January 2020
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Coal and Mining Sector

[op-ed of the day] Let’s not muddle along on how we share natural endowmentsop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- Adoption of policy of auctioning of resources and periodic review of the policy.


Context

Governments regulations and restrictions in the markets, believing that policies could artificially restrict either supply or demand, or both, often results in unrealistic or unworkable prices.

Adoption of the auctioning process to allocate resources

  • Design of process makes the difference: While auctions may be the cleanest way to allot scarce natural resources to private parties, their design makes all the difference.
  • Three things needed to get the desired results from auctions:
    • Clear policy goal: Define clear policy goals for the allotment of the resource whether coal blocks, spectrum or land.
    • The proper process of periodic review: Define a proper process for periodic review of the design itself, since it may not be possible to get everything right in the first instance.
    • Make the process non-partisan: Make the political oversight process as non-partisan as possible, so that regime changes do not keep upending policies.

What went wrong in spectrum allocation case?

  • Arbitrary tweaks in policy: Arbitrary tweaks were made in the telecom licence and spectrum allocation policy.
    • Which is what forced the apex court to intervene and cancel those licences.
  • The claim of revenue loss: Cancellation followed a  claim by the CAG that the “presumptive” revenue losses may have been as high as ₹1.76.
  • Result of the two events-policy of revenue maximisation: The net result was that all subsequent auctions were designed to maximize spectrum bids.
    • Winner’s curse: The policy finally ended up becoming a winner’s curse, evident in the pile of debt incurred by the telecom sector.
  • Why did this happen? This happened because of the absence of a clear policy goal.

Real estate sector

  • High land prices: The same goes for real estate, which is struggling right now due to high land prices because the bureaucracy prevents price reduction in land.
    • Unaffordable to middle-income buyers: That make most properties unaffordable for middle and lower-middle-income buyers.
  • Low FSI issue: Urban land prices are high due to artificial constriction of supplies through the fixing of low floor space indices (FSIs) even in land-scarce localities.

Technology and periodic review of policy

  • Technology can lower costs: Spectrum or land or coal mines are not always in short supply, for new technology lowers costs.
    • Efficient spectrum use: The same spectrum can, with the use of newer technology, be used more efficiently.
    • 3D printing in construction: Better infrastructure and improved building technologies (even 3D printing techniques for mass housing projects in non-urban areas) can lower housing costs enormously.
    • Automated coal mining: Automated coal mining can lower coal production costs, enabling higher profitability even with relatively high auction bids.
  • Need for periodic policy review: Technology can reduce the prices of the resources and hence the periodic review of the prices at which the resources are allocated need to be taken to for balanced pricing.

Conclusion

  • Policies on the allocation of scarce resources need to evolve based on actual experience and changing technologies and processes.
  • The success or failure of a specific policy cannot be judged purely from a revenue or transparency point of view.

 

 

 

UDAY Scheme for Discoms

[op-ed snap] Power replayop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3-Indian power sector-Problems faced by the Discoms and their solutions.


Context

Five years after the launch of UDAY, power-sector once again seems to be going deep into the troubles.

Where the Discoms stand now?

  • Losses increased: The losses of state-owned distribution companies (discoms) risen.
  • Dues increased: Discom’s dues for power purchases have also surged.
    • Dues owed by discoms to power producers, both independent and state-run entities, stood at Rs 80,930 crore.
    • Of these, Rs 71,673 crore extends beyond the allowed grace period of 60 days.
    • Rajasthan leads the states with the most dues, followed by Tamil Nadu and Uttar Pradesh.

Components of UDAY and progress made

  • The UDAY scheme, which involved state governments taking over the debt of discoms, had three critical components
  • First-Reduction in AT&C losses: While progress has been made on some of these fronts, it hasn’t been in line with the targets laid out under UDAY.
    • AT&C (Aggregate Technical and Commercial) losses have declined in some states, but not to the extent envisaged.
    • Under UDAY, discoms were to bring down AT&C losses to 15 per cent by FY19.
  • Second- Timely revision of tariffs: While some states have raised power tariffs, the hikes have not been sufficient.
    • In tariff revision decisions political considerations prevailed over commercial decisions.
  • Third- elimination of the gap between per unit of cost and revenue realised: The gap between the average cost per unit of power and the revenue realised has not declined in the manner envisaged.
    • Because of this discoms were forced to reduce their power purchases and delay payments to power producers.

Way forward:

  • The new plan, being formulated by the government reportedly, aims to address these issues by-
    • Reducing electricity losses.
    • Eliminating the tariff gap.
    • Smart metering.
    • Privatising discoms.
    • Having distribution franchisees.
  • Altering incentive structure: Along with the above, the Centre should also look at altering the incentive structures of states in order to ensure compliance.
  • Provision of penalties: Stiff penalties need to be imposed for not meeting the targets laid out in the new scheme.

 

 

 

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

[op-ed snap] Reset and reformop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- Socio-economic upheaval in Indian economy and its consequences for the Indian economy.


Context

With the Indian economy caught in the middle of a socio-economic upheaval, the government needs to make its focus on the economy clear and pronounced.

India in the middle of a socio-economic upheaval

  • Weakening economy: The economy has been weakening for a couple of years now.
  • Social upheaval: The social upheaval is new but its seeds have been fermenting for a while.
  • Consequences of the two: The social and economic sides of an economy are not divorced from each other.
    • Each influences the other and the current quagmire threatens to unleash the worst type of feedback between the two.

Consequences for the employment

  • Most severe consequence due to the interaction between the social and economic sides is unemployment.
  • Rising unemployment disproportionately affects the young.
  • India’s job market: India whose median citizen is in the 30s and which is inducting 10 million new young people to the job market every year.
  • Demographic dividend turning into a curse: This dynamic, popularly hailed as India’s demographic dividend, can rapidly turn into a demographic curse if the employment situation doesn’t improve.

Falling investment rate, increased risk perception

  • Where will the jobs come from? The job creators are entrepreneurs, conglomerates, and multinationals.
    • It is in their nature to take investment risks as long as the returns are high enough.
  • Investment rates below 30: In India, investment rate fell well below 30 per cent a while back.
    • Falling returns: The returns on investment were not compensating entrepreneurs for the risk.
    • The recent social upheaval is only adding to the perceived risk.
  • Wait and see approach: The more investors adopt a “wait-and-see” approach, the worse the job situation will become.

Way forward

  • Structural reforms: The government needs to announce a clear plan and timeline for structural reforms.
  • Prioritising domain competence in staff: The government has to start staffing technical positions by prioritising domain competence and empowering these hires with policy relevance.
  • Maintaining the integrity of institutions: The government need to maintain the integrity of institutions tasked with the regulation of corporations and banks, monetary policy management, data collection/dissemination and law enforcement.
  • Accommodate dissent: The government also needs to desist from trying to drown out protesting voices with state muscle power.

 

Police Reforms – SC directives, NPC, other committees reports

Explained: What is the NIA Act, and why is Chhattisgarh challenging it?Explained

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NIA Act

Mains level : Policing Issues with NIA


The Chhattisgarh state govt. moved the Supreme Court against the 2008 National Investigative Agency (NIA) Act, stating it is violative of the Constitution. In its civil suit, the government told the apex court the NIA should have no power over state policing matters.

What is the NIA Act, 2008?

  • The NIA Act, 2008 governs the functioning of India’s premier counter-terror agency.
  • It was introduced by then home minister P Chidambaram in the wake of the 26/11 Mumbai terrorist attacks and was passed in Parliament with very little opposition.
  • The Act makes the NIA the only truly federal agency in the country, along the lines of the FBI in the United States, more powerful than the CBI.
  • It gives the NIA powers to take suo motu cognizance of terror activities in any part of India and register a case, to enter any state without permission from the state government, and to investigate and arrest people.

Objections made by CG

  • In its petition, the Chhattisgarh govt. said the Act is “ultra vires the Constitution” and “beyond the legislative competence of the Parliament”.
  • According to the state, the 2008 Act allows the Centre to create an agency for investigation, which is a function of the state police.
  • ‘Police’ is an entry in the State List of the Constitution’s 7th Schedule.
  • The petition says the 2008 Act takes away the state’s power of conducting an investigation through the police, while conferring unfettered, discretionary and arbitrary powers” on the Centre.
  • The provisions of the Act leave no room of coordination and pre-condition of consent, in any form whatsoever, by the Centre from the State govt. which clearly repudiates the idea of state sovereignty as envisaged under the Constitution.

Changes made to the NIA’s powers last year

  • The 2019 NIA Amendment Act expanded the type of offences that the investigative body could investigate and prosecute.
  • The agency can now investigate offences related to human trafficking, counterfeit currency, manufacture or sale of prohibited arms, cyber-terrorism, and offences under the Explosive Substances Act, 1908.
  • The amendment also enables the central government to designate sessions courts as special courts for NIA trials.
  • The Unlawful Activities (Prevention) Amendment (UAPA), also passed in 2019, allows an NIA officer to conduct raids, and seize properties that are suspected to be linked to terrorist activities without taking prior permission of the DG of Police of a state.
  • The investigating officer only requires sanction from the Director General of NIA.
Citizenship and Related Issues

Indian Origin Tamils and Sri Lanka’s Citizenship LawPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : IOT

Mains level : Citizenship issues of Indian origin Tamils in Sri Lanka


Recently an MHA spokesperson wrote on Twitter that about 4.61 lakh Tamils of Indian origin were given Indian citizenship during 1964-2008. The reference was to the Indian Origin Tamils (IOTs) of Sri Lanka, and the Lal Bahadur Shastri-Sirimavo Bandaranaike Pact of 1964.

The Indian Origin Tamils

  • Different from Sri Lankan Tamils who live predominantly in the North and East, the IoTs are descendants of indentured Tamil workers.
  • The British had shipped them to the island in the mid 19th century to work on tea estates in the five hill districts of the Central and Uva provinces.
  • These people now call themselves Malayaha (hill country) Tamils — because of the historical stigma attached to being “Indian” Tamils.
  • At the time of Sri Lanka’s independence, the IOTs numbered around 800,000.
  • They were the backbone of the tea industry, politically active, and keen to ensure their rights in independent Sri Lanka through strategic alliances with unions and left parties.
  • Determined to blunt their political rights, the ruling parties described IOTs as “birds of passage” with no loyalty to the country, as India’s fifth column in Sri Lanka, and as people who stole the locals’ jobs.

SL’s 1948 Citizenship Act

  • Sri Lanka’s Nov. 1948 Citizenship Act was the first in a series of divisive moves by the Sinhala rulers to consolidate their political base in the majority Sinhalese (Buddhist and Christian) community.
  • It was aimed at excluding IOTs — then as now, the predominant workforce in the upcountry tea estates — whose numbers and growing association with leftist parties were proving to be politically inconvenient.
  • The IOTs that India accepted through the 1964 agreement were not “fleeing” Sri Lanka.
  • Most were, in fact, reluctant to leave the country in which they had lived for three generations or longer.
  • Those that remained, were stateless in Sri Lanka for decades until their status as citizens was settled ironically because the ruling party now wanted their votes.

What did the Act provide?

  • Under the Act, citizenship could be only by patrilineal descent or registration.
  • For citizenship by registration, umarried persons had to show 10 years of uninterrupted stay in Sri Lanka from the date of application; married persons had to show 7 years.
  • Most IOTs were unlettered and poor, with no documents. Effectively an entire community was rendered stateless.
  • Soon afterward came the Indian & Pakistani Residents’ Act of 1949, which opened a window for those above a certain income level.
  • Only 1,40,000 had been granted citizenship under the Indian & Pakistani Residents’ Act, and 2,50,000 were accepted by India as its citizens.
  • Finally, the 1949 Ceylon (Parliamentary Elections) Amendment was passed, under which only citizens could vote.
  • The IOTs were stripped of voting rights, and the fallout was immediate: in 1947, there were 7 Indian Tamils in the legislature; in 1952, there were none.

Issues with the Act

  • This Act sharply delineated ethnic differences, and distorted the political system to weight it in favour the Sinhalese majority.
  • This created an intractable dynamic of ethnic outbidding between the two major Sinhalese-dominated parties to attract Sinhalese voters at the expense of the Sri Lankan Tamil minority.
  • This directly contributed to the latter’s alienation, support for secessionism, and the outbreak of ethnic violence and civil war in the 1970s and 1980s.

India’s response

  • The treatment of Indian Tamils had cast a shadow on India-Sri Lanka relations even before independence; post-independence, the citizenship laws became a major irritant.
  • They were denounced in India, and the Madras legislature passed a resolution against them.
  • In 1947, PM Nehru had tried unsuccessfully to persuade Senanayake to give citizenship to all Indian Tamils who had lived in the country for 7 years prior to January 1, 1948.
  • The two countries corresponded on this issue until Nehru’s death in 1964.
  • Nehru rejected the Sri Lankan position that the “stateless” IOTs were automatically Indian citizens, and would have to be shipped to India.

Repatriation of IOTs

  • After the 1962 war with China, PM Shastri was eager to mend fences with Sri Lanka. He gave in to Bandaranaike’s demands, and it was agreed that Sri Lanka would accept 3,00,000 IOTs and their natural increase, while India would accept 5,25,000 IOTs and their natural increase.
  • The status of the balance 1,50,000 IOTs was to be decided later.
  • Some 4,00,000 reluctantly applied for citizenship of India; 6,30,000 applied for Sri Lanka’s.
  • By the time the window agreed upon in 1964 closed, only 1,62,000 IOTs had been given Sri Lankan citizenship. In the same period, India gave citizenship to over 3,50,000.
Foreign Policy Watch: India-China

Ethnic Unity Law in TibetPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : India-China Relations in context of Tibet


The People’s Congress of Tibet passed a law that makes ethnic unity in the region mandatory, reflecting the significant role that the autonomous Himalayan region plays in its economic and social development.

About the Law

  • The law makes it clear that Tibet has been an inalienable part of China since ancient times.
  • It states that it is the common responsibility of the people of all ethnic groups to safeguard national reunification and take a clear stand against separatism.

Ethnic Unity in China

  • This is not the first time that the phrase ethnic unity has been mentioned by China.
  • In October 2019 the Communist Party of China published a guideline for enhancing ethnic unity.
  • It stressed on efforts to improve the governance of ethnic affairs, guaranteeing the legal rights and interests of citizens of ethnic groups.
  • It called for cracking down on “criminal acts” that sabotage ethnic unity or cause ethnic separation.
  • Before this, in 2016, China began a campaign in the autonomous territory of Xinjiang to promote ethnic unity and called for people to respect the cultures of the minorities who call the region home.

Why such Law?

  • There are more than 40 ethnic minorities in the region, which account for 95 per cent of Tibet’s population of over three million.
  • Like Tibet, Xinjiang is another region of China that houses multiple ethnic minorities.
  • A similar legislation was passed there four years ago and in recent times, China has faced criticism for detaining at least a million Uighur and other Muslims, along with some ethnic Kazakhs and Uzbeks.
  • China has began “re-education camps” in Xinjiang, a region that has been claimed by China since 1949.
  • China has denied these allegations and maintains that the facilities where the detainees are housed are vocational training centers.
Tourism Sector

Henley Passport Index 2020IOCR

Note4Students

From UPSC perspective, the following things are important :

Prelims level : About the Index

Mains level : Global visa policies for Indians


The Indian passport is closer to the bottom, ranked 84th in the world, according to the 2020 edition of the Henley Passport Index.

Henley Passport Index

  • According to Henley & Partners publishes the ranking and the Index of the world’s passports “according to the number of destinations their holders can access without a prior visa”.
  • The ranking is based on data from the International Air Transport Association (IATA), a trade association of some 290 airlines, including all major carriers.
  • The index includes 199 different passports and 227 different travel destinations.
  • The data are updated in real time as and when visa policy changes come into effect.

India’s performance

  • Since the index began in 2006, the Indian passport has ranked in a band of 71st to 88th. (The number of passports ranked has, however, varied from year to year.)
  • The Indian passport’s 2020 ranking of 84th translates into visa-free access to 58 destinations, including 33 which give Indians visas on arrival.
  • It ranked higher in both 2019 (82, with visa-free access to 59 destinations) and 2018 (81, with visa-free access to 60 destinations).
  • Twenty of the 58 visa-free access destinations in the 2020 list are in Africa, and 11 each in Asia and the Caribbean.
  • Serbia is the only European country to which Indian passport holders can travel visa-free. There is no major or developed country to which Indian passport holders have visa-free access.

Global performance

  • The top 10 most powerful passports this year are ranked in this order: Japan, Singapore, South Korea, Germany, Italy, Finland, Spain, Luxembourg and Denmark.
  • Japan has been topping the Index for three straight years; according to the 2020 index, its citizens are able to access 191 destinations without having to obtain a visa in advance.
  • Afghanistan at rank 107 is the weakest.
  • Singapore, in second place (same as in 2019), has a visa-free/visa-on-arrival score of 190.
  • Germany is No. 3 (same position as in 2019), with access to 189 destinations; it shares this position with South Korea, which dropped from the second place it held a year ago.
  • The US and the UK have been falling consistently over successive Indices.
Tourism Sector

[pib] Indian Digital Heritage (IDH) InitiativePIB

Note4Students

From UPSC perspective, the following things are important :

Prelims level : IDH

Mains level : Virtual and Augmented Reality, IDH


 

The Union Ministry of Culture and Tourism launched a month-long special exhibition titled Indian Heritage in Digital Space. This special exhibition showcases the adaptation and infusion of technologies being developed under the Indian Digital Heritage (IDH) initiative.

Indian Digital Heritage (IDH)

  • This initiative is undertaken by the Department of Science and Technology (DST) in the cultural heritage domain of the country.
  • The exhibition demonstrates the outcome of two flagship projects viz., A digital mini-spectacle to showcase the glory of Hampi and Augmented Reality based interactions with physical models of monuments.
  • The goals of these projects are to create digital installations using 3D laser scan data, AR, holographic projections and 3D fabrication,to provide interactive and immersive experiences showcasing the glory of Hampi and five Indian monuments namely Kashi Vishwanath Temple, Varanasi; TajMahal, Agra; Sun Temple, Konark; Ramachandra Temple, Hampi ; and RaniKiVav, Patan .
  • These projections are driven by cutting-edge technologies such as 3D fabrication, Artificial Intelligence, Augmented, Virtual and Mixed Reality, Holographic Projections and Projection Mapping etc.

ViRaasat

A special installation named ‘ViRaasat’, consisting of a scaled-down 3D printed replica shall provide a mixed reality experience to visitors for selected monuments, using laser-scanning, 3D modelling and rendering, 3D printing, computer vision and spatial AR.

Oil and Gas Sector – HELP, Open Acreage Policy, etc.

[pib] Saksham CampaignPIB

Note4Students

From UPSC perspective, the following things are important :

Prelims level : ‘Saksham’ Campaign

Mains level : Fossil fuels conservation


‘Saksham’ Campaign for fuel conservation has been launched.

‘Saksham’ Campaign

  • It is an annual one-month long, people-centric fuel conservation mega campaign of Petroleum Conservation Research Association (PCRA) under the aegis of Ministry of Petroleum and Natural Gas.
  • PCRA and Oil & Gas companies carry out various interactive programs during this month-long campaign.
  • Activities like ‘Saksham’ Cycle Day, Cyclothons, Workshops for drivers of commercial vehicles, Seminars for housewives/cooks on adopting simple fuel saving measure.
Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

[pib] HSN CodePIB

Note4Students

From UPSC perspective, the following things are important :

Prelims level : HSN Code

Mains level : India's Import regulation


 

No imports will be allowed without HSN code into the country clarified the Union Minister of Commerce & Industry.

What is HSN Code?

  • HSN code stands for “Harmonized System of Nomenclature”.
  • This system has been introduced for the systematic classification of goods all over the world.
  • HSN code is a 6-digit uniform code that classifies 5000+ products and is accepted worldwide.
  • It was developed by the World Customs Organization (WCO) and it came into effect from 1988.
  • The main purpose of HSN is to classify goods from all over the World in a systematic and logical manner. This brings in a uniform classification of goods and facilitates international trade.
Indian Navy Updates

Exercise ‘Sahyog-Kaijin’Prelims Only

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Exercise ‘Sahyog-Kaijin’

Mains level : NA


Exercise ‘Sahyog-Kaijin’

  • Indian and Japanese coast guards participated in a joint exercise ‘Sahyog-Kaijin’ on January 16.
  • The aim behind ‘Sahyog-Kaijin’ is to strengthen the bond between the two countries.
  • One ship of the Japanese Coast Guard and four ships and an aircraft of the Indian Coast Guard participated in the joint exercise.
  • The drill is a five-day event.