💥UPSC 2026, 2027, 2028 UAP Mentorship (March Batch) + Access XFactor Notes & Microthemes PDF

Archives: News

  • G20 : Economic Cooperation ahead

    OECD-G20 Inclusive Framework Tax Deal

    India has joining the OECD-G20 framework for a global minimum tax.

    Must read

    What is Global Minimum Corporate Tax?

    What is this tax deal?

    • The proposed solution consists of two components:
    1. Pillar One is about the reallocation of an additional share of profit to the market jurisdictions and
    2. Pillar Two consists of minimum tax and subject to tax rules
    • Some significant issues including share of profit allocation and scope of subject to tax rules, remain open and need to be addressed.
    • Further, the technical details of the proposal will be worked out in the coming months and a consensus agreement is expected by October.

    Why did India join?

    • The principles underlying the solution vindicates India’s stand for a greater share of profits for the markets, consideration of demand-side factors in profit allocation.
    • There is a need to seriously address the issue of cross border profit shifting and need for the subject to tax rules to stop treaty shopping.
    • India is in favour of a consensus solution that is simple to implement and simple to comply with.
    • At the same time, the solution should result in the allocation of meaningful and sustainable revenue to market jurisdictions, particularly for developing and emerging economies.

    What is Base Erosion and Profit Shifting (BEPS)?

    • BEPS refers to corporate tax planning strategies used by multinationals to “shift” profits from higher-tax jurisdictions to lower-tax jurisdictions.
    • It thus “erodes” the “tax base” of the higher-tax jurisdictions.
    • Corporate tax havens offer BEPS tools to “shift” profits to the haven, and additional BEPS tools to avoid paying taxes within the haven.
    • It is alleged that BEPS is associated mostly with American technology and life science multinationals.
  • Capital Markets: Challenges and Developments

    Investors should not be tempted to ignore macroeconomic factors

    Despite gloom in the economy, financial markets are scaling new highs. The situations calls for diligence on the part of individual investors. The deals with this issue.

    What influences investors’ decision

    • Investors may not necessarily be always sensible or even capable of perceiving the larger picture.
    • Nobel laureate Daniel Kahneman argues that humans usually use the ‘first system’ of ‘fast thinking’ to hurriedly act and perceive their environment.
    • Consequently, they are susceptible to the ‘priming effect’, ‘framing bias’, ‘anchoring effect’, ‘overconfidence bias’ and ‘availability heuristic’.
    • These phenomena, thus, play their part in pervading optimistic market conditions.
    • As a result, investors often end up ignoring or overlooking uncertainties and risks involved in their decision.
    • At the same time, investors’ decision choices could be significantly influenced by ‘nudging’.
    • It is a deliberate tactics and method of behaviour modification by which it is the ‘choice architect’ that decides who does what and who does so, as argued by the Nobel laureate, Richard H. Thaler.
    • The present surge in the Indian stock market is indeed nudging individual investors to trade more.

    What makes individual investors vulnerable

    • National Stock Exchange data indicate following trends:
    • The share of the non-institutional individual investors in equity trading volume has risen to one half of the total turnover. in 2021.
    • It was around a third in 2016.
    • In contrast, the share of Foreign Institutional Investors (FIIs) in the total trading volume has shrunk to just about a tenth, it used to be one fifth in 2016.
    • Trading in the stock market, the sudden rise, the intraday moves, etc., are, thus, attributable largely to individual traders now. 
    • However, despite their large trading volumes, individual investors have actually contracted their holding of the market capitalisation.
    • The FIIs currently own around half of the free float of all Indian companies.
    • Apparently, the retail investors have constantly sold their stake to end up holding less than 20% shares now.
    • Trading, thus, seems to be the mainstay of retail investors and this is what makes them more vulnerable to the vagaries of the market.

    Market is ignoring macroeconomic factors

    • Centre for Monitoring Indian Economy Pvt. Ltd. data of the listed companies reveal a rise in their profit, due to rationalisation and cost-cutting.
    • Investors might be tempted to ignore macroeconomic factors and invest in such stock believing that it is the profit that impels the stock prices.
    •  In reality, however, share price is expected to ascend if a company declares to cut its wage bill.
    • This probably explains why stock markets around the world have been on the rise amidst the novel coronavirus pandemic; demand may have declined but profits have been least impacted.
    • At the larger economic level, however, real wages have plunged.
    • Clearly, the market has not entirely decoupled itself from the economic indicators.
    • Established wisdom suggests that corporates cannot sustain contraction in the economy for long.
    • Sustained decline in demand caused by waning disposable household income would catch them soon.
    • Robert J. Shiller attributes this phenomenon of creating a possible bubble to irrational exuberance.
    • When bubbles burst, they cause a kind of financial earthquake, in turn destabilising public trust in the integrity of the financial system.
    • Critically, as the past portrays, individual investors, with all their vulnerabilities, suffer the most devastating consequences.
    • Retail investors are as well susceptible to overreaction when negative news hits the market.

    Consider the question “What are the factors driving the financial markets up despite the weak macroeconomic foundations? What are the risks involved in such situation for the individual investors?”

    Conlcusion

    History of financial markets is replete with bubbles and bursts. Most affected in such burst are the individual investors. Informed decisions based on information and risks involved should form the basis of investment by individual investors.

  • Rule of Law vs Rule by Law

    What makes the Rule of Law different from the Rule by Law? It is the idea of justice and equity that separates the two. The article explains the principles that emerge as the basis of the Rule of law and the role of the judiciary in ensuring their constitutionality.

    Understanding law

    • Law, in its most general sense, is a tool of social control that is backed by the sovereign.
    • However, such a definition of law can be used not only to render justice, it can also be used to justify oppression.
    • Therefore it is argued that a law cannot really be classified as a “law” unless it imbibes within itself the ideals of justice and equity.
    • So, any law backed by a sovereign must be tempered by certain ideals or tenets of justice.
    • Only a state that is governed by such law, can be said to have the Rule of Law.
    • The British colonial power used the law as a tool of political repression, enforcing it unequally on the parties, with a different set of rules for the British and for the Indians.
    •  It was an enterprise famous for “Rule by Law”, rather than “Rule of Law.

    Four principles of rule of law

    • Clarity and accessibility: Laws must be clear and accessible, the people at least ought to know what the laws are.
    • Another implication of this principle is that they should be worded in simple, unambiguous language.
    • Equality: An important aspect of equality before law is having equal access to justice.
    • This guarantee of equal justice will be rendered meaningless if the vulnerable sections are unable to enjoy their rights because of their poverty or illiteracy or any other kind of weakness.
    • Another aspect is the issue of “gender equality”.
    • Participation of people: The third principle, the “right to participate in the creation and refinement of laws”.
    • The very essence of a democracy is that its citizenry has a role to play, directly or indirectly, in the laws that govern them.
    • In India, it is done through elections.
    • The idea that people are the ultimate sovereign is also to be found in notions of human dignity and autonomy
    • Strong independent judiciary: The fourth principle stemsp from the idea that the judiciary is the “guardian” of the Constitution.
    • The judiciary is the primary organ which is tasked with ensuring that the laws that are enacted are in line with the Constitution.

    Independent judiciary and role of media

    • The judiciary cannot be controlled, directly or indirectly, by the legislature or the executive, or else the Rule of Law would become illusory.
    • At the same time, judges should not be swayed by the emotional pitch of public opinion either, which is getting amplified through social media platforms.
    • Judges have to be mindful of the fact that the noise thus amplified is not necessarily reflective of what is right and what the majority believes in.
    • Therefore, media trials cannot be a guiding factor in deciding cases.
    • It is, therefore, extremely vital to function independently and withstand all external aids and pressures.
    • While there is a lot of discussion about the pressure from the executive, it is also imperative to start a discourse as to how social media trends can affect the institutions.

    Conclusion

    The importance of the judiciary shouldn’t blind us to the fact that the responsibility of safeguarding constitutionalism lies not just with the courts. All the three organs of the state, i.e., the executive, legislature and the judiciary, are equal repositories of constitutional trust.

  • Climate Change Impact on India and World – International Reports, Key Observations, etc.

    What is the ‘Heat Dome’ causing record temperatures in USA?

    A US city has recorded the highest temperatures as high as 46-degree Celsius part due to the historic heatwave that lasted as a result of a phenomenon referred to as a “heat dome”.

    What is a Heat Dome?

    • To understand what causes a heat dome, one should liken the Pacific Ocean to a large swimming pool in which the heater is turned on.
    • Once the heater is on, the portions of the pool close to the heating jets will warm up faster and therefore, the temperature in that area will be higher.
    • In the same way, the western Pacific ocean’s temperatures have increased in the past few decades and are relatively more than the temperature in the eastern Pacific.
    • This strong change in ocean temperature from the west to the east is what a team of scientists believe is the reason for the heat dome.
    • This occurs when the atmosphere traps heat at the surface, which encourages the formation of a heatwave.
    • To compare, the reason that the planet Venus is the hottest in the Solar System is that its thick, dense cloud cover traps the heat at the surface, leading to temperatures as high as 471 degrees Celsius.

    Is this heat wave a result of climate change?

    • It cannot be said for sure if the heatwave is a direct result of global warming.
    • Scientists are usually wary of linking climate change to any contemporary event mainly because of the difficulty in completely ruling out the possibility of the event having been caused by some other reason.
    • Similarly, scientists who have been studying the climate tend to agree that the heat waves occurring today are more likely to be a result of climate change for which humans are responsible.

    Answer this PYQ in the comment box:

    Q.Consider the following statements:

    1. Jet streams occur in the Northern Hemisphere only.
    2. Only some cyclones develop an eye.
    3. The temperature inside the eye of a cyclone is nearly 100C lesser than that of the surroundings.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 and 3 only

    (c) 2 only

    (d) 1 and 3 only

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

    What is the Purchasing Managers’ Index (PMI)?

    India’s manufacturing industry has slid back to a decline in June, as per the IHS Markit Manufacturing Purchasing Managers’ Index (PMI).

    Purchasing Managers’ Index

    • PMI is an indicator of business activity — both in the manufacturing and services sectors.
    • It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month before.
    • It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.
    • The PMI is compiled by IHS Markit based on responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.

    How is the PMI derived?

    • The PMI is derived from a series of qualitative questions.
    • Executives from a reasonably big sample, running into hundreds of firms, are asked whether key indicators such as output, new orders, business expectations and employment were stronger than the month before and are asked to rate them.

    How does one read the PMI?

    • A figure above 50 denotes expansion in business activity. Anything below 50 denotes contraction.
    • Higher the difference from this mid-point greater the expansion or contraction. The rate of expansion can also be judged by comparing the PMI with that of the previous month data.
    • If the figure is higher than the previous month’s then the economy is expanding at a faster rate. If it is lower than the previous month then it is growing at a lower rate.

    What are its implications for the economy?

    • The PMI is usually released at the start of the month, much before most of the official data on industrial output, manufacturing and GDP growth becomes available.
    • It is, therefore, considered a good leading indicator of economic activity.
    • Economists consider the manufacturing growth measured by the PMI as a good indicator of industrial output, for which official statistics are released later.
    • Central banks of many countries also use the index to help make decisions on interest rates.
  • Cyber Security – CERTs, Policy, etc

    Global Cybersecurity Index 2020

    India has made it to the top 10 in Global Cybersecurity Index (GCI) 2020 by ITU, moving up 37 places to rank as the tenth best country in the world on key cybersafety parameters.

    Global Cybersecurity Index

    • GCI assessment is done on the basis of performance on five parameters of cybersecurity including legal measures, technical measures, organizational measures, capacity development, and cooperation.
    • The performance is then aggregated into an overall score.
    • For each of the five aspects, all the countries’ performance and commitment are assessed through a question-based online survey, which further allowed for the collection of the supporting evidence.

    India’s progress

    • As per the ranking, India has moved up by 37 places to rank as the tenth best country in the world.
    • The US topped the chart, followed by the UK and Saudi Arabia tied on the second position, while Estonia was ranked third in the index.
    • India has also secured the fourth position in the Asia Pacific region, underlining its commitment to cybersecurity.

    Its significance

    • The affirmation by the UN body of India’s efforts on cybersecurity comes just ahead of the sixth anniversary of Digital India on July 1.
    • India is emerging as a global IT superpower, asserting its digital sovereignty with firm measures to safeguard data privacy and online rights of citizens.

    Back2Basics: International Telecommunication Union

    • ITU is the United Nations specialized agency for information and communication technologies – ICTs.
    • Founded in 1865 to facilitate international connectivity in communications networks. It is Headquartered in Geneva, Switzerland.
    • It allocates global radio spectrum and satellite orbits, develops the technical standards that ensure networks and technologies seamlessly interconnect, and strives to improve access to ICTs to underserved communities worldwide.
    • Recently, India got elected as a member of ITU Council for another 4-year term – from 2019 to 2022. India has remained a regular member since 1952.
  • Higher Education – RUSA, NIRF, HEFA, etc.

    [pib] United District Information System for Education Plus (UDISE+) 2019-20

    The Union Education Minister has released the Report on United Information System for Education Plus (UDISE+) 2019-20 for School Education in India.

    What is UDISE+?

    • UDISE+ is one of the largest Management Information Systems on school education.
    • It covers more than 1.5 million schools, 8.5 million teachers and 250 million children.
    • Launched in 2018-2019, UDISE+ was introduced to speed up data entry, reduce errors, improve data quality and ease its verification.
    • It is an updated and improved version of UDISE, which was initiated in 2012-13 by the Ministry of Education under the UPA govt by integrating DISE for elementary education and SEMIS for secondary education.

    Why is it important?

    • As per the UDISE+ website, “Timely and accurate data is the basis of sound and effective planning and decision-making.
    • Towards this end, the establishment of a well-functioning and Sustainable Educational Management Information System is of utmost importance today.”
    • In short, the UDISE+ helps measure the education parameters from classes 1 to 12 in government and private schools across India.

    What does the 2019-20 report say?

    • The total enrolment in 2019-20 from primary to higher secondary levels of school education was a little over 25.09 crore.
    • Enrolment for boys was 13.01 crore and that of the girls was 12.08 crore.
    • This was an increase by more than 26 lakh over the previous year 2018-19.

    (1) Pupil-teacher ratio improves

    • The Pupil-Teacher Ratio — the average number of pupils (at a specific level of education) per teacher (teaching at that level of education) in a given school year — showed an improvement all levels of school education in 2019-2020 over 2012-2013.

    (2) GER improves

    • The gross enrolment ratio (GER), which compares the enrolment in a specific level of education to the population of the age group which is age-appropriate for that level of education has improved at all levels in 2019-2020 compared to 2018-2019.
    • The GER increased to 89.7 percent (from 87.7 percent) at Upper Primary level, 97.8 percent (from 96.1 percent) at Elementary Level, 77.9 percent (from 76.9 percent) at Secondary Level and 51.4 percent (from 50.1 percent) at Higher Secondary Level in 2019-20 compared to 2018-19.
    • GER for girls at secondary level has gone up by 9.6 percent to reach 77.8 percent in 2019-20 compared to 68.2 percent in 2012-13.

    (3) Phyical infrastructure improves, but computers and internet access remain lacking

    • The report stated that just 38.5 percent of schools across the country had computers, while only 22.3 percent had an internet connection in 2019-20.
    • This is an improvement over 2018-2019 when 34.5 percent of schools had computers and a mere 18.7 percent of schools had internet access.

    Key takeaways

    • While physical infrastructure is steadily improving, the digital infrastructure for schools has a long way to go.
    • With the overwhelming majority of schools have neither computers (61 percent) nor internet access (78 percent), achieving the Centre’s ‘Digital India’ vision when it comes to online education is still some ways off.
    • The vast increase in hand wash facilities is a big step towards the fulfilment of the Modi government’s ‘Swachh Bharat’ push.
    • The Gross Enrolment Ratio improving at all levels of school education in 2019-20 compared to 2018-19 is a plus.
    • While 93 lakh more boys enrolled in education than girls, when it comes to GER, the girls pulled ahead.
  • Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

    Can India avoid a telecom duopoly?

    The Indian telecom sector faces the prospect of duopoly due to the impending exit of Vodafone-Idea. This has several implications.

    India’s telecom sector: From monopoly to hyper-competition

    • India’s telecom market has seen monopoly as well as hyper-competition.
    • Twenty-five years ago, the government alone could provide services.
    • Ten years later, there were nearly a dozen competing operators. Most service areas now have four players.
    • However, the possible exit of the financially-stressed Vodafone Idea would leave only two dominant players-Airtel and Jio in the telecom sector.
    • A looming duopoly, or the exit of a global telecommunications major, are both worrying.
    • They deserve a careful and creative response.

    Why it matters

    • Competition has delivered relatively low prices, advanced technologies, and an acceptable quality of services.
    • There is a long way to go in expanding access as well as network capacity.
    • For example, India is ranked second globally—after China—in the number of people connected to the internet.
    • However, it is also first in the number of people unconnected.
    • Over 50% of Indians are not connected to the internet, despite giant strides in network reach and capacity. India tops aggregate mobile data usage.
    • However, its per capita or device data usage is low.
    • It has an impressive 4G mobile network, however, its fixed network—wireline or optical fibre—is sparse and often poor.
    • 5G deployment has yet to start and will be expensive.
    • Filling the gaps in infrastructure and access will require large investments and competition.
    • The exit of the Vodafone-Idea will hurt both objectives.
    • The closure of Vodafone Idea is an arguably greater concern than the fading role of BSNL and MTNL.
    • The government companies are yet to deploy 4G and have become progressively less competitive.
    • Vodafone Idea, on the other hand, still accounts for about a quarter of subscriptions and revenues and can boast of a quality network.

    Way out

    1) Strategic partnership with BSNL-MTNL

    • A possible way out could be to combine the resources of the MTNL and BSNL and Vodafone Idea through a strategic partnership.
    • Creative government action can save Vodafone Idea as well as improve the competitiveness of BSNL and MTNL.
    • It could help secure government dues, investments, and jobs.

    2) Develop resale market

    • Global experience suggests that well-entrenched incumbents have massive advantages.
    • New players are daunted by the large investments.
    • However, regulators and policymakers have other options to expand choice for telecom consumers.
    • Their counterparts in mature regulatory regimes—e.g., in the European Union—have helped develop extensive markets for resale. 
    • Recognising the limited influence of smaller players, regulators mandate that the incumbent offer wholesale prices to resellers who then expand choice for end-users.
    • A key barrier to resale is India’s licence fee regime which requires licence-holders to share a proportion of their revenues with the government.

    Conclusion

    It would be tragic if India’s telecom-access market was to be reduced to only two competing operators, as we have a long way to go. The government needs to consider the implications of the situation arising due to the exit of one of the major players in the sector.


    Source:

    https://www.financialexpress.com/opinion/failing-to-connect-can-india-avoid-a-telecom-duopoly/2281486/

  • Police Reforms – SC directives, NPC, other committees reports

    How police can serve citizens better

    The article highlights the necessity of adopting the technology driven service delivery mechanism by the police.

    SC mandated police reforms of 2006

    Cost of inefficient criminal justice system

    • There is a reluctance to implement the Supreme Court-mandated police reforms of 2006.
    • The economic cost of the failed criminal justice system is reflected in the reluctance of foreign companies to set up manufacturing and commercial ventures in India for want of quick settlement of criminal, labour and civil disputes.
    • The social implications can be gauged from the report, “Crime in India 2019”, published by the National Crime Records Bureau.
    • Investigation and prosecution need improvement and all criminal trials must be completed within a year.
    • Technology-driven service delivery mechanisms can help achieve this.

    Need to ensure time-bound delivery of services

    • Along with prevention and detection of crime and maintenance of law and order, police stations in India undertake numerous daily tasks.
    • These tasks include providing verifications and no objection certificates of different kinds to citizens.
    • In criminal and non-cognisable cases, police stations provide copies of FIRs, complaints and final reports.
    • Police stations also verify domestic help/employees of central and state governments/public sector undertakings/students going abroad for studies.
    • The Bureau of Police Research & Development (BPR&D) had identified 45 such tasks in 2017.
    • Ease of business means police stations dispose of these requests in a transparent and time-bound manner.
    • The procedures are non-transparent and timelines are often blurred which encourage corrupt practice.
    • Even as police reforms are pursued by the Supreme Court, a definite attempt can be made to ensure time-bound delivery of the above-mentioned services to citizens.

    Use of technology for service delivery

    • These e-portals of various state police seek to provide citizen-centric services such as requests for issue/renewal of various NOCs, verification requests for servants, employment, passport, senior citizen registrations etc.
    • The India Justice Report (IJR) 2020 supported by Tata Trusts has studied the e-portals of various state police organisations.
    • The report mentions that “despite the push for digitisation, no state offered the complete bouquet of services…
    • The report also mentions that users face numerous problems of accessibility to these services.
    • The IJR 2020 audit confirms that states need to invest more resources to upgrade their e-portals for providing the 45 identified basic services to the citizens

    Way forward

    • This highlights that technology for service delivery to citizens has not been prioritised by the police leadership.
    • . This is a task that police leadership can concentrate on without any political interference.
    • The Bureau of Police Research had worked out the timeline for each service and the hierarchy/levels involved.
    • The recommendations have been shared with the state police organisations.
    • Adhering to a defined process with a timeline and clear delineation of the levels of police officers involved can ensure transparent and non-corrupt service delivery.
    • It will reduce the number of fruitless visits a citizen makes to a police station chasing different officers.
    • Along with ease of use, the language of e-portals needs attention too.
    • Citizens seeking clearances may not be very educated.
    • The Ministry of Home Affairs (MHA) earmarked about Rs 20,000 crore for the modernisation of police (2017-2020), for schemes such as crime and criminal tracing networks and system (CCTNS), police wireless and e-prisons.
    • States can take up this crucial service delivery mechanism.

    Conclusion

    Life for Indians would be transformed if government departments, including the police, provide maximum information and services through their portals respecting the defined processes and timelines

  • LGBT Rights – Transgender Bill, Sec. 377, etc.

    Gender self-identification and related issues

    The Spanish government has approved the first draft of a bill that would allow anyone over the age of 14 to legally change gender without a medical diagnosis or hormone therapy.

    What is gender self-identification?

    • Self-identification, or ‘self-id’, is the concept that a person should be allowed to legally identify with the gender of their choice by simply declaring so, and without facing any medical tests.
    • This has been a long-held demand of trans-right groups around the world, including in India, as prejudice against trans people remains rampant.

    European scenario

    • In Europe, this issue has remained divisive not only on liberal-conservative lines but also within the LGBT community.
    • The current processes for declaring one’s desired gender are lengthy, expensive and degrading.

    Related issues

    • Some feminist and gay-rights groups insist that such a law could endanger women and cause more gay teenagers to be told that they might be trans and thus encouraged towards hormones and surgery.
    • Feminist forums believe that sex is not something that can be chosen.
    • They insist that allowing self-identification could put at risk all laws that specifically prevent discrimination against women.
    • They have instead asked lawmakers to look at concerns that they say are more pressing, such as the gender pay gap.

    What is the process for declaring one’s desired sex in India?

    • In India, the rights of transgender persons are governed by the Transgender Persons (Protection of Rights) Act, 2019 and the Transgender Persons (Protection of Rights) Rules, 2020.
    • Under the Rules, an application to declare gender is to be made to the District Magistrate.
    • Parents can also make an application on behalf of their child.
    • A much-criticized previous draft of regulations required transgender persons to go through a medical examination for declaring their desired sex.
    • This requirement was omitted in the Final Rules.
    • As per the Rules, state governments have also been directed to constitute welfare boards for transgender persons to protect their rights and interests, and facilitate access to schemes and welfare measures framed by the Centre.

Join the Community

Join us across Social Media platforms.