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Archives: News

  • Coronavirus – Economic Issues

    Atmanirbhar Bharat Abhiyan 3.0 Package

    Finance Minister has announced a fresh set of relief and stimulus measures for the economy worth ₹1.19 lakh crore, including a scheme to boost re-employment chances of formal sector employees who lost their jobs amidst the COVID-19 pandemic.

    Assist this newscard with:

    [Burning Issues] Atmanirbhar Abhiyan Package

    Atmanirbhar Bharat

    • Atmanirbhar Bharat, which translates to ‘self-reliant India’ or ‘self-sufficient India’, is the vision of our PM of making India a bigger and more important part of the global economy.
    • It doesn’t mean “self-containment”, “isolating away from the world” or being “protectionist”.
    • It calls for pursuing policies that are efficient, competitive and resilient, and being self-sustaining and self-generating.
    • The five pillars of ‘Atmanirbhar Bharat’ are stated as economy, infrastructure, technology-driven systems, vibrant demography and demand.

    Highlights of the Package 3.0

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

    What is a Technical Recession?

    Latest RBI bulletin projects contraction for a second consecutive quarter, which means the economy, is in a ‘technical recession’.

    Nowcasts by RBI

    • In its latest monthly bulletin, the Reserve Bank of India has dedicated a chapter on the “State of the economy”.
    • The idea is to provide a monthly snapshot of some of the key indicators of India’s economic health.
    • As part of the exercise, the RBI has started “nowcasting” or “the prediction of the present or the very near future of the state of the economy”.
    • And the very first “nowcast” predicts that India’s economy will contract by 8.6% in the second quarter (July, August, September) of the current financial year.
    • It implies India that has entered a “technical recession” in the first half of 2020-21— for the first time in its history.

    What is a Recessionary Phase?

    • At its simplest, in any economy, a recessionary phase is the counterpart of an expansionary phase.
    • In simpler terms, when the overall output of goods and services — typically measured by the GDP — increases from one quarter (or month) to another, the economy is said to be in an expansionary phase.
    • And when the GDP contracts from one quarter to another, the economy is said to be in a recessionary phase.
    • Together, these two phases create what is called a “business cycle” in any economy. A full business cycle could last anywhere between one year and a decade.

    Now try this PYQ:

    Q.Consider the following actions by the Government:

    1. Cutting the tax rates
    2. Increasing government spending
    3. Abolishing the subsidies

    In the context of economic recession, which of the above actions can be considered a part of the “Fiscal stimulus” package?

    (a) 1 and 2 only

    (b) 2 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

    How is the Recession different?

    • When a recessionary phase sustains for long enough, it is called a recession. That is, when the GDP contracts for a long enough period, the economy is said to be in a recession.
    • There is, however, no universally accepted definition of a recession — as in, for how long should the GDP contract before an economy is said to be in a recession.
    • But most economists agree with the US definition that during a recession, a significant decline in economic activity spreads across the economy and can last from a few months to more than a year.

    Then, what is a Technical Recession?

    • While the basic idea behind the term “recession” — significant contraction in economic activity — is clear, from the perspective of empirical data analysis, there are too many unanswered queries.
    • For instance, would quarterly GDP be enough to determine economic activity? Or should one look at unemployment or personal consumption as well?
    • It is entirely possible that GDP starts growing after a while but unemployment levels do not fall adequately.
    • To get around these empirical technicalities, commentators often consider a recession to be in progress when real GDP has declined for at least two consecutive quarters.
    • That is how real quarterly GDP has come to be accepted as a measure of economic activity and a “benchmark” for ascertaining a “technical recession”.

    How long do recessions last?

    • Typically, recessions last for a few quarters. If they continue for years, they are referred to as “depressions”.
    • But depression is quite rare; the last one was during the 1930s in the US.
    • In the current scenario, the key determinant for any economy to come out of recession is to control the spread of Covid-19.
  • Freedom of Speech – Defamation, Sedition, etc.

    Contempt of Court and A-G’s consent

    Attorney-General gave his consent for the initiation of criminal contempt proceedings against the stand-up comedian for his tweets following a Supreme Court’s decision to grant interim bail to a news anchor.

    Note important power, functions and limitations of AGI. A bluff can be created with the dicey statements in the prelims.

    Also read:

    [Burning Issue] Free Speech Vs. Contempt of Court

    What is Contempt of Court?

    • According to the Contempt of Courts Act, 1971, contempt of court can either be civil contempt or criminal contempt.
    • Civil contempt means wilful disobedience of any judgment, decree, direction, order, writ or another process of a court, or wilful breach of an undertaking given to a court.
    • Criminal contempt, on the other hand, is attracted by the publication (whether by words, spoken or written, or by signs, or by visible representations, or otherwise) of any matter or the doing of any other act whatsoever which:

    (i) Scandalizes or tends to scandalise, or lowers or tends to lower the authority of, any court; or

    (ii) Prejudices, or interferes or tends to interfere with, the due course of any judicial proceeding; or

    (iii) Interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner

    • In 2006, the government brought in an amendment, which now provides “truth” as defence provided it is bona fide and in the public interest.

    Why is the A-G’s consent needed to initiate contempt proceedings?

    • In cognizance of criminal contempt, The Contempt of Courts Act, 1971 has a provision under Subsection 1 of Section 15.
    • It reads that- in the case of criminal contempt, (other than contempt in the face of the Supreme Court or a High Court), the related court may take action on its own motion or on a motion made by (a) the Advocate-General, or (b) any other person, with the consent in writing of the Advocate-General.

    Back2Basics: Attorney General of India (AGI)

    • The AGI is the Indian government’s chief legal advisor and is a primary lawyer in the Supreme Court of India.
    • They can be said to be the advocate from the government’s side.
    • They are appointed by the President of India on the advice of Union Cabinet under Article 76(1) of the Constitution and holds office during the pleasure of the President.
    • They must be a person qualified to be appointed as a Judge of the Supreme Court ( i.e. a judge of some high court for five years or an advocate of some high court for ten years or an eminent jurist, in the opinion of the President and must be a citizen of India.).

    Functions and duties

    • The AGI is necessary for advising the Government of India on legal matters referred to them.
    • They also perform other legal duties assigned to them by the President.
    • The AGI has the right of audience in all Courts in India as well as the right to participate in the proceedings of the Parliament, though not to vote.
    • The AGI appears on behalf of Government of India in all cases (including suits, appeals and other proceedings) in the Supreme Court in which GoI is concerned.
    • They also represent the Government of India in any reference made by the President to the Supreme Court under Article 143 of the Constitution.
    • The AG is assisted by a Solicitor General and four Additional Solicitors General.
  • Indian Navy Updates

    [pib] Project-75

    The fifth Scorpene submarine of Project-75 named ‘Vagir’ has been launched at Mazagon Dock Shipbuilders Limited (MDL) in Mumbai.

    In a rare case we would see a question based on various classes of Indian Submarines in the CSP. However, we can expect a question based on Project-75 in the CSP and CAPF exam very well.

    About Vagir

    • Vagir, ex-Russia, named after the Sand Fish, a deadly deep-sea predator of the Indian Ocean, was commissioned into the Indian Navy on December 3, 1973, and was decommissioned on June 7, 2001.
    • In true nautical tradition, it is refurbished under the same name – Vagir.
    • It is rebuilt with superior stealth features (such as advanced acoustic absorption techniques, low radiated noise levels, hydro-dynamically optimized shape etc.) and precision-guided weapons.
    • The attack can be launched with both torpedoes and tube-launched anti-ship missiles, whilst underwater or on the surface.

    What is Project-75?

    • The Project 75I-class submarine is a follow-on of the Project 75 Kalvari-class submarine for the Indian Navy.
    • In the late 1990s, around the time of Kargil war, a three-decade plan took shape for indigenous construction of submarines.
    • It was known to have two separate series of submarine building lines – codenamed Project 75 and Project 75I — in collaboration with foreign entities.
    • Under this project, the Indian Navy intends to acquire six diesel-electric submarines, which will also feature advanced air-independent propulsion systems.
    • This is for enabling them to stay submerged for longer duration and substantially increase their operational range.

    Submarines commissioned till date

    • The submarines in the current Kalvari-class take their names from erstwhile decommissioned classes of submarines named Kalvari.
    • It included Kalvari, Khanderi, Karanj and Vela class — which included Vela, Vagir, Vagsheer.
    • Two submarines of the ongoing project, Kalvari and Khanderi, have been commissioned into the Indian Navy.
    • The third submarine, Karanj, is in the last phase of rigorous sea trials.
    • The fourth Scorpene, Vela, has commenced her sea trials, whilst the sixth and last submarine, Vagsheer, is being readied for boot together.

    Strategic importance of these submarines

    • India currently operates one submarine each in nuclear-powered Classes of Chakra and Arihant and in addition to 14 submarines belonging to three classes of Diesel Electric category — Kalvari, Shishumar and Sindhughosh, some of which are ageing.
    • The nuclear powered and diesel-electric submarines have their designated roles in the Carrier Battle Groups, which are formations of ships and submarines with Aircraft Carriers at the lead role.
    • As per the basic principles of submarine deployment and the minimum requirement for India to create a strategic deterrence, there is a specific number of submarines of both types that India needs to have in active service.
    • Currently, India has less number of submarines than what is required with some more of those from both types being at various stages of construction.

    Back2Basics: Classes of Submarines in India

    • In maritime terms, a class of ships is a group of vessels which have the same make, purpose and displacement.
    • In the Navy and Coast Guard in India, the ships belonging to a particular class are named in a specific manner.
    • Many times the names have the same first letters, prefixes, similar meanings or the names belong to a particular type of words for example names of cities, persons, mythological concepts, animals, rivers, mountains, weapons, etc.
    • The class is generally named after the first vessel in the category. In some cases, a particular class of vessels takes their names from an earlier class of vessels which are now decommissioned.
    • Like Kalvari – which means Tiger Shark, Vagir has been named after a Sand Fish, a predatory marine species.
    • Khanderi has been named after an Island Fort built by Chhatrapati Shivaji, which played a key role in his Navy. Karanj has also been named after an Island located South of Mumbai.
  • New Species of Plants and Animals Discovered

    Species in news: Rohanixalus -the frogs of the new genus

    Indian researchers have discovered a genus of tree frog found in the Andaman Islands and the northeast.

    A stand-alone species being mentioned in the news for the first time find their way into the prelims. Make special note here. Usually, note the species and its habitat location (IUCN status if available), in the purview of a generic prelims question.

    Genus Rohanixalus

    • Named after Sri Lankan taxonomist Rohan Pethiyagoda, the frogs of the new genus Rohanixalus are characterised by a rather small and slender body (size about 2 to 3 cm long).
    • It has a pair of contrastingly coloured lateral lines on either side of the body, minute brown speckles scattered throughout the upper body surfaces, and light green coloured eggs laid in arboreal bubble-nests.
    • Based on DNA studies, the new genus is also revealed to be a distinct evolutionary lineage from all previously known tree frog genera.
    • It is the 20th recognised genus of the family Rhacophoridae that comprises 422 known Old World tree frog species found in Asia and Africa.

    Sub-species of this frog

    • There are eight frog species in this genus Rohanixalus.
    • They are known to inhabit forested as well as human-dominated landscapes right from the northeast to Myanmar, Thailand, Malaysia, Indonesia, Vietnam, Laos, and Cambodia, up to southern China.

    Unique features of this genus

    • The genus has several unique behavioural traits including maternal egg attendance where the female (mother) attends the egg clutches until hatching and assists in the release of the tadpoles into the water.
    • During the first three days after egg-laying, the female sits over the eggs and produces a gelatinous secretion with which she glazes the egg mass through the clock-wise movement of her legs.
    • This behaviour provides necessary moisture to the eggs laid on exposed leaf surfaces and protects them from insect predation.
  • Banking Sector Reforms

    `Financial institutions in India need more freedom

    The article deals with the issue of credit and financial institutions in India. It also suggests the five changes needed in the lending financial institutions in India.

    Financial institutions and credit in India

    •  India has labour and land but not enough capital.
    • The case for foreign financial institutions is also simple — their technology, processes, and experience raise everybody’s game.
    • India is open — foreigners own 25 per cent of public equity, 90 per cent of private equity, and Google and Walmart are UPI’s biggest volume contributors.
    • India’s challenge over the last 10 years has been bank credit.
    • Credit-to-GDP ratio is stuck at 50 per cent, banking concentration measured by flow has increased by 70 per cent, and bad loans exceed Rs 10 lakh crore.

    Significance of  lending financial institutions

    • Foreign institutions are unlikely to lend when needed most and lend to small enterprise borrowers.
    • Bank numbers have practically remained unchanged since 1947 despite world-leading net interest margins.
    • Nationalised banks that have an eight-times higher chance of bad loan, would save Rs 35,000 crore annually with industry benchmarked productivity.
    • regulators prioritise domestic stakeholders.
    • The home bias for global bank lending is accelerating.
    • UPI crossing 2 billion monthly transactions demonstrates how mandated interoperability, local innovation, and enlightened regulation help insurgents take on incumbents.

    5 Changes required in lending financial institutions

    • 1) The biggest impact lies in creating a nationalised bank holding company that replaces the Finance Ministry’s Department of Financial Services, has no access to government finances, and is governed by an independent board.
    • 2) We must licence 25 new full banks over 10 years.
    • 3) We must expect and empower the RBI to deal with bank challenges earlier, faster, and invasively, by reimagining post-mortems, granting listed bank capital induction flexibility and making regulation ownership agnostic.
    • 4) We must explore new eyes for banking supervision that include differential deposit insurance pricing.
    • 5) Finally, financial stability and innovation are not contradictory; let’s blunt regulatory barriers between banks, non-banks, and fintech.

    Conclusion

    The opportunities for India arising from the coming Asian century, China’s contradictions and China’s new inward focus strategy come not once in a decade but once in a generation. Let’s empower our financial services entrepreneurs to exploit this opportunity.

  • Languages and Eighth Schedule

    Issues with legal language in India

    Context

    •  Recently, a PIL was filed in the Supreme Court regarding the use of legal language.
    • Reacting to the plea, the Supreme Court has asked the Ministry of Law and Justice and Bar Council to respond.

    Wha the PIL is about?

    • The PIL (Subhash Vijayran vs Union of India) wants the legislature and executive to use plain English in drafting laws, the Bar Council to introduce plain English in law curricula and the Supreme Court to only allow concise and precise pleadings.
    • He begins the synopsis to the writ petition in the following way. “The writing of most lawyers is: (1) wordy, (2) unclear, (3) pompous and (4) dull.

    Way forward

    • When asking the Ministry of Law and Justice and Bar Council to respond, the Chief Justice of India referred to Anthony Burgess’s book (1964) Language Made Plain.
    • George Orwell set out six principles, which could be used while drafting.
    • Copy editors routinely use these principles, but not the judiciary.
    • The Vidhi Centre for Legal Policy produced a manual on plain language drafting in 2017.

    Conclusion

    The Ministry of Law and Justice make use of the opportunity provided by the PIC to come up with the set of principles to make the legal language easier for all.

  • Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

    Governing OTT Platforms

    In a move that will have a far-reaching impact, the Union government has brought Over The Top (OTT) platforms, or video streaming service providers under the ambit of the Ministry of Information and Broadcasting (MIB).

    Try answering this

    Q.What is Over the Top (OTT) media services? Critically analyse the benefits and challenges offered by the OTT media services in India.

    Background

    • The MIB has found a vast swathe of unregulated content, namely news online and Over the top (OTT) platforms which had escaped any architecture of regulation.
    • The print was regulated by the Press Council of India and Television, both News and Entertainment were being regulated by the Cable Networks Regulation Act (2005).
    • However, the content on online, the Government felt, fell into a black hole with no oversight.

    What are OTT Media?

    • An over-the-top (OTT) media service is a streaming media service offered directly to viewers via the Internet.
    • OTT bypasses cable, broadcast, and satellite television platforms, the companies that traditionally act as a controller or distributor of such content.
    • The term is most synonymous with subscription-based video-on-demand (SVoD) services that offer access to film and television content.
    • They are typically accessed via websites on personal computers, as well as via apps on mobile devices (such as smartphones and tablets), digital media players, or televisions with integrated Smart TV platforms.

    Regulating OTT

    • Currently, there is no law or autonomous body governing digital content. The recent move will give the government control over OTT platforms, which were unregulated till now.
    • From time to time, the government had indicated the necessity to monitor these platforms.
    • In October 2019, the government had indicated that it will issue the “negative” list of don’ts for the video streaming services like Netflix and Hotstar.
    • It also wanted the platforms to come up with a self-regulatory body on the lines of the News Broadcasting Standards Authority.

    Self-regulation is not sufficient

    • Anticipating the government’s intervention, in January 2019, video streaming services had signed a self-regulatory code that laid down a set of guiding principles for content on these platforms.
    • The code adopted by the OTTs prohibited five types of content:
    1. Content that deliberately and maliciously disrespects the national emblem or national flag,
    2. Any visual or storyline that promotes child pornography
    3. Any content that “maliciously” intends to outrage religious sentiments
    4. Content that “deliberately and maliciously” promotes or encourages terrorism and
    5. Any content that has been banned for exhibition or distribution by law or court
    • The government had refused to support this code.

    What lies ahead?

    • The government had been giving enough hints from time to time that it wanted to regulate digital media but the exact nature of the regulation it wanted to bring was not clear.
    • The government considers digital media and digital aggregators in the same breath but they are different things.
    • It is unclear whether it is looking at licensing or entry barriers, or any other curbs in digital media.
    • However, monitoring content 24×7 has its own challenges. Whether the Ministry will set up a committee involving the public to look into complaints received remains to be seen.
  • Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

    What is the Viability Gap Funding (VGF) Scheme?

    The government has expanded the provision of financial support by means of viability gap funding for public-private partnerships (PPPs) in infrastructure projects to include critical social sector investments in sectors such as health, education, water and waste treatment.

    Note the minutes of VGF, its meaning, funding mechanism, various sectors included and its nodal ministry etc. UPSC can ask static statements based question.

    What is the move?

    • Now, under this scheme, private sector projects in areas like wastewater treatment, solid waste management, health, water supply and education, could get 30% of the total project cost from the Centre.
    • Separately, pilot projects in health and education, with at least 50% operational cost recovery, can get as much as 40% of the total project cost from the central government.
    • The Centre and States would together bear 80% of the capital cost of the project and 50% of operation and maintenance costs of such projects for the first five years.

    Viability Gap Funding (VGF) Scheme

    • Viability Gap Finance means a grant to support projects that are economically justified but not financially viable.
    • The scheme is designed as a Plan Scheme to be administered by the Ministry of Finance and amount in the budget are made on a year-to-year basis.
    • Such a grant under VGF is provided as a capital subsidy to attract the private sector players to participate in PPP projects that are otherwise financially unviable.
    • Projects may not be commercially viable because of the long gestation period and small revenue flows in future.
    • The VGF scheme was launched in 2004 to support projects that come under Public-Private Partnerships.

    Its’ funding

    • Funds for VGF will be provided from the government’s budgetary allocation. Sometimes it is also provided by the statutory authority who owns the project asset.
    • If the sponsoring Ministry/State Government/ statutory entity aims to provide assistance over and above the stipulated amount under VGF, it will be restricted to a further 20% of the total project cost.

    VGF grants

    • VGF grants will be available only for infrastructure projects where private sector sponsors are selected through a process of competitive bidding.
    • The VGF grant will be disbursed at the construction stage itself but only after the private sector developer makes the equity contribution required for the project.
  • NGOs vs. GoI: The Conflicts and Scrutinies

    Home Ministry amends FCRA rules

    The Ministry of Home Affairs (MHA) has relaxed FCRA norms for farmer, student, religious and other groups who are not directly aligned to any political party to receive foreign funds if the groups are not involved in “active politics”.

    Must read:

    What is Foreign Contribution (Regulation) Act, and how does it control donations?

    What is the FCRA?

    • The Foreign Contribution Regulation Act (FCRA), 2010 regulates foreign donations and ensures that such contributions do not adversely affect the internal security of our country.
    • The Act, first enacted in 1976, was amended in the year 2010 when a slew of new measures was taken by the Union Home Ministry to regulate foreign donations. It was again amended in September this year.
    • It is applicable to all associations, groups and NGOs which intend to receive foreign donations. It is mandatory for all such NGOs to register themselves under the FCRA.
    • The registration is initially valid for five years and it can be renewed subsequently if they comply with all norms.

    What are the new rules?

    • The new rule says- the organisations specified under clauses (v) and (vi) of sub-rule (1) shall be considered to be of political nature, if they participate in active politics or party politics, as the case may be.
    • The 2011 rules on said clauses dealt with “guidelines for the declaration of an organisation to be of a political nature, not being a political party”.
    • It said that the Central government could specify an organisation as that of political nature based on six criteria.

    Defining ‘Political group’

    • Clause V of Rule 3 (FCRA 2011) qualified a political group as, “organisations of farmers, workers, students, youths based on caste, community, religion, language or otherwise, which is not directly aligned to any political party, but whose objectives or activities, include steps towards advancement of political interests of such groups.
    • The activities include: habitually engagement in or employ common methods of political action like rasta roko, jail bharo, rail roko, bandh or hartal in support of public causes.

    Why such a move?

    • As per the FCRA, members of legislatures, political parties, government officials, judges and media persons are prohibited from receiving any foreign contribution.
    • The new rules make new FCRA registrations more stringent.

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