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

    State Reforms Action Plan Rankings 2019

    Andhra Pradesh has bagged the first rank among all the states in the country in the state business reforms action plan-2019 (BRAP-2019), representing ease of doing business for Atmanirbhar Bharat.

    About the Ranking

    • It is the annual ease of doing business index of states and UTs of India based on the completion percentage scores of action items points of annual Business Reforms Action Plan (BRAP) under the Make in India initiative.
    • This ranking is based on the implementation of the business reform action plan.
    • Some of the key focus areas are access to information and technology, the setting up of a single-window system, construction permit enablers and land administration, according to DPIIT.
    • It based on the progress of states in completing annual reform action plan covering 8 key areas.

    The top ten states under the State Reform Action Plan 2019 are:

    1. Andhra Pradesh
    2. Uttar Pradesh
    3. Telangana
    4. Madhya Pradesh
    5. Jharkhand
    6. Chhattisgarh
    7. Himachal Pradesh
    8. Rajasthan
    9. West Bengal
    10. Gujarat
  • Tax Reforms

    Reforming tax system

    The article discusses two recent measures announced by the government to bring in the transparency in the tax system.

    Issue of lower tax collection and way out

    • An economic contraction this year will severely impact tax collections.
    • Changing tax rates or the tax base in response is difficult and a hurried approach can have wider consequences.
    • So, the only tool available is to urge voluntary compliance.
    • Compliance is achieved through a fine balance between enforcement and encouragement.
    • Despite enforcement-driven measures in the past the taxpaying population has remained at only 6 per cent.
    • Thus, the only way to boost collections is to build trust between the administration and the taxpayer.

    Relation between complexity of system and compliance

    • A taxpayer has to interact with the tax system at numerous instances.
    • While interacting, if the taxpayer perceives the system to be complex, such perception affects compliance.
    • Perceived complexity can discourage individuals from filing returns.
    • This could reflect simply in the difference between the number of taxpayers and the returns filed: which is around 20 million.
    • Such behaviour is bound to impact tax collection.

    Recent government measures to bring transparency

    1) New taxpayer’s charter with some new features

    • The charter is a document that lists a taxpayer’s rights and obligations.
    • A taxpayer’s charter is often perceived as a means to build taxpayer’s trust.
    • The rights and obligations mentioned in India’s new charter are in line with global practices.
    • There are 3 interesting additions in the new charter: 1) commitment to reducing compliance costs 2) holding its authorities accountable 3) publishing a periodic report of service standards.
    • A tax ombudsman can ensure that some of these standards are met, however, in 2019, the cabinet approved the abolition of the quasi-judicial post.

    2) Faceless assessment

    • This relates to the frequent complaint of taxpayers about corruption and delay.
    • To end personal interface, e-assessment was introduced in 2019.
    • Developing this idea further, faceless assessment now seeks to further automate the case selection and the distribution function of the assessing officer.
    • The intent is to divest and distribute the functions of a single assessing officer so that assessment is carried out in a fair manner.

    Consider the question “What are the factors responsible for low tax compliance in India? What are the steps taken by the government to increase compliance?

    Conclusion

    If the commitment to a fair and impartial system and a time-bound resolution of matters is to be met, the new processes, with reviews and anonymity, must ensure efficiency in case selection and consistency in assessment.

  • Civil Services Reforms

    Our civil services need a reboot

    The Mission Karmayogi seeks to overhaul the bureaucracy in the country. The article discusses its aims and the challenges it could face.

    Context

    • The Union cabinet’s approval of Mission Karmayogi has raised the hope of a national bureaucracy that is adequately responsive to the country’s needs.

    Need for the overhaul

    • The system’s focus needs to be role- rather than rule-specific,
    • Coordination should prevail over battles for control, and IAS officers ought to be enablers instead of red-tape wrappers. 
    • There has been a near consensus in the country that our system of policy implementation needs an overhaul.

    What  is Mission Karmayogi

    • It is an upskilling initiative for government officials that aims to fix and galvanize India’s administration.
    • As envisaged, the Karmayogi training mechanism will cover an estimated 4.6 million officials at all levels.
    • Due to the scale of the exercise elaborate multi-tier command structure is expected to be put in place for it.
    • At its apex would be a Human Resource Council, headed by the Prime Minister.
    • Human Resource Council shall approve and monitor various skill-enhancing programmes as well as review the performance of employees routinely.

    Challenges

    • Given the way our bureaucracy has operated for decades, Mission Karmayogi is likely to prove disruptive.
    • The idea of being subject to continuous evaluation by a central authority could unsettle some officers.
    • There has been some disquiet within IAS ranks over the Centre’s lateral induction of people for senior roles, perhaps the new mission will resolve such disgruntlement.

    Conclusion

    Gentralized supervision of such large numbers does not promise to be easy. Globally, centralization has been observed to militate against diversity of thought. And that’s vital to the governance of a country like India.

  • Parliament – Sessions, Procedures, Motions, Committees etc

    Scrutinising government’s work in limited monsoon session

    The article analyses the impact of pandemic on the functioning legislatures and issues its implications.

    Context

    • Due to coronavirus pandemic, several States have held very short sessions in which they ratified a number of ordinances and hardly questioned any executive action over the last few months.

    Role of Parliament and Court

    • The government has the mandate to take decisions and perform various public tasks.
    • Government in turn is accountable to the legislature which can question it, and, as an extreme step, even replace it.
    • The legislature is accountable to citizens through regular elections.
    • Finally, constitutional courts are expected to ensure that all actions are made within the boundaries of the Constitution and laws made by the legislature.

    Dilution of the role of Parliament in  India

    • Indian Parliament has allowed its role to be diluted over the last few decades.
    • It has not questioned and monitored the activity of the executive.
    • Comparison with British Parliament: The United Kingdom’s joint parliamentary committee on human rights examined the proposals of a contact tracing app.
    • The committee recommended that an app could be used only if there was specific primary legislation to enable it. 
    •  India, in contrast, rolled out Aarogya Setu through executive decision, and has created a grey zone on whether it is mandatory or not.
    • Parliament should recover lost ground by fulfilling its constitutionally mandated role.

    Lack of parliamentary oversight during pandemic

    • Parliament will be meeting after 175 days.
    • 175 days’ is the longest gap without intervening general elections and just short of the six-month constitutional limit.
    • During the pandemic, over 900 central and nearly 6,000 State government notifications have been issued
    • Parliamentary committees did not meet for about four months.
    • This is unlike many other countries where both the plenary and committees have adopted technology to enable members to participate from home.

    Judicial intervention in policy issues

    • The lack of parliamentary oversight has been compounded by judicial intervention in many policy issues.
    •  For example, the government’s actions related to the lockdown should have been questioned by Parliament.
    • However, this was taken to the Supreme Court, which is not equipped and mandated to balance policy options.
    • Directions of the Court have to be followed which removes flexibility needed to tackle evolving issues with implementation.
    • Consider another case, Court decided to limit the period in which telecom companies have to pay their dues to the government, and overruled a cabinet decision.
    • This is a policy matter that balances interests of telecom companies, consumers and banks.
    • This issue is best judged by the government with oversight by Parliament.
    • And court should step in if there is an illegality.

    Way forward

    • Several events have taken place over the last six months that need thorough discussion.
    • This includes ways to tackle the spread of the coronavirus, economic growth which has had a sharp fall in the first quarter of this fiscal year.
    • This has far-reaching implications for creating jobs, stability of the banking system, and government finances.
    • The government is likely to bring in a supplementary budget; indeed, a fresh look at the Union Budget may be required given the changes in basic assumptions since January.
    • The situation at the China border also needs to be discussed.

    Consider the question “Anlyse the impact of pandemic on the key organs of the democracy.”

    Conclusion

    Parliamentarians have a duty towards Indian citizens to fulfil their role in scrutinising the work of the government and guiding policy. Despite the curtailed session and the constraints due to the coronavirus, they should make the best of the limited time to do so. They need to wrest back their rightful role in our democracy.

  • RBI Notifications

    Priority Sector Lending (PSL)

    The RBI has released a revised priority sector lending guidelines to augment funding to segments including start-ups and agriculture.

    New Priority Sector Lending (PSL) guidelines

    • Bank finance of up to ₹50 crores to start-ups, loans to farmers both for installation of solar power plants for Solarization of grid-connected agriculture pumps and for setting up compressed biogas (CBG) plants have been included as fresh categories eligible for finance under the priority sector.
    • This has come to align it with emerging national priorities and bring a sharper focus on inclusive development, after having wide-ranging discussions with all stakeholders.
    • It will enable better credit penetration to credit deficient areas, increase the lending to small and marginal farmers and weaker sections, boost credit to renewable energy, and health infrastructure
    • The targets prescribed for ‘small and marginal farmers’ and ‘weaker sections’ are being increased in a phased manner.
    • Higher credit limit has been specified for farmer producer organisations (FPOs)/farmers producers companies (FPCs) undertaking farming with assured marketing of their produce at a pre-determined price.

    Back2Basics: Priority Sector Lending

    • PSL is an important role given by the (RBI) to the banks for providing a specified portion of the bank lending to few specific sectors like agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low-income groups and weaker sections.
    • This is essentially meant for an all-round development of the economy as opposed to focusing only on the financial sector.
    • The broad categories of priority sector for all scheduled commercial banks are as under:
    1. Agriculture and Allied Activities (Direct and Indirect finance)
    2. Small Scale Industries (Direct and Indirect Finance)
    3. Small Business / Service Enterprises
    4. Micro Credit
    5. Education loans
    6. Housing loans
  • Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

    What counts as ‘Act of God’?

    Amid disruptions caused by Covid-19, the Finance Minister has referred to an Act of God while businesses are looking at a legal provision, force majeure, to cut losses.

    Note the key differences between the Act of God and Force Majeure.

    Evoking “Act of God”

    • The force majeure or “Act of God” clause has its origins in the Napoleonic Code.
    • The finance ministry had issued an office memorandum inviting attention to the force majeure clause (FMC) in the 2017 Manual for Procurement of Goods issued by the Department of Expenditure.
    • It clarified that the pandemic should be considered a case of natural calamity and FMC may be invoked, wherever considered appropriate.

    What is a force majeure clause?

    • The law of contracts is built around a fundamental norm that the parties must perform the contract.
    • When a party fails to perform its part of the contract, the loss to the other party is made good.
    • However, the law carves out exceptions when the performance of the contract becomes impossible for the parties.
    • A force majeure clause is one such exception that releases the party of its obligations to an extent when events beyond their control take place and leave them unable to perform their part of the contract.
    • FMC is a clause that is present in most commercial contracts and is a carefully drafted legal arrangement in the event of a crisis.
    • When the clause is triggered, parties can decide to break from their obligations temporarily or permanently without necessarily breaching the contract.
    • Companies in such situations use the clause as a safe exit route, sometimes in opportunistic ways, without having to incur the penalty of breaching the contract.

    Difference between the two

    • Both concepts elicit the same consequences in law.
    • Generally, an “Act of God” is understood to include only natural unforeseen circumstances, whereas force majeure is wider in its ambit and includes both naturally occurring events and events that occur due to human intervention.

    What situations legally qualify for use of force majeure?

    • While some contracts have clauses with standard circumstances, some contracts would have specific circumstances that are more focused.
    • For example, a shipping contract would have a force majeure clause that could cover a natural disaster like a tsunami.
    • If an event is not described, then it is interpreted in a way that it falls in the same category of events that are described.
    • An FMC is negotiated by parties, and events that could potentially hamper the performance of the contract are catalogued.
    • It is not invoked just by expressing that an unforeseen event has occurred.
    • In case a contract does not have a force majeure clause, there are some protections in common law that can be invoked by parties.
    • For example, the Indian Contract Act, 1872 provides that a contract becomes void if it becomes impossible due to an event after the contract was signed that the party could not prevent.

    Global precedents dealing with COVID-19 pandemic

    • In China, where the Covid-19 outbreak originated, the Council for Promotion of International Trade is issuing force majeure certificates to businesses.
    • China’s Supreme People’s Court had recognised the 2002 SARS outbreak as a force majeure event.
    • Singapore enacted the Covid-19 (Temporary Measures) Act in April to provide relief to businesses that could not perform their contractual obligations due to the pandemic.
    • The Paris Commercial Court in July ruled that the pandemic could be equated to a force majeure event.
    • In the UK, the Financial Conduct Authority has brought in a test case before the High Court to look into business insurance contracts and interpret the standard wordings in such contracts.
    • The International Chamber of Commerce has developed a Model Code on the force majeure clause reflecting current international practice.
  • Wildlife Conservation Efforts

    What is Project Dolphin?

    In his Independence Day Speech this year, PM has announced the government’s plan to launch a Project Dolphin. The proposed project is aimed at saving both river and marine dolphins.

    Project Dolphin

    • The Project will be on the lines of Project Tiger, which has helped increase the tiger population.
    • So far, the National Mission for Clean Ganga (NMCG), which implements the government’s flagship scheme Namami Gange, has been taking some initiatives for saving dolphins.
    • Now, Project Dolphin is expected to be implemented by the Ministry of Environment, Forest and Climate Change.

    About Gangetic Dolphin

    • The Gangetic river system is home to a vast variety of aquatic life, including the Gangetic dolphin (Platanista gangetica).
    • It is one of five species of river dolphin found around the world.
    • It is found mainly in the Indian subcontinent, particularly in Ganga-Brahmaputra-Meghna and Karnaphuli-Sangu river systems.
    • An adult dolphin could weigh between 70 kg and 90 kg. The breeding season of the Gangetic dolphin extends from January to June.
    • They feed on several species of fishes, invertebrates etc.

    Why is it important to save dolphins?

    • The construction of dams and barrages and increasing pollution has led to a decline in the population of aquatic animals in the rivers in general and of dolphins in particular.
    • Aquatic life is an indicator of the health of river ecosystems.
    • As the Gangetic dolphin is at the top of the food chain, protecting the species and its habitat will ensure

    Aquatic life as an indicator of the health of a river system

    • Globally, there have been such examples. For instance, the Rhine Action Plan (1987) of the International Commission for the Protection of the Rhine (ICPR) brought back the salmon.
    • The return of the migratory fish is taken as an indicator of the river’s improved health.
    • Salmon used to migrate from the North Sea to the Rhine every year and reproduce, but this stopped when pollution increased in the river.
    • After a chemical accident in 1986 that caused the death of fish and microorganisms, the Action Plan was launched.
    • This led to an improvement in the quality of the river water, and the salmons began to return.

    What has been done to save Gangetic dolphins so far?

    • Although efforts to save them were started in the mid-1980s, the estimates suggest the numbers have not risen as a result.
    • The Gangetic dolphin remains listed as Endangered by the IUCN.
    • After the launch of Ganga Action Plan in 1985, the government on November 24, 1986, included Gangetic dolphins in the First Schedule of the Indian Wildlife (Protection), Act 1972.
    • This was aimed at checking hunting and providing conservation facilities such as wildlife sanctuaries. For instance, Vikramshila Ganges Dolphin Sanctuary was established in Bihar under this Act.

    Conservation so far

    • The government has prepared The Conservation Action Plan for the Ganges River Dolphin 2010-2020.
    • It identified threats to Gangetic Dolphins and impact of river traffic, irrigation canals and depletion of prey-base on Dolphins populations.
    • On October 5, 2009, the then PM declared the Gangetic river dolphin as the national aquatic animal.
    • A notification was issued by the MoEFCC the following year. Now, the National Mission for Clean Ganga celebrates October 5 as National Ganga River Dolphin Day.
  • Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

    Vitamin-D Deficiency

    The pandemic-induced lockdown has confined people to their houses for five months now. The resultant lack of sunlight, followed by rains, has brought down the vitamin D levels to the lowest.

    Try this PYQ from CSP 2014:

    Q.Consider the following pairs:

    Vitamin Deficiency:: Disease

    1. Vitamin C::Scurvy
    2. Vitamin D:: Rickets
    3. Vitamin E:: Night blindness

    Which of the pairs given above is/are correctly matched?

    (a) 1 and 2 only

    (b) 3 only

    (c) 1, 2 and 3

    (d) None

    What is Vitamin-D?

    • Vitamin D is an essential vitamin that has myriad positive effects on several systems in the body.
    • Unlike other vitamins, it functions like a hormone and every cell in your body has a receptor for it.
    • It is sparsely found in certain fatty fish and fortified dairy products, and it is extremely difficult to get the Recommended Daily Intake (RDI) of 600-800 IU from diet alone.

    There are two main forms of vitamin D in the diet:

    – Vitamin D2 (Ergocalciferol) — found in plant foods like mushrooms.
    – Vitamin D3 (Cholecalciferol) — found in animal foods like salmon, cod and egg yolks.

    Common signs and symptoms of the deficiency

    Vitamin D deficiency is incredibly common and most people are unaware of it, as the symptoms are subtle and nonspecific.

    – Getting sick or infected often with common cold and flu, because of a weak immune system.
    – Fatigue and tiredness
    – Bone and muscle pains
    – Depression
    – Impaired wound healing
    – Bone loss and osteoporosis

    Sources of Vit. D

    • Sunlight is the best natural source of vitamin D. Sunlight synthesizes cholesterol into Vitamin D3.
    • Usually, 20 to 30 minutes of sun exposure between 10 am and 3 pm is adequate to meet daily requirements, in places with minimum pollution levels.
  • Foreign Policy Watch: India-China

    Non-War Military Tactics used by China

    An annual report from the U.S. Department of Defense describes Chinese leaders’ use of tactics short of armed conflict to further the country’s objectives, citing border conflicts with India and Bhutan among the examples.

    Try this question:

    Q. What are Non-War Military Activities (NWMA)? Discuss how China is using NWMA as a tool for its overtly ambitious expansionist policy.

    Various non-war military tactics

    The report describes Non-War Military Activities (NWMA) as one of two kinds of military operations (the other is war) used by the PLA. NWMA can be conducted internationally or domestically and encompass activities in multiple domains.

    (1) Provoking armed conflict

    • China calibrates its coercive activities to fall below the threshold of provoking conflict with the United States, its allies and partners, or others in the Indo-Pacific region.
    • It can notably include operations in which the PLA uses coercive threats and/or violence below the level of armed conflict against states and other actors to safeguard its expansionism.
    • These tactics are particularly evident in China’s pursuit of its territorial and maritime claims in the South and East China Seas as well as along its border with India and Bhutan.

    (2) Neo-imperialist tools

    • China also employs non-military tools coercively, including economic tools during periods of political tensions with countries that China accuses of harming its national interests.
    • The Belt and Road Initiative is leading to a greater overseas military presence for China in the guise to protect its economic interests.

    (3) Multilateralism as a strategic messaging tool

    • The report says that China uses multilateral forums and international organisations to generate new opportunities to expand its influence, strengthen its political influence.
    • It promotes strategic messaging that portrays China as a responsible global actor, advances its development interests, and limit outside interference in and criticism of its initiatives.
    • The Brazil Russia India China South Africa (BRICS) grouping and Shanghai Cooperation Organization are among those cited as examples of this alleged phenomenon.
  • J&K – The issues around the state

    New Official Languages in J&K

    The Union Cabinet has approved a Bill to introduce Hindi, Kashmiri and Dogri as official languages in Jammu and Kashmir, in addition to Urdu and English. As of now, the official language is Urdu and Kashmiri is recognised as a regional language.

    Try this PYQ:

    Q.Consider the following languages:

    1. Gujarati
    2. Kannada
    3. Telugu

    Which of the above has/have been declared as ‘Classical Language/ Languages’ by the Government?

    (a) 1 and 2 only

    (b) 3 only

    (c) 2 and 3 only

    (d) 1, 2 and 3

    Languages in J&K

    • In the undivided Jammu and Kashmir state, various ethnicities spoke Kashmiri, Pahari, Gojri, Ladakhi, Dogri, Balti and Punjabi as their mother tongues.
    • Urdu and Hindi had become a means for inter-community communication.
    • In 1889, Maharaja Pratap Singh, the third ruler of the Hindu Dogra dynasty, replaced Persian with Urdu as the court language.
    • It was an anomaly that the three languages — Dogri, Hindi and Kashmiri — which are spoken by nearly 70 per cent of the population of Jammu and Kashmir were not approved for use in official business.

    Official languages in India

    • Article 343 of the Indian constitution stated that the official language of the Union is Hindi in Devanagari script instead of the extant English.
    • Later, a constitutional amendment, The Official Languages Act, 1963, allowed for the continuation of English alongside Hindi in the Indian government indefinitely until legislation decides to change it.
    • The form of numerals to be used for the official purposes of the Union is “the international form of Indian numerals”, which are referred to as Arabic numerals in most English-speaking countries.
    • Despite the misconceptions, Hindi is not the national language of India; the Constitution of India does not give any language the status of the national language.
    • The Eighth Schedule of the Indian Constitution lists 22 languages, which have been referred to as scheduled languages and given recognition, status and official encouragement.

    Other classical languages

    • In addition, the Government of India has awarded the distinction of classical language to Kannada, Malayalam, Odia, Sanskrit, Tamil and Telugu.
    • Classical language status is given to languages which have a rich heritage and independent nature.

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