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

    What is a Cartel?

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

    Last week, the Competition Commission of India (CCI) has slapped a penalty on a cartel of beer companies for hiking the prices.

    What is a Cartel?

    • According to CCI, a “Cartel includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services”.
    • The International Competition Network, which is a global body dedicated to enforcing competition law, has a simpler definition.
    • The three common components of a cartel are:
    1. an agreement
    2. between competitors
    3. to restrict competition

    What is Cartelization?

    • Cartelization is when enterprises collude to fix prices, indulge in bid rigging, or share customers, etc.
    • But when prices are controlled by the government under a law, that is not cartelization.
    • The Competition Act contains strong provisions against cartels.
    • It also has the leniency provision to incentivise a party to a cartel to break away and report to the Commission, and thereby expect total or partial leniency.
    • This has proved a highly effective tool against cartels worldwide.
    • Cartels almost invariably involve secret conspiracies.

    How do they work?

    • According to ICN, four categories of conduct are commonly identified across jurisdictions (countries). These are:
    1. price-fixing
    2. output restrictions
    3. market allocation and
    4. bid-rigging
    • In sum, participants in hard-core cartels agree to insulate themselves from the rigours of a competitive marketplace, substituting cooperation for competition.

    How do cartels hurt?

    • While it may be difficult to accurately quantify the ill-effects of cartels, they not only directly hurt the consumers but also, indirectly, undermine overall economic efficiency and innovations.
    • A successful cartel raises the price above the competitive level and reduces output.
    • Consumers choose either not to pay the higher price for some or all of the cartelised product that they desire, thus forgoing the product, or they pay the cartel price and thereby unknowingly transfer wealth to the cartel operators.

    In other words, by artificially holding back the supply or raising prices in a coordinated manner, companies either force some consumers out of the market by making the commodity (say, beer) more scarce or by earning profits that free competition would not have allowed.

    Are there provisions in the Competition Act against monopolistic prices?

    • There are provisions in the Competition Act against abuse of dominance.
    • One of the abuses is when a dominant enterprise “directly or indirectly imposes unfair or discriminatory prices” in purchase or sale of goods or services.
    • Thus, excessive pricing by a dominant enterprise could, in certain conditions, be regarded as an abuse and, therefore, subject to investigation by the Competition Commission if it were fully functional.
    • However, it should be understood that where pricing is a result of normal supply and demand, the Competition Commission may have no role.

    How might cartels be worse than monopolies?

    • It is generally well understood that monopolies are bad for both individual consumer interest as well as the society at large.
    • That’s because a monopolist completely dominates the concerned market and, more often than not, abuses this dominance either in the form of charging higher than warranted prices or by providing lower than the warranted quality of the good or service in question.

    How to stop the spread of cartelisation?

    • Cartels are not easy to detect and identify.
    • As such, experts often suggest providing a strong deterrence to those cartels that are found guilty of being one.
    • Typically this takes the form of a monetary penalty that exceeds the gains amassed by the cartel.
    • However, it must also be pointed out that it is not always easy to ascertain the exact gains from cartelisation.
    • In fact, the threat of stringent penalties can be used in conjunction with providing leniency — as was done in the beer case.

    Try this PYQ:

    One of the implications of equality in society is the absence of:

    (a) Privileges

    (b) Restraints

    (c) Competition

    (d) Ideology

     

    Post your answers here.

    Back2Basics: Competition Commission of India (CCI)

    • The CCI is the chief national competition regulator in India.
    • It is a statutory body within the Ministry of Corporate Affairs.
    • It is responsible for enforcing The Competition Act, 2002 in order to promote competition and prevent activities that have an appreciable adverse effect on competition in India.

     

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  • National Mission on Cultural Mapping

    Prelims Only | History | Mains Paper 1: Arts & Culture

    Having made little progress since its launch in 2017, the National Mission on Cultural Mapping has now been handed over to the Indira Gandhi National Centre for the Arts (IGNCA).

    About the National Mission on Cultural Mapping

    • The NMCM is a mission mode project of the Ministry of Culture. It was incepted in 2015.
    • It is aimed to address the necessity of preserving the threads of rich Indian Art and Cultural Heritage, convert vast and widespread cultural canvas of India into an objective Cultural Mapping while creating a strong “Cultural Vibrancy” throughout the nation.
    • It will identify, collect and record cultural assets and resources. It correlates this to planning and strategizing.
    • A portal and a database listing organisations, spaces, facilities, festivals and events will be created.
    • This database can be used to preserve culture and provide or ameliorate livelihoods.

    Objectives of the Mission

    Under this Mission, at broad-level, there are three important objectives as follows:

    1. National Cultural Awareness Abhiyan: Hamari Sanskriti Hamari Pahchan Abhiyan (Our Culture Our Identity)
    2. Nationwide Artist Talent Hunt/Scouting Programme: Sanskritik Pratibha Khoj Abhiyan
    3. National Cultural Workplace: Centralised Transactional Web Portal with database and demography of cultural assets and resources including all art forms and artists.

    Significance of the mission

    • Revival and safeguarding of oral traditions
    • Fostering Cultural Awareness
    • Cultural Preservation
    • Sustainable Employment to creative industries
    • Optimal Resource Allocation and Utilization:
    • Creation of objective Database for inclusive growth of cultural heritage

     

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  • International Space Agencies – Missions and Discoveries

    What is Dark Energy?

    Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    Last week, an international team of researchers has made the first direct detection of dark energy.

    About the Project

    • The XENON1T experiment is the world’s most sensitive dark matter experiment and was operated deep underground at the INFN Laboratori Nazionali del Gran Sasso in Italy.
    • The finding also suggests that experiments like XENON1T, which are designed to detect dark matter, could also be used to detect dark energy.

    What is Dark Energy?

    • Dark energy is an unknown form of energy that affects the universe on the largest scales.
    • The first observational evidence for its existence came from measurements of supernovae, which showed that the universe does not expand at a constant rate; rather, the expansion of the universe is accelerating.
    • Prior to these observations, it was thought that all forms of matter and energy in the universe would only cause the expansion to slow down over time.
    • Measurements of the cosmic microwave background suggest the universe began in a hot Big Bang, from which general relativity explains its evolution and the subsequent large-scale motion.
    • Without introducing a new form of energy, there was no way to explain how an accelerating universe could be measured.

    Does it exist?

    • Since the 1990s, dark energy has been the most accepted premise to account for the accelerated expansion.
    • As of 2021, there are active areas of cosmology research aimed at understanding the fundamental nature of dark energy.

    Dark energy Vs Dark matter

    • Everything we see – the planets, moons, massive galaxies, you, me, this website – makes up less than 5% of the universe.
    • About 27% is dark matter and 68% is dark energy.
    • While dark matter attracts and holds galaxies together, dark energy repels and causes the expansion of our universe.

     

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  • GI(Geographical Indicator) Tags

    GI in news: Goa Cashew Feni

    Prelims Only | Economics | Mains Paper 3: Intellectual Property Rights

    The Goa government’s Feni Policy 2021 has paved the way to take the state’s ‘heritage drink’ forward.

    Sounds strange but an alcoholic beverage has been GI tagged!

    Goa Cashew Feni

    • Feni is a spirit produced in Goa, India.
    • The two most popular types of feni are cashew feni and toddy palm feni, depending on the original ingredient; however, many other varieties are sold.
    • Feni distilleries are usually family-run affairs, and the history of the drink goes back to at least 1585.
    • The feni consumed in South Goa is generally of higher alcohol content (43-45% abv) as compared to the feni produced in North Goa.
    • Commercially packaged feni is available at 42.8% abv.
    • Cashew feni was awarded Geographical Indication registration in 2009 as a speciality alcoholic beverage from Goa.
    • It has been described as a colourless, clear liquid that when matured in wooden barrels develops golden brown tint.

    Must read

    GI Tags in News

     

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  • Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

    IIT-B develops One-time Programmable Memory

    Prelims Only | Science Tech | Mains Paper 3: Achievements Of Indians In S&T

    IIT Bombay researchers have developed a “memory technology” that can, in principle, revolutionise Indian industry and the many applications that need semiconductor chips, such as in the defence sector, automobiles and future aspirations in cell phone manufacturing.

    One-time Programmable Memory

    • Hard disks, flash memory, etc, are examples of memory technology.
    • There is also another form of memory called the one-time programmable memory (OTP) where the memory is written once, stored for a lifetime, and retrieved and used many times.
    • This finds varied uses, one of which is in correcting faulty chips that have been mass produced for specific applications.

    Its utility

    • For instance, think of a chip that helps read off the temperature.
    • Due to a manufacturing defect, the chip may read 100 degree Celsius as 101 degree Celsius.
    • This “offset” of 1 degree may be corrected by storing the error correction parameter in the OTP memory.
    • This is done uniquely for each chip and once stored, the memory corrects the chip’s output for its lifetime.
    • OTP memories are also used for other purposes, mainly three: chip identity, secure information storage and chip calibration for error correction.

    How does it work?

    • To store the correction value, the researchers used eight memory cells, each of which would store one “bit” (that is a value of zero or one).
    • Each of the memory cells consist of an ultrathin silicon dioxide layer which is 10-15 atomic layers thick.
    • This is deposited uniformly over a dinner plate–sized eight-inch silicon wafer to form millions of nanoscale capacitors.
    • The pristine silicon dioxide layer is insulating, passing a very low current [which in digital electronics is read as a “0”].
    • A nanoscale lightning is generated of 3.3 volts to blow the capacitor, leading to a short circuit that produced high current [this is a “1”].
    • Thus, the OTP memory remembers either the “0” state or “1” state through its lifetime.

    Benefits offered

    • The group has successfully demonstrated CMOS 180-nanometre–based, production-ready, eight-bit memory technology.
    • These include successful operation between minus 40 degrees C to 125 degrees C and reliability to ensure excess of 95% yield on eight-bit memories.

    Significance

    • A large fraction of manufactured chips may need to be discarded for faults that can be corrected using this technology.
    • This technology is the first indigenous semiconductor memory technology adoption to manufacturing at 180-nanometre node.
    • Thus, this is a major national milestone for semiconductor innovation.

     

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  • Start-up Ecosystem In India

    Risks involved in Indian tech unicorns gaining at China’s expense

    | Economics | Mains Paper 3: Indian Economy

    Context

    Investment firms with a reputation for tracking and hunting unicorns — startups with billion-dollar-plus valuations are shifting their attention to India from China. While this cannot be good for China, the question remains over whether or not it is good for India either.

    China’s crackdown on tech industry

    • Beijing has decided to crack down on the tech industry, wiping out $1.5 trillion in market value.
    •  The crackdown began with the abrupt suspension of the much-anticipated initial public offering (IPO) of Ant Group last November.
    •  China’s regulators stopped the ride-hailing company, Didi Chuxing, from accepting new users, as soon as it went public on the New York Stock Exchange.
    • There have been sweeping industry-wide changes, from anti-monopoly legislation to new rules governing data collection and use.
    • All of this has investors spooked.

    How India can benefit from China’s crackdown on the tech industry?

    • Due to China’s crackdown, for the first time since 2013, the value of venture deals in India surpassed that of China.
    • Converging factors in India: If this keeps up, India will experience a veritable blessing of unicorns, thanks not only to the fact that the money fleeing China needs refuge, but to many converging forces within India itself.
    • India is the world’s second largest digital market.
    • The use of the United Payment Interface has made digital payments easier in a society that was — and still is — so tied to cash.
    • The pandemic lockdowns have driven an unusually large proportion of that digital population to spend an unusually large amount of time and spend money online.
    • This means that in a very short time, the need to serve this digital population has exploded.
    • The Chinese crackdown could not have come at a more opportune time.
    • Many startups are in a hurry to capitalise on the boom with many investors looking to capitalise them.

    Concern: the risk of tech-bubble

    • When investors rush in to seek refuge because they are fleeing risk elsewhere, even if the refuge looks promising, they can contribute to a self-reinforcing cycle that ends up destroying the refuge.
    • Eager to get a piece of the action, each investor may over-value a company, far exceeding what is justifiable based on market fundamentals.
    • The stampede builds and soon you have the makings of a tech bubble.

    Way forward for investors

    • Instead of reflexively chasing the next shiny startup in India, investors ought to ask a few questions.
    • Do the startups and the markets they serve have the capacity to scale up and do they justify sticking with them for a long period?
    • Has the Indian initial public offerings market really proven itself?
    • Are there enough large corporations that might buy these startups?
    • Can the under-investment in essentials, such as education, health and job market readiness, clog the talent pipeline?
    • Can the Indian government be trusted not to borrow a page from the government it would like to emulate — the Chinese state — and attempt a crackdown of its own?

    Consider the question “Indian tech start-ups are dealing with the gush of capital owing to the convergence of certain factors. Examine these factors and also the concerns with such influx of capital.”

    Conclusion

    India desperately needs patient capital, skilled talent and appropriate technology to solve the country’s numerous fundamental problems laid bare by the pandemic. The last thing India can afford is a bubble that bursts and for all three to take flight and seek refuge in yet another country because no one wants to pick up the pieces of a popped bubble.

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    Back2Basics: IPO

    • An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance.
    • An IPO allows a company to raise capital from public investors.
    • The transition from a private to a public company can be an important time for private investors to fully realize gains from their investment as it typically includes a share premium for current private investors.
    • Meanwhile, it also allows public investors to participate in the offering.

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  • Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

    Complex count: On caste census

    op-ed snap | Indian Society | Mains Paper 1: Salient features of Indian Society

    These days, many states are urging the Centre to include a caste-wise census in the Census of India to have substantial data for reservations of certain dominant caste groups.

    Background

    Caste census of Backward Classes difficult: Centre

    Reaction by the Centre

    • In this backdrop, the Union government’s assertion in the Supreme Court that a census of the backward castes is “administratively difficult and cumbersome” may evoke varying responses.
    • There are two components to the Government’s stand:
    1. Jeopardizing the Census: It asserts that it is a policy decision not to have caste as part of the regular census and that, administratively, the enumeration would be rendered so complex that it may jeopardise the decennial census itself.
    2. Adding more vagueness: It cites the difficulties and complexities inherent in getting an accurate count of castes, given the mind-boggling numbers of castes and sub-castes, with phonetic variations and similarities.

    This is the reason that the data from the 2011 SECC were not acted upon because of “several infirmities” that rendered them unusable.

    Why is caste census not feasible?

    • Hurdle to casteless society: The idea of a national caste census is abhorrent when the stated policy is to strive for a casteless society.
    • Political polarization: Political parties with their base in particular social groups may find a caste enumeration useful, if their favoured groups are established as dominant in specific geographies.
    • Electoral impact: Politicians may find the outcome inconvenient, if the precise count turns out to be lower and has a negative bearing on perceptions about their electoral importance.

    Limitations of SECC, 2011

    • Completeness and Accuracy: Even in the Censuses up to 1931, when caste details were collected, they were wanting in completeness and accuracy.
    • Lakhs of Caste: Further, the data contained 46 lakh different caste names, and if subcastes were considered, the ultimate number may be exponentially high.

    Need for such census

    • Quantifiable data: It may also be a legal imperative, considering that courts want ‘quantifiable data’ to support the existing levels of reservation.
    • Basis for Affirmative actions: It will be useful to establish statistical justification for preserving caste-based affirmative action programmes.

    These points do merit consideration, and even those clamouring for a caste census cannot easily brush them aside.

    Way forward

    • A caste census need not necessarily mean caste in the census.
    • It may be an independent exercise, but one that needs adequate thought and preparation, if its ultimate goal is not for political or electoral purposes, but for equity in distribution of opportunities.
    • A preliminary socio-anthropological study can be done at the State and district levels to establish all sects and sub-castes present in the population.
    • These can be tabulated under caste names that have wider recognition based on synonymity and equivalence among the appellations that people use to denote themselves.
    • Thereafter, it may be possible to do a field enumeration that can mark any group under castes found in the available OBC/BC lists.

    Conclusion

    • A caste census may not sit well with the goal of a casteless society, but it may serve, in the interim, as a useful, even if not entirely flawless, means of addressing inequities in society.

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  • North-East India – Security and Developmental Issues

    Naga Peace Accord

    | Polity | Mains Paper 2: Federalism

     

    Tamil Nadu Governor has resigned as interlocutor for the Naga peace talks.

    What is the Naga Peace Process?

    (A) Issue

    • It refers to ongoing talks between the Indian government and Naga insurgent groups, in particular the NSCN(IM), since 1997 with the aim to sign a Naga Peace Accord.
    • The Naga insurgency, rooted in Naga nationalism, is one of the oldest insurgencies in the country.
    • The Naga-inhabited areas of the Northeast never considered themselves part of British India, and on August 14, 1947, the Naga National Council (NNC) declared independence for Nagaland.
    • It formed an underground Government (NFG) and an Army in 1952, in response to which the Centre sent in the Army and enacted the Armed Forces (Special) Powers Act, or AFSPA.

    (B) Shillong Agreement

    • After years of talks, the Shillong Accord was signed in 1976 with underground groups of Nagaland.
    • But it was rejected by many top NNC leaders on the ground that it did not address the issue of Naga sovereignty and forced Nagas to accept the Indian Constitution.
    • Since then the Naga groups have split into various factions.

    (C) The Peace Accord

    • There have been nearly 100 rounds of talks.
    • In August 2015, the group signed a framework agreement with the Indian government for the Naga Peace Accord.

    How did things go wrong?

    • Sources say even the various competencies of the accord had been agreed upon, although a few bones of contention remained.
    • The groups were insistent on a Naga constitution and were pushing for a Greater Nagalim stretching beyond the boundaries of the present Nagaland state.
    • The state panel rejected the demand for a separate flag and constitution outright, and warned that “any misadventure to disintegrate this great nation shall not be tolerated”.

    Amid all this, what are the real issues?

    • The enthusiasm with which the framework agreement was announced led to unreasonable expectations of an imminent Accord.
    • There is no way the government would accept a separate constitution for Nagaland. This was never under discussion.
    • There was, indeed, an opinion that the flag could be given.
    • But that went off the table after August 5, 2019 when the Kashmiri flag was taken away.

    Best way forward

    • It is important to understand that there cannot be an accord without the militant factions.
    • Some demands that need ironing out include one for a bicameral Assembly with at least 40 nominated members representing different tribes; absorption of cadres as local armed forces or in the Indian paramilitary.
    • There is a need for setting up of autonomous councils in Naga-dominated areas of neighbouring states; and the use of the Naga flag for at least customary events.

    Must read:

    [Burning Issue] Naga Peace Talks

     

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  • Modern Indian History-Events and Personalities

    In news: Battle of Chamkaur (1704)

    Prelims Only | | Mains Paper 1: Modern Indian History

    The new Punjab CM represents the Assembly constituency of Chamkaur Sahib, which is of significance in Sikh history.

    For such history-related topics, one must not forget to note the contemporaries of a particular period.

    The Battle of Chamkaur

    • The coalition forces of Mughals and hill rajas led by Wazir Khan, the Nawab of Sirhind, had laid siege to Anandpur Sahib in the hope of capturing Guru Gobind Singh in May 1704.
    • After seven months of fighting and heavy losses, the coalition forces offered a safe passage to the Guru and his followers.
    • The heads of the coalition pledged they would not harm the Guru, his family, or his soldiers.
    • The peace treaty was sent in the name of Emperor Aurangzeb himself.
    • But when Gobind Singh and his followers stepped out of the Anandpur Sahib fort on the night of December 20, they were attacked.
    • Historically, this was where that Guru Gobind Singh lost two of his elder sons in a battle with the coalition forces of Mughals and the hill rajas.

    What happened at Chamkaur Sahib?

    • The Guru, accompanied by panj piaras (the five Sikhs he had initially baptised), his elder sons and around 40 soldiers, regrouped in a fortress-like two-storey house, with high compound walls made of mud.
    • They were surrounded by an army commandeered by Wazir Khan and Sher Mohammed Khan, the younger brother of Malerkotla’s chieftain.
    • The Guru sent out soldiers in small squads for hand-to-hand combat. Two such attacks were led by his sons, both of whom died fighting.
    • Three of the panj piaras — Mohkam Singh, Himmat Singh and Sahib Singh — too died fighting.

    How did the battle conclude?

    • When very few soldiers were left, they decided the Guru should leave so that he could carry on his mission.
    • It was at the Chamkaur fort that panj piaras issued an edict (hukumnama) ordering the Guru to leave.
    • This was the first edict issued by panj piaras after the formation of the Khalsa on April 13, 1699.
    • Before leaving, the Guru gave his attire and distinguishing kalgi to Sangat Singh, a Mazhabi Sikh who resembled him.
    • Three other soldiers too left the fort, and went in separate directions. The following day, the enemy forced their way inside to find only two soldiers who fought till their last breath.
    • Five days later, Guru Gobind Singh’s two younger sons, aged nine and seven, were bricked alive for refusing to convert.

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  • International Space Agencies – Missions and Discoveries

    Chang’e-5 Lunar Mission

    | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    The Europlanet Society has released details from the samples brought back by China’s Chang’e-5 Lunar Mission in December 2020.

    Chang’e-5 Lunar Mission

    • The Chang’e-5 lunar mission delivered to Earth nearly 2 kg of rocky fragments and dust from the Moon.
    • It had landed on an area of the Moon (the ‘far side’) not sampled by the American or Soviet missions nearly 50 years ago.
    • It thus retrieved fragments of the youngest lunar rocks ever brought back for analysis in laboratories on Earth.
    • The rocks are also different from those returned decades ago.

    Key findings

    • 90% of the materials collected by Chang’e-5 likely derive from the landing site and its immediate surroundings, which are of a type termed ‘mare basalts’.
    • These volcanic rocks are visible to us as the darker grey areas that spilled over much of the nearside of the Moon as ancient eruptions of lava.
    • Yet 10% percent of the fragments have distinctly different, ‘exotic’ chemical compositions.

    What are the exotic compositions?

    • The distinct 10% fragments may preserve records of other parts of the lunar surface as well as hints of the types of space rocks that have impacted the Moon’s surface.
    • Researchers have looked at the potential sources of beads of rapidly cooled glassy material.
    • They have traced these glassy droplets to extinct volcanic vents known as ‘Rima Mairan’ and ‘Rima Sharp’.
    • These fragments could give insights into past episodes of energetic, fountain-like volcanic activity on the Moon.

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