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[op-ed snap] The price is right

Note4students

Mains Paper 3: Agriculture | Issues related to direct & indirect farm subsidies & minimum support prices

From UPSC perspective, the following things are important:

Prelims level: MSP system

Mains level: Government intervention in the agricultural sector and their overall impact


Context

Hike in MSP

  1. The cabinet has approved MSPs for Kharif crops for the year 2018-19
  2. The MSPs are not only 50 percent higher than the cost, in some cases, they are far greater
  3. Since the beginning of the economic reforms in the early 1990s, the focus of agricultural policy has shifted towards prices
  4. Farmers are losing faith in the market and seeking direct intervention by the government, mainly at the Centre
  5. The situation has been aggravated by unanticipated increases in the domestic production of some crops like pulses and the low global prices of agricultural commodities exerting downward pressure on domestic prices

History of MSP system

  1. India started the system of MSPs in the mid-1960s for wheat
  2. It gradually brought all major cereals, oilseeds, pulses, cotton, jute and sugarcane into its ambit

MSP economics

  1. The Union government has decided to keep MSPs at least 50 per cent above the sum of cost of production (A2) and imputed wages for the time spent by the farmer and his/her family (FL) in crop production
  2. A2 is a comprehensive cost and includes paid or imputed costs of all purchased or own inputs like seed, fertilizer, manure, bullock labour and machine labour, interest on working capital, irrigation expenses, depreciation, rent paid for the leased-in land, costs of repair and miscellaneous expenses

Using C2 cost instead of A2 will not be good

  1. Cost C2 is arrived at by adding the rental value of owned land and interest on fixed capital to cost A2 plus FL
  2. On average, around 40 percent of Cost C2 (imputed rent for own land and imputed value of family labour used in crop production) is not a cost but income to the farmer
  3. If MSP is just equal to cost C2, it includes 40 percent as a net return for the farmers
  4. No principle of economics tells us to award a margin on those costs which are not actually incurred
  5. Keeping MSP at 50 percent above cost C2 involves an increase in the current MSP by 27-89 percent for kharif and up to 45 percent for rabi crops
  6. Such a price entails a 50-100 percent increase in the existing farm-level prices of some crops at one go

Impact of using the C2 methodology

  1. Demand-side factors at present do not support such a sharp increase in prices
  2. In such a situation, the private trade will not have any incentive to operate in the market
  3. The entire onus of procuring the marketable surplus will come on the government, which in turn will be required to heavily subsidize the procured produce in order to dispose of it
  4. This will make domestic prices much higher than global prices, which will strongly hit exports and make India attractive for imports
  5. It will also leave little incentive for efficiency and diversification in the crop sector
  6. Such a move involves keeping prices artificially high and cannot be sustained fiscally

Why should market intervention in terms of prices be minimum?

  1. Excessive intervention in prices can have serious implications for the functioning of the market, fiscal resources and imports and exports
  2. The best prices for farm produce can be realised from a competitive market

What can be done to ensure fair prices?

  1. Regulatory reforms
  2. Institutional changes
  3. The development of appropriate infrastructure to promote the evolution of the agricultural market system

Way forward

  1. The new MSPs announced by the government for kharif crops meet the spirit the Swaminathan Committee recommendation of 50 per cent net return over Cost C2
  2. The stakeholders now need to differentiate areas for action by the Centre and the states
  3. There is a particular need to put pressure on the states to undertake the required reforms to make agricultural markets more efficient, competitive and responsive to the needs of producers and consumers
Minimum Support Prices for Agricultural Produce

Allow gambling, betting on sports as regulated, taxable activities: Law panel

Note4students

Mains Paper 3: Internal Security | Money-laundering & its prevention

From UPSC perspective, the following things are important:

Prelims level: Law Commission, Articles 249 & 252 of the Constitution

Mains level: Gambling market in India and its linkages with organized crime


News

Suggestion to legalize gambling

  1. The Law Commission has recommended that gambling and betting on sports, including cricket, be allowed as regulated activities taxable under the direct and indirect tax regimes and used as a source for attracting foreign direct investment (FDI)
  2. The commission’s report, “Legal Framework: Gambling and Sports Betting including Cricket in India”, recommends a number of changes in the law for regulating betting and generating tax revenues from it

Key suggestions

  1. Parliament may also enact a model law for regulating gambling that may be adopted by the states
  2. In the alternative, Parliament may legislate in the exercise of its powers under Articles 249 or 252 of the Constitution
  3. In case legislation is made under Article 252, states other than the consenting states will be free to adopt the same
  4. The commission has recommended linking Aadhar or PAN card of an individual indulging in betting and gambling, and making the transaction cashless to regulate illegal activities such as money laundering
  5. The commission has also recommended amending the laws regulating forex and India’s FDI policy to allow investments in the casino and online gaming industry

Possible impacts

  1. Allowing FDI in the industry would bring substantial amounts of investment to those states that decide to permit casinos, propelling the growth of the tourism and hospitality industries
  2. It will also enable such states to generate higher revenue and employment opportunities
BCCI Reforms – Lodha Committee, etc.

[op-ed snap] Is India winning the battle against extreme poverty?

Note4students

Mains Paper 3: Economy | Development and employment

From UPSC perspective, the following things are important:

Prelims level: Definitions of Poverty

Mains level: The news card talks about the dynamic nature of poverty and deprivation. Old definitions will dramatically reduce persons below the poverty line. It is outdated to see it in terms of income levels or extreme forms such as hunger. Poverty has now to be equated with inequality to address the present problem.


Context

India out of extreme poverty cycle

  1. India is perhaps no longer home to the highest number of people living in extreme poverty.
  2. Researchers at Brookings Institution say Nigeria had 87 million people living in extreme poverty in May 2018, compared to 73 million in India.
  3. They predict that the Indian number is expected to drop to around 20 million over the next four years.

Poverty – a disguise in India?

  1. The World Bank defines a person as extremely poor if she is living on less than 1.90 international dollars a day, which are adjusted for inflation as well as price differences between countries.
  2. The results of the recently concluded consumer expenditure survey conducted by the National Sample Survey Organisation are used to generate estimates of absolute poverty.
  3. It will show that there are only 50 million Indians now living below the poverty line defined by the Suresh Tendulkar committee, or one in 25.
  4. Poverty numbers have always been a source of heated debate in India and the claims that India is on the verge of winning the battle against extreme poverty sit uneasily with the current concerns about job creation or rural distress.

Comparing with China

  1. China began to score massive wins against extreme poverty at the turn of the century when its per capita income in terms of purchasing power parity (PPP) was around $4,000.
  2. It was thus very likely that India would see a similar result after it reached a similar average income level at the end of the previous decade.
  3. PPP incomes average around $7,000 right now, compared to around $2,500 in the year 2000.
  4. Chinese success has no doubt that rapid economic growth as the main reason why extreme poverty could be rolled back.

What pulled China out of extreme poverty?

  1. The centrality of economic expansion is often lost in the heated ideological debates in India.
  2. But there were also other factors at play—the shift of people to jobs in formal enterprises, investments in human capital, relatively equal land ownership in rural areas, and targeted interventions to help the extremely poor.
  3. These allowed China to pull most of its citizens out of extreme poverty despite rising inequality.

Indian Scenario of Poverty Reduction

  • Poverty Reduction isn’t the only Indicator
  1. It is time to close the tired debate about whether the economic reforms of 1991 have only helped the rich, though empirical proof will not come in the way of grand claims that poverty is actually increasing in India.
  2. Other indicators of well-being such as infant mortality and nutrition have also been improving.
  • Outdated poverty definition in India
  1. India will once again have to redefine what it means by poverty. Poverty lines have to be recalibrated depending on changes in income, consumption patterns and prices.
  2. The usual poverty line used in narratives is 1.90 international dollars a day, but the World Bank has two others—$3.20 per day for middle-income countries and $5.50 per day for rich countries.
  3. India is now a middle-income country, with an estimated per capita income of around $9,000 in purchasing power parity.
  4. Economists suggest that a poverty line of $3.20 translates into ₹75 a day, or 68% higher than the Tendulkar poverty line.
  • Poverty not to be assumed as Hunger only
  1. Third, the Indian political, policy and administrative systems have to adjust to the new realities of the transition to a middle- income country.
  2. Here poverty does not mean living at the edge of hunger but, rather, lack of income to take advantage of the opportunities thrown up by a growing economy.

Way Forward

  1. The focus of government spending should be on the provision of public goods rather than subsidies.
  2. Also, the rate at which economic growth translates into poverty reduction depends on what happens to inequality.
  3. India was battling the threat of widespread famine some five decades ago when even its ability to feed a growing population was questioned. There has been a lot of progress since then.
  4. Even the very possibility of a final victory against the sort of extreme poverty that was common not so long ago is no mean achievement.
  5. Inequality along with poverty needs to be targeted.

Back2Basics

Definitions of Poverty

Read more about the Poverty Line in India in this blog

Poverty Lines in India: Estimations and Committees

Poverty Eradication – Definition, Debates, etc.

[pib] ICAT releases First BS-VI engine certificate

Note4students

Mains Paper 3: Environment | Conservation, environmental pollution and degradation, environmental impact assessment

From UPSC perspective, the following things are important:

Prelims level: BS emission norms

Mains level: India’s policy measures to curb vehicular pollution


News

Volvo Eicher to receive first commercial BS VI Certificate

  1. ICAT has completed the first BS-VI certification for a heavy-duty engine model for M/s Volvo Eicher Commercial Vehicle Limited.
  2. The engine has been developed and manufactured indigenously by Volvo Eicher in India.
  3. The successful completion of the compliance test of the engine, much ahead of the implementation date of 1 April 2020, gives sufficient time for product stabilization in terms of making it more robust and cost competitive for the end consumers.

Why BS VI?

  1. The pro-active approach from the Government of India has made the country leapfrog from the conventional BS-IV to directly adopt BS-VI emission norms as the next level for regulatory framework in India.
  2. The BS-VI emission standards are much more elaborate in their scope and integrate substantial changes to existing emission standards ensuring cleaner products to the consumer.
  3. Besides the more stringent limits on the gaseous emission components, the particulate matter (PM) limits have also been significantly reduced along with the introduction of particle number (PN) limits.

International Centre for Automotive Technology (ICAT)

  1. The International Centre for Automotive Technology (ICAT) is a division of NATRiP implementation society (NATIS), under the administrative control of the Ministry of Heavy Industries & Public Enterprises, Government of India.
  2. ICAT is the first of new world-class centers established under the National Automotive Testing and R&D Infrastructure Project (NATRiP) with the main objective of carrying out Research & Development besides extending homologation facilities in the field of Automotive Engineering.
  3. ICAT is one of the prime testing agencies recognized by the Government of India as one of the accredited ‘Type Approval and Homologation’ agencies in India under Central Motor Vehicle Rules (CMVR).
  4. It has also been recognized as Scientific and Industrial Research Organization (SIRO) by the Department of Scientific and Industrial Research (DSIR), since Feb 2010, by BIS for Tyre Testing, Safety Glasses and by Central Pollution Control Board (CPCB) for emission and noise testing of generator sets.

Back2Basics

Bharat Emission Standards

  1. Bharat stage emission standards (BSES) are emission standards instituted by the Government of India to regulate the output of air pollutants from internal combustion engines and Spark-ignition engines equipment, including motor vehicles
  2. The standards and the timeline for implementation are set by the Central Pollution Control Board under the Ministry of Environment & Forests and climate change
  3. The standards, based on European regulations were first introduced in 2000
  4. Bharat Stage IV emission norms have been in place since April 2010 and it has been enforced for entire country since April 2017
  5. In 2016, the Indian government announced that the country would skip the BS-V norms altogether and adopt BS-VI norms by 2020
  6. While the norms help in bringing down pollution levels, it invariably results in increased vehicle cost due to the improved technology & higher fuel prices
Bharat Emission Standards

HEFA to allot ₹1 lakh crore for education

Note4students

Mains Paper 2: Governance | Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

From UPSC perspective, the following things are important:

Prelims level: Higher Education Financing Agency (HEFA)

Mains level: Higher educational Infrastructure development  in India


 News

₹1 lakh crore for Educational Infrastructure

  1. The Union Cabinet permitted the Higher Education Funding Agency (HEFA) to mobilize ₹1 lakh crore to fund research and academic infrastructure in higher educational institutions by 2022.
  2. The funding will also be available to government-run schools Kendriya Vidyalayas and Jawahar Navodaya Vidyalayas.
  3. This will help build speedier infrastructure of new Kendriya Vidyalayas and Jawahar Navodaya
  4. Indian Institutes of Technology, National Institutes of Technology, Indian Institutes of Science Education and Research, other Central universities and medical colleges will also get funds from the agency.

Funding till date

  1. HEFA was set up last year as a non-banking financing company for mobilizing extra-budgetary resources for building crucial infrastructure in Central higher educational institutions
  2. The Cabinet had approved the creation of the agency in September 2016.
  3. In the existing arrangement, the entire principle portion is repaid by the institution over 10 years, and the interest portion is serviced by the government by providing additional grants to the institution.
  4. So far, funding proposals worth ₹2,016 crore have been approved by the HEFA.
  5. In November 2017, the agency allocated ₹2,066 crore for six higher education institutions — the IITs in Mumbai, Delhi, Chennai, Kharagpur and Kanpur, and the National Institute of Technology, Suratkal — to improve research infrastructure there.

Back2Basics

Higher Education Financing Agency (HEFA)

  1. It will be formed as a Special Purpose Vehicle (SPV) within a PSU Bank or the Government-owned-NBFC (Promoter).
  2. HEFA will have an authorized capital of 2,000 crore rupees and the government equity would be 1,000 crore rupees.
  3. The HEFA will also mobilize CSR funds from Corporates/PSUs which will, in turn, be released for promoting research and innovation in these institutions on grant basis.
  4. The principal portion of the loan will be repaid through the ‘internal accruals’ of the institutions earned through the fee receipts, research earnings etc.
  5. All the Centrally Funded Higher Educational Institutions will be eligible to join as members of the HEFA.
  6. For joining as members, the educational institution must agree to escrow a specific amount from their internal accruals for a period of 10 years to the HEFA.
Higher Education – RUSA, NIRF, HEFA, etc.

ISRO’s first ‘pad abort’ test, critical for future human space mission, successful

The crew module successfully lands.

Note4students

Mains Paper 3: Science & Technology | Awareness in the fields of IT, Space, Computers, robotics, nano-technology, bio-technology and issues relating to intellectual property rights.

From UPSC perspective, the following things are important:

Prelims level:  Pad Abort Test and its particulars

Mains level: All missions of the ISRO are important from examination point of view. It is also a landmark success for future manned missions of ISRO.


News

What is Crew Escape (Pad Abort) System?

  1. The Crew Escape System is an emergency escape measure to quickly pull the crew module — the astronaut cabin — along with astronauts out to a safe distance from the launch vehicle in the event of a launch abort.
  2. It is held for the safe recovery of the crew module in case of any exigency at the launch pad.

ISRO’s success for future “Manned Mission”

  1. The first ‘pad abort’ test critical for a future human space mission was conducted successfully by ISRO.
  2. The test was conducted at the Satish Dhawan Space Centre, Sriharikota.
  3. Describing it as a major technology demonstrator the space agency said the PAT (pad abort test) is the first in a series of tests to qualify a crew escape system technology of a manned mission in the future.
  4. The Crew Escape System is an emergency escape measure to quickly pull the crew module — the astronaut cabin — along with astronauts out to a safe distance from the launch vehicle in the event of a launch abort.

Particulars of the test

  1. The Crew Escape System with a simulated 6-tonne crew module lifted off from its pad.
  2. It was propelled on its own seven specially made complex in-built rockets.
  3. In the next four-odd minutes, it reached a height of 2.7 km and curved down into the Bay of Bengal on parachutes.
  4. It landed in the sea at a distance of 2.9 km from the launch center.
  5. The rockets are solid-fuel powered and specially designed for quickly ejecting the crew module and astronauts to a safe distance without exceeding the safe G-levels.
  6. Nearly 300 sensors recorded various functional aspects of the mission during the test flight.
ISRO Missions and Discoveries

Uttarakhand HC declares animals to be ‘legal persons’

Note4students

Mains Paper 3: Agriculture | Economics of animal-rearing

From UPSC perspective, the following things are important:

Prelims level: Particulars of the Prevention of Cruelty to Animals Act, Particulars of the Judgement

Mains level: The newscard highlights the directives issued by Judiciary to prevent cruelty against animals.


News

Background

  1. The order came on a public interest lawsuit seeking restrictions on the movement of horse-drawn carts between Indian and Nepal through Banbasa.
  2. It was also prayed for in the PIL that there should be provisions for vaccination, medical checkup of the horses for suspected infections before entering into the Indian Territory from Nepal and for regulating traffic in the border areas.

To prevent cruelty against animals

  1. In a unique ruling, the Uttarakhand High Court accorded the status of “legal person or entity” to animals in the State, saying “they have a distinct persona with corresponding rights, duties and liabilities of a living person.”
  2. A Division Bench bestowed the unique status on animal kingdom while issuing a series of directions to prevent cruelty against animals.
  3. The bench said that to protect and promote the greater welfare of animals including avian and aquatic, animals are required to be conferred with the status of legal entity/ legal person.
  4. The entire animal kingdom, including avian and aquatic ones, are declared as legal entities having a distinct persona with corresponding rights, duties and liabilities of a living person.

Guidelines issued by the bench

  1. The court also declared all Uttarakhand natives the guardians of animals and endowed them with the duty to ensure their welfare and protection.
  2. The Bench also gave directions ranging from the amount of load allowed to be pulled by various animals in accordance with the kind of carriage being pulled to the number of riders per carriage.
  3. Further banning the use of spike or other sharp tackle or equipment on the animal, the court also directed the State government to ensure that if the temperature exceeds 37°C or drops below 5°C, no person be permitted to keep in harness any animal used for the purpose of drawing vehicles.
  4. The court also went into the aspect of animal safety, highlighting the need for fluorescent reflectors in carriages and animals, certificates of unladen weight of vehicles, compulsory shelter of suitable size for horses, bullocks and stray cattle and a direction to the veterinary doctors of Uttarakhand to treat any stray animals brought to them or by visiting them.
  5. The court said as the carts driven by animals have no mechanical devices, animal-drawn carriages have to be given Right of Way over other vehicles.

Two Types of Persons

  1. In common law jurisprudence, there are two types of persons — natural persons or human beings and artificial person, which are also known as juristic persons, juridical entity or a legal person other than a natural person.
  2. Legal or juristic persons are created by law and recognized as a legal entity, having a distinct identity, legal personality and besides duties and rights.
  3. They include private business firm or entity, non-governmental or government organizations, trusts and societies, besides others.

Back2Basics

Prevention of Cruelty to Animals Act, 1960

  1. The Prevention of Cruelty to Animals Act is an Act of the Parliament of India enacted in 1960 to prevent the infliction of unnecessary pain or suffering on animals and to amend the laws relating to the prevention of cruelty to animals.
  2. The Act further recognizes slaughter for food. Section 11 of the Act does not categorize slaughter of animals for food as cruelty.
  3. It makes a specific exemption for “destruction of any animal as food for mankind unless such destruction or preparation was accompanied by the infliction of unnecessary pain or suffering.
  4. As per the provisions of the law, the government of India formed the Animal Welfare Board of India.
Animal Husbandry, Dairy & Fisheries Sector – Pashudhan Sanjivani, E- Pashudhan Haat, etc