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  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    A year of cautious optimism on economic front

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    The article argues that we are less likely to witness high growth next year rather it is going to be the year of consolidation.

    Year of consolidation

    • The Economic Survey, the Union budget, and the RBI credit policy attest that the economy is on the recovery path.
    • The fourth quarter will register a positive growth rate, and as a consequence, the contraction for the full year will be between 7.5-8 per cent.
    • The contraction sets the pace for growth in 2021-22 which is now going to be critical as it is the foundation for the fructification of the budget revenue targets.
    • But consider this: GDP in 2019-20 was Rs 146 lakh crore, which has come down to Rs 134 lakh crore in 2020-21.
    • Hence, a 10 per cent growth will take the Indian economy to Rs 147 lakh crore — when compared to Rs 145 lakh crore, this reflects modest growth.
    • Therefore, expectations should be tempered when we talk of growth next year.
    • There will be a revival in economic activity on all ends which will probably bear fruit in 2022-23 — FY 2021-22 will be a year of consolidation.

    Policy architecture

    • The government has brought in a cogent policy framework right from the time of the Atmanirbhar announcements, culminating in the budget.
    • There is a focus on infrastructure as well as providing incentives to investment through the Production Linked Incentive (PLI) scheme.
    • Real estate, power and construction saw several policy reforms last year.
    • There is a strong capex push by the government and there will more action taken here.

    RBI policies

    • The RBI has promised to continue accommodative policies, which sends a signal of managing liquidity considering the large borrowing programme of the government of Rs 12.8 lakh crore.
    • RBI will carry out more open market operations, and long-term repo operations during the year to ensure that interest rates remain stable.
    • However, there will be concern around state government borrowings too, which will exert pressure on the availability of funds.
    • Hence, there will be more central bank intervention in the market to ensure that funds are available.

    Inflation concerns

    • Inflation is a concern as global commodity prices have already started going up and this has led to core inflation rising.
    • Given that the monsoon has been good in the last four years, there is a possibility of an adverse season this time which can affect food prices. 
    • In India, too, we have seen that the price of petrol and diesel is rising sharply.
    • Add to this rising manufactured goods inflation witnessed of late, and there is a possibility of inflation rising above the MPC’s tolerance levels.

    Lack of consumption growth

    • For growth to take place, consumption growth has to be real and rapid.
    • Consumption growth has been affected by the absence of commensurate job creation.
    • Consumption growth is unlikely too soon as consumption is dependent on job creation.
    • Jobs get created when growth is high and hence there is circular reasoning here.
    • Income has been affected in 2020 due to the pandemic which has led to job losses as well as salary cuts.
    • This has affected the sustainability of the pent-up demand seen in October and November.

    Falling investment

    • Investment has lagged with gross fixed capital formation falling to a low of 24.2 per cent in 2019-20 from 34.3 per cent in 2011-12.
    • Reversing this decline will be challenging because the demand for such projects has slowed down and banks have been wary of lending for infrastructure.
    • There is also surplus capacity in industry with the capacity utilisation rate being 63.3 per cent in the second quarter of 2020-21.
    • Therefore, private investment will rise only gradually and the onus is on governments to manage their targets.
    • Private investment will follow, but at a slower pace and realistically speaking, will fire more in 2022-23 rather than 2021-22.

    Consider the question “Growth has to be driven by two engines- consumption and investment. India has been facing challenges on both fronts. In light of this, suggest the measures India needs to adopt to move forward on both fronts.

    Conclusion

    The year 2021-22 will be one of cautious optimism. Growth will trend upwards, but it has to be interpreted with caution, keeping a check on the consumption while pushing the investment while arresting the inflation.

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  • Land Reforms

    Why does India need Conclusive Land Titling?

    | Governance | Mains Paper 2: Government Scheme/Policies

     

    Land ownership in India

    • In India, land ownership is determined through various records such as sale deeds that are registered, property tax documents, government survey records, etc.
    • Land ownership is broadly defined by access to a land title.  Land Title is a document that determines the ownership of land or immovable property.
    • Having a clear land title protects the rights of the titleholder against other claims made by anyone else to the property.

    What is the news?

    • In 2020, even as laws for farm reform and labour code reform were being enacted, the government’s think tank, NITI Aayog, took steps to initiate land reforms.
    • A Model Bill on Conclusive Land Titling was sent to States and Union Territories last June seeking their comments.
    • In September, after many States failed to send in their feedback, the Centre warned that their agreement would be presumed.

    What is Conclusive Land Titling?

    • In a conclusive titling system, the government provides guaranteed titles and compensation in case of any ownership disputes.
    • Achieving this will require shifting to a system of registered property titles (as opposed to sale deeds) as the primary evidence of ownership, and having clear and updated land records.

    How does the current system work?

    • India currently follows a system of presumptive land titling.
    • This means that land records are maintained, with information on possession, which is determined through details of past transactions.
    • Ownership, then, is established on the basis of current possession. Registration of land is actually a registration of transactions, such as sale deeds, records of inheritance, mortgage and lease.
    • Holding registration papers does not actually involve the government or the legal framework guaranteeing the ownership title of the land.

    What will change in the new system?

    • On the other hand, under a conclusive land titling system, land records designate actual ownership.
    • The title is granted by the government, which takes the responsibility for accuracy.
    • Once a title is granted, any other claimant will have to settle disputes with the government, not the titleholder.

    Why is conclusive land titling needed?

    • The main advantage is that a conclusive system will drastically lower litigation related to land.
    • According to a 2007 World Bank study on ‘Land Policies for growth and poverty reduction’, land-related disputes accounted for two-thirds of all pending court cases in India.
    • A NITI Aayog study on strengthening arbitration estimated that disputes on land or real estate take an average time of 20 years in the courts to be resolved.

    A move for EODB

    • Right now, because land titles are based on transactions, people have to keep the entire chain of transaction records, and a dispute on any link in that chain causes ambiguity in ownership.
    • Once conclusive titling is in place, investors who want to purchase land for business activities will be able to do so without facing the constant risk that their owners may be questioned and their entire investment may go to waste.
    • Land disputes and unclear titling also create hurdles for infrastructure development and housing construction, leading to costly delays and inefficiency.

    Multiple benefits

    • In cities, urban local bodies depend on property taxes that can be levied properly only if there is clear ownership data available.
    • In rural areas, the need is even more acute. Access to agricultural credit is dependent on the ability to use the land as collateral.
    • Without being able to prove their ownership of land and access formal credit from banks, small and marginal farmers are often left at the mercy of unscrupulous moneylenders.

    What does the model Bill propose?

    • The Bill circulated by the NITI Aayog in 2020 calls for Land Authorities to be set up by each State government, which will appoint a Title Registration Officer (TRO),
    • TRO will prepare and publish a draft list of land titles based on existing records and documents.
    • This will be considered a valid notice to all potential claimants interested in the property, who will have to file their claims or objections within a set period of time.
    • If disputing claims are received, the TRO will verify all the relevant documents and refer the case to a Land Dispute Resolution Officer (LDRO) for resolution.

    Major hurdles

    • The biggest challenge is that land records have not been updated for decades, especially in rural and semi-urban areas.
    • Land records are often in the name of the grandparents of the current owner, with no proof of inheritance.
    • Unless they are based on updated records, conclusive land titles could create even more problems.
    • Comprehensive village-level surveys with community involvement are a necessary precursor to the land titling process.
    • Relying on current records or even satellite imagery will not provide the same accuracy as actual, on-the-ground, local surveys.

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  • Global Geological And Climatic Events

    What is Laschamp Excursion?

    | Enviro & Biodiversity | Mains Paper 1: Geographical Features & Their Location

    This newscard is an excerpt from the original article published in DownToEarth.

    The world experienced a few centuries of apocalyptic conditions 42,000 years ago, triggered by a reversal of the Earth’s magnetic poles combined with changes in the Sun’s behaviour. This event is called as Laschamps Excursion.

    Try this PYQ from CSP 2018:

    Q.The term “sixth mass extinction/sixth extinction” is often mentioned in the news in the context of the discussion of

    (a) Widespread monoculture Practices agriculture and large-scale commercial farming with indiscriminate use of chemicals in many parts of the world that may result in the loss of good native ecosystems.

    (b) Fears of a possible collision of a meteorite with the Earth in the near future in the manner it happened 65million years ago that caused the mass extinction of many species including those of dinosaurs.

    (c) Large scale cultivation of genetically modified crops in many parts of the world and promoting their cultivationin other Parts of the world which may cause the disappearance of good native crop plants and the loss offood biodiversity.

    (d) Mankind’s over-exploitation/misuse of natural resources, fragmentation/loss, natural habitats, destructionof ecosystems, pollution and global climate change.

    Laschamp Excursion

    • The Laschamp event was a geomagnetic excursion (a short reversal of the Earth’s magnetic field). It occurred 41,400 years ago, during the end of the Last Glacial Period.
    • This event is named after the village where it was discovered in the French Massif Central.
    • It led to series of catastrophic events like the ozone layer was destroyed, electrical storms raged across the tropics, solar winds generated spectacular light shows (auroras), Arctic air poured across North America, ice sheets and glaciers surged and weather patterns shifted violently.
    • During these events, life on earth was exposed to intense ultraviolet light, Neanderthals and giant animals known as megafauna went extinct, while modern humans sought protection in caves.

    The Adams Event

    • This last major geomagnetic reversal triggered a series of dramatic events that have far-reaching consequences for our planet.
    • Because of the coincidence of seemingly random cosmic events and the extreme environmental changes found around the world 42,000 years ago, researchers have called this period the “Adams Event”.

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  • Monsoon Updates

    Mawsynram: Wettest place on Earth sees a decreasing trend in rainfall

    India MappingPrelims Only | Enviro & Biodiversity | Mains Paper 1: Geographical Features & Their Location

    A recent study that looked at the rainfall pattern in the past 119 years found a decreasing trend at Cherrapunji and nearby areas.

    Try this PYQ:

    Q.“Climate is extreme, rainfall is scanty and the people used to be nomadic herders.” The above statement best describes which of the following regions?

    (a) African Savannah

    (b) Central Asian Steppe

    (c) North American Prairie

    (d) Siberian Tundra

    Mawsynram

    • Mawsynram is a town in the East Khasi Hills district of Meghalaya state in northeastern India, 60.9 kilometres from Shillong.
    • Mawsynram receives the highest rainfall in India.
    • It is reportedly the wettest place on Earth, with an average annual rainfall of 11,872mm but that claim is disputed.
    • According to the Guinness Book of World Records, Mawsynram received 26,000 millimetres (1,000 in) of rainfall in 1985.

    Why it rain highest in Mawsynram?

    • Because of the uneven relief of India due to the presence of a number of hill ranges, the monsoon is not able to shed its moisture evenly over India.
    • Windward sides receive more rainfall and leeward sides receive less rainfall.
    • Mawsynram lies in the funnel-shaped depression caused by the Khasi range in Meghalaya.
    • The Bay of Bengal branch of monsoons is trapped in it and causes heavy rainfall.

    Decreasing rainfall trends

    • The research analysed daily rain gauge measurements during 1901–2019 and noted that the changes in the Indian Ocean temperature have a huge effect on the rainfall in the region.
    • There was a reduction in the vegetation area in northeast India in the past two decades, implying that human influence also plays an important role in the changing rainfall patterns.
    • The traditional way of cultivation known as Jhum cultivation or shifting cultivation is now decreased and being replaced by other methods.
    • Also, previous studies have noted there is sizable deforestation in the region.

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  • Modern Indian History-Events and Personalities

    [pib] Who was Sant Ravidas?

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

    The President of India recently addressed the ‘Shri Guru Ravidas Vishva Mahapeeth Rashtriya Adhiveshan-2021’ in New Delhi.

    Try this PYQ from CSP 2019:

    Q.Consider the following statements:

    1.Saint Nimbarka was a contemporary of Akbar.

    2.Saint Kabir was greatly influenced by Shaikh Ahmad Sirhindi.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

    Who was Sant Ravidas?

    • Ravidas was an Indian mystic poet-saint of the Bhakti movement and founder of the Ravidassia religion during the 15th to 16th century CE.
    • Venerated as a guru (teacher) in the region of Uttar Pradesh, Rajasthan, Maharashtra, Madhya Pradesh and mainly Punjab and Haryana. He was a poet-saint, social reformer and spiritual figure.
    • The life details of Ravidas are uncertain and contested. Scholars believe he was born in 1450 CE, in the cobbler caste.
    • Ravidas’s devotional Verses were included in the Sikh scriptures known as Guru Granth Sahib.
    • The Panch Vani text of the Dadupanthi tradition within Hinduism also includes numerous poems of Ravidas.
    • He taught the removal of social divisions of caste and gender and promoted unity in the pursuit of personal spiritual freedoms.

    Why his preaching is important?

    • Philosophy and values of Sant Ravidas like social justice, equality and fraternity have been imbued in our constitutional values.
    • He had envisaged a society that is based on equality and free from any kind of discrimination.
    • He gave it the name ‘Be-gampura’ (a city near Lahore) where there is no place for any kind of grief or fear.
    • Such an ideal city would be bereft of fear, vulnerability or scarcity. Rule of law based on the right ideas like equality and welfare of all would be the principle for governance.

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  • Women Safety Issues – Marital Rape, Domestic Violence, Swadhar, Nirbhaya Fund, etc.

    Ramani Judgement

    op-ed snap | Governance | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections

     

    Why the Ramani judgement matters

    • The verdict went beyond a mere refusal to convict Ramani for criminal defamation.
    • The verdict vindicated Ramani by accepting Ramani’s truth as a defence to the charge of defamation.
    • The verdict urged society to “understand that sometimes a victim may for years not speak up due to mental trauma,” and underlined that a woman has a right to speak up about the abuse, even after decades.
    • It pointed out that since sexual harassment typically takes place in private, women’s testimonies cannot be dismissed as untrue or defamatory simply because they are unable to provide other witnesses to back their allegations.
    • Institutional mechanisms have systemically failed to protect women or provide justice, the verdict reasoned.
    • Therefore, survivors are justified in sharing their testimonies on media or social media platforms as a form of self-defence.

    Right to dignity

    • The Ramani verdict points out that sexual abuse violates the constitutionally recognised rights to dignity (Article 21) and equality (Articles 14 and 15), and that (a man’s) right to reputation cannot be protected at the cost of (a woman’s) right to dignity. 
    • The Ramani verdict is a huge moral vindication of the #MeToo movement and will serve to deter powerful men from using the defamation law to silence survivors.

    Problem of institution

    • Sexual harassment is a problem of institutions rather than of individuals alone.
    • The world over, employers deploy sexual harassment as a means to discipline and control women workers.
    • In India and Bangladesh, at least 60 per cent of garment factory workers experience harassment at work.
    • In Guangzhou, China, a survey found that 70 per cent of female factory workers had been sexually harassed at work, and 15 per cent quit their jobs as a result.
    • For factory workers, domestic workers, street vendors, sanitation and waste workers, construction workers, sex workers, labour laws or laws against sexual harassment exist only on paper.

    Conclusion

    The women who spoke were unanimous that individual complaints were not an option, they needed unions to fight collectively. Women workers fighting sexual harassment, need more support and attention.

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  • Blockchain Technology: Prospects and Challenges

    Regulate but do no ban Bitcoin

    | Economics | Mains Paper 3: Indian Economy

    The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 seeks to ban cryptocurrencies. Banning cryptocurrencies would have several implications for India. This article deals with this issue.

    Soaring value of Bitcoin

    • Recently, Tesla announced that it will soon accept cryptocurrency as legitimate payment for its cars.
    • Mastercard followed by announcing that it will incorporate ‘select cryptocurrencies’ on its global payment network.
    • BNY Mellon, incidentally the US’s oldest bank, announced holding and transferring digital currencies for asset management clients.
    • JP Morgan and Goldman Sachs announced executive positions to look at cryptocurrencies.
    • All of this resulted in a soaring value of Bitcoin, and its younger sibling, Ethereum.

    India’s governments stand on cryptocurrencies

    • India’s government sought to ban cryptocurrency through a proposed legislation, the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.
    • The Bill also provides to also set up a legal structure for an “official digital currency”.
    • The Bill promises to “allow for certain exceptions to promote the underlying technology of cryptocurrency (blockchain) and its uses.”
    • The way the technology is built, an ownerless, consensus-driven, distributed ledger like a blockchain needs cryptocurrency to grease its wheels.
    • India tried to ban cryptocurrency once before, in 2018, before it was reversed by the Supreme Court.

    Implications of banning cryptocurrencies

    • The banning will kill innovation.
    • India has more than 30,000 blockchain innovators and practitioners.
    • These innovators will now be looking at moving out to friendlier regimes like the US, Switzerland, Singapore and Estonia.
    • International tech companies will freeze blockchain and crypto-exchange investments in India and the step will undermine India’s reputation as a technology hub.
    • India is the second-largest Bitcoin trading nation in Asia, and all those trades will move to overseas exchanges.
    • China has large crypto trading and mining operations, and an Indian ban on Bitcoin will leave that space open for it.

    Consider the question “What is cryptocurrency? What would be the implications of banning it?”

    Conclusion

    No doubt, there are many problems with cryptocurrency—it is volatile, sucks energy, and is often abused by criminals. But the answer is not to ban it, but regulate it.

     

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  • Freedom of Speech – Defamation, Sedition, etc.

    Big tech regulation and problems

    op-ed snap | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters,Government Scheme/Policies

    Article highlights the issues with the growing dominance of social media giants and challenges involved in regulating them.

    Issues to consider

    1) Conflict of interest

    • Many of the big tech companies were not, as they claimed, mere platforms.
    • This is because they began to curate and generate their own content, creating possible conflicts of interest.

    2) Monopoly power

    • There is a suspicion that big tech companies were acquiring more monopoly power leading to lack of free competition.
    • There is a conjunction of technology and finance here.
    • The more companies were valued, the more they needed monopoly rent extraction to be able to justify those valuations.

    3) Lack of accountability in algorithms

    • There was an irony in an opaque algorithm being the instrument of a free, open and equitable society.

    4) Mixed implications for distribution of wealth

    • While the companies had immense economic impact, their distributive implications were more mixed.
    • They empowered new players, but they also seem to destroy lots of businesses.
    • These companies themselves became the symbol of inequality of economic and political power.

    5) Lack of accountability and standards in regulating free speech

    • Big tech companies set themselves up almost as a sovereign power.
    • This was most evident in the way they regulated speech, posing as arbiters of permissible speech without any real accountability or consistency of standards.
    • The prospect of a CEO exercising almost untrammelled authority over an elected president only served to highlight the inordinate power  these companies could exercise.

    6) Effects of big tech on democracy and democratisation

    •  The social legitimacy of California Libertarianism came from the promise of a new age of democratic empowerment.
    • But as democracies became more polarised, free speech more weaponised, and the information order more manipulated, greater suspicion was going to be cast on this model.
    • All democracies are grappling with this dilemma.

    Big tech in Indian context

    • India will justifiably worry about its own economic interests.
    • India will be one of the largest bases of internet and data users in the world.
    • The argument will be that this should be leveraged to create iconic Indian companies and Indian value addition.
    • India can create competition and be more self-reliant in this space.
    • Pushing back against big tech is not protectionism, because this pushback is to curb the unfair advantages they use to exploit an open Indian market.
    • India can also justifiably point out that in China keeping out tech companies did not make much of a difference to financial flows or investment in other areas.

    The real challenge

    • It will be important to distinguish between regulations that are solving some real problems created due to Big tech, and regulation that is using this larger context to exercise more control.
    • It will be easier to address those issues if the government showed a principled commitment to liberty, commitment to root out crony capitalism, an investment in science and technology commensurate with India’s challenges, and a general regulatory independence and credibility.

    Consider the question “What are the challenges posed by the dominance of social media giants? Suggest the measures to deal with these challenges.”

    Conclusion

    We should not assume that just because big tech is being made to kneel, the alternative will be any better.

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

    No role in State’s quota decisions: Centre tells SC

    | Polity | Mains Paper 2: Indian Constitution – historical underpinnings, evolution, features, amendments, significant provisions and basic structure

    The Centre has told the Supreme Court that it has no role in the choices made by the Tamil Nadu government with regard to the provision of reservation for specific castes or communities in state government jobs and admissions.

    Reservation being an all-time contested issue is a less inevitable topic for mains. However, we can expect some of the thought triggering questions such as – “Reservation is hardly capable of striking a balance between social inclusion and merit. Critically comment. (250 W)”

    OR

    Essay topic like- “Meritocracy is unrealized without an egalitarian society” are ready to raid your mind.

    Issue over 69%

    • The Centre was responding to a petition challenging the constitutionality of the Tamil Nadu Backward Classes, SCs and STs Act of 1993, which provides 69% reservation in the State.
    • The petitioner contends that the TN has acted “outside its competence” by identifying and classifying socially and educationally backward classes (SEBCs).
    • It is too far in excess of the 50% limit on quota laid down by a nine-judge Bench of the Supreme Court in its judgment in the Indira Sawhney Case (1992).

    Indira Sawhney Case

    In the famous Mandal case (Indra Sawhney Case, 1992), the scope and extent of Article 16(4), which provides for reservation of jobs in favour of backward classes, has been examined thoroughly by the Supreme Court.

    • Though the Court has rejected the additional reservation of 10% for poorer sections of higher castes, it upheld the constitutional validity of a 27% reservation for the OBCs with certain conditions.
    • The advanced sections among the OBCs (the creamy layer) should be excluded from the list of beneficiaries of reservation.
    • No reservation in promotions; reservation should be confined to initial appointments only. Any existing reservation in promotions can continue for five years only (i.e., upto 1997).
    • The total reserved quota should not exceed 50% except in some extraordinary situations. This rule should be applied every year.
    • The ‘carry forward rule’ in case of unfilled (backlog) vacancies is valid. But it should not violate the 50% rule.

    What did the Centre say in the TN case?

    • The inclusion or exclusion of any caste/community in the State List of SEBCs is the subject matter of the State government, and the Government of India has no role in the matter.
    • It referred to the Constitution (102nd Amendment) Act of 2018, which details the difference in the procedure for inclusion or exclusion of castes and communities in the State List for SEBCs and the Central List.

    Identifying SEBC

    • The power to identify and specify SEBCs lies with Parliament only with reference to the Central List.
    • The State governments may have separate State Lists of SEBCs for providing reservation for recruitment to State services or admissions in State government educational institutions.
    • Under the newly-inserted Article 342A of the 102nd Amendment Act of 2018, the President notifies the SEBCs in a State after consultation with the Governor.
    • The castes or communities included in such State Lists may differ from those included in the Central List.

    A case for TN

    The senior advocate appearing for Tamil Nadu said the State’s case should be heard separately. The filed affidavit said:

    • India is an amalgam of States with varied population, size, history, culture and social fabric.
    • The circumstances and facts prevailing in Tamil Nadu are not the same or similar to those in any other State.
    • Tamil Nadu is a pioneer in the implementation of reservation in public employment and education. The policy of reservation has been in practice since 1921 in this State.
    • Factual variations contributing to the grant of reservation need to be reckoned with differently for different States while deciding the question on its validity.
    • The State argued that its law was protected under the Ninth Schedule of the Constitution from judicial review.
    • Section 4 of the 1993 Act provides 30% reservation to the Backward Classes, 20% for the Most Backward Classes and de-notified communities, 18% for the SCs and 1% for the STs.

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  • Social Media: Prospect and Challenges

    Australia vs Facebook Row

    | Security Issues | Mains Paper 3: Social Media Networks & Internal Security

    The social media giant Facebook is locked in a battle with Australia over legislation that would require FB, Google to pay for news outlets.

    Row over the news on social media

    • Australia had proposed a law called the News Media and Digital Platforms Mandatory Bargaining Code Bill 2020.
    • It seeks to mandate a bargaining code that aims to force Google and Facebook to compensate media companies for using their content.

    Imagine if the case arises in India where tons of news channels and impulsive journalists are dying off hard to gather TRPs!

    Response from the ‘giants’

    • Google had threatened to make its search engine unavailable in Australia in response to the legislation, which would create a panel to make pricing decisions on the news.
    • Facebook responded by blocking users from accessing and sharing Australian news.

    Why countries are bringing such legislation?

    • Australia has launched a global diplomatic offensive to support its proposed law to force Internet giants Facebook and Google to pay media companies.
    • Google accounts for 53% of Australian online advertising revenue and Facebook for 23%.
    • The legislation sets a precedent in regulating social media across geographies and is being closely watched the world over.

    What is happening in other countries?

    • Australia’s proposed law would be the first of its kind, but other governments also are pressuring Google, Facebook and other internet companies to pay news outlets and other publishers for the material.
    • In Europe, Google had to negotiate with French publishers after a court last year upheld an order saying such agreements were required by a 2019 EU copyright directive.
    • France is the first government to enforce the rules, but the decision suggests Google, Facebook and other companies will face similar requirements in other parts of the 27-nation trade bloc.

    The ‘doubted’ reluctance

    • Last year, Facebook announced it would pay US news organizations including The Wall Street Journal, The Washington Post and USA Today for headlines.
    • In Spain, Google shut down its news website after a 2014 law required it to pay publishers.

    Why does this matter?

    • Developments in Australia and Europe suggest the financial balance between multibillion-dollar internet companies and news organizations might be shifting.
    • Australia is responding to complaints by news reports, magazine articles and other content that appears on their websites or is shared by users.
    • The government acted after its competition regulator tried and failed to negotiate a voluntary payment plan with Google.
    • The proposed law would create a panel to make binding decisions on the price of news reports to help give individual publishers more negotiating leverage with global internet companies.

    Not losing out revenue gain

    • Google’s agreement means a new revenue stream for news outfits, but whether that translates into more coverage for readers, viewers and listeners is unclear.
    • The union for Australian journalists is calling on media companies to make sure online revenue goes into newsgathering.

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