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July 2019

Child Rights – POSCO, Child Labour Laws, NAPC, etc.

[op-ed snap] Commercial surrogacy


From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Commercial surrogacy in India

The Union Cabinet on Wednesday cleared a Bill to prohibit commercial surrogacy in India, allowing only altruistic, ethical surrogacy to the needy infertile married Indian couples, including NRIs.


  • The Bill lists conditions requiring couples seeking surrogacy service to have been married for five years and a medical certificate for infertility for either of the spouse at the end of that period in conformity with the stated age group.
  • Surrogacy services will be banned for persons of Indian origin, overseas citizens of India, members of the LGBT community, single parents and live-in partners.

Concerns with commercial surrogacy

  • The concern over the commercialisation of surrogacy is justified with chances of its misuse.
  • Procreation is not just about furthering the family lineage, but also about succession, tradition and legality.
  • Having a child is about putting a biological system in place, not just caring for societal mores.
  • There is therefore a need to define the legality and ethicality of the practice.
  • Commercial surrogacy can lead to complaints of exploitation of women, especially those from the economically weaker section, because it would involve financial compensation, the adequacy of which can always be challenged.
  • Pregnancy remains a biological phenomenon, with its attendant complications, necessitating proper medical care, the grossness of which could be open to challenge in case something goes wrong.
  • Children born out of surrogacy can also face the problems of citizenship, abandonment and abuse, another aspect that needs to be taken care of.
  • There is also the problem of jurisdiction because not all countries permit it. Couples wanting a surrogacy arrangement may travel to a country that permits it.


Perhaps keeping this in mind, the Bill clearly lists the category of persons eligible for this. Considering our penchant for observing rules more in spirit than in letter, it will have to be ensured that the avowed aims of the Bill do not go awry.

[op-ed snap] Union Budget 2019-20: Bucks for the banks


From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Details of union budget


The maiden budget of Nirmala Sitharaman has many interesting features, but it does not have a defining central theme. There were expectations of a big growth push through either tax cuts or large expenditure programmes even if it meant a rise in the fiscal deficit. But the Finance Minister has chosen to be fiscally conservative, opting to play the long-term game, though it could lead to pain in the short term.

Infusion in the banking sector

  • The only indulgence she has permitted herself is a big ₹70,000 crore capital infusion in banks that will, it is hoped, spur lending to growth sectors in the economy.
  • Also, quite notably, the budget has sought to address the problems that have plagued the non-banking finance companies space over the last few months and the consequent credit freeze and loss of confidence in the market.
  • Ms. Sitharaman has comprehensively addressed the important issues of liquidity, solvency and poor governance in the NBFC sector.
  • She has made available a liquidity window of ₹1 lakh crore to public sector banks through the Reserve Bank of India to buy pooled assets of NBFCs and offered a one-time credit guarantee for first loss of up to 10%.
  • To enable better supervision of the sector, housing finance companies, which have been the main villains of the piece, will come under the RBI’s regulatory ambit.
  • A long-standing demand of NBFCs for equitable treatment with banks in the matter of taxing interest receivable on bad loans has been conceded.
  • They will not need to maintain a Debenture Redemption Reserve on public placements that was leading to locking-up of funds, which is their raw material for business.

NBFC Sector

  • These are important reform measures for NBFCs. More interesting is the move towards reviving development financial institutions.
  • The big problem faced by NBFC financing infrastructure is the lack of long-term funding sources to match their lending tenure.
  • This pushed them into borrowing short-term funds to lend to long-term projects, leading to asset-liability mismatches.
  • The proposal to set up a committee to study the issue, including the experience with development finance institutions, is welcome.

Strategic disinvestment

There are several reform measures that have been announced, but the most interesting is the reiteration of the government’s commitment to strategic disinvestment and the declaration that it is willing to allow its stake to fall below 51% in non-financial PSUs.

Angel Tax

  • Start-ups can heave a sigh of relief as the angel tax is practically off the table.
  • Aadhar as single identity card

Single identity card –

  • The government seems to be moving towards a single identity card for citizens in the form of Aadhaar, which will now be interchangeable with the PAN card.
  • Taxpayers who do not have a PAN card can file returns quoting their Aadhaar number, which effectively can be a substitute for PAN in all transactions.

E-assessment of tax returns

  • Another reform measure is the introduction of faceless e-assessment of tax returns taken up for scrutiny.
  • This will eliminate the scope for rent-seeking by officers as there will be no interface between assessee and official.
  • In fact, the assessee will not even know the identity of the officer scrutinising the return. This is an absolutely welcome measure but needs to be closely watched for implementation.

Corporate sector

  • The corporate sector has got a minor sop with the turnover limit for the 25% tax bracket being raised to ₹400 crore per annum from ₹250 crore.
  • The expectation was that this would be extended to all companies irrespective of size.
  • It appears that the government wants to wait for the finalisation of the Direct Taxes Code, which is being examined by a committee.
  • Affordable housing
  • Real estate companies may have reason to cheer as the generous tax concession for affordable housing may create demand, especially in the smaller metros.

Nudge Theory

  • ‘nudge theory’ of economist Richard Thaler, mentioned extensively in the Economic Survey 2018-19 presented in Parliament on Thursday, has been put to use by the Finance Minister to push forward two of this government’s pet themes — increasing digitalisation of money and promoting electric mobility.
  • On the first, there will now be a 2% tax deducted at source when withdrawals from bank accounts exceed ₹1 crore in a year.
  • This is a commendable measure, but it could lead to genuine problems for businesses such as construction and real estate that are forced to deal in cash for wage payments.
  • Of course, the TDS can be set off against their overall tax liability.
  • The second, and more interesting ‘nudge’, is towards electric vehicles where those taking loans to buy one will get a tax deduction of up to ₹1.5 lakh on the interest paid by them.
  • But the fact is that there are not too many electric vehicles in the market now. And even for those that are there, the waiting period to deliver one is long. Besides, there is no ecosystem, such as charging points, even in the major cities.
  • The government’s hope seems to be that this incentive will create a market for e-vehicles that will then lead to the development of the ecosystem.

Fiscal deficit

  • The budget documents show that the government has stuck to the glide path for fiscal deficit, which will be at 3.3% this fiscal.
  • This is, however, based on exaggerated growth projections in tax revenues. The estimated total revenue receipts this fiscal is ₹19.62 lakh crore, which implies a 25.56% growth compared to the actual receipts of ₹15.63 lakh crore (as presented in the Economic Survey) in 2018-19.
  • This is an extremely ambitious projection, especially given the ongoing slowdown in the economy.
  • Of course, the Finance Minister could get a comfortable buffer if the Bimal Jalan committee that is going into the sharing of RBI’s reserves with the government comes up with favourable recommendations.


The government also appears to be sliding into a protectionist mode, going by the increase in customs duty on everything from cashew kernels to PVC, newsprint and even auto parts. While some of it may be well-intentioned to promote domestic manufacturing, this sends out a retrograde signal on the reforms front.

Climate Change Impact on India and World – International Reports, Key Observations, etc.

MOSAiC Mission


From UPSC perspective, the following things are important :

Prelims level : MOSAiC Mission

Mains level : Consequences of climate change on Polar region


  • Scientists from 17 nations will take part in the year-long MOSAIC mission as they anchor the RV Polarstern ship to a large piece of Arctic sea ice to study climate change.

 MOSAiC mission

  • The MOSAiC mission stands for Multidisciplinary drifting Observatory for the Study of Arctic Climate.
  • It is a one-year-long expedition into the Central Arctic, planned to take place from 2019 to 2020.
  • For the first time a modern research icebreaker will operate in the direct vicinity of the North Pole year round, including the nearly half year long polar night during winter.
  • It comes about 125 years after Norwegian explorer Fridtjof Nansen first managed to seal his wooden expedition ship, Fram, into the ice during a three-year expedition to the North Pole.
  • MOSAiC will contribute to a quantum leap in our understanding of the coupled Arctic climate system and its representation in global climate models.
  • The focus of MOSAiC lies on direct in-situ observations of the climate processes that couple the atmosphere, ocean, sea ice, bio-geochemistry and ecosystem.

Why study Arctic climate?

  • The Arctic is a key area of global climate change, with warming rates exceeding twice the global average.
  • The observed rate of climate change in the Arctic is not well reproduced in climate models.
  • Many processes in the Arctic climate system are poorly represented in climate models because they are not sufficiently understood.
  • Understanding of Arctic climate processes is limited by a lack of year round observations in the central Arctic.

Digital India Initiatives

Gandhipedia ‘to sensitize society’


From UPSC perspective, the following things are important :

Prelims level : Gandhipedia

Mains level : Importance of Gandhian thoughts

  • A “Gandhipedia” was being developed in order to sensitize society, particularly the youth, about Gandhian values, Finance Minister informed in her Budget 2019-2010 speech.

What is Gandhipedia?

  • With the government marking the 150th birth anniversary of Gandhi with several programmes throughout the year, an encyclopedia-like “Gandhipedia” would be among the efforts to spread his values.
  • The National Council for Science Museums (NCSM), based in Kolkata, is developing a Gandhipedia “to sensitize” youth and society “at large” about positive Gandhian values.
  • This comes about 10 months after President launched a web portal to provide people with free access to an online repository of Gandhian literature, philosophy, audios, videos and rare photographs of the Father of nation
  • The Minister, however, did not share more details on ‘Gandhipedia’ project of the NCSM, which functions under the Union Culture Ministry.

Policy Wise: India’s Power Sector

One Nation, One Grid


From UPSC perspective, the following things are important :

Prelims level : National Grid

Mains level : One Nation, One Grid

One Nation, One Grid

  • In a move to improve India’s connectivity infrastructure, the government in its second term plans to build a model of ‘One Nation, One Grid’ to ensure availability of power to states at ‘affordable’ rates.
  • FM in his budget speech made available a blueprint for developing gas grids, water grids, i-ways, and regional airports.
  • The government is also examining the performance of its Ujjwal DISCOM Assurance Yojana (UDAY), aimed at financial and operational turnaround of power distribution companies.

Power grids in India

  • The Indian Power system for planning and operational purposes is divided into five regional grids.
  • The integration of regional grids, and thereby establishment of National Grid, was conceptualized in early nineties.
  • The initial inter-regional links were planned for exchange of operational surpluses amongst the regions.
  • However, later on when the planning philosophy had graduated from Regional self-sufficiency to National basis, the Inter-regional links were planned associated with the generation projects that had beneficiaries across the regional boundaries.

Evolution of National Grid

  • Grid management on regional basis started in sixties.
  • Initially, State grids were inter-connected to form regional grid and India was demarcated into 5 regions namely Northern, Eastern, Western, North Eastern and Southern region.
  • In October 1991 North Eastern and Eastern grids were connected.
  • In March 2003 WR and ER-NER were interconnected .
  • August 2006 North and East grids were interconnected thereby 4 regional grids Northern, Eastern, Western and North Eastern grids are synchronously connected forming central grid operating at one frequency.
  • On 31st December 2013, Southern Region was connected to Central Grid in Synchronous mode with the commissioning of 765kV Raichur-Solapur Transmission line thereby achieving ‘ONE NATION’-‘ONE GRID’-‘ONE FREQUENCY’.

About National Grid

  • The National Grid is the high-voltage electricity network in mainland India, connecting power stations and major substations and ensuring that electricity generated anywhere in mainland India can be used to satisfy demand elsewhere.
  • The National Grid is owned, operated, and maintained by state-owned Power Grid Corporation of India.
  • It is one of the largest operational synchronous grids in the world with 334.40 GW of installed power generation capacity as on 31 January 2018.

 Benefits of centralized power grid

  • Synchronization of all regional grids will help in optimal utilization of scarce natural resources by transfer of Power from Resource centric regions to Load centric regions.
  • Further, this shall pave way for establishment of vibrant Electricity market facilitating trading of power across regions.
  • One Nation One Grid shall synchronously connect all the regional grids and there will be one national frequency.

Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Centre to streamline labour laws into set of 4 codes


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Minimum Wages

  • The government in its second term would streamline several existing labour laws into a set of four labour codes in a move aimed at reducing disputes.

Set of four labour laws

  • The government is proposing to streamline multiple labour laws into a set of four labour codes.
  • The government wants to concise 44 labour laws into four broad codes on wages, social security, industrial safety and welfare, and industrial relations.
  • This will ensure that process of registration and filing of returns will get standardised and streamlined.
  • The Bill will replace the current Payment of Wages Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.
  • It provides that the Central government will fix minimum wages for certain sectors, including railways and mines, while the states would be free to set minimum wages for another category of employment.
  • The code also provides for setting up of a national minimum wage.
  • The Central government can set a separate minimum wage for different regions or states.
  • The draft law also says that the minimum wage would be revised every five years.

Beginning with wages

  • The first of these labour codes– Wage Code Bill –will likely be enacted in the ongoing budget session, paving the way for benchmarking minimum wage for different regions.

For more reading, navigate to:

New Code on Wages Bill