Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Indian economy
Context
There is fear that the way the money will be used by the Centre will disempower the states further, just when they must do most of the heavy lifting on public welfare.
Wealth creation and trickle-down
- Failure of trickle-down: Evidence from around the world is that the economic policy paradigm, of first increasing the overall size of the pie by reducing taxes at the top and then “redistributing” the wealth, has not delivered benefits to people.
- Gandhiji had declared that he was not against wealth creators. He lauded wealth creation.
- However, it must not be at the cost of workers and welfare.
- Wealth creators must be trustees of the wealth they create, not its exclusive owners.
The demand-side problem of the Indian economy
- The Indian economy is suffering from a chronic “demand-side” problem that is becoming worse with misguided economic policies.
- Young people who have been getting educated in larger numbers than before, even learning vocational skills, cannot find jobs.
- If people don’t earn, demand will not increase, and investments in businesses will not be attractive.
- Moreover, frustrated youth are tinderboxes for social unrest.
Financial globalization and its impact on India
- Around the world, there is a reaction to the financial globalization of the last 30 years.
- In his book, Davos Man, Peter Goodman explains how the wealthiest people have influenced economic policies in democratic countries from the 1990s to make themselves wealthier.
- Thomas Piketty has documented how wealth inequalities have increased alarmingly.
- Wealth has accumulated at the top, with regressive tax policies along with deregulation.
- Government expenditure on social reforms has been crimped.
Way forward
- The global economy must move on from hyper-financial, deregulated capitalism, which has given easy money too much freedom.
- They must move out from their ideological ruts.
- Invest in human capital: Until the economy grows there will be no resources to invest in human development — whereas China invested in human development before its economic take-off.
- Protection to industrial sector: That an unprepared industrial sector will thrive in global free trade — whereas the UK and US (and Japan and China too), grew their industrial sectors behind walls of protection, and then demanded that the rest open their markets to the might of their enterprises.
- Inclusive growth: Political divisions by religion and caste are tearing India’s social fabric again. The Indian economy must grow inclusively to repair it.
Conclusion
Indian policymakers must urgently discover India’s own, contextually appropriate model of development and shed defunct economic theories.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CPI and WPI
Mains level: Paper 3- Inflation and policy response
Context
The disconnect between retail and wholesale inflation suggests that the two measures are driven by distinct and unrelated shocks.
The disconnect between retain inflation and wholesale inflation
- In the months between April 2020 and November 2020, retail inflation remained above 6%, while average wholesale inflation was -0.20%.
- During the financial crisis (2008-2009) wholesale inflation came down significantly as commodity prices crashed after a boom, but retail inflation kept rising.
- Correlation: This disconnect is reflected in the contemporaneous correlation between these two measures of inflation, which we find to be very low (0.04), and not significant.
Understanding the reasons for the disconnect
- We cannot rule out feedback from wholesale inflation to retail inflation.
- To better explore this, it helps to understand the driving forces behind retail and wholesale inflation.
- Driving factors for CPI: Retail inflation is closely linked to food and beverage prices, partly because of their higher weightage in the consumer price index (CPI).
- The dominance of supply shocks: High retail inflation in 2020 was primarily due to the rising prices of food and beverages.
- The surge was likely led by the usual supply shocks—rainfall, agricultural productivity, or Covid-19-induced supply shocks.
- This suggests two important features of Indian retail inflation: it is predominantly led by supply shocks (food inflation shock) and it is transitory in nature.
- Driving factor for WPI: High wholesale inflation in recent months was mainly due to rising prices in fuel and power and manufacturing, which together comprise around 77% of the wholesale price index (WPI).
- Rising fuel and energy prices in India were a result of the recent increase in global oil prices.
Takeaways
- High wholesale inflation should not warrant any immediate policy responses as the two inflation measures seem to reflect different things.
- Overall, the high correlation between world energy inflation and India’s wholesale inflation (0.88) indicates that India’s wholesale inflation is predominantly driven by world commodity prices.
- On the other hand, the low correlation between India’s retail inflation and world energy inflation (-0.13, and not significant), suggests that India’s retail inflation is primarily driven by domestic food prices.
- Higher wholesale inflation implies a higher profit margin for producers, which acts as an incentive for investment
- There are, in fact, some early signs of a revival in investment in recent quarters, and policy must be careful not to derail this.
Policy options
- Given the pass-through of wholesale inflation into retail inflation, if the ongoing commodity boom persists, then the fuel and power component of the WPI is likely to raise retail inflation directly.
- At that point, there would be some urgency to increase the interest rate, which may be premature and could dampen the revival of growth prospects.
- To avoid the interest rate response, the best option going forward would be to rationalise fuel taxes, to reduce the pass-through of global commodity prices into wholesale prices and ultimately into retail inflation.
Conclusion
The correct fiscal-monetary coordination requires fiscal policy not to be inflationary, so that the RBI can support growth by keeping interest rates low.
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Source:
https://www.financialexpress.com/opinion/time-to-rationalise-fuel-taxes-oil-is-a-major-input-in-production-hence-a-tax-on-it-is-highly-inflationary/2430635/
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Geospatial sector
Context
Last year new guidelines took effect to completely de-regulate the geospatial sector for Indians.
Potential of India’s geospatial sector
- India has a robust ecosystem in geospatial, with the Survey of India (SoI), the Indian Space Research Organisation (ISRO), remote sensing application centres (RSAC)s, and the National Informatics Centre (NIC) in particular, and all ministries and departments, in general, using geospatial technology.
- However, the full benefits have yet to percolate to the public; neither is there much contribution to the nation’s GDP.
- The Prime Minister’s speech during Independence Day and mention of geospatial in the Union Budget have created the necessary buzz.
- The last year has also witnessed some activity on the ground.
- The most noticeable was the over subscription of the initial public offering of MapmyIndia.
- The other noticeable activity was the launching of a city mapping programme by Genesys International in India.
- Such an aggressive stance by investors for geospatial was not seen in the earlier regime; it is certain that the new guidelines have played a role.
Challenges
- Lack of demand: There is no demand for geospatial services and products on a scale linked to India’s potential and size.
- This is mainly due to the lack of awareness among potential users in government and private.
- Lack of skilled manpower: The other hurdle has been the lack of skilled manpower across the entire pyramid.
- Unavailability of foundation data: The unavailability of foundation data, especially at high-resolution, is also a constraint.
- Lack of clarity on data sharing: The lack of clarity on data sharing and collaboration prevents co-creation and asset maximisation.
- Lastly, barring a few cases, there are still no ready-to-use solutions especially built to solve the problems of India.
Suggestions
- Despite one year since the new guidelines came into effect, users are still not fully aware of things.
- Publish policy document: First and foremost is the need to publish the entire policy document and make government and private users aware of things.
- Data sharing protocol: The data available with government departments should be unlocked, and data sharing should be encouraged and facilitated.
- Standards: The Government needs to invest in developing standards and must mandate the adoption of standards
- Foundation data: While different types of data will be produced on a project-to-project basis, there is a need to generate foundation data across India.
- This should include the Indian national digital elevation model (InDEM), data layers for cities, and data of natural resources.
- Local technology and solutions should be promoted, and competition should be encouraged for quality output.
- As the new guidelines prevent high-accuracy data being stored in overseas clouds, there is a need to develop a geospatial data cloud locally and facilitate a solution as service.
- Professionals: Unlike the West, India lacks a strata of core professionals who understand geospatial end-to-end. India should start a bachelor’s programme in geospatial also in the Indian Institutes of Technology and the National Institutes of Technology.
- Besides these, there should be a dedicated geospatial university.
Conclusion
The geospatial sector in the country is rightly positioned for investment. However, clarity on the issues discussed and the creation of an enabling ecosystem are essential.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: PMLA
Mains level: Issues with PMLA
The Supreme Court is looking into allegations of the metamorphosis of the Prevention of Money Laundering Act (PMLA), brought to sniff out drug money, into a potent weapon to raid rivals and deny rights.
What is meant by money laundering?
- Money laundering is the process of making significant amounts of money obtained through criminal activities, such as drug trafficking or terrorist funding, appear to have come from a legitimate source.
- Large profits are made by illegal arms sales, drug trafficking, smuggling and prostitution rings, insider trading, bribery, and computer fraud schemes.
- As a result, it provides an incentive for money launderers to “legitimize” their ill-gotten gains through money laundering.
- The money generated is referred to as ‘dirty money,’ and money laundering is the act of converting ‘dirty money’ into ‘legitimate’ money.
Money Laundering Procedure:
It is a 3-stage process. They are:
- Placement: The first stage involves the injection of crime money into the formal financial system.
- Layering is the second stage, money injected into the system is layered and spread over various transactions in order to conceal the money’s tainted origin.
- Integration: In the third and final stage, money enters the financial system in such a way that the initial association with the crime is sought to be erased, and the money can then be utilized as clean money by the offender.
Some of the most Common Money Laundering Methods:
- Bulk cash smuggling, cash-intensive businesses, round-tripping,trade-based laundering, shell companies and trusts, bank capture, gambling, real estate, black salaries, fictional loans, hawala, and false invoicing
Prevention of Money Laundering Act (PMLA)
- PMLA, 2002 is an Act of the Parliament of India enacted by the NDA government to prevent money laundering and to provide for confiscation of property derived from money laundering.
- It was enacted in response to India’s global commitment (including the Vienna Convention) to combat the menace of money laundering.
- PMLA and the Rules notified there under came into force with effect from July 1, 2005.
- The act was amended in the year 2005, 2009 and 2012.
Objectives of PMLA
The PMLA seeks to combat money laundering in India and has three main objectives:
- To prevent and control money laundering.
- To confiscate and seize the property obtained from the laundered money; and
- To deal with any other issue connected with money laundering in India.
Key definitions
- Payment System: A system that enables payment to be effected between a payer and a beneficiary, involving clearing, payment or settlement service or all of them. It includes the systems enabling credit card, debit card, smart card, money transfer or similar operations.
- Money-laundering: Whosoever directly or indirectly attempts to indulge or assist other person or actually involved in any activity connected with the proceeds of crime and projecting it as untainted property.
- Attachment: Prohibition of transfer, conversion, disposition or movement of property by an appropriate legal order.
- Proceeds of crime: Any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence.
Salient features
- Punishment and Jail term: The Act prescribes that any person found guilty of money laundering shall be punishable with rigorous imprisonment from three years to seven years. The maximum punishment may extend to 10 years instead of 7 years.
- Powers of attachment of tainted property: The Director or officer above the rank of Deputy Director with the authority of the Director, can provisionally attach property believed to be “proceeds of crime”.
- Adjudicating Authority: It is the authority appointed by the central government which decides whether any of the property attached or seized is involved in money laundering.
- Presumption in inter-connected transactions: Where money laundering involves two or more inter-connected transactions. It is presumed that the remaining transactions form part of such inter-connected transactions.
- Burden of proof: A person, who is accused of having committed the offense of money laundering, has to prove that alleged proceeds of crime are in fact lawful property.
- Appellate Tribunal: It is given the power to hear appeals against the orders of the Adjudicating Authority and any other authority under the Act. Its orders are not final and can be challenged.
- Establishment of Special Court: To ensure speedy trial.
Issues with PMLA
- Misuse of central agencies: PMLA is being pulled into the investigation of even ordinary crimes by the Enforcement Directorate.
- Seizing of assets: Assets of genuine victims have been attached. The ED could just walk into anybody’s house.
- Politically motivated raids: In all this, the fundamental purpose of PMLA to investigate the conversion of “illegitimate money into legitimate money” was lost.
- Opacity of charges: Petitioners pointed out that even the Enforcement Case Information Report (ECIR) – an equivalent of the FIR – is considered an “internal document” and not given to the accused.
- Vagueness over evidences: The accused is called upon to make statements that are treated as admissible in evidence.
- Harassment: The ED begins to summon accused persons and seeks details of all their financial transactions and of their family members.
- Against individual liberty: The initiation of an investigation by the ED has consequences that have the potential of curtailing the liberty of an individual.
Way ahead
- It is unlikely that corruption can be substantially reduced without modifying the way government agencies operate.
- The fight against corruption is intimately linked with the reform of the investigations.
- Therefore the adjudicating authorities must work in cooperation and ensure the highest standards of transparency and fairness.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Data sovereignty issue
The Ministry of Home Affairs has recommended a ban on 54 Chinese mobile applications that pose a threat to the country’s security.
Legal basis of app ban
- The ban has been enforced under Section 69A of the Information Technology Act, 2000.
- This act empowers to issue directions for blocking for public access of any information through any computer resource.
- This is done in the interest of –
- sovereignty and integrity of India
- defense of India, security of the State
- friendly relations with foreign states
- public order (or)
- for preventing incitement to the commission of any cognizable offense relating to above
Why MHA has put such a ban?
- Most of these apps were operating as clones or shadow apps of the apps that had earlier been banned by the government.
- There was stealing and secretly transmitting users’ data in an unauthorized manner to servers that have locations outside India.
- These apps largely impact the psychosocial abilities of the users.
- The immediate decision has been taken in a specific strategic and national security
Implications of the ban
- India’s offensive: The move comes as an exercise of coercive diplomacy with China amid the heated exchange of words during the diplomatic boycott on the winter Olympics.
- Hurting china’s ambitions: The ban may affect one of China’s most ambitious goals, namely to become the digital superpower of the 21st century.
- Data nationalization: The ban is also based on the recognition that data streams and digital technology are a new currency of global power.
Issues with the ban
- Not only China: Data privacy and data security concerns are not limited only to Chinese apps.
- Harm already caused: The apps that were banned were very popular in India and the move to block them comes after these apps had already amassed hundreds of millions of users in India.
- Further dependency on China: The ban on Chinese mobile apps is a relatively soft target, as India remains reliant on Chinese products in several critical and strategically sensitive sectors.
Way Forward
- There is a strong case to revise the key legislations and sync them to change the digital environment.
- Data privacy and security remain to be major challenges emanating from the ongoing digital revolution.
- Thus, a data protection law is long overdue.
- India must speed up indigenization, research, and development, and frame up a regulatory architecture to claim data sovereignty.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Charaka, Charaka Samhita, Ayurveda
Mains level: Medical Ethics of Charaka
The National Medical Commission (NMC), the regulator for medical education and practices that replaced the Medical Council of India in 2020, has suggested to medical colleges that the traditional Hippocratic Oath should be replaced by a “Charak Shapath”.
Who was Hippocrates?
- The Hippocratic Oath is attributed to Hippocrates of the island of Kos, a Greek physician of the classical period (4th-5th centuries BC, until the death of Alexander the Great in 323 BC).
- It broadly corresponds to the period from the death of the Buddha (486 BC) to the rise of the Mauryas (321 BC) in India.
- Among the great contemporaries of Hippocrates were the Athenian philosopher Plato and his teacher Socrates, and Plato’s student and Alexander’s tutor, the polymath Aristotle.
- He is regarded as the “father of modern medicine”.
What is the Hippocratic Oath?
- Basically, the Hippocratic Oath is a charter of ethical principles that physicians over the ages have sworn to uphold in the practice of their profession.
- The earliest available fragments of what is understood to be the original oath date back to the late 3rd century AD, and a millennium-old version is now in the library of the Holy See.
What are general outlines of a Medical Oath?
- Always exercise his/her independent professional judgment and maintain the highest standards of professional conduct
- Respect a competent patient’s right to accept or refuse treatment
- Not allow his/her judgment to be influenced by personal profit or unfair discrimination
- Be dedicated to providing competent medical service in full professional and moral independence, with compassion and respect for human dignity
- Deal honestly with patients and colleagues, and report to the appropriate authorities those physicians who practice unethically or incompetently or who engage in fraud or deception
- Certify only that which he/she has personally verified
- Respect the local and national codes of ethics
About Charaka and Charak Samhita
- The Charak Samhita is a medical pharmacopeia and collection of commentaries and discussions on medical practices that is dated to the 1st-2nd centuries AD.
- Along with the compendium of Susruta (c. 4th century AD), which is about surgery, the Charak Samhita is considered the foundational text of ancient Indian medicine,.
- It is an evolved system of understanding and treating disease that resembled that of Hippocrates and Galen (2nd century AD), and was in some ways ahead of the Greeks.
- In theory and praxis, ayurvedic medicine today remains broadly unchanged from these ancient Indian principles.
The medical ethics of Charaka
- The physician was an important and respected member of ancient Indian society, and medical practice followed rules of professional conduct and ethical principles. It goes on to say that-
- You must strive with all your soul for the health of the sick.
- You must not betray your patients, even at the cost of your own life.
- You must not get drunk, or commit evil, or have evil companions.
- You must be pleasant of speech…and thoughtful, always striving to improve your knowledge.
- When you go to the home of a patient you should direct your words, mind, intellect, and senses nowhere but to your patient and his treatment.
- Nothing that happens in the house of the sick man must be told outside, nor must the patient’s condition be told to anyone who might do harm by that knowledge to the patient or to another.
- This ethical code is universal, and remains just as relevant and applicable today.
Arguments in favour of Charaka Oath
- There is no universally accepted version of the physician’s oath.
- Many medical schools around the world hold a ceremony in which graduating doctors swear to a broad charter of ethics that are sometimes customised by individual institutions.
- A version of the ‘physician’s code of ethics’ is commonly displayed in hospitals or clinics in most places, including India.
Issues with this oath
- The opposition has criticised the proposal as an attempt to saffronise medical education.
- Introducing Indian elements into Indian education is necessary, but not at the expense of universal values and standards.
- Like several other sages mentioned in the literature of ancient India, the historicity of Charaka is still uncertain.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Erra Matti Dibbalu
Mains level: NA
Citizens join hands to preserve the geological marvel of Erra Matti Dibbalu in Visakhapatnam.
What is Erra Matti Dibbalu?
- Located between Visakhapatnam and Bheemunipatnam, the Erra Matti Dibbalu are rare red sand dunes that are a reminder of the million years of geological processes.
- Its towering red sand dunes with patches of greenery is like a meandering maze.
- The width of the dunes, which runs for five kilometres along the coast, varies from 200 metres to two kilometres.
- It is listed among the 34 notified National Geological Heritage Monument Sites of India by the Geological Survey of India.
(Don’t they resemble to Ravines of Chambal?)
Its formation
- Studies indicate that the area was tectonically active between 2.5 million years and 11,000 years ago.
- The sediments are mainly derived from the Khondalite rocks from the hinterland of the Eastern Ghats.
- Geologically these red sand dune sediments particularly hold significance.
- They are the result of the combined effect of numerous factors including global climatic changes, sea-level variations, monsoonal variability and as a result serves as valuable paleo-environment indicators.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Tilka Manjhi
Mains level: Tribal Revolts during colonial times
The Nation is remembering revolutionary freedom fighter and tribal leader Tilka Manjhi on his 272nd birth anniversary.
Tilka Manjhi (1750-1785)
- He organized Adivasis into an army and led the famous Santhal Hool in 1784 against the exploitative British.
- In 1770, there was a severe famine in the Santhal region and people were dying of hunger.
- Tilka Manjhi looted the treasury of the East India Company and distributed it among the poor and needy.
- Inspired by this noble act of Tilka, many other tribals also joined the rebellion.
- With this began his Santhal Hool, the revolt of the Santhals.
- He continued to attack the British and their sycophantic allies.
- From 1771 to 1784, Tilka Manjhi never surrendered.
Offensive with the colonists
- Tilka Majhi attacked Augustus Cleveland, an East India Company administrator and fatally wounded him.
- The British surrounded the Tilapore forest from which he operated but he and his men held them at bay for several weeks.
- When he was finally caught in 1784, he was tied to the tail of a horse and dragged all the way to the Collector’s residence at Bhagalpur, Bihar, India.
- There, his deeply wounded body was hung from a Banyan tree.
Try this question from CSP 2018:
Q.After the Santhal uprising subsided, what was/ were the measure/measures taken by the colonial government?
- The territories called ‘Santhal Paraganas’ were created.
- It became illegal for a Santhal to transfer land to a non Santhal.
Select the correct answer using the code given below:
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Post your answers here.
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