[op-ed snap] The competition law and data advantage conundrum

Mains Paper 3 : Indian Economy |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Web platforms and role of competition


CONTEXT

Competition law is struggling to come to grips with the internet-based platforms who pursue growth over profits. 

How web platforms work

  1. They operate on the basis that long-term customer lock-in is more important than the short-term benefits of quarterly profits. Thus they keep the prices very low so as to maximize customer growth.
  2. The price of a product or service is “predatory” or not depends on whether it is being sold below cost.
  3. Internet businesses offer unprecedented economies of scale and savings on overheads. So it is difficult to establish whether their price is predatory.
  4. Some internet platforms are fast becoming part of the critical infrastructure of the internet.
  5. Due to this, platform businesses have access to unprecedented volumes of data in excess of what their competitors will ever possess and can understand consumer behavior.
  6. Thus they can tailor their services more accurately than before and offer an unprecedented quality of user experience.
  7. They understand what sells and can take advantage of the feedback loops based on rankings, user reviews, and shopping carts. This data gives them an advantage over traditional advertisers as to who they should aim their advertisements. 
  8. It is this data advantage that internet platforms use to establish authority over their competition.
  9. As data platforms acquire more and more customers, their understanding of user behavior improves exponentially, making it possible for them to deliver services more directly relevant to the needs of their individual customers. 

Competition regulation

  1. If the purpose of competition regulation is to ensure diversity of market access and prevent the concentration of market power in the hands of a few, regulators should do something to address the distortion brought by internet platforms. 
  2. Restricting the manner in which digital platforms function will end up denying consumers these advantages.
  3. Many smaller businesses have rolled themselves into larger platforms to leverage the scale and data advantage of the combined business. 
  4. This consolidation also progressively robs customers of choice and users will eventually have no option but to use one single dominant platform for all their needs.

If we want to regulate competition on the internet, we will need to come up with something new. The remedies that have served us so well for all these years are just not useful in the same way when it comes to internet platforms.

e-Commerce: The New Boom

[op-ed snap] Some tax relief for our corporate sector

Mains Paper 3 : Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Direct Tax Code; Direct tax reforms


CONTEXT

A panel set up by the government to review the direct tax code (DTC) has submitted its report.

Facts

  1. Its recommendations would supplant the existing Income Tax Act of 1961
  2. There are hints towards the contents of the report:
    1. relief in tax rates for individual taxpayers
    2. simpler assessment procedures 
    3. lower corporate tax rate even for large companies
    4. fewer exemptions 
    5. use of Artificial Intelligence to curb tax evasion
    6. replacement of “assessing officers” with “assessment units” is reported 
    7. mediation process to settle tax disputes

Benefits to corporates

  1. It could reduce the harassment of taxpayers. 
  2. It will be the most effective rationalization of corporate taxation. 
  3. The panel proposes a 25% corporate tax rate to all firms without exception.
  4. 99.3% of all corporate assessees may already be in the 25% bracket. But the division between small and large companies is hard to justify.
  5. The size cutoff is not just arbitrary, it deters firms just under the limit from growing bigger
  6. Large companies in the 30% tax bracket account for the bulk of revenues raised this way burdening corporate India. These are the country’s biggest job providers. They need to be globally competitive.

Problems with 25%

  1. Even at 25%, India Inc. would be paying more money than companies in other parts of the world. The global average corporate tax rate is around 23%. 
  2. Big Indian corporations pay a base rate of 30%, with add-on cesses and surcharges taking the effective rate to 35% or so. 
  3. Firms must compete with others not just on product quality and prices, but also on raising capital. A high rate serves as a handicap.
  4. Policy-imposed constraints on corporate profitability also result in lower investible surpluses, leading to slower growth. 
  5. It hurts their ability to take on global competition and turn into world-beaters.

A lighter tax burden may curtail revenues but could have a positive impact that would more than compensate for this loss in the long term.

Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

[op-ed snap] Free fall: On the Afghan conflict

Mains Paper 2 : India & Its Neighborhood - Relations |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Afghan peace process


CONTEXT

A recent suicide attack at a crowded wedding hall in Kabul killed at least 63 people and injured more than 180 others. It is a tragic reminder of the security situation in Afghanistan.

Background

  1. The blast is claimed by the local arm of the Islamic State. It occurred at a time when the U.S. and the Taliban are preparing to announce a peace agreement to end the 18-year-long conflict.
  2. It’s now a three-way conflict in Afghanistan — the government, the Taliban insurgents and the global terrorists.
  3. The Afghan government is fighting to preserve the existing system that offers a semblance of democracy. But it failed in ensuring the safety and security of the people.
  4. The Taliban controls the mountainous hinterlands and wants to expand its reach to the urban centers.
  5. IS declared a province (Khorasan) in eastern Afghanistan and has emerged as the third player. Attacks against civilians, especially the Shia minority, is the central part of its brutal military tactics. Afghanistan’s Hazara Shias were the target of the wedding hall bombing.
  6. IS has demonstrated an ability to survive and strike in Afghanistan despite the U.S.’s heavy air campaign in the east.

Afghanistan peace deal:

  1. U.S. is ready to pull troops from Afghanistan in return for assurances from the Taliban that they will not allow the Afghan soil to be used by transnational terrorists such as the IS and al-Qaeda.
  2. But the Taliban’s intentions are hardly clear. It ran most of Afghanistan according to its puritanical interpretation of Islamic law from 1996 to 2001.
  3. There are chances that it turns against Kabul once the Americans are out and the country may plunge into a multi-party civil war as it did after the Soviet Union pulled out in 1989.

Way ahead :

  1. Taliban and the government should have their own peace talks and settle differences. It would allow both sides to rechannel their resources to fighting terrorist groups.
  2. The international community should strengthen the hands of the Kabul government against all kinds of terrorists, before seeking a settlement with the insurgents.
Foreign Policy Watch: India-Afghanistan

Explained: Sikkim, from Chogyal rule to Indian state

Mains Paper 2 : Federalism |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Read the attached story

Mains level : Sikkims's accession to India



News

Context

  • Last week in Sikkim, 10 MLAs from the Opposition SDF defected to the BJP, adding to the political uncertainty that has loomed over since Assembly elections this year delivered a fractured mandate.
  • The current instability follows a unique event: the voting out of a government in power for the first time in Sikkim’s history.
  • Since joining India in 1975, Sikkim has seen its government changed only twice — in both cases, the government had fallen before the new one was voted in.

Departure from Monarchy

  • Before 1975, Sikkim was ruled by the Chogyal rulers, and democratic rights were limited.
  • Analysts have described the current events as a departure from what has been called a “monarchic psychology”.
  • The overall trajectory has been seen as being geared towards strengthening democracy.

Sikkim under the Chogyal rulers

  • For 333 years before 1975, Sikkim was ruled by the Chogyals (or kings) of the Namgyal dynasty of Tibetan descent.
  • According to one account, the first ruler, Penchu Namgyal, was installed as king by Tibetan lamas in 1642.
  • At its zenith, the Sikkim kingdom included the Chumbi valley and Darjeeling. The former is part of China now.
  • After 1706, there were a series of conflicts between the powers of the region, which included Sikkim, Nepal, Bhutan, and Tibet, resulting in a shrinking of Sikkim’s territorial boundaries.

Contact with British India

  • In 1814, Sikkim allied with the East India Company in the latter’s campaign against Nepal.
  • After the Company won, it restored to Sikkim some of the territories that Nepal had wrested from it in 1780.
  • In 1841, the Company purchased Darjeeling from the Namgyal rulers.
  • A treaty in 1861 made Sikkim a de facto protectorate of British India.
  • Subsequently, the Calcutta Convention of 1890 demarcated the border between Sikkim and Tibet, and was signed by Viceroy Lord Lansdowne and Qing China’s Imperial Associate Resident in Tibet.
  • The Lhasa Convention of 1904 affirmed the Calcutta Convention.

Sikkim becomes a Protectorate

  • After India became independent in 1947, the relationship between New Delhi and Gangtok had to be redefined.
  • In 1950, a treaty was signed between Maharaja Tashi Namgyal and India’s then Political Officer in Sikkim Harishwar Dayal.
  • The relationship between India and Sikkim was encapsulated in the clause: “Sikkim shall continue to be a Protectorate of India and, subject to the provisions of this Treaty, shall enjoy autonomy in regard to its internal affairs.”

Continued struggle in Sikkim

  • In the following decades, gaping income inequality and feudal control over key resources led to popular discontent against the Chogyal rulers.
  • In December 1947, diverse political groupings came together to form the Sikkim State Congress.
  • In 1949, the Chogyal agreed to appoint a five-member Council of Ministers, with three Congress nominees, and two of his own.
  • In 1953, the Chogyal introduced a new Constitution, and four general elections were held based on separate electorates in 1957, 1960, 1967, and 1970.
  • Plagued by distrust between the Chogyal and the Congress, none of these elections helped further democracy.

India comes in

  • Matters came to a head in 1973, when the royal palace was besieged by thousands of protesters.
  • The Chogyal was left with no choice but to ask India to send troops for his assistance.
  • Finally, a tripartite agreement was signed in the same year between the Chogyal, the Indian government, and three major political parties, so that major political reforms could be introduced.

From protectorate to full state

  • In 1974, elections were held, in which the Congress led by Kazi Lhendup Dorji emerged victorious over pro-independence parties.
  • In the same year, a new constitution was adopted, which restricted the role of the Chogyal to a titular post.
  • The Chogyal resented this, and refused to deliver the customary address to the elected Assembly.
  • In the same year, India upgraded Sikkim’s status from protectorate to “associated state”, allotting to it one seat each in the Lok Sabha and Rajya Sabha.
  • The Chogyal was unhappy with this move, and sought to internationalize the issue. This did not go down well with Sikkim’s elected leaders, and a referendum was held in 1975.
  • A total 59,637 voted in favour of abolishing the monarchy and joining India, with only 1,496 voting against.
  • Subsequently, India’s Parliament approved an amendment to make Sikkim a full state.
North-East India – Security and Developmental Issues

Why India is vulnerable to attacks by alien species

Mains Paper 3 : Awareness In The Fields Of It, Space, Computers, Robotics, Nano-Technology, Bio-Technology |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Read the attached story

Mains level : Alien invasive species in India



News

  • In the past 15 years, India has faced at least 10 major invasive pest and weed attacks.
  • When pests, weeds, viruses and bacteria invade, they can wipe out food crops, alter the ecology, deplete water levels and cause diseases.

Most recent: Fall Armyworm

  • The most recent was the fall armyworm that destroyed almost the entire maize crop in the country in 2018.
  • India had to import maize in 2019 due to the damage caused by the pest in 2018.

Why India gets such invasions?

  • It is difficult to establish how pests and weeds are entering India.
  • What’s inexplicable is that there is no institutional mechanism to even probe these invasions.
  • The Union Ministry of Agriculture and Farmers Welfare (MAFW), which is responsible for the control of invasive pests and weeds, has not investigated any invasions till date.

Checking their entry

  • Invasive pests and weeds can enter a country by flying over the border or by simply growing gratuitously. In such cases, checking their entry is difficult.
  • But when they land up at airports and dockyards in cargos of imported grain or with items carried by tourists, the authorities should be able to weed them out.
  • For this reason countries have animal, plant and health quarantine facilities at all transborder entry points.
  • India, however, seems to have let its guard down of late, especially with regards to agricultural products, which form the bulk of its imports.

How is entry regulated?

  • When an agricultural product arrives, customs officials check if it has a phytosanitary certificate or not.
  • This certificate, showing that the product is without any pest or weed infestation, is issued by the government of the exporting country.
  • If the product is certified, it is cleared by Quarantine system after a sample test.
  • If the product has not been given a phytosanitary certificate, the foreign government is obliged to inform India, in which case Quarantine system fumigates the product with methyl bromide and issues a phytosanitary certificate.
  • The fumigation is for two to 48 hours and depends upon the volume and quality of the product, and the country of origin. The company is charged for the fumigation.

Check on agri imports

  • Import of agricultural products is governed by the Destructive Insects and Pests Act, 1914.
  • The country has 108 plant quarantine centres located at major airports, seaports and transborder railway stations.
  • The check posts at these quarantine centres are under the control of the Central Board of Indirect Taxes and Customs (CBITC), which works in close coordination with DPPQS.

What needs to be done?

  • There should be a war room-like cell to catalogue, monitor and investigate the influx of exotic pests and weeds.
  • In fact, India’s quarantine system needs an overhaul.
  • Nepal, for instance, stopped the entry of agriculture products from India without a phytosanitary certificate in June after the outbreak of acute encephalitis syndrome in Bihar earlier this year.

Way forward

  • With increasing global trade and movement, countries worldwide are becoming serious about alien pests and microbes.
  • At a time when bioterrorism is a global reality, it is imperative that we get our quarantine system in order.
Agricultural Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

Biosimilar Medicines

Mains Paper 2 : Health & Education |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Biosimilars

Mains level : Not Much


News

  • A renowned pharma company has launched in India Versavo (bevacizumab), a biosimilar of Roche’s Avastin is indicated for the treatment of several types of cancers.

What is Biosimilarity?

  • Biosimilarity means that the biological product is highly similar to the reference product notwithstanding minor differences in clinically-inactive components.
  • There are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product.

Biosimilars

  • A biosimilar is a biological medicine highly similar to another already approved biological medicine (the ‘reference medicine’).
  • Biosimilars are approved according to the same standards of pharmaceutical quality, safety and efficacy that apply to all biological medicines.
  • Biological medicines contain active substances from a biological source, such as living cells or organisms (human, animals and microorganisms such as bacteria or yeast) and are often produced by cutting-edge technology.

Biosimilars vs generics

  • Biosimilar drugs are often confused with generic drugs. Both are marketed as cheaper versions of costly name-brand drugs.
  • Both are available when drug companies’ exclusive patents on expensive new drugs expire. And both are designed to have the same clinical effect as their pricier counterparts.
  • But biosimilar drugs and generic drugs are very different, mainly because while generic drugs are identical to the original in chemical composition, biosimilar drugs are “highly similar,” but close enough in duplication to accomplish the same therapeutic and clinical result.
  • Another key difference is that generics are copies of synthetic drugs, while biosimilars are modeled after drugs that use living organisms as important ingredients.
  • But many experts hope the two will share a critical commonality and that, like generics, biosimilars will dramatically lower the cost of biologic drugs.
Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

M-Sand

Mains Paper 3 : Conservation, Environmental Pollution & Degradation, Eia |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : M-sand

Mains level : M-sand as an alternative to conventional sand



News

  • In three months, the TN State government will put in place an M-sand policy that aims to promote the use of M-sand as an alternative building material.
  • It is aimed to eliminate the pervasion of sub-standard products in the market through regulation of trade.

 Manufactured sand (M-Sand)

  • M-sand is a substitute of river sand for concrete construction.
  • Manufactured sand is produced from hard granite stone by crushing.
  • The crushed sand is of cubical shape with grounded edges, washed and graded to as a construction material.
  • The size of manufactured sand (M-Sand) is less than 4.75mm.

Why use M-sand?

  • Manufactured sand is an alternative for river sand.
  • Due to fast growing construction industry, the demand for sand has increased tremendously, causing deficiency of suitable river sand in most part of the word.
  • Due to the depletion of good quality river sand for the use of construction, the use of manufactured sand has been increased.
  • Another reason for use of M-Sand is its availability and transportation cost.
  • Since manufactured sand can be crushed from hard granite rocks, it can be readily available at the nearby place, reducing the cost of transportation from far-off river sand bed.
  • Thus, the cost of construction can be controlled by the use of manufactured sand as an alternative material for construction.
  • The other advantage of using M-Sand is, it can be dust free, the sizes of m-sand can be controlled easily so that it meets the required grading for the given construction.
  • Usage of M-sand prevents dredging of river beds to get river sand which may lead to environmental disaster like ground water depletion, water scarcity.
Renewable Energy – Wind, Tidal, Geothermal, etc.

Breast milk banks to ensure all infants get protective cover

Mains Paper 2 : Health & Education |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Benefits of breast milk

Mains level : Read the attached story



News

  • A breast milk bank proposed by the Neonatology Forum (NNF), Kerala, is expected to provide solutions to all such babies who required intensive care at birth or are not able to be breastfed immediately for various other reasons.
  • There are many mothers who are not able to produce breast milk for various medical reasons.

About the milk bank

  • Any lactating mother can donate to the bank.
  • The milk stored in the bank will be pasteurised and would follow the international guidelines for safety.
  • Such milk becomes a blessing for working mothers who require joining work soon after their maternity leave.
  • Breast Milk Bank provides a cheaper option for the needy.

Protection

  • India faces the challenge of having the highest number of low birth weight babies with 20% mortality and morbidity in various hospitals.
  • Death of preterm babies is among three major causes of neonatal deaths. In all the neonatal intensive care units, about one-third of the babies would be preterm.
  • Feeding these babies with breast milk can significantly bring down the risk of infections.
  • These milk banks help the baby not just with the feed, but gives protection from many infections because of its inherent property to provide immunity to the infant.

On WHO guidelines

  • The World Health Organisation has said that breast milk is “tailor made” for human infants.
  • If for some reason, mother is not able to feed the infant, her milk should be expressed and fed, according to WHO.
  • The Neonatology Forum had been following this diktat and insists that the newborns are aggressively breastfed in the first hour.
Mother and Child Health – Immunization Program, BPBB, PMJSY, PMMSY, etc.