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Inflation in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Weightage of Services in WPI and CPI

Mains level : Paper 3- Issues with inflation data

Context

Inflation for the last four months has been worryingly high. This is happening at a time when demand has been down, unemployment has been high, many have lost incomes and poverty has aggravated.

Issues with the recent inflation data

  • The shock of lockdowns not only made data collection difficult but the consumption basket for calculating CPI should have been changed.
  • Issue with the base: In April and May 2020, data on production and prices could not be collected due to the strict lockdown.
  • As such, the official inflation figures for these months in 2021 do not reflect the true picture.
  • For calculating inflation, a single number is arrived at by assigning weights to different commodities and services.
  • Issue due to different consumption baskets: For WPI, the weights in production are used; for CPI, the consumption basket is used.
  • The consumption basket is vastly different for the poor, the middle classes, and the rich.
  • Hence, the CPI is different for each of these classes and a composite index requires averaging the baskets.
  • So, in a sense, it represents none of the categories.
  • Changed consumption pattern: During lockdown and unlock in 2020, people largely consumed essentials.
  •  RBI data show that consumer confidence fell drastically from 105 in January 2020 to 55.5 by January 2021.
  • While the consumption pattern of the well-off sections may have changed little, the poor and middle classes, especially those who lost jobs and incomes, would have had to cut back on their consumption.
  • Thus, the weights in the CPI would have changed and inflation required recalculation, but this has not been done.
  • Under-representation of services: Inflation data under-represents services in the consumption basket.
  • In production, services are about 55% of the GDP but have no representation in WPI and about 40% in CPI.
  • Increased health and education cost not captured: Health costs and education costs shot up during the pandemic, but this is not captured in inflation figures.
  • Many services were not used. Eating out and travel, for instance, should have been factored out.

Impact of the inflation

  • If the income does not increase in proportion to inflation, for the middle classes, both consumption of less essential items and savings get reduced.
  • But the poor, who hardly save, have to curtail essential consumption.
  • Decline in demand: In India, 94% work in the unorganised sector and mostly earn low incomes and have little savings.
  • By definition, they cannot bargain for higher incomes as prices rise, further, due to lockdowns, the wages of many declined, both in the unorganised and organised sectors.
  • Consequently, demand has declined not only for non-essentials but even for essentials.
  • Impact on employment generation: In a vicious cycle, this is slowing down economic recovery and employment generation.
  •  Further, this impacts the government’s revenues and tends to increase the budgetary deficit.
  • This puts pressure on the government to cut back budgetary expenditures, especially on the social sector.
  • That aggravates poverty and reduces demand further.

Factors leading to inflation

  • Tax on fuels: Increase in tax on fuel push up the prices of all goods and services.
  • This is an indirect tax, it is regressive and impacts the poor disproportionately more.
  • It also makes the RBI’s task of controlling inflation difficult.
  • Supply bottlenecks: The lockdowns disrupted supplies and that added to shortages and price rise.
  • Prices of medicines and medical equipment rose dramatically.
  • Prices of items of day-to-day consumption also rose.
  • International factors: Most major economies have recovered and demand for inputs has increased while supplies have remained disrupted (like chips for automobiles).

Consider the question “What are the issues with measurement of inflation data in India? How inflation in times of low demand and reduced incomes leads to a vicious cycle?”

Conclusion

The current official inflation rate does not correctly measure price rise since the lockdown administered a shock to the economy. The method of calculating it needed modification.

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Judicial Appointments Conundrum Post-NJAC Verdict

Judicial selection needs more than a tweak

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Collegium system, NJAC

Mains level : Transparency issues is Judicial Appointments

In recent weeks, the Supreme Court of India’s collegium has been busy. New judges have been appointed to the Court on its advice and long overdue vacancies have been filled up.

Read this before proceeding:

Collegium recommends nine judges for Supreme Court

What is the matter of concern?

Ans. Transparency in appointments

  • These recommendations are seen as reflective of a new and proactive collegium.
  • What ought to concern us, though, is that long-standing apprehensions about the collegium’s operation remain unaddressed: specifically, its opacity and a lack of independent scrutiny of its decisions.
  • These misgivings are usually seen in the context of a battle between the executive and the judiciary.
  • Less evident is the effect that the failings have on the status of the High Courts.
  • Today, even without express constitutional sanction, the collegium effectively exercises a power of supervision over each of the High Courts.

No specified reasons for Exclusion

  • For nearly two years, despite vacancies on the Bench, the collegium made no recommendations for appointments to the Supreme Court.
  • The conjecture in the press was that this logjam owed to a reluctance amongst some of its members to elevate Justice Akil Kureshi to the Court.
  • Indeed, it was only after a change in its composition that the panel recommended on August 17 a list of names for elevation. This list did not contain Justice Kureshi’s name.
  • The perfunctory nature of the collegium’s resolutions means that we do not know the reasons for his exclusion.
  • We also do not know why five Chief Justices, including Justice Kureshi, and several other puisne judges are now being transferred to different courts.

The public has right to know

  • This is not to suggest that these decisions are unfounded. It is possible that each of the choices made is predicated on administrative needs.
  • But whatever the rationale, surely the public has a right to know.

What is needed?

Ans. Striking a balance in Separation of Power

  • Separation of powers is a bedrock principle of Indian constitutionalism. Inherent in that idea is the guarantee of an autonomous judiciary.
  • To that end, the process of appointing and transferring judges assumes salience.
  • But the question of how to strike a balance between the sovereign function of making appointments and the need to ensure an independent judiciary has long plagued the republic.

As suggested by Dr. Ambedkar

  • The Constitution’s framers wrestled over the question for many days. Ultimately, they adopted what Dr. B.R. Ambedkar described as a “middle course”.
  • That path stipulates the following: Judges to the Supreme Court are to be appointed by the President of India in consultation with the Chief Justice of India (CJI) and such other judges that he deems fit.
  • Judges to the High Courts are to be appointed by the President in consultation with the CJI, the Governor of the State and the Chief Justice of that court.
  • In the case of transfers, the President may move a judge from one High Court to another, after consulting the CJI.

Where does primacy rest?

Ans. In a transparent Collegium system

  • In this design, there is no mention of a “collegium”.
  • But since 1993, when the Supreme Court rendered a ruling in the Second Judges Case, the word consultation has been interpreted to mean “concurrence”.
  • What is more, that concurrence, the Court held there, ought to be secured not from the CJI alone, but from a body of judges that the judgment described as a “collegium”.
  • Thus, the Court wound up creating a whole new process for making appointments and transfers and carved out a system where notional primacy came to rest in the top echelons of the judiciary.

This procedure has since been clarified.  But there is, in fact, no actual guidance on how judges are to be selected.

The NJAC and after

  • In 2015, Parliament sought to undo the procedures put in place by the Court through the 99th Constitutional Amendment.
  • The National Judicial Appointments Commission (NJAC), that the law created, comprised members from the judiciary, the executive, and the lay-public.
  • But the Court scrapped the efforts to replace the collegium and it held in the Fourth Judges Case that judicial primacy in making appointments and transfers was an essential feature of the Constitution.
  • In other words, the Court held that a body that found no mention in the actual text of the Constitution had assumed a position so sacrosanct that it could not be touched even by a constitutional amendment.

Assessing the NJAC

Ans. The NJAC was far from perfect

  • There were legitimate fears that the commission might have resulted in the appointment of malleable judges.
  • Therefore, it is plausible to argue that until a proper alternative is framed, the collegium represents the best solution.
  • This is that allowing senior judges of the Supreme Court primacy in matters of appointments and transfers is the only practical way to guarantee the independence of the judiciary.

Promises are yet unfulfilled over transparency

  • When the Court struck down the NJAC, it also promised to reform the existing system. Six years down the line those promises have been all but forgotten.
  • The considerations that must go into the procedure for selecting judges is left unexplained.
  • The words “merit” and “diversity” are thrown around without any corresponding debates on what they, in fact, mean.
  • Somehow, amidst all of this, we have arrived at a consensus that enveloping a veil over the process of selection is essential to judicial autonomy, and that there is no legitimate reason why the public ought to know how judges are chosen and transferred.

Way forward

  • It is clear that we have come a long way from a time when Chief Justices of High Courts declined invitations to the Supreme Court, because they valued the work that they were already entrusted with.
  • Restoring High Courts to that position of prestige must be seen as essential to the process of building trust in our Constitution.
  • Achieving this will no doubt require more than just a tweak in the process of appointments.

Conclusion

  • It is clear is that the present system and the mysteries underlining the decision-making only further dilute the High Courts’ prominence.
  • At some point we must take seriously the task of reforming the existing scheme because the status quo is ultimately corrosive of the very institutions that it seeks to protect.

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Foreign Policy Watch: India-SAARC Nations

Why the SAARC meeting was cancelled

Note4Students

From UPSC perspective, the following things are important :

Prelims level : SAARC

Mains level : Success and failures of SAARC

A meeting of foreign ministers from the South Asian Association for Regional Cooperation (SAARC) countries, which was set to be held in New York has been cancelled.

About SAARC

  • The South Asian Association for Regional Cooperation (SAARC) is the regional intergovernmental organization and geopolitical union of states in South Asia.
  • Its member states are Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.
  • The SAARC comprises 3% of the world’s area, 21% of the world’s population and 4.21% (US$3.67 trillion) of the global economy, as of 2019.
  • The SAARC was founded in Dhaka on 8 December 1985. Its secretariat is based in Kathmandu, Nepal.
  • The organization promotes development of economic and regional integration. It launched the South Asian Free Trade Area in 2006.
  • The SAARC maintains permanent diplomatic relations at the United Nations as an observer and has developed links with multilateral entities, including the European Union.

Formation of SAARC

  • After the USSR invaded Afghanistan in 1979, the security situation in South Asia rapidly deteriorated. In response, the foreign ministers of the initial seven members met in Colombo in 1981.
  • At the meeting, Bangladesh proposed forming a regional association that would meet to discuss matters such as security and trade.
  • While most of the countries present were in favour of the proposal, India and Pakistan were sceptical.
  • Eventually, both countries relented and in 1983 in Dhaka, joined the other five nations in signing the Declaration.

What has SAARC done so far

  • Despite its lofty ambitions, SAARC has not become a regional association in the mould of the European Union or the African Union.
  • Its member states are plagued by internal divisions, most notably the conflict between India and Pakistan.
  • This in turn has hampered its ability to form comprehensive trade agreements or to meaningfully collaborate on areas such as security, energy and infrastructure.
  • The 18th and last SAARC summit was held in 2014 with Pakistan scheduled to host the 19th summit in 2016.
  • Many nations pulled out of the summit, citing fears of regional insecurity caused by Pakistan and a lack of a conducive environment for the talks.

Limited success to count

  • Despite these setbacks, SAARC has achieved a modicum of success.
  • It has provided a platform for representatives from member countries to meet and discuss important issues, something that may have been challenging through bilateral discussions.
  • India and Pakistan for example would struggle to publicly justify a meeting when tensions between the two are particularly high, but representatives from both countries could come together under the banner of SAARC.
  • The bloc has also made some headway in signing agreements related to climate change, food security and combatting the Covid-19 crisis.
  • It has the potential to do far more but that is contingent upon cooperation on key issues between member states.

Why was the recent meet cancelled?

Ans. Pakistan’s insistence to include the Taliban

  • The member states are unable to agree upon the participation of Afghanistan, with Pakistan and India in particular at loggerheads over the issue.
  • After Pakistan objected to the participation of any official from the previous Ghani administration, SAARC members reportedly agreed to keep an “empty chair” as a symbolic representation of Afghanistan.
  • However, Islamabad later insisted that the Taliban be allowed to send its representative to the summit, a notion that all of the other member states rejected.
  • After no consensus could be formed, Nepal, the ‘host’ of the summit, officially cancelled the meeting.

Why did countries object?

Ans. Taliban is not a legitimate govt

  • The Taliban has not been recognised as the official government of Afghanistan by any SAARC countries barring Pakistan.
  • Several top Taliban leaders are blacklisted by the US and/or designated as international terrorists.
  • Senior leaders who are not blacklisted are known for supporting terrorist activities or affiliating with terrorist organisations.
  • Allowing Taliban to represent Afghanistan in SAARC would legitimise the group and serve as a formal recognition of their right to govern.
  • Apart from Pakistan, which has close ties to the Taliban, particularly its violent subgroup, the Haqqani Network, none of the other SAARC members recognise the Taliban.

Why nations should not recognize the Taliban?

  • PM Modi has referred to the Taliban as a non-inclusive government, warning other nations to think before accepting the regime in Afghanistan.
  • SAARC members are deeply aware of the threat of spillover terrorism from Afghanistan under the Taliban regime, with Bangladesh in particular, concerned with the effect it may have on extremism.
  • Developments in Afghanistan could lead to uncontrolled flow of drugs, illegal weapons and human trafficking.

Conclusion

  • With Pakistan headfast in its support for the Taliban and the rest of SAARC weary to acknowledge the group, any future summit is unlikely until the issue has been resolved.

Water Management – Institutional Reforms, Conservation Efforts, etc.

Wastewater Treatment in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Important facts mentioned

Mains level : Wastewater treatment in India

Sewage treatment plants (STPs) in India are able to treat a little more than a third of the sewage generated per day, according to the latest report of the Central Pollution Control Board (CPCB).

What is Wastewater?

Wastewater is used water from any combination of domestic, industrial, commercial or agricultural activities, surface runoff/ stormwater, and any sewer inflow or sewer infiltration.

In everyday usage, wastewater is commonly a synonym for:

  • Sewage also called domestic wastewater or municipal wastewater which is wastewater that is produced by a community of people.
  • Industrial wastewater, water-borne waste generated from a variety of industrial processes, such as manufacturing operations, mineral extraction, power generation, or water and wastewater treatment.
  • Cooling water, released with potential thermal pollution after use to condense steam or reduce machinery temperatures by conduction or evaporation
  • Leachate, precipitation containing pollutants dissolved while percolating through ores, raw materials, products, or solid waste
  • Return flow, carrying suspended soil, pesticide residues, or dissolved minerals and nutrients from irrigated cropland
  • Surface runoff, the flow of water occurring on the ground surface when excess rainwater, stormwater, meltwater, or other sources, can no longer sufficiently rapidly infiltrate in the soil.
  • Urban runoff, including water used for outdoor cleaning activity and landscape irrigation in densely populated areas created by urbanization
  • Agricultural wastewater, generated from confined animal operations

Wastewater in India

  • India generated 72,368 MLD (million litres per day) whereas the installed capacity of STPs was 31,841 MLD (43.9 per cent), according to the report.

Treatment facilities available

  • Of this installed capacity, developed and operationalized capacity was 26,869 MLD (84 per cent).
  • Of the total operationalised capacity, 20,235 MLD (75 per cent) was the actual utilised capacity.
  • In other words, out of total 72,368 MLD sewage generated every day, only 20,235 MLD is treated.

Skewed distribution

  • Five states and Union Territories (UT) — Maharashtra, Gujarat, Uttar Pradesh, Delhi and Karnataka — account for 60 per cent of the total installed treatment capacity of the country.
  • These, along with five other states and UTs — Madhya Pradesh, Haryana, Punjab, Tamil Nadu and Rajasthan — alone constitute 86 per cent of the total installed capacity.
  • Arunachal Pradesh, Andaman & Nicobar Islands, Lakshadweep, Manipur, Meghalaya and Nagaland have not installed sewage treatment plants.
  • There are states like Bihar which do have a small installed capacity of STPs. But on the operational front, they score a zero.
  • Chandigarh ranks first in terms of total sewage generated to what is actually treated. It generates 188 MLD of sewage and has an operational capacity to treat 271 MLD.

Major issue: Reuse of sewage

  • The reuse of treated sewage is an issue which hasn’t assumed much importance in the policy planning of many state governments.
  • Treated sewage water can be reused for horticulture, irrigation, washing activities (road, vehicles and trains), fire-fighting, industrial cooling, toilet flushing and gardening.
  • The proportion of the reuse of treated sewage is maximum in Haryana (80 per cent) followed by Puducherry (55 per cent), Delhi (50 per cent), Chandigarh (35 per cent), Tamil Nadu (25 per cent), Madhya Pradesh (20 per cent) and Andhra Pradesh (5 per cent).

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Air Pollution

WHO tightens Global Air Quality norms

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Global Air Quality Guidelines (AQGs) 2021

Mains level : Air pollution

The World Health Organisation (WHO) in its first-ever update since 2005 has tightened global air pollution standards.

Global Air Quality Guidelines (AQGs) 2021

  • WHO announces limits for six pollutant categories —particulate matter (PM) 2.5 and 10, ozone (O3), nitrogen dioxide (NO2) sulphur dioxide (SO2) and carbon monoxide (CO).

Air quality standards in India

  • India aligns with the WHO guidelines only in the case of ozone and carbon monoxide, as these have not changed. But both NO2 and SO2 guidelines are tighter than the current Indian standard.
  • The move doesn’t immediately impact India as the National Ambient Air Quality Standards (NAAQS) don’t meet the WHO’s existing standards.
  • The government has a dedicated National Clean Air Programme that aims for a 20% to 30% reduction in particulate matter concentrations by 2024 in 122 cities, keeping 2017 as the base year.

Significance of WHO’s AQG

Ans. It sets the stage for eventual shifts in policy

  • WHO move sets the stage for eventual shifts in policy in the government towards evolving newer stricter standards.
  • This will soon become part of policy discussions — much like climate targets to reduce greenhouse gas emissions keep getting stricter over time.
  • Once cities and States are set targets for meeting pollution emission standards, it could lead to overall changes in national standards.

Challenges for India

  • The current challenge in India is to meet its national ambient air quality standards in all the regions.
  • The hard lockdown phases during the pandemic have demonstrated the dramatic reduction that is possible when local pollution and regional influences can be minimised.
  • This has shown that if local action is strengthened and scaled up at speed across the region, significant reduction to meet a much tighter target is possible.
  • The influence of geo-climatic attributes is quite pronounced in all regions of India, which further aggravates the local build-up of pollution.
  • This is further worsened due to the rapid proliferation of pollution sources and weak air quality management systems.
  • India may require a more nuanced regional approach to maximise benefits and sustain air quality gains.

Conclusion

  • Air pollution is a threat to health in all countries, but it hits people in low- and middle-income countries the hardest.
  • WHO’s new Air Quality Guidelines are an evidence-based and practical tool for improving the quality of the air on which all life depends.

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Food Safety Standards – FSSAI, food fortification, etc.

Centre announces uniform norms for Fortified Rice

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Fortification of food

Mains level : Isuses with fortified food

Days after the Prime Minister’s announcement of a rice fortification plan, the Centre has issued “uniform” parameters for fortified rice kernels (FRK) for grade ‘A’ and common rice.

Plan for fortified rice

  • The fortified rice is to be distributed under various government schemes, including the public distribution system (PDS) and midday meals in schools, by 2024.
  • The specifications for such rice have been issued by the Ministry of Consumer Affairs, Food and Public Distribution.
  • Department of Food and Public Distribution (DFPD) under Ministry of Consumer Affairs, Food and Public Distribution for the first time issued uniform specifications for Fortified Rice Kernels (FRK).

What are the norms announced?

  • Common Rice have in case of procurement of Fortified Rice Stocks, of which 1% of FRK (w/w) should be blended with normal rice stock.
  • These specifications as per standard practice have been issued in respect of Paddy, Rice and other coarse grains namely Jowar, Bajra, Maize, Ragi.

What is Fortification?

  • FSSAI defines fortification as “deliberately increasing the content of essential micronutrients in a food so as to improve the nutritional quality of food and to provide public health benefit with minimal risk to health”.

What is Fortified Rice?

  • Rice can be fortified by adding a micronutrient powder to the rice that adheres to the grains or spraying the surface of ordinary rice grains with a vitamin and mineral mix to form a protective coating.
  • Rice can also be extruded and shaped into partially precooked grain-like structures resembling rice grains, which can then be blended with natural polished rice.
  • Rice kernels can be fortified with several micronutrients, such as iron, folic acid, and other B-complex vitamins, vitamin A and zinc.
  • These fortified kernels are then mixed with normal rice in a 1:100 ratio, and distributed for consumption.

Note: Biofortification is the process by which the nutritional quality of food crops is improved through agronomic practices, conventional plant breeding, or modern biotechnology. It differs from conventional fortification in that Biofortification aims to increase nutrient levels in crops during plant growth rather than through manual means during the processing of the crops.

What is the plan announced by the PM?

  • Malnutrition and lack of essential nutrients in poor women and poor children pose major obstacles in their development.
  • In view of this, it has been decided that the government will fortify the rice given to the poor under its various schemes.
  • Be it the rice available at ration shops or the rice provided to children in their mid-day meals, the rice available through every scheme will be fortified by the year 2024.

Why such a move?

  • The announcement is significant as the country has high levels of malnutrition among women and children.
  • According to the Food Ministry, every second woman in the country is anemic and every third child is stunted.
  • India ranks 94 out of 107 countries and is in the ‘serious hunger’ category on the Global Hunger Index (GHI).
  • Fortification of rice is a cost-effective and complementary strategy to increase vitamin and mineral content in diets.
  • According to the Food Ministry, seven countries have mandated rice fortification – the USA, Panama, Costa Rica, Nicaragua, Papua New Guinea, Philippines, and the Solomon Islands.

Advantages offered

  • Health: Fortified staple foods will contain natural or near-natural levels of micro-nutrients, which may not necessarily be the case with supplements.
  • Taste: It provides nutrition without any change in the characteristics of food or the course of our meals.
  • Nutrition: If consumed on a regular and frequent basis, fortified foods will maintain body stores of nutrients more efficiently and more effectively than will intermittently supplement.
  • Economy: The overall costs of fortification are extremely low; the price increase is approximately 1 to 2 percent of the total food value.
  • Society: It upholds everyone’s right to have access to safe and nutritious food, consistent with the right to adequate food and the fundamental right of everyone to be free from hunger

Issues with fortified food

  • Against nature: Fortification and enrichment upset nature’s packaging. Our body does not absorb individual nutrients added to processed foods as efficiently compared to nutrients naturally occurring.
  • Bioavailability: Supplements added to foods are less bioavailable. Bioavailability refers to the proportion of a nutrient your body is able to absorb and use.
  • Immunity issues: They lack immune-boosting substances.
  • Over-nutrition: Fortified foods and supplements can pose specific risks for people who are taking prescription medications, including decreased absorption of other micro-nutrients, treatment failure, and increased mortality risk.

Adhering to FSSAI standard

The Food Safety and Standards Authority of India (FSSAI) sets standards for food items in the country.

  • According to FSSAI norms, 1 kg fortified rice will contain iron (28 mg-42.5 mg), folic acid (75-125 microgram), and Vitamin B-12 (0.75-1.25 microgram).
  • In addition, rice may also be fortified with micronutrients, singly or in combination, with zinc(10 mg-15 mg), Vitamin A (500-750 microgram RE), Vitamin B1 (1 mg-1.5 mg), Vitamin B2 (1.25 mg-1.75 mg), Vitamin B3 (12.5 mg-20 mg) and Vitamin B6 (1.5 mg-2.5 mg) per kg.

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