Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Privatisation of PSBs
The article deals with the stark differences in the performance of the public sector banks (PSBs) and private banks and suggests ways to deal with the issues.
Comparing PSBs with private banks
- The performance of PSBs over the years hasn’t been worth the money that the government has invested in them.
- As the Economic Survey of 2019-20 pointed out that over ₹4.3 trillion of taxpayer money is invested as government’s equity in PSBs.
- In 2019, every rupee of taxpayer money invested in PSBs, on average, lost 23 paise.
- In contrast, every rupee of investor money invested in New Private Banks—banks licensed after India’s 1991 liberalization—on average gained 9.6 paise.
- The combined market value of HDFC Bank’s shares is ₹8.56 trillion (as of 18 February), whereas the market capitalization of all PSBs is around ₹6.41 trillion (excluding IDBI Bank, which is now categorized as a private bank).
- Of course, if we add up the assets of PSBs, they are a lot bigger than HDFC Bank’s.
Dual regulation
- The private banks are regulated by the Reserve Bank of India (RBI).
- PSBs are regulated both by RBI and the department of financial services under the finance ministry.
- The P.J. Nayak Committee report of May 2014 had pointed out this issue of dual regulation.
- This is primarily because PSBs are used by the government to fulfil its social obligations and pump-prime the economy when it’s not doing well.
- The stock market discounts these factors while valuing them.
Way forward
- The policies for regulating and promoting industrial growth do not have any social content in them.
- Hence, PSBs should be run as proper banks irrespective of whether they are privatized or not.
- If they are not privatized, the government’s stake in these banks needs to come down to 33%, something which would help them raise more capital.
- Once investors see PSBs being run as proper banks their market capitalization will start to go up.
- Once PSBs are properly valued by the stock market, the government can sell some of its stake in them every year, and use that money to fund its social objectives.
- It can also use some of that money to incentivize all banks, not just PSBs, to deliver some of its social objectives.
Conclusion
The government should take these steps to let the PSBs realise their potential. At the end of the day, nothing improves service delivery more than some good competition.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Bicameralism
Mains level: Paper 2- Importance of bicameralism
The article discusses the issue of undermining of the upper house by passing the certain bills through voice vote and use of money bill route.
Passing of the Bill by voice vote
- The Karnataka Prevention of Slaughter and Preservation of Cattle Bill was passed by the State’s Legislative Council by voice vote without any division.
- The law was passed by the Council despite the lack of a majority.
- There was no division vote based on actual voting as is usual and as the Opposition members had demanded.
A new legislative precedent
- Similar process was followed to pass the controversial farm laws (by the Rajya Sabha) in September 2020.
- The pandemonium in the House caused by heated interventions by the Opposition was used as a pretext to resort to a voice vote.
- The laws passed with a voice vote seem like a new template for bypassing the constitutionally envisaged legislative process.
- Another process repeatedly used over the last few years to bypass the Upper House of Parliament is the Money Bill route.
- The Aadhaar Bill was passed in this manner.
- Other controversial laws such as those pertaining to electoral bonds, retrospective validation of foreign political contributions and the overhaul of the legal regime relating to tribunals have also been carried out through the Money Bill route.
The Rajya Sabha’s role
- The Lok Sabha is seen as directly representing the will of the people, and the Rajya Sabha as standing in its way.
- The countervailing function of the Upper House is rarely seen as legitimate.
- The Rajya Sabha has historically stopped the ruling party from carrying out even more significant legal changes.
- The Rajya Sabha is imperfect, partly because of constitutional design.
- And partly because obviously undesirable practices, such as members representing States they have no affiliation to, have been allowed to flourish.
Importance of bicameralism
- The very questioning of the monopoly of the Lower House to represent the ‘people’ makes bicameralism desirable, argues legal philosopher Jeremy Waldron.
- In India, the fact that the Rajya Sabha membership is determined by elections to State Assemblies leads to a different principle of representation, often allowing different factors to prevail than those in the Lok Sabha elections.
- John Stuart Mill had warned about a single assembly becoming despotic and overweening, if released from the necessity of considering whether its acts will be concurred in by another constituted authority.
- The other merit of bicameralism is significant in a Westminster system like India, where the Lower House is dominated by the executive.
- The Rajya Sabha holds the potential of a somewhat different legislative relation to the executive, making a robust separation of powers possible.
Consider the question “Examine the importance of bicameralism in India. Why passage of certain bills as money bill is causing controversies?”
Conclusion
The important role played by the upper house needs to be recognised and respected in the legislative processess.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Gross fixed capital formation
Mains level: Paper 3- Year of economic consolidation
The article argues that we are less likely to witness high growth next year rather it is going to be the year of consolidation.
Year of consolidation
- The Economic Survey, the Union budget, and the RBI credit policy attest that the economy is on the recovery path.
- The fourth quarter will register a positive growth rate, and as a consequence, the contraction for the full year will be between 7.5-8 per cent.
- The contraction sets the pace for growth in 2021-22 which is now going to be critical as it is the foundation for the fructification of the budget revenue targets.
- But consider this: GDP in 2019-20 was Rs 146 lakh crore, which has come down to Rs 134 lakh crore in 2020-21.
- Hence, a 10 per cent growth will take the Indian economy to Rs 147 lakh crore — when compared to Rs 145 lakh crore, this reflects modest growth.
- Therefore, expectations should be tempered when we talk of growth next year.
- There will be a revival in economic activity on all ends which will probably bear fruit in 2022-23 — FY 2021-22 will be a year of consolidation.
Policy architecture
- The government has brought in a cogent policy framework right from the time of the Atmanirbhar announcements, culminating in the budget.
- There is a focus on infrastructure as well as providing incentives to investment through the Production Linked Incentive (PLI) scheme.
- Real estate, power and construction saw several policy reforms last year.
- There is a strong capex push by the government and there will more action taken here.
RBI policies
- The RBI has promised to continue accommodative policies, which sends a signal of managing liquidity considering the large borrowing programme of the government of Rs 12.8 lakh crore.
- RBI will carry out more open market operations, and long-term repo operations during the year to ensure that interest rates remain stable.
- However, there will be concern around state government borrowings too, which will exert pressure on the availability of funds.
- Hence, there will be more central bank intervention in the market to ensure that funds are available.
Inflation concerns
- Inflation is a concern as global commodity prices have already started going up and this has led to core inflation rising.
- Given that the monsoon has been good in the last four years, there is a possibility of an adverse season this time which can affect food prices.
- In India, too, we have seen that the price of petrol and diesel is rising sharply.
- Add to this rising manufactured goods inflation witnessed of late, and there is a possibility of inflation rising above the MPC’s tolerance levels.
Lack of consumption growth
- For growth to take place, consumption growth has to be real and rapid.
- Consumption growth has been affected by the absence of commensurate job creation.
- Consumption growth is unlikely too soon as consumption is dependent on job creation.
- Jobs get created when growth is high and hence there is circular reasoning here.
- Income has been affected in 2020 due to the pandemic which has led to job losses as well as salary cuts.
- This has affected the sustainability of the pent-up demand seen in October and November.
Falling investment
- Investment has lagged with gross fixed capital formation falling to a low of 24.2 per cent in 2019-20 from 34.3 per cent in 2011-12.
- Reversing this decline will be challenging because the demand for such projects has slowed down and banks have been wary of lending for infrastructure.
- There is also surplus capacity in industry with the capacity utilisation rate being 63.3 per cent in the second quarter of 2020-21.
- Therefore, private investment will rise only gradually and the onus is on governments to manage their targets.
- Private investment will follow, but at a slower pace and realistically speaking, will fire more in 2022-23 rather than 2021-22.
Consider the question “Growth has to be driven by two engines- consumption and investment. India has been facing challenges on both fronts. In light of this, suggest the measures India needs to adopt to move forward on both fronts.
Conclusion
The year 2021-22 will be one of cautious optimism. Growth will trend upwards, but it has to be interpreted with caution, keeping a check on the consumption while pushing the investment while arresting the inflation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Conclusive Land Titling
Mains level: Land records management in India
Land ownership in India
- In India, land ownership is determined through various records such as sale deeds that are registered, property tax documents, government survey records, etc.
- Land ownership is broadly defined by access to a land title. Land Title is a document that determines the ownership of land or immovable property.
- Having a clear land title protects the rights of the titleholder against other claims made by anyone else to the property.
What is the news?
- In 2020, even as laws for farm reform and labour code reform were being enacted, the government’s think tank, NITI Aayog, took steps to initiate land reforms.
- A Model Bill on Conclusive Land Titling was sent to States and Union Territories last June seeking their comments.
- In September, after many States failed to send in their feedback, the Centre warned that their agreement would be presumed.
What is Conclusive Land Titling?
- In a conclusive titling system, the government provides guaranteed titles and compensation in case of any ownership disputes.
- Achieving this will require shifting to a system of registered property titles (as opposed to sale deeds) as the primary evidence of ownership, and having clear and updated land records.
How does the current system work?
- India currently follows a system of presumptive land titling.
- This means that land records are maintained, with information on possession, which is determined through details of past transactions.
- Ownership, then, is established on the basis of current possession. Registration of land is actually a registration of transactions, such as sale deeds, records of inheritance, mortgage and lease.
- Holding registration papers does not actually involve the government or the legal framework guaranteeing the ownership title of the land.
What will change in the new system?
- On the other hand, under a conclusive land titling system, land records designate actual ownership.
- The title is granted by the government, which takes the responsibility for accuracy.
- Once a title is granted, any other claimant will have to settle disputes with the government, not the titleholder.
Why is conclusive land titling needed?
- The main advantage is that a conclusive system will drastically lower litigation related to land.
- According to a 2007 World Bank study on ‘Land Policies for growth and poverty reduction’, land-related disputes accounted for two-thirds of all pending court cases in India.
- A NITI Aayog study on strengthening arbitration estimated that disputes on land or real estate take an average time of 20 years in the courts to be resolved.
A move for EODB
- Right now, because land titles are based on transactions, people have to keep the entire chain of transaction records, and a dispute on any link in that chain causes ambiguity in ownership.
- Once conclusive titling is in place, investors who want to purchase land for business activities will be able to do so without facing the constant risk that their owners may be questioned and their entire investment may go to waste.
- Land disputes and unclear titling also create hurdles for infrastructure development and housing construction, leading to costly delays and inefficiency.
Multiple benefits
- In cities, urban local bodies depend on property taxes that can be levied properly only if there is clear ownership data available.
- In rural areas, the need is even more acute. Access to agricultural credit is dependent on the ability to use the land as collateral.
- Without being able to prove their ownership of land and access formal credit from banks, small and marginal farmers are often left at the mercy of unscrupulous moneylenders.
What does the model Bill propose?
- The Bill circulated by the NITI Aayog in 2020 calls for Land Authorities to be set up by each State government, which will appoint a Title Registration Officer (TRO),
- TRO will prepare and publish a draft list of land titles based on existing records and documents.
- This will be considered a valid notice to all potential claimants interested in the property, who will have to file their claims or objections within a set period of time.
- If disputing claims are received, the TRO will verify all the relevant documents and refer the case to a Land Dispute Resolution Officer (LDRO) for resolution.
Major hurdles
- The biggest challenge is that land records have not been updated for decades, especially in rural and semi-urban areas.
- Land records are often in the name of the grandparents of the current owner, with no proof of inheritance.
- Unless they are based on updated records, conclusive land titles could create even more problems.
- Comprehensive village-level surveys with community involvement are a necessary precursor to the land titling process.
- Relying on current records or even satellite imagery will not provide the same accuracy as actual, on-the-ground, local surveys.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Laschamp Excursion
Mains level: Mass Extinction
This newscard is an excerpt from the original article published in DownToEarth.
The world experienced a few centuries of apocalyptic conditions 42,000 years ago, triggered by a reversal of the Earth’s magnetic poles combined with changes in the Sun’s behaviour. This event is called as Laschamps Excursion.
Try this PYQ from CSP 2018:
Q.The term “sixth mass extinction/sixth extinction” is often mentioned in the news in the context of the discussion of
(a) Widespread monoculture Practices agriculture and large-scale commercial farming with indiscriminate use of chemicals in many parts of the world that may result in the loss of good native ecosystems.
(b) Fears of a possible collision of a meteorite with the Earth in the near future in the manner it happened 65million years ago that caused the mass extinction of many species including those of dinosaurs.
(c) Large scale cultivation of genetically modified crops in many parts of the world and promoting their cultivationin other Parts of the world which may cause the disappearance of good native crop plants and the loss offood biodiversity.
(d) Mankind’s over-exploitation/misuse of natural resources, fragmentation/loss, natural habitats, destructionof ecosystems, pollution and global climate change.
Laschamp Excursion
- The Laschamp event was a geomagnetic excursion (a short reversal of the Earth’s magnetic field). It occurred 41,400 years ago, during the end of the Last Glacial Period.
- This event is named after the village where it was discovered in the French Massif Central.
- It led to series of catastrophic events like the ozone layer was destroyed, electrical storms raged across the tropics, solar winds generated spectacular light shows (auroras), Arctic air poured across North America, ice sheets and glaciers surged and weather patterns shifted violently.
- During these events, life on earth was exposed to intense ultraviolet light, Neanderthals and giant animals known as megafauna went extinct, while modern humans sought protection in caves.
The Adams Event
- This last major geomagnetic reversal triggered a series of dramatic events that have far-reaching consequences for our planet.
- Because of the coincidence of seemingly random cosmic events and the extreme environmental changes found around the world 42,000 years ago, researchers have called this period the “Adams Event”.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Mawsynram
Mains level: Not Much
A recent study that looked at the rainfall pattern in the past 119 years found a decreasing trend at Cherrapunji and nearby areas.
Try this PYQ:
Q.“Climate is extreme, rainfall is scanty and the people used to be nomadic herders.” The above statement best describes which of the following regions?
(a) African Savannah
(b) Central Asian Steppe
(c) North American Prairie
(d) Siberian Tundra
Mawsynram
- Mawsynram is a town in the East Khasi Hills district of Meghalaya state in northeastern India, 60.9 kilometres from Shillong.
- Mawsynram receives the highest rainfall in India.
- It is reportedly the wettest place on Earth, with an average annual rainfall of 11,872mm but that claim is disputed.
- According to the Guinness Book of World Records, Mawsynram received 26,000 millimetres (1,000 in) of rainfall in 1985.
Why it rain highest in Mawsynram?
- Because of the uneven relief of India due to the presence of a number of hill ranges, the monsoon is not able to shed its moisture evenly over India.
- Windward sides receive more rainfall and leeward sides receive less rainfall.
- Mawsynram lies in the funnel-shaped depression caused by the Khasi range in Meghalaya.
- The Bay of Bengal branch of monsoons is trapped in it and causes heavy rainfall.
Decreasing rainfall trends
- The research analysed daily rain gauge measurements during 1901–2019 and noted that the changes in the Indian Ocean temperature have a huge effect on the rainfall in the region.
- There was a reduction in the vegetation area in northeast India in the past two decades, implying that human influence also plays an important role in the changing rainfall patterns.
- The traditional way of cultivation known as Jhum cultivation or shifting cultivation is now decreased and being replaced by other methods.
- Also, previous studies have noted there is sizable deforestation in the region.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Sant Ravidas
Mains level: Bhakti Saints and their contribution
The President of India recently addressed the ‘Shri Guru Ravidas Vishva Mahapeeth Rashtriya Adhiveshan-2021’ in New Delhi.
Try this PYQ from CSP 2019:
Q.Consider the following statements:
1.Saint Nimbarka was a contemporary of Akbar.
2.Saint Kabir was greatly influenced by Shaikh Ahmad Sirhindi.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Who was Sant Ravidas?
- Ravidas was an Indian mystic poet-saint of the Bhakti movement and founder of the Ravidassia religion during the 15th to 16th century CE.
- Venerated as a guru (teacher) in the region of Uttar Pradesh, Rajasthan, Maharashtra, Madhya Pradesh and mainly Punjab and Haryana. He was a poet-saint, social reformer and spiritual figure.
- The life details of Ravidas are uncertain and contested. Scholars believe he was born in 1450 CE, in the cobbler caste.
- Ravidas’s devotional Verses were included in the Sikh scriptures known as Guru Granth Sahib.
- The Panch Vani text of the Dadupanthi tradition within Hinduism also includes numerous poems of Ravidas.
- He taught the removal of social divisions of caste and gender and promoted unity in the pursuit of personal spiritual freedoms.
Why his preaching is important?
- Philosophy and values of Sant Ravidas like social justice, equality and fraternity have been imbued in our constitutional values.
- He had envisaged a society that is based on equality and free from any kind of discrimination.
- He gave it the name ‘Be-gampura’ (a city near Lahore) where there is no place for any kind of grief or fear.
- Such an ideal city would be bereft of fear, vulnerability or scarcity. Rule of law based on the right ideas like equality and welfare of all would be the principle for governance.
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