to be in congruence with each other.
  • It intends to design the BNCAP to resemble the GNCAP, the global gold standard, as closely as possible, including the speed for crash testing at 64kmph.
  • Central Motor Vehicle rules encompass standards with respect to pedestrian protection and seat belt reminders among others and will be retained in the testing under the BNCAP.
  • The government hopes the move will increase the export-worthiness of Indian automobiles.

 

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Road and Highway Safety – National Road Safety Policy, Good Samaritans, etc.

Road Safety in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NA

Mains level : Road safety issues in India

The United Nations is holding a high-level meeting on Global Road Safety on June 30 and July 1, 2022 to review the progress and challenges.

Road Accidents in India: A lookover

  • In spite of several years of policymaking to improve road safety, India remains among the worst-performing countries in this area.
  • Total 1,47,913 lives lost to road traffic accidents in 2017 as per Ministry of Road Transport and Highways statistics.
  • The National Crime Records Bureau (NCRB) figure for the same year is 1,50,093 road accident deaths.

Why in news?

  • The persistently high annual death toll brings into question the country’s ability to meet Sustainable Development Goal (SDG) 3.6.
  • This aims to halve the fatalities and injuries from road traffic accidents by 2030.

Lancet’s findings on road safety

  • A new analytical series on road safety worldwide, published by The Lancet, proposes that India and other countries could cut accident-related deaths by 25 to 40%.
  • This is based on evidence that preventive interventions produce good outcomes when applied to four well-known risk factors:
  1. High speed
  2. Driving under the influence of alcohol
  3. Not using proper helmets
  4. Not wearing seat-belts and not using child restraints

Issues highlighted in developing countries

  • The structural problems linked to unplanned motorisation and urbanisation remain.
  • In India, speedy highway construction takes place without reconciling fast and slow-moving traffic.
  • There is a rampant presence of ramshackle vehicles, wrong-side driving, absence of adequate traffic police forces etc.

Why are there so many road fatalities in India alone?

  • Weak enforcement of traffic laws: People hardly oblige to traffic rules and find easier to bribe policemen rather than paying hefty challans.
  • Speeding issue: More accidents on the highways have been attributed to higher vehicle speeds and higher volume of traffic on these roads.
  • Engineering bottlenecks: Issues such as gaps in the median on the national highways, untreated intersections, and missing crash barriers are some of the biggest engineering issues.
  • Behavioural issue: Driver violations such as wrong-side driving, wrong lane usage by heavy vehicles, and mass violation of traffic lights, intoxication are the biggest behavioural issues.
  • Lack of Golden hour treatment: Lack of rapid trauma care on highways leads to such high fatalities.

Various steps taken by India

  • India amended Motor Vehicles Act in 2019, but its implementation by State governments is not uniform or complete.
  • A National Road Safety Board was constituted under the Act, with advisory powers to reform safety.
  • The World Bank has approved a $250 million loan to support for India State Support Programme for Road Safety.

Issues with implementation

  • The focus of State governments, however, remains conventional, with an emphasis on user behaviour (drivers and other road users), education and uneven enforcement.
  • Low emphasis is placed on structural change such as raising engineering standards for roads, signages, signals, training for scientific accident investigation, raising policing skills and fixing responsibility on government departments for design, creation and maintenance of road infrastructure.

What can be done to cut death and injury rates?

  • The ambitious amendments to the Motor Vehicles Act in 2019 (MV Act) have not yielded significant results.
  • Major interventions in India, first suggested by the Sundar Committee (2007) and ordered by the Supreme Court in Rajasekaran vs Union of India have not made a dent in the problem.

Key findings of Sundar Committee

  • The Sundar Committee pointed out that India lacked a technically competent investigation arm that could determine the cause of accidents.
  • There is little clarity on whether the States have formed such units to aid traffic investigation, or whether the insurance industry has pressed for these to accurately determine fault.
  • In the absence of scientific investigation, perceptions usually guide the fixing of liability.

Solutions provided by the Lancet

  • The Lancet calculated that 17% of road traffic injury-related deaths could be avoided if trauma care facilities improved.
  • This is significant as several accidents take place in rural areas on highways, and victims are taken to poorly-equipped district hospitals or medical college hospitals.
  • While positive user behaviour — slower travel, wearing of helmets, seat belts and so on — could save thousands of lives.
  • In the short term, slowing down traffic, particularly near habitations, segregating slower vehicles, enforcing seat belt and helmet use and cracking down on drunken drivers could produce measurable gains.

Imbibing road safety: Way forward

  • Road safety education
  • Better road design, maintenance and warning signage
  • Crackdown on driving under influence of alcohol and drugs
  • Strict enforcement of traffic rules
  • Encouraging better road behaviour
  • Ensuring road worthiness of a vehicle
  • Better first aid and paramedic care

Do you know?

The ‘golden hour’ has been defined as ‘the time period lasting one hour following a traumatic injury during which there is the highest likelihood of preventing death by providing prompt medical care.

 

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Terrorism and Challenges Related To It

UAPA necessary to act against terrorists: Minister

Note4Students

From UPSC perspective, the following things are important :

Prelims level : UAPA

Mains level : Terrorism and radicalization in India

A Union Minister has said it was necessary to have certain laws like the Unlawful Activities Prevention Act (UAPA) so that action could be taken against terrorists and those who “behead other people”.

Unlawful (Activities) Prevention Act (UAPA)

  • The UAPA is aimed at effective prevention of unlawful activities associations in India.
  • Its main objective was to make powers available for dealing with activities directed against the integrity and sovereignty of India
  • It is an upgrade on the Terrorist and Disruptive Activities (Prevention) Act TADA, which was allowed to lapse in 1995 and the Prevention of Terrorism Act (POTA) was repealed in 2004.
  • It was originally passed in 1967 under the then Congress government led by former Prime Minister Indira Gandhi.
  • Till 2004, “unlawful” activities referred to actions related to secession and cession of territory. Following the 2004 amendment, “terrorist act” was added to the list of offences.

Major feature: Designation of Terrorists

  • The Centre had amended UAPA, 1967, in August 2019 to include the provision of designating an individual as a terrorist.
  • Before this amendment, only organisations could be designated as terrorist outfits.
  • Section 15 of the UAPA defines a “terrorist act” as any act committed with intent to threaten or likely to threaten the unity, integrity, security, economic security, or sovereignty of India or with intent to strike terror or likely to strike terror in the people or any section of the people in India or in any foreign country.
  • The original Act dealt with “unlawful” acts related to secession; anti-terror provisions were introduced in 2004.

Who makes such designation?

  • The UAPA (after 2019 amendment)seeks to empower the central government to designate an individual a “terrorist” if they are found committing, preparing for, promoting, or involved in an act of terror.
  • A similar provision already exists in Part 4 and 6 of the legislation for organizations that can be designated as a “terrorist organisations”.

How individuals are declared terrorists?

  • The central government may designate an individual as a terrorist through a notification in the official gazette, and add his name to the schedule supplemented to the UAPA Bill.
  • The government is not required to give an individual an opportunity to be heard before such a designation.
  • At present, in line with the legal presumption of an individual being innocent until proven guilty, an individual who is convicted in a terror case is legally referred to as a terrorist.
  • While those suspected of being involved in terrorist activities are referred to as terror accused.

What happens when an individual is declared a terrorist?

  • The designation of an individual as a global terrorist by the United Nations is associated with sanctions including travel bans, freezing of assets and an embargo against procuring arms.
  • The UAPA, however, does not provide any such detail.
  • It also does not require the filing of cases or arresting individuals while designating them as terrorists.

Removing the terrorist tag

  • The UAPA gives the central government the power to remove a name from the schedule when an individual makes an application.
  • The procedure for such an application and the process of decision-making will is decided by the central government.
  • If an application filed by an individual declared a terrorist is rejected by the government, the UAPA gives him the right to seek a review within one month after the application is rejected.
  • The central government will set up the review committee consisting of a chairperson (a retired or sitting judge of a High Court) and three other members.
  • The review committee is empowered to order the government to delete the name of the individual from the schedule that lists “terrorists” if it considers the order to be flawed.
  • Apart from these two avenues, the individual can also move the courts to challenge the government’s order.

 

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ISRO Missions and Discoveries

What is PSLV Orbital Experimental Module (POEM)?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : POEM

Mains level : Not Much

The ISRO has launched three Singaporean satellites in precise orbit through the PSLV Orbital Experimental Module or ‘POEM’.

What is POEM?

  • The POEM is a platform that will help perform in-orbit experiments using the final, and otherwise discarded, stage of ISRO’s workhorse rocket, the Polar Satellite Launch Vehicle (PSLV).
  • The PSLV is a four-stage rocket where the first three spent stages fall back into the ocean, and the final stage (PS4) — after launching the satellite into orbit — ends up as space junk.
  • However, in PSLV-C53 mission, the spent final stage will be utilised as a “stabilised platform” to perform experiments.
  • POEM is carrying six payloads, including two from Indian space start-ups Digantara and Dhruva Space.

Features of POEM

  • POEM has a dedicated Navigation Guidance and Control (NGC) system for attitude stabilisation, which stands for controlling the orientation of any aerospace vehicle within permitted limits.
  • The NGC will act as the platform’s brain to stabilize it with specified accuracy.
  • POEM will derive its power from solar panels mounted around the PS4 tank, and a Li-Ion battery.
  • It will navigate using four sun sensors, a magnetometer, gyros & NavIC.
  • It carries dedicated control thrusters using Helium gas storage. It is enabled with a telecomm and feature.

Has ISRO repurposed and used PS4 rocket junk earlier?

  • The Indian space agency first demonstrated the capability of using PSLV-C44 as an orbital platform in 2019.
  • It injected Microsat-R and Kalamsat-V2 satellites into their designated orbits.
  • The fourth stage in that mission was kept alive as an orbital platform for space-based experiments.
  • While in that mission, the fourth stage had Li-Ion batteries, solar panels are an addition this time.
  • The latest repurposing and upgrade of the fourth stage of the PSLV rocket involves the stabilization of the orbital platform.

 

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Russian Invasion of Ukraine: Global Implications

Russia withdraws from Snake Island

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Snake Island

Mains level : Russia-Ukraine War

Russian forces abandoned the strategic Black Sea outpost of Snake Island, in a major victory for Ukraine that could loosen the grip of Russia’s blockade on Ukrainian ports.

I will give you a trick to remember countries bordering Black Sea. It is ‘GURRBUT’.

Now please take effort to write those names of countries here.

Snake Island

  • Zmiinyi Island, also known as Snake or Serpent Island, is a small piece of rock less than 700 metres from end to end, that has been described as being “X-shaped”.
  • It is located 35 km from the coast in the Black Sea, to the east of the mouth of the Danube and roughly southwest of the port city of Odessa.
  • The island, which has been known since ancient times and is marked on the map by the tiny village of Bile that is located on it, belongs to Ukraine.

Why does Russia seek to control the Black Sea?

  • Domination of the Black Sea region is a geostrategic imperative for Moscow.
  • The famed water body is bound by Ukraine to the north and northwest, Russia and Georgia to the east, Turkey to the south, and Bulgaria and Romania to the west.
  • It links to the Sea of Marmara through the Bosporus and then to the Aegean through the Dardanelles.
  • It has traditionally been Russia’s warm water gateway to Europe.
  • For Russia, the Black Sea is both a stepping stone to the Mediterranean as well as a strategic buffer between NATO and itself.
  • Cutting Ukrainian access to the Black Sea will reduce it to a landlocked country and deal a crippling blow to its trade logistics.

 

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Anti Defection Law

The anti-defection law — political facts, legal fiction

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Anti-defection law

Mains level : Paper 2- Paragraph 4 of Tenth Schedule

Context

The ongoing political crisis in Maharashtra, and many others before it, are grim reminders of what the Tenth Schedule can and cannot do.

About 10th Schedule

  • In 1985 the Tenth Schedule, popularly known as the anti-defection law, was added to the Constitution.
  • But its enactment was catalyzed by the political instability after the general elections of 1967.
  • This was the time when multiple state governments were toppled after MLAs changed their political loyalties.
  • The purpose of the 1985 Constitution Amendment was to bring stability to governments by deterring MPs and MLAs from changing their political parties on whose ticket they were elected.
  • The penalty for shifting political loyalties is the loss of parliamentary membership and a bar on becoming a minister.

Provisions of the 10th Schedule

  • Instances of floor crossing have long gone unchecked and unpunished.
  • In part, this can be attributed to the exemption given to mergers between political parties which facilitate bulk defections.
  • Disqualification provision: The second paragraph of the Tenth Schedule allows for disqualification of an elected member of a House if such member belonging to any political party has voluntarily given up membership of their party, or if they vote in the House against such party’s whip.
  • Exceptions: Paragraph 4 creates an exception for mergers between political parties by introducing three crucial concepts — that of the “original political party”, the “legislature party”, and “deemed merger”.
  • What is the legislature party?  It means the group consisting of all elected members of a House for the time being belonging to one political party.
  • Original political party: An “original political party” means the political party to which a member belongs (this can refer to the party generally, outside of the House).
  • Paragraph 4 does not clarify whether the original political party refers to the party at the national level or the regional level.

How Paragraph 4 of the 10th Schedule deals with mergers?

  • Paragraph 4 is spread across two sub-paragraphs, a conjoint reading of which suggests that a merger can take place only when an original party merges with another political party, and at least two-thirds of the members of the legislature party have agreed to this merger.
  • It is only when these two conditions are satisfied that a group of elected members can claim exemption from disqualification on grounds of merger.
  • The second sub-paragraph (of Paragraph 4) says that a party shall be “deemed” to have merged with another party if, and only if, not less than two-thirds of the members of the legislature party concerned have agreed to such merger.
  • However, in most cases there is no factual merger of original political parties at the national (or even regional) level.
  • Creation of legal fiction: Paragraph 4 seems to be creating a “legal fiction” so as to indicate that a merger of two-third members of a legislature party can be deemed to be a merger of political parties, even if there is no actual merger of the original political party with another party.
  • In statutory interpretation, “deemed” has an established understanding.
  • The word “deemed” may be used in a law to create a legal fiction, and give an artificial construction to a word or a phrase used in a statute.
  • In other cases, it may be used to include what is obvious or what is uncertain.
  • In either of these cases, the intention of the legislature in creating a deeming provision is paramount.

Merger exception and issues with it

  • The merger exception was created to save instances of the principled coming together of political groups from disqualification under the anti-defection law, and to strike a compromise between the right of dissent and party discipline. 
  • In the absence of mergers of original political parties, the deeming fiction could, presumably, be used as a means to allow mergers of legislature parties.
  • Encouraging defection: Reading Paragraph 4 in this manner would empower legislature parties to solely merge with another party, and thus, practically ease defection.

What if sub-paragraphs are read conjunctively?

  • For a valid merger then, an original political party has to first merge with another political party, and then two-thirds of the legislature party must support that merger.
  • Given the politics of current times, stark differences in parties’ respective ideologies, and deep-seated historical rivalries, it is unimaginable how a merger between major national or regional parties would materialise.

Way forward

  • Remove Paragraph 4: In a situation where either reading of Paragraph 4 in its current form yields undesirable results, its deletion from the Tenth Schedule is a possible way forward.
  • The Law Commission in 1999 and the National Commission to Review the Working of the Constitution (NCRWC) in 2002 made similar recommendations.
  • Revisiting by Supreme Court: Till that happens, an academic revisiting of the Tenth Schedule by the Supreme Court, so as to guide future use of the anti-defection law, is timely and should happen soon.

Conclusion

Neither of these two interpretations of Paragraph 4complements the ‘mischief’ that the Tenth Schedule was expected to remedy — that of curbing unprincipled defections. Amending it is the need of the hour.

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Foreign Policy Watch: India-Middle East

The significance of PM’s visit to the UAE

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2- India-UAE relations

Context

Prime Minister Narendra Modi’s visit to the UAE on June 28 was his fourth, having visited the country earlier in August 2015, in February 2018 and again in August 2019.

Why do the Gulf and UAE matters to India?

  • The UAE has given crucial support to India in the Islamic world, first by inviting our late External Affairs Minister Sushma Swaraj as a guest of honour at an OIC foreign ministers meeting in Abu Dhabi.
  • The UAE stood with us on Jammu and Kashmir following the abrogation of Article 370.
  • The Gulf is our third-largest trading partner.
  • The Gulf region is our principal source of hydrocarbons.
  • It is also a major source of foreign investment.
  • The region is home to some 8 million Indians who send in over $50 billion annually in remittances.

Deepening bilateral ties

  • CEPA: In a virtual summit with Sheikh Mohamed in February 2022, both sides signed a Comprehensive Economic Partnership Agreement (CEPA).
  • CEPA is a significant milestone that was negotiated and finalised in just 88 days and promises to increase bilateral trade from $60 billion to $ 100 billion in five years.
  •  It is expected to help Indian exports in areas ranging from gems and jewellery and textiles to footwear and pharmaceuticals, apart from enhanced access for Indian service providers to 11 specific sectors.
  • Vision statement: An ambitious, forward-looking Joint Vision Statement titled, “Advancing the India and UAE Comprehensive Strategic Partnership: New Frontiers, New Milestones” was also issued.
  • The Dubai-based DP World and India’s National Skills Development Council signed an agreement to set up a Skill India Centre in Varanasi to train local youth in logistics, port operations and allied areas so that they can pursue overseas employment.

New avenues for multilateral cooperation

  • The rapid normalisation of ties between the UAE and Israel following the Abraham Accords of August 2020 has also opened new avenues of trilateral and multilateral cooperation.
  • Technology, capital and scale: Some Israeli tech companies are already establishing a base in Dubai and seeking to marry niche technologies with Emirati capital and Indian scale. 
  • 2I2U: The US has announced that President Joe Biden’s forthcoming visit to West Asia will see a virtual summit of what it calls the 2I2U, a new grouping that brings together India, Israel, the US and UAE.

Conclusion

The UAE today is India’s closest partner in the Arab world. Both countries need to expand the areas of cooperation and deepen their engagement.

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Back2Basics: Abraham Accords

  • The Israel–UAE normalization agreement is officially called the Abraham Accords Peace Agreement.
  • It was initially agreed to in a joint statement by the United States, Israel and the United Arab Emirates (UAE) on August 13, 2020.
  • The UAE thus became the third Arab country, after Egypt in 1979 and Jordan in 1994, to agree to formally normalize its relationship with Israel as well as the first Persian Gulf country to do so.
  • Concurrently, Israel agreed to suspend plans for annexing parts of the West Bank.
  • The agreement normalized what had long been informal but robust foreign relations between the two countries.

Poverty Eradication – Definition, Debates, etc.

The extent of poverty

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Poverty line

Mains level : Paper 3- Estimating poverty in India

Context

There has been an uproar about the working papers of the IMF and World Bank, reporting no or low poverty for India in the pandemic year or just before that.

About the IMF paper

  • The paper by Roy and Weide (2022) for the World Bank explores the possibility of using CMIE (unemployment data) in poverty calculations after correcting for the unrepresentative character of its panel data by modifying the weightages of households for aggregation.
  • These adjustments carried out to remove the non-convergence of the CMIE data with other macro statistics have resulted in a poverty figure of 12 per cent.

What does the poverty index measure or attempt to capture?

  • Its construction involves complex calculations — to identify a poverty basket of consumption, working out price indices for updation of the poverty line and then applying it to the income or consumption of households for determining their poverty status.
  • Absence of consumption expenditure: The computation becomes far more challenging in the absence of data on consumption expenditure as is the case in India and several developing countries.
  • Intending to provide inputs for policy making, researchers have evolved ingenious methods of estimating the data, using past datasets and those that have not been designed to get robust expenditure estimates.

Background of poverty line in India

  • A nine-member working group set up by the Planning Commission proposed the poverty line at Rs 20 per capita per month in the early Sixties, loosely ensuring the adequacy of minimum requirements.
  • Poverty line based on calorie needs: Dandekar and Rath (1970) went into detail about minimum calorie needs, based on the average consumption pattern.
  • Issues with calorie based poverty line: During the Eighties and Nineties, it was realised that this linkage is getting blurred due to changes in the consumption pattern, microenvironment for living, etc.
  • Sukhatme argued that the emphasis on calories and nutrition is misplaced as the absorption of nutrients depends on physical health, particularly the presence or absence of gastrointestinal diseases.
  • Water and sanitation facilities were noted as important in determining the poverty line.
  •  It was accepted that the state, through poverty interventions, cannot and should not try to guarantee adequate nutrition to people.
  • Delinking the nutritional norms: The Tendulkar Committee formally announced delinking of nutritional norms from poverty in 2010.

Extrapolating the consumption expenditure on NSS 2011-12

  • Bhalla, Virmani and Bhasin (2022) in their IMF Working Paper have developed a method of interpolation and extrapolation of the consumption expenditure of the NSS 2011-12 and building a series up to 2019-20.
  • They use the growth rate of private final consumption expenditure (PFCE) but bring in the distributional changes by allowing household consumption to grow as per the nominal per capita income in each state.
  • Takes into account rural-urban price difference: Rural-urban price differences are also introduced through separate poverty lines.
  • The method is reasonable except that it assumes the distributions to remain unchanged both within the rural and urban segments in each state over 2014-20.
  • Also, the growth rates of different commodities in the PFCE are significantly different and hence commodity-wise adjustments can be done to give higher weights to the items of consumption by the poor.
  • Taking into account the role of state: The most significant contribution of the study is its bringing in the differential engagement of the state in the provisioning of the essentials to the poor into poverty calculations.
  • This opens up the possibility of changes in the level of state engagement in poverty estimation, including free gas cylinders, etc.

Conclusion

People find the World Bank paper figures pegged at 12% more acceptable not because of the methodology but the magnitude. One does not know whether the poverty estimate would be a bit higher had the adjustments been carried out for a few other parameters and also at the state level.

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Parliament – Sessions, Procedures, Motions, Committees etc

How is Vice-President of India elected?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Office of the VP

Mains level : Read the attached story

The Election Commission has announced that the election to the post of the Vice-President (VP) will be held on August 6, as M. Venkaiah Naidu’s term was coming to an end on August 10.

About Vice President of India

  • The VP is the deputy to the head of state of the Republic of India, the President of India.
  • His/her office is the second-highest constitutional office after the president and ranks second in the order of precedence and first in the line of succession to the presidency.
  • The vice president is also a member of the Parliament as the ex officio Chairman of the Rajya Sabha.

Qualifications

  • As in the case of the president, to be qualified to be elected as vice president, a person must:
  1. Be a citizen of India
  2. Be at least 35 years of age
  3. Not hold any office of profit
  • Unlike in the case of the president, where a person must be qualified for election as a member of the Lok Sabha, the vice president must be qualified for election as a member of the Rajya Sabha.
  • This difference is because the vice president is to act as the ex officio Chairman of the Rajya Sabha.

Roles and responsibilities

  • When a bill is introduced in the Rajya Sabha, the vice president decides whether it is a money bill or not.
  • If he is of the opinion that a bill introduced in the Rajya Sabha is a money bill, he shall refer it to the Speaker of the Lok Sabha.
  • The vice president also acts as the chancellor of the central universities of India.

Election procedure

  • Article 66 of the Constitution of India states the manner of election of the vice president.
  • The vice president is elected indirectly by members of an electoral college consisting of the members of both Houses of Parliament and NOT the members of state legislative assembly.
  • The election is held as per the system of proportional representation using single transferable votes.
  • The voting is conducted by Election Commission of India via secret ballot.
  • The Electoral College for the poll will comprise 233 Rajya Sabha members, 12 nominated Rajya Sabha members and 543 Lok Sabha members.
  • The Lok Sabha Secretary-General would be appointed the Returning Officer.
  • Political parties CANNOT issue any whip to their MPs in the matter of voting in the Vice-Presidential election.

Removal

  • The Constitution states that the vice president can be removed by a resolution of the Rajya Sabha passed by an Effective majority (majority of all the then members) and agreed by the Lok Sabha with a simple majority( Article 67(b)).
  • But no such resolution may be moved unless at least 14 days’ notice in advance has been given.
  • Notably, the Constitution does not list grounds for removal.
  • No Vice President has ever faced removal or the deputy chairman in the Rajya Sabha cannot be challenged in any court of law per Article 122.

 

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Banking Sector Reforms

What are Primary Agricultural Credit Society (PACS)?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : PACS

Mains level : Rural banking in India

The Cabinet Committee on Economic Affairs (CCEA) has approved a proposal to digitise around 63,000 primary agricultural credit societies (PACS).

What are the Primary Agricultural Credit Societies (PACS)?

  • PACS is a basic unit and smallest co-operative credit institutions in India.
  • In 1904 the first Primary Agricultural Credit Society (PACS) was established.
  • It works on the grassroots level (gram panchayat and village level).
  • PACS is the final link between the ultimate borrowers, i.e., rural people, on the one hand, and the higher agencies, i.e., Central cooperative bank, state cooperative bank, and Reserve Bank of India, on the other.

Who regulates PACS?

  • PACS are registered under the Co-operative Societies Act and also regulated by the RBI.
  • They are governed by the “Banking regulation Act-1949” and Banking Laws (Co-operative societies) Act 1965.

Various objectives of PACS

  1. To raise capital for the purpose of making loans and supporting members’ essential activities.
  2. To collect deposits from members with the goal of improving their savings habit.
  3. To supply agricultural inputs and services to members at reasonable prices,
  4. To arrange for the supply and development of improved breeds of livestock for members.
  5. To make all necessary arrangements for improving irrigation on land owned by members.
  6. To encourage various income-generating activities through supply of necessary inputs and services.

Functions of PACS

  • As registered cooperative societies, PACS have been providing credit and other services to their members.
  • PACS typically offer the following services to their members:
  1. Input facilities in the form of a monetary or in-kind component
  2. Agriculture implements for hire
  3. Storage space

Who can form PACS?

  • A primary agricultural credit society can be formed by a group of ten or more people from a village. The society’s management is overseen by an elected body.
  • The membership fee is low enough that even the poorest agriculturist can join.
  • Members of the society have unlimited liability, which means that each member assumes full responsibility for the society’s entire loss in the event of its failure.

What capitalizes PACS?

  • The primary credit societies’ working capital is derived from their own funds, deposits, borrowings, and other sources.
  • Share capital, membership fees, and reserve funds are all part of the company’s own funds.
  • Deposits are made by both members and non-members.
  • Borrowings are primarily made from central cooperative banks.

Why need digitization?

  • PACS account for 41 % (3.01 Cr. farmers) of the KCC loans given by all entities in the country and 95 % of these KCC loans (2.95 Cr. farmers) through PACS are to the small and marginal farmers.
  • The other two tiers viz. State Cooperative Banks (StCBs) and District Central Cooperative Banks (DCCBs) have already been automated by the NABARD and brought on Common Banking Software (CBS).
  • Majority of PACS have so far been not computerized and still functioning manually resulting in inefficiency and trust deficit.

Significance of digitization

  • Computerization of PACS will increase their transparency, reliability and efficiency, and will also facilitate the accounting of multipurpose PACS.
  • Along with this, it will also help PACS to become a nodal centre for providing services such as direct benefit transfer (DBT), Interest subvention scheme (ISS), crop insurance scheme (PMFBY), and inputs like fertilizers and seeds.

Try this PYQ from CSP 1999:

Q.The farmers are provided credit from a number of sources for their short and long term needs. The main sources of credit to the farmers include-

(a) the Primary Agricultural Cooperative Societies, commercial banks, RRBs and private money lenders

(b) the NABARD, RBI, commercial banks and private money lenders

(c) the District Central Cooperative Banks (DCCB), the lead banks, IRDP and JRY

(d) the Large Scale Multi-purpose Adivasis Programme, DCCB, IFFCO and commercial banks

 

Post your answers here.

 

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Goods and Services Tax (GST)

Govt. hikes GST for household items

Note4Students

From UPSC perspective, the following things are important :

Prelims level : New GST slabs

Mains level : Rationalization of GST

The Goods and Services Tax (GST) Council has decided to hike and lower GST on certain commodities.

What is the news?

  • From July 18, tax hikes will kick in for over two dozen goods and services, ranging from unbranded food items, curd and buttermilk to low-cost hotels, cheques and maps.
  • Tax rates will be lowered for about half-a-dozen goods and services, including ropeways and truck rentals where fuel costs are included.
  • It scrapped GST for items imported by private vendors for use by defence forces.

What is GST?

  • GST launched in India on 1 July 2017 is a comprehensive indirect tax for the entire country.
  • It is charged at the time of supply and depends on the destination of consumption.
  • For instance, if a good is manufactured in state A but consumed in state B, then the revenue generated through GST collection is credited to the state of consumption (state B) and not to the state of production (state A).
  • GST, being a consumption-based tax, resulted in loss of revenue for manufacturing-heavy states.

What are GST Slabs?

  • In India, almost 500+ services and over 1300 products fall under the 4 major GST slabs.
  • There are five broad tax rates of zero, 5%, 12%, 18% and 28%, plus a cess levied over and above the 28% on some ‘sin’ goods.
  • The GST Council periodically revises the items under each slab rate to adjust them according to industry demands and market trends.
  • The updated structure ensures that the essential items fall under lower tax brackets, while luxury products and services entail higher GST rates.
  • The 28% rate is levied on demerit goods such as tobacco products, automobiles, and aerated drinks, along with an additional GST compensation cess.

Why rationalize GST slabs?

  • From businesses’ viewpoint, there are just too many tax rate slabs, compounded by aberrations in the duty structure through their supply chains with some inputs are taxed more than the final product.
  • These are far too many rates and do not necessarily constitute a Good and Simple Tax.
  • Multiple rate changes since the introduction of the GST regime in July 2017 have brought the effective GST rate to 11.6% from the original revenue-neutral rate of 15.5%.
  • Merging the 12% and 18% GST rates into any tax rate lower than 18% may result in revenue loss.

Haven’t GST revenues been hitting new records?

  • Yes, they have – GST revenues have scaled fresh highs in three of the first four months of 2022, going past ₹1.67 lakh crore in April.
  • But there is another key factor — the runaway pace of inflation.
  • Wholesale price inflation, which captures producers’ costs, has been over 10% for over a year and peaked at 15.1% in April.
  • Inflation faced by consumers on the ground has spiked to a near-eight year high of 7.8% in April.
  • The rise in prices was the single most important factor for higher tax inflows along with higher imports.

 

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