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Banking Sector Reforms

53 years of Bank Nationalization

| Economics | Mains Paper 3: Indian Economy
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Bank merger and nationalization

Mains level: Debate over banks privatization

Last week, on July 19 was the 53rd anniversary of then Prime Minister Indira Gandhi nationalizing 14 banks.

Bank Nationalization: A Backgrounder

  • In 1955 Imperial Bank of India was nationalized as RBI with State Bank of India to act as the principal agent  for extensive banking facilities on a large scale, especially in rural and semi-urban areas.
  • The other banks of the princely states were acquired by SBI much earlier.
  • However, the nationalization of banks in 1969 and later in 1980 was of a completely different scale.
  • In 1969, the move covered 14 (followed by six in 1980) of the largest private sector banks—putting 85% of the deposit base into the hands of the government.
  • This brought 80% of the banking segment in India under Government ownership.

Why Nationalization of Banks?

  • After independence, the Government of India (GOI) adopted planned economic development for the country.
  • Nationalization was in accordance with the national policy of adopting the socialistic pattern of society.
  • The actual course came at the end of a troubled decade when India had suffered many economic as well as political shocks.

Other reasons

  • Social welfare
  • Controlling private monopolies
  • Expansion of banking to rural areas
  • Reducing regional imbalance to curb the urban-rural divide
  • Priority Sector Lending
  • Mobilization of savings

Immediate causes

  • There were two wars with China in 1962 and Pakistan in 1965 that put immense pressure on public finances.
  • Banks were failing largely due to speculative financial activities when Indira Gandhi became the prime minister in 1967.
  • Two successive years of drought had not only led to food shortages but also compromised national security because of the dependence on American food shipments.
  • Subsequently, a three-year plan holiday affected aggregate demand as public investment was reduced.
  • Agriculture needed a capital infusion, with the initiation of the Green Revolution in India which aimed to make the country self-sufficient in food security.
  • The collapse of banks was causing distress among people, who were losing their hard-earned money in the absence of a strong government support and legislative protection to their money.

Post-nationalization challenges

  • Having ownership and operational control of the banks was a challenging task for the government.
  • The banks were constantly challenged on their profitability parameters—particularly RRBs which had both geographical and portfolio concentration risks.

Establishing regional balance

  • The objective of social control was about making banking sector accessible in areas where these services were not accessible.
  • The state established 196 Regional Rural Banks (RRBs) between two nationalizations.
  • While nationalization, branch licensing policy and priority sector lending targets helped the banks to go to rural areas and certain sectors, it did not achieve regional balance.
  • Of the 20 banks that were nationalized, seven were concentrated in south India, six in west India, four in north India and three in east India.
  • The expanded rural branch network followed the extant regional concentration, bringing more intensive banking in southern and western regions.

How was regional balance achieved then?

  • This skew was partially set right by two initiatives. The first was an institutional intervention of opening 196 RRBs which had focused area of operation.
  • The RRBs contributed significantly to reduce the regional imbalance with their expanding branch network in the 1980s.
  • RRBs also had a greater proportion of their loans flowing to priority sector in general and agriculture in particular.
  • The second was the policy on lead bank scheme where one bank was assigned as a lead for each district.
  • The lead bank was responsible for the growth and penetration of banking in districts and had to achieve it in coordination with other banks and the state machinery.
  • A “district credit” plan (euphemism for a banking plan), dovetailed with the government schemes, was to be prepared and monitored by the lead bank.
  1. Regional Rural Banks
  • RRBs are a shade better when it comes to rural lending.
  • While they have deployed 72% of the rural and semi-urban deposits as credit in those areas, the figure for urban understandably is very low, and most of these funds have gone into investments.
  1. Small Finance Banks
  • The new small finance banks (SFBs) give an entirely different picture—a large number of them are MFIs that converted into banks.
  • These institutions are trying to collect deposits from the middle and upper middle class and deploy those resources towards the poor.
  • From a paradigm point of view, possibly SFBs are the most interesting institutions that have turned the tables and are trying to achieve from the private sector the objectives set out in the bank nationalization.

Public versus Private Banks

  • A look at the broad performance ratios for 2017-18 shows that private sector banks score better on efficiency and profitability parameters.
  • They have better return on assets, return on equity, net interest margin and a higher proportion of low-cost deposits.
  • On the other hand, public sector banks (PSBs) have a better impact on priority sector lending achievement, and paid higher wages.
  • Of the new Pradhan Mantri Jan Dhan Yojana accounts 77% were opened by state-owned banks, 20% by RRBs, and a mere 3.4% accounts were opened by private banks.
  • From this perspective bank nationalization was indeed a good move at that time.

What benefits do we reap today?

  • Banking under government ownership gave the public implicit faith and immense confidence about the sustainability of the banks.
  • Banks were no longer confined to only metropolitan or cosmopolitan in India. In fact, the Indian banking system has reached even to the remote corners of the country.
  • The present government has reached out to people through banks.
  • Assistance for constructing toilets under Swachh Bharat programme, DBT, Crop insurance schemes etc was given through banks.
  • The dispensing of Mudra loans to about 20 crore individuals, benefits under PM Kisan scheme for providing cash assistance to close to 15 crore farmers annually are only possible through this banks.
  • Thus banks became the government’s dispenser of goodies due to the decision which was taken 50 years ago.

What about Financial Inclusion?

  • The All India Debt and Investment Survey reports indicate that the formal sector has been losing ground to the informal sector in the rural indebtedness pie since 2001 onwards.
  • This is worrying and indicates that the inclusion agenda is far from achieved.
  • Some examples in the public sector banking system—particularly SBI—have shown that it is possible to achieve the double bottom line of being in the commercial market while continuing to achieve significant targets in inclusion, sectoral, spatial and geographical.

Way Forward

  • From the larger perspective of efficiency and better utilization of capital, it may be a good idea to move state-owned banks towards more market-based framework.
  • However, that call should be taken to achieve the residual task of inclusion.
  • Making state-owned banks more autonomous and accountable to the market may be the first significant step that can be taken for now.

Also read:

[Burning Issue] Privatization of PSBs

 

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A new global standard for AI ethics

op-ed snap | Science Tech | Mains Paper 3: Awareness in various sc and tech fields
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- AI governance

Context

Artificial intelligence (AI) is more present in our lives than ever. From predicting what we want to see as we scroll through social media to helping us understand weather patterns to manage agriculture, AI is ubiquitous.

Issues with AI  and it why it matters to India

  • Bias and discrimination: The data used to feed into AI often aren’t representative of the diversity of our societies, producing outcomes that can be said to be biased or discriminatory.
  • Errors in facial recognition: There are problems emerging in facial recognition technologies, which are used to access our phones, bank accounts and apartments, and are increasingly employed by law-enforcement authorities, in identifying women and darker-skinned people.
  • For three such programs released by major technology companies, the error rate was 1% for light-skinned men, but 19% for dark-skinned men, and up to 35% for dark-skinned women.
  • Biases in facial recognition technologies have led to wrongful arrests.
  •  Indeed, if the business model of how these technologies are developed does not change to place human interests first, inequalities will grow to a magnitude never before experienced in history; access to the raw material that is data is key.
  • These issues are of particular importance to India, which is one of the world’s largest markets for AI-related technologies, valued at over $7.8 billion in 2021.
  •  The National Strategy on Artificial Intelligence released by NITI Aayog in 2018 highlights the massive potential of AI in solving complex social challenges faced by Indian citizens across areas such as agriculture, health, and education, in addition to the significant economic returns that AI-related technologies are already creating.

UNESCO agreement

  • To ensure that the full potential of these technologies is reached, the right incentives for ethical AI governance need to be established in national and sub-national policy.
  • India has made great strides in the development of responsible and ethical AI governance, starting with NITI Aayog’s #AIForAll campaign to the many corporate strategies that have been adopted to ensure that AI is developed with common, humanistic values at its core.
  • UNESCO’s recommendations: Last November 193 countries reached a groundbreaking agreement at UNESCO on how AI should be designed and used by governments and tech companies.
  • UNESCO’s Recommendation on the Ethics of Artificial Intelligence took two years to put together and involved thousands of online consultations with people from a diverse range of social groups.
  •  It aims to fundamentally shift the balance of power between people, and the businesses and governments developing AI.
  • Countries which are members of UNESCO have agreed to implement this recommendation by enacting actions to regulate the entire AI system life cycle, ranging from research, design and development to deployment and use.
  • This means they must use affirmative action to make sure that women and minority groups are fairly represented on AI design teams.
  • The Recommendation also underscores the importance of the proper management of data, privacy and access to information.
  •  It establishes the need to keep control over data in the hands of users, allowing them to access and delete information as needed.
  • It also calls on member states to ensure that appropriate safeguards schemes are devised for the processing of sensitive data and effective accountability, and redress mechanisms are provided in the event of harm.
  • Socio-cultural impact: The broader socio-cultural impacts of AI-related technologies are also addressed, with the Recommendation taking a strong stance that-
  • 1] AI systems should not be used for social scoring or mass surveillance purposes;
  • 2] That particular attention must be paid to the psychological and cognitive impact that these systems can have on children and young people;
  • 3] Member states should invest in and promote not only digital, media and information literacy skills, but also socio-emotional and AI ethics skills to strengthen critical thinking and competencies in the digital era.
  • In a number of countries, the principles of the Recommendation are already being used in AI regulation and policy.
  • Finland provides an example of good practice of this regard, with its 2017 AI Strategy.

Conclusion

The new agreement is broad and ambitious. It is a recognition that AI-related technologies cannot continue to operate without a common rulebook. Over the coming months and years, the Recommendation will serve as a compass to guide governments and companies, to voluntarily develop and deploy AI technologies that conform with the commonly agreed principles it establishes.

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Rohingya Conflict

ICJ’s latest judgment on Rohingya Genocide

| Security Issues | Mains Paper 2: Important International Institutions
Note4Students

From UPSC perspective, the following things are important :

Prelims level: ICJ, ICC

Mains level: Rohingya Crisis

Judges at the United Nations’ highest court have dismissed preliminary objections by Myanmar to a case alleging for genocide against the Rohingya ethnic minority.

Who are the Rohingyas?

  • Rohingya Muslims comprise one million out of the 53 million people that live in Myanmar, forming the world’s largest stateless population in a single country.
  • Universally reviled by the country’s Buddhist majority, they have been oppressed by the government since the late 1970s when the government launched a campaign to identify ‘illegal immigrants’.
  • Serious abuses were committed, forcing as many as 250,000 Rohingya refugees to flee to Bangladesh.
  • The 1982 Citizenship Law in former Burma made the Rohingyas stateless people.
  • They have often been called the most persecuted minority in the world.
  • The 1.1 million Rohingya Muslims squeezed precariously into the northwest state of Rakhine, in mainly Buddhist Burma, bordering majority Muslim Bangladesh, are stateless and unwanted.

Why are they persecuted by Myanmar?

  • To qualify for citizenship, Rohingya applicants had to renounce their identity And accept being labelled as ‘Bengalis’ on all official documents.
  • They also had to prove that they could trace the presence of their family in Rakhine back three generations, something which is extremely difficult as many Rohingya lack documents or had lost them in 2012.

Why did the Rohingya Crisis happen?

  • Since World War II they have been treated increasingly by Burmese authorities as illegal, interloping Bengalis, facing apartheid-like conditions that deny them free movement or state education.
  • The army “clearing operations” sparked the mass exodus of Rohingyas in both October 2016.
  • In August 2017, were launched after insurgents known as the Arakan Rohingya Salvation Army (ARSA) attacked several paramilitary check posts.
  • Rohingya activists claim the insurgents are mainly young men who have been pushed to breaking point by relentless oppression.

Security Implications

  • The Rohingya issue and its spill over impact on Myanmar`s western peripheral region and security implications figured in the discussions is not clear.
  • In all probability, the import of the ferment caused by the Rohingya migration, efforts of radical Islamists to influence some of the Rohingya youth, and the Pakistan ISI’s attempts to capitalise on the situation.
  • Rising anger in the Muslim world about the plight of the Rohingya has compounded fears of home-grown militancy as well as support from international jihadists.
  • Illegal movement of people, combined with human trafficking and cross-border migration, can weaken Myanmar’s relations with its neighbour Bangladesh and its ASEAN partners.

What is the case against Myanmar?

  • Last year, the Republic of the Gambia moved the ICJ against Myanmar over alleged violations of the Convention on the Prevention and Punishment of the Crime of Genocide.
  • The Gambia urged the ICJ to direct Myanmar to stop the genocide, ensure that persons committing genocide are punished, and allow the “safe and dignified return of forcibly displaced Rohingya”.
  • The Gambia and Myanmar are parties to the Genocide Convention that allows a party to move the ICJ for violations.
  • Disputes between the Contracting Parties are settled according to Article 9 of the Genocide Convention.

International support for Gambia’s case

  • The Netherlands and Canada are backing Gambia, saying in 2020 that the country took a laudable step towards ending impunity for those committing atrocities in Myanmar and upholding this pledge.
  • Canada and the Netherlands consider it their obligation to support these efforts which are of concern to all of humanity.

What next?

  • The ICJ’s ruling sets the stage for court hearings, airing evidence of atrocities against the Rohingya that human rights groups and a UN probe say amount to breaches of the 1948 Genocide Convention.
  • The International Court of Justice rules on disputes between states.
  • It is not linked to the International Criminal Court, also based in The Hague, which holds individuals accountable for atrocities.
  • Prosecutors at the ICC are investigating crimes committed against the Rohingya who were forced to flee to Bangladesh.
  • The ruling of the ICJ is binding on Myanmar, and cannot be appealed. However, no means are available to the court to enforce it.

Back2Basics:

BASIS INTERNATIONAL CRIMINAL COURT (ICC) INTERNATIONAL COURT OF JUSTICE (ICJ)
Relationship with the United Nations Independent; UN Security Council may refer matters to it Primary judicial branch of the UN.
Members 105 members 193 members (all members of the United Nations).
Derives authority from The Rome Statute Charter of the United Nations and the Statute of the International Court of Justice.
Scope of work Criminal matters – investigating and prosecuting crimes of genocide, crimes against humanity, and war crimes Civil matters- settling legal disputes between the member-states and giving advisory opinions on international legal issues
Jurisdiction Only the member nations of the ICC, which means around 105 countries. Can try individuals. All the member nations of the UN, which means 193 countries. Cannot try individuals and other private entities.
Composition 1 prosecutor and 18 judges, who are elected for a 9-year term each by the member-states which make up the Assembly of State Parties with all being from different nations 15 judges who are elected for a 9-year term each and are all from different nations.
Funding Funded by state parties to the Rome Statute and voluntary contributions from the United Nations, governments, individual corporations, etc. Funded by the UN.

 

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Goods and Services Tax (GST)

What is the Controversy over GST levies on Food?

Prelims Only | Economics | Mains Paper 3: Indian Economy
Note4Students

From UPSC perspective, the following things are important :

Prelims level: GST Slabs

Mains level: Issues with GST Rationalization

From July 18, a 5% Goods and Services Tax (GST) has been levied on several food items and grains that are sold in a pre-packed, labelled form even if they are not branded.

What is the news?

  • So far, these items, which include curd, lassi, buttermilk, puffed rice, wheat, pulses, oats, maize and flour, were exempted from the GST net.
  • The fresh tax levies have attracted an outcry from traders as well as consumers.

What is GST?

  • GST launched in India on 1 July 2017 is a comprehensive indirect tax for the entire country.
  • It is charged at the time of supply and depends on the destination of consumption.
  • For instance, if a good is manufactured in state A but consumed in state B, then the revenue generated through GST collection is credited to the state of consumption (state B) and not to the state of production (state A).
  • GST, being a consumption-based tax, resulted in loss of revenue for manufacturing-heavy states.

What are GST Slabs?

  • In India, almost 500+ services and over 1300 products fall under the 4 major GST slabs.
  • There are five broad tax rates of zero, 5%, 12%, 18% and 28%, plus a cess levied over and above the 28% on some ‘sin’ goods.
  • The GST Council periodically revises the items under each slab rate to adjust them according to industry demands and market trends.
  • The updated structure ensures that the essential items fall under lower tax brackets, while luxury products and services entail higher GST rates.
  • The 28% rate is levied on demerit goods such as tobacco products, automobiles, and aerated drinks, along with an additional GST compensation cess.

How did the rate hikes come about?

  • The 5% tax on unbranded packed food items was approved by the GST Council.
  • Some of the other items to have lost their tax-exempt status include bank cheques, maps and atlases, hotel rooms that cost up to ₹1,000 a night, and hospital room rents of over ₹5,000 a day.
  • The pre-packed items weighing over 25 kg would not attract GST.

Why such move?

  • This move was part of a broader set of changes in the GST structure to do away with tax exemptions as well as concessional tax rates.
  • The Centre and States had discussed the need to raise revenues from the GST, which at the time of its launch five years ago, was premised on levying a ‘revenue-neutral’ rate of 15.5%.
  • All affected food items, including wheat, pulses, rice, curd and lassi, will be exempt from GST when sold loose.

What has the government said on the issue?

  • FM has hit out at misconceptions about the GST levies on food items and dismissed suggestions that they were imposed unilaterally by the Centre.
  • The 5% levy, she said, was critical to curb tax leakages and was not taken by ‘one member’ of the GST Council alone as all States had agreed to the move.
  • When GST was rolled out, a GST rate of 5% was made applicable on branded cereals, pulses, flour.
  • This was later amended to tax only such items which were sold under a registered brand or brands on which enforceable right was not foregone by the suppliers.
  • This tax exemption triggered ‘rampant misuse’ by reputed manufacturers and brand owners leading to a gradual drop in revenues.

 

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Zoonotic Diseases: Medical Sciences Involved & Preventive Measures

Monkeypox is ‘Public Health Emergency’

Prelims Only | International Relations | Mains Paper 2: Important International Institutions
Note4Students

From UPSC perspective, the following things are important :

Prelims level: PHEIC, Monkeypox

Mains level: Rise in zoonotic diseases

The World Health Organization’s Director-General has declared monkeypox a public health emergency of international concern (PHEIC) July 23, 2022.

What is PHEIC?

Definition: Under the International Health Regulations (IHR), a public health emergency is defined as “an extraordinary event which is determined, as provided in these Regulations: to constitute a public health risk to other States through the international spread of disease; and to potentially require a coordinated international response”.

What criteria does the WHO follow to declare PHEIC?

  • PHEIC is declared in the event of some “serious public health events” that may endanger international public health.
  • The responsibility of declaring an event as an emergency lies with the Director-General of the WHO and requires the convening of a committee of members.

Implications of a PHEIC being declared

The PHEIC is the highest level of alert the global health body can issue.

  • There are some implications of declaring a PHEIC for the host country.
  • Only polio and SARS-CoV-2 were ongoing PHEIC prior to monkeypox.
  • Declaring a PHEIC may lead to restrictions on travel and trade.

Back2Basics: Monkeypox

  • The monkeypox virus is an orthopoxvirus, which is a genus of viruses that also includes the variola virus, which causes smallpox, and vaccinia virus, which was used in the smallpox vaccine.
  • It causes symptoms similar to smallpox, although they are less severe.
  • While vaccination eradicated smallpox worldwide in 1980, monkeypox continues to occur in a swathe of countries in Central and West Africa, and has on occasion showed up elsewhere.
  • According to the WHO, two distinct clade are identified: the West African clade and the Congo Basin clade, also known as the Central African clade.

 

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Modern Indian History-Events and Personalities

[pib] Anushilan Samiti

Prelims Only | | Mains Paper 1: Modern Indian History
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Anushilan Samiti

Mains level: Not Much

Union Education and Skill Development Minister has urged NCERT and the Education fraternity to include enough information about Anushilan Samiti, especially in the upcoming National Curriculum Framework

Anushilan Samiti

  • Anushilan Samiti was an Indian fitness club, which was actually used as an underground society for anti-British revolutionaries.
  • It was founded by Satish Chandra Pramatha Mitra, Aurobindo Ghose and Sarala Devi.
  • In the first quarter of the 20th century it supported revolutionary violence as the means for ending British rule in India.
  • The organisation arose from a conglomeration of local youth groups and gyms (akhara) in Bengal in 1902.
  • It had two prominent, somewhat independent, arms in East and West Bengal, Dhaka Anushilan Samiti (centred in Dhaka), and the Jugantar group (centred in Calcutta).
  • It challenged British rule in India by engaging in militant nationalism, including bombings, assassinations, and politically motivated violence.

Revolutionary activities

  • The Samiti collaborated with other revolutionary organisations in India and abroad.
  • It was led by the nationalists Aurobindo Ghosh and his brother Barindra Ghosh, influenced by philosophies like Italian Nationalism, and the Pan-Asianism of Kakuzo Okakura.
  • The Samiti was involved in a number of noted incidents of revolutionary attacks against British interests and administration in India, including early attempts to assassinate British Raj officials.
  • These were followed by the 1912 attempt on the life of the Viceroy of India, and the Seditious conspiracy during World War I, led by Rash Behari Bose and Jatindranath Mukherjee respectively.

Defiance from militant nationalism

  • The organisation moved away from its philosophy of violence in the 1920s due to the influence of the Indian National Congress and the Gandhian non-violent movement.
  • A section of the group, notably those associated with Sachindranath Sanyal, remained active in the revolutionary movement, founding the Hindustan Republican Association in north India.
  • A number of Congress leaders from Bengal, especially Subhash Chandra Bose, were accused by the British Government of having links with the organisation during this time.
  • The Samiti’s violent and radical philosophy revived in the 1930s, when it was involved in the Kakori conspiracy, the Chittagong armoury raid, and other actions against the administration in British-occupied India.

Other personalities associated with Anushilan Samiti

  • Legends like, Deshabandhu Chittaranjan Das, Surendranath Tagore, Jatindranath Banerjee, Bagha Jatin were associated with Anushilan Samiti.
  • Dr Hedgewar who established the Rashtriya Swayamsevak Sangh (RSS) was also an alumnus of the Samity.

 

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Wildlife Conservation Efforts

Why is Karnataka opposing Centre’s draft Eco-Sensitive Area norms for Western Ghats?

| Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia
Note4Students

From UPSC perspective, the following things are important :

Prelims level: ESA in Western Ghats

Mains level: Issues with ESA

The Union Environment Ministry’s latest draft notification on Ecologically Sensitive Areas (ESA) in the Western Ghats is facing stiff opposition in Karnataka.

What is the news?

  • The MoEFCC had issued a draft notification that demarcated large parts of Karnataka, Tamil Nadu, Gujarat and Maharashtra as eco-sensitive areas.
  • Among these states, Karnataka contains the largest geographical share of the notified areas in the Western Ghats, at 20,668 sq km.

ESA in Western Ghats

  • In 2013, the Kasturirangan committee had submitted a report which recommended that 37% of the Western Ghats, covering an area of 59,940 sq km be classified as ESA.
  • On the basis of this, several drafts were introduced which were subsequently rejected by the surrounding states, including Karnataka.

What is ESA?

  • Eco-Sensitive Zones (ESZs) or Ecologically Fragile Areas (EFAs) are areas notified by the MoEFCC around Protected Areas, National Parks and Wildlife Sanctuaries.
  • The purpose of declaring ESZs is to create some kind of “shock absorbers” to the protected areas by regulating and managing the activities around such areas.
  • They also act as a transition zone from areas of high protection to areas involving lesser protection.

How are they demarcated?

  • The Environment (Protection) Act, 1986 does NOT mention the word “Eco-Sensitive Zones”.
  • However, Section 3(2)(v) of the Act, says that Central Government can restrict areas in which any industries, operations or processes or class of industries, operations or processes shall be carried out or shall not, subject to certain safeguards.
  • Besides Rule 5(1) of the Environment (Protection) Rules, 1986 states that central government can prohibit or restrict the location of industries and carrying on certain operations or processes on the basis of certain considerations.
  • The same criteria have been used by the government to declare No Development Zones (NDZs).

Defining its boundaries

  • An ESZ could go up to 10 kilometres around a protected area as provided in the Wildlife Conservation Strategy, 2002.
  • Moreover, in the case where sensitive corridors, connectivity and ecologically important patches, crucial for landscape linkage, are beyond 10 km width, these should be included in the ESZs.
  • Further, even in the context of a particular Protected Area, the distribution of an area of ESZ and the extent of regulation may not be uniform all around and it could be of variable width and extent.

Activities Permitted and Prohibited

  • Permitted: Ongoing agricultural or horticultural practices, rainwater harvesting, organic farming, use of renewable energy sources, and adoption of green technology for all activities.
  • Prohibited: Commercial mining, saw mills, industries causing pollution (air, water, soil, noise etc.), the establishment of major hydroelectric projects (HEP), commercial use of wood, Tourism activities like hot-air balloons over the National Park, discharge of effluents or any solid waste or production of hazardous substances.
  • Under regulation: Felling of trees, the establishment of hotels and resorts, commercial use of natural water, erection of electrical cables, drastic change of agriculture system, e.g. adoption of heavy technology, pesticides etc, widening of roads.

What does the new draft notification for the Western Ghats say?

  • The draft notification demarcates 46,832 sq km in the five states Gujarat, Maharashtra, Karnataka, Goa and Tamil Nadu as ESA in the Western Ghats.
  • Kerala is excluded from the draft notification and it had earlier undertaken the exercise of demarcating ESA in the state by physical verification.
  • Among the five states, 20,668 sq km of the ESA lies in Karnataka, 1,461 sq km in Goa, 17,340 sq km in Maharashtra, 6,914 sq km in Tamil Nadu and 449 sq km in Gujarat.
  • According to the notification, the concerned state governments are responsible for monitoring and enforcing the provisions of the notification.

What are the curbs that the state governments will have to implement?

  • The draft notification states there shall be a complete ban on mining, quarrying and sand mining in the ESA.
  • All existing mines are to be phased out within five years from the date of issue of the final notification or on the expiry of the existing mining lease.
  • It also bars setting up of new thermal power projects and expansion of existing plants in the sensitive area, and the banning of all new ‘Red’ category industries.
  • The construction of new townships and area development projects will also be prohibited in the areas.
  • ‘Orange’ category industries, with a pollution index score of 41-59, such as jute processing and ‘White’ industries that are considered non-polluting will also be allowed with strict compliance.

What were the suggestions by the Kasturirangan panel?

  • The panel, formed in 2012, was tasked with the mandate of taking a “holistic view of the issue, and to bring synergy”.
  • It aimed to protecting the environment and biodiversity, while maintaining the needs and aspirations of the local and indigenous people, of sustainable development and environmental integrity of the region.
  • The report had recommended a blanket ban on mining, quarrying, red category industries and thermal power projects.
  • It also stated that the impact study of infrastructural projects on the forest and wildlife should be conducted before permission is given.

What is Karnataka’s stand on the matter?

  • The Karnataka government has been firm in rejecting the implementation of the guidelines.
  • It has staunchly opposed to the Kasturirangan committee report on Western Ghats.
  • It urged that declaring Western Ghats as ESA would adversely affect the livelihood of people in the region.
  • Environmental experts consider the state government’s decision to be disastrous for the biodiversity of the Western Ghats.

 

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

Despite pressures, the Indian rupee’s remarkable resilience

op-ed snap | Economics | Mains Paper 3: Indian Economy
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Dollar Index

Mains level: Paper 3- Depreciation of Indian rupee

Context

The Indian rupee has depreciated by around 7% against the U.S. dollar, since the start of the year, in response to various domestic and global factors.

What are the factors responsible for decline?

  • A widening current account deficit, persistent risk-off sentiment as a result of geopolitical tensions, ‘a strengthening dollar index, and continuous sell-off by foreign portfolio investors have all put pressure on the rupee’.
  • Reversal of monetary policy in the US: The runaway inflation levels since last year, which have seen consumer price index (CPI) inflation in the United States reaching a multi-decade high of 9.1% in June 2022, have prompted the reversal in the monetary policy stance of the US Federal Reserve.
  • With inflation rising unabated, the Fed is widely expected to continue raising interest rates.
  • Higher risk-free return in the US: As a result of higher risk-free returns being available in the U.S., there have been persistent outflows of foreign portfolio capital since October 2021, which, on a cumulative basis, stands at $30 billion this year.

Comparison with the depreciation in the past

  • Even as the rupee has fallen sharply against the dollar, the depreciation has been relatively lower compared with past crises.
  • During the global financial crisis of 2008, the rupee had weakened by over 20% between December 2007-June 2009 and during the Taper Tantrum of 2013 for seven months from the start of the crisis in May 2013, the rupee had depreciated by over 11%.
  • Reduced external vulnerability: The relative lower depreciation this time is attributed to the lowering of India’s external vulnerability measured in terms of a relatively high import cover and low short-term external debt.
  • During the Taper Tantrum, India’s import cover stood at over seven months as compared to around 12 months in the current period.

Decline in foreign exchange reserves

  • The Reserve Bank of India (RBI) has stepped in to arrest a large depreciation in the currency, with interventions in the spot and forward foreign exchange markets.
  • Consequently, India’s foreign exchange reserves have moderated by almost $55 billion from a high of $635 billion seen this year.
  • Elevated global crude oil prices have impinged on India’s oil import bill, in turn widening the trade deficit, thus increasing the demand for U.S. dollars, and affecting forex reserves further.

Effects of weak rupee

  • Export to become competitive: Among the benefits is the premise that the rupee’s weakening should aid exporters in becoming more competitive.
  • However, the concomitant depreciation of currencies of some of India’s competitors such as South Korea, Malaysia and Bangladesh against the dollar, alongwith a high import intensity of some of its key export segments (petroleum, gems and jewellery and electronics), is likely to have blunted the ameliorative impact on India’s exports.
  • Increase in the price of imported commodities: a weaker rupee is driving up prices of key import commodities such as coal, oil, edible oil, gold, thus impacting the imported component of inflation.
  • Impact on the borrowers: The unhedged component of corporate debt denominated in dollars is also likely to bear the brunt of a weaker rupee.
  • Impact on investment: Most importantly, a continuously sliding exchange rate discourages foreign investors from making fresh investments, which keep losing value in dollar terms.
  • For this reason, it is ideal to provide confidence to investors by arresting a continuous slide in the exchange rate.

Measure by the RBI to arrest the weakening of rupee

  • Apart from intervening in the forex market to arrest the fall in the rupee’s value, the RBI announced a slew of measures recently to liberalise foreign inflows into the country and make them more attractive.
  • Measures such include:
  • Promoting trade settlements between India and other countries in rupee terms.
  • Offering higher interest rates on fresh Foreign Currency Non-Resident (Bank) and Non-Resident External deposits.
  • A widening of investible universe of government and corporate debt, a relaxation of the interest rate.
  • Amount ceiling for External Commercial Borrowing loans, among others, have contributed to arresting the rupee’s slide against the greenback.

Way forward

  • Inclusion of companies in glabal indices: The Government could encourage some of the large market cap companies (private and public sectors) to be included in the major global indices such as MSCI and FTSE.
  • This will help increase the weight of Indian equities in these indices, compensating for foreign portfolio outflows to some extent as investors are unlikely to be underweight on India.
  • India’s entry into bond indices: The Government could also expedite India’s entry into bond indices such as J.P. Morgan’s Emerging-Market Bond Index and Barclays Global Bond Index.
  • This will not only lead to forex inflows but also have a benign impact on interest rates.
  • Such measures will keep the forex war chest of the RBI at a comfortable level, providing the central bank the requisite ammunition in case there is further weakness.
  • The maintenance of the U.S.-India interest rate differential along with timely forex market interventions by the central bank to manage volatility will prove to be salutary in preserving the rupee value against the greenback.

Conclusion

Even as the rupee is expected to remain under pressure in the near term because of global uncertainty, high commodity prices and rising U.S. interest rates, mitigating measures have to be taken to partly arrest the slide.

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Back2Basics: What is taper tantrum?

  • Taper tantrum refers to the 2013 collective reactionary panic that triggered a spike in U.S. Treasury yields, after investors learned that the Federal Reserve was slowly putting the breaks on its quantitative easing (QE) program.
  • The Fed announced that it would be reducing the pace of its purchases of Treasury bonds, to reduce the amount of money it was feeding into the economy.
  • The ensuing rise in bond yields in reaction to the announcement was referred to as a taper tantrum in financial media.

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Russian Invasion of Ukraine: Global Implications

Russia, Ukraine seal grain exports deal

| International Relations | Mains Paper 2:
Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Global wheat shortage

Kyiv and Moscow penned a landmark agreement with Turkey and the UN to unblock Ukraine’s Black Sea grain exports after a Russian blockade raised fears of a global food crisis.

What is the deal about?

  • The deal was agreed through UN and Turkish mediation.
  • It establishes safe corridors along which Ukrainian ships can come in and out of three designated Black Sea ports in and around Odessa.
  • Both sides also pledged not to attack ships on the way in or out.

Why such move?

  • It will bring relief for developing countries on the edge of bankruptcy and the most vulnerable people on the edge of famine.
  • The five-month war has already displaced millions and left thousands dead.
  • It is being fought across one of Europe’s most fertile regions by two of the world’s biggest grain producers.
  • Up to 25 million tonnes of wheat and other grain have been blocked in Ukrainian ports by Russian warships and landmines Kyiv has laid to avert a feared amphibious assault.

Why was the grain export deal signed?

  • Ukraine is one of the world’s largest exporters of wheat, corn and sunflower oil, but Russia’s invasion of the country and naval blockade of its ports have halted shipments.
  • Some grain is being transported through Europe by rail, road and river, but the prices of vital commodities like wheat and barley have soared during the nearly five-month war.
  • Ukrainian and Russian military delegations reached a tentative agreement last week on a UN plan that would also allow Russia to export its grain and fertilizers.
  • Ukraine is expected to export 22 million tons of grain and other agricultural products that have been stuck in Black Sea ports due to the war.

What is the grain export deal?

  • The deal makes provisions for the safe passage of ships.
  • It foresees the establishment of a control center in Istanbul, to be staffed by UN, Turkish, Russian and Ukrainian officials, to run and coordinate the process.
  • Ships would undergo inspections to ensure they are not carrying weapons.
  • Ukraine has insisted that no Russian ship would escort vessels and that there would be no Russian representative present at Ukrainian ports.
  • Ukraine also plans an immediate military response in case of provocations.

 

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Parliament – Sessions, Procedures, Motions, Committees etc

What is a Private Member’s Bill?

| Polity | Mains Paper 2: Parliament & State Legislatures
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Private Members Bill

Mains level: Places of worship act

Opposition members protested against the introduction of a private member’s Bill on the repeal of The Places of Worship (Special Provisions) Act, 1991, in the Rajya Sabha.

Private Member’s Bill

  • A private member’s Bill is different from a government Bill and is piloted by an MP who is not a minister. An MP who is not a minister is a private member.
  • Individual MPs may introduce private member’s Bill to draw the government’s attention to what they might see as issues requiring legislative intervention.

Difference between private and government Bills

  • While both private members and ministers take part in the lawmaking process, Bills introduced by private members are referred to as private member’s Bills and those introduced by ministers are called government Bills.
  • Government Bills are backed by the government and also reflect its legislative agenda.
  • The admissibility of a Private Bill is decided by the Chairman in the case of the Rajya Sabha and the Speaker in the case of the Lok Sabha.
  • Before the Bill can be listed for introduction, the Member must give at least a month’s notice, for the House Secretariat to examine it for compliance with constitutional provisions and rules on legislation.
  • While a government Bill can be introduced and discussed on any day, a private member’s bill can only be introduced and discussed on Fridays.

Has a private member’s bill ever become a law?

  • No private member’s Bill has been passed by Parliament since 1970.
  • To date, Parliament has passed 14 such Bills, six of them in 1956.
  • In the 14th Lok Sabha, of the over 300 private member’s Bills introduced, roughly four per cent were discussed, the remaining 96 per cent lapsed without a single dialogue.
  • The selection of Bills for discussion is done through a ballot.

Back2Basics: Places of Worship Act, 1991

  • It was passed in 1991 by the P V Narasimha Rao-led government.
  • The law seeks to maintain the “religious character” of places of worship as it was in 1947 — except in the case of the Ram Janmabhoomi-Babri Masjid dispute, which was already in court.
  • The law was brought in at the peak of the Ram Mandir movement, exactly a year before the demolition of the Babri Masjid.
  • Introducing the law, then Home Minister S B Chavan said in Parliament that it was adopted to curb communal tension.

What are its provisions?

The objective of the law describes it as an Act to prohibit conversion of any place of worship.

  • It aims to provide for the maintenance of the religious character of any place of worship as it existed on the 15th day of August 1947, and for matters connected therewith or incidental thereto”.
  • Sections 3 and 4 of the Act declared that the religious character of a place of worship shall continue to be the same as it was on August 15, 1947.
  • No person shall convert any place of worship of any religious denomination into one of a different denomination or section.
  • Section 4(2) says that all suits, appeals or others regarding converting the character of a place of worship, that was pending on August 15, 1947, will stand abated when the Act commences and no fresh proceedings can be filed.
  • However, legal proceedings can be initiated after the commencement of the Act if the change of status took place after the cut-off date of August 15, 1947.

What does it say about Ayodhya, and what else is exempted?

  • Act does not to apply to Ram Janma Bhumi Babri Masjid.

Besides the Ayodhya dispute, the Act also exempted:

  • any place of worship that is an ancient and historical monument or an archaeological site, or is covered by the Ancient Monuments and Archaeological Sites and Remains Act, 1958;
  • a suit that has been finally settled or disposed of;
  • any dispute that has been settled by the parties or conversion of any place that took place by acquiescence before the Act commenced.

What has the Supreme Court said about the Act?

  • In the 2019 Ayodhya verdict, the Constitution Bench led by former CJI Ranjan Gogoi referred to the law and said it manifests the secular values of the Constitution and strictly prohibits retrogression.
  • In providing a guarantee for the preservation of the religious character of places, Parliament determined that independence from colonial rule furnishes a constitutional basis for healing the injustices of the past.
  • The law addresses itself to the State as much as to every citizen of the nation. Its norms bind those who govern the affairs of the nation at every level.
  • Those norms implement the Fundamental Duties under Article 51A and are hence positive mandates to every citizen as well.

Why is the law under challenge?

  • A politician has challenged the law on the ground that violates secularism.
  • He has also argued that the cut-off date of August 15, 1947, is “arbitrary, irrational and retrospective” and prohibits Hindus, Jains, Buddhists, and Sikhs from approaching courts to “reclaim” their places of worship.
  • Such places, he argued, were “invaded” and “encroached” upon by “fundamentalist barbaric invaders”.
  • The right-wing politicians have opposed the law even when it was introduced, arguing that the Centre has no power to legislate on “pilgrimages” or “burial grounds” which is under the state list.
  • Another criticism against the law is that the cut-off is the date of Independence, which means that the status quo determined by a colonial power is considered final.

 

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Goods and Services Tax (GST)

What is Transition Tax Credit?

Prelims Only | Economics | Mains Paper 3: Indian Economy
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Transitional Tax Credit

Mains level: Not Much

Taxpayers who had missed out on getting the benefit of transitional tax credits during India’s switchover to the Goods and Services Tax (GST) regime five years ago, will now get a fresh window to avail them.

What is Transitional Tax Credit?

  • A tax credit is a component of a company’s tax payment that can be applied to offset a subsequent tax obligation.
  • When India moved to the GST regime in 2017, companies had to transition the credit sitting on their books.
  • So, the closing balance in the old tax regime would become the opening credit balance under GST.
  • When India moved from the old indirect tax regime to GST, a one-time transition of credit was allowed.
  • That is, companies could set off part of the taxes paid during the old tax regime against future GST liabilities.
  • Many companies claimed that they had simply forgotten to claim the transitional credit.

Why in news?

  • The Supreme Court has directed the revenue authorities to facilitate such credits.
  • The move is likely to benefit hundreds of GST assessees who had hitherto not been able to avail such credits.
  • They will be given two-month window to claim during September and October.

 

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Modern Indian History-Events and Personalities

Who were Raja Serfoji and Sivaji?

Prelims Only | | Mains Paper 1: Modern Indian History
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Doctrine of Lapse

Mains level: Not Much

A 19th-century painting of Raja Serfoji and his son Sivaji, which was stolen from Saraswathi Mahal, Thanjavur, a few years ago has been traced to the Peabody Essex Museum, Massachusetts, in the US.

Who was Raja Serfoji?

  • For long, the rulers of Thanjavur had been devoid of absolute power.
  • Serfoji, placed by the British on the throne over his stepbrother Amar Singh, died in 1832.
  • His only son Sivaji ruled until 1855.
  • However, he had no male successor.
  • Thanjavur became a casualty of Lord Dalhousie’s infamous ‘Doctrine of Lapse’, and it got absorbed into British-ruled Indian provinces.
  • The painting, which has Raja Serfoji and his young son, according to some historians, was probably painted between 1822 and 1827 and kept in the Saraswathi Mahal.

Back2Basics: Doctrine of Lapse

  • Between 1848 and 1856, Lord Dalhousie, the Governor-General of India, devised the Doctrine of Lapse as an annexation policy.
  • It was an idea to annex those states which have no heir.
  • They lose the right of ruling, and it will not be reverted by the adoption of a child.
  • It was one of the key components that added to the 1857 revolt.

Features of the doctrine

  • Any princely state or any territory under the direct influence of the British, as a vassal state under the British Subsidiary System, would inevitably be annexed if the ruler was either “manifestly incompetent or died without a direct heir”.
  • It ousted the age-old right of an Indian ruler without an heir to select a successor.
  • Additionally, the British decided whether potential rulers were competent enough or not.

Annexations made under this policy

Annexation           Year

Satara                1848

Jaitpur                1849

Sambalpur            1849

Baghat               1850

Udaipur              1852

Jhansi                 1853

Nagpur               1854

 

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Foreign Policy Watch: India-Sri Lanka

‘Advantage New Delhi’ in Sri Lanka’s India lifeline

op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- India-Sri Lanka relations

Context

Ranil Wickremesinghe’s election as the President of Sri Lanka in a crucial Parliament vote on July 20, 2022, gives India an opportunity to take the lead in the foreign aid game in its neighbourhood.

Background of the crisis in Sri Lanka

  • Sri Lanka has been facing economic turbulence since its pre-emptive default on its foreign debt obligations in mid-April this year.
  • Following the debt default and a shortage of dollars, the Sri Lankan economy is experiencing stagflation.
  •  Inflation has spiralled to over 50%, translating into higher food and fuel prices.
  •  Sri Lanka’s worst economic crisis since its independence in 1948 is due to a tepid recovery from the COVID-19 pandemic, the Russia-Ukraine conflict shock and economic mismanagement under the administration of the Rajapaksas.
  • Sri Lanka is also facing challenges in getting foreign aid, as 60% of the world’s poorest countries are also experiencing debt distress.

Opportunities for India

  •  In the first six months of 2022, Indian aid worth $3.8 billion has flowed to Sri Lanka through loans, swaps and grants.
  • This is India’s largest bilateral aid programme in recent times.
  •  Stabilising Sri Lanka’s economy could prove to be a major win for Indian’s ‘neighbourhood-first’ policy.
  • Moreover, once the Sri Lankan economy stabilises, India can deepen its trade and investment linkages with Sri Lanka, transcending the current humanitarian aid relationship.
  • On the other hand, an unstable Sri Lankan economy could pose security risks to India and lead to a flood of refugees across the Palk Strait.
  • This is an opportunity for India to strengthen bilateral and regional partnerships.
  • Countering Chinese influence: In recent years, China has emerged as a major partner for Sri Lanka, especially for infrastructure projects, many of which are under scrutiny now.
  • This provides an opportunity for India to upscale its aid and cement its first mover advantage over China by leading an aid consortium for Sri Lanka, working closely with other friendly countries such as the United States, Japan and the European Union as well as the International Monetary Fund (IMF).

Why China is reluctant to help?

  • China worries that unilaterally restructuring Sri Lanka’s debt or giving it moratoria would set a new precedent in its lending practices, leading to a queue of similarly distressed countries seeking debt relief from Beijing.
  • Furthermore, China, which is a G2 economy, and wanting to challenge the U.S., does not want its reputation to be tarnished by bailing out a floundering economy.

Steps Sri Lanka needs to take

  • Concluding the talks with Sri Lanka: The government must show that it is serious about stabilising the economy by concluding talks on an IMF programme which will increase taxes and utility prices to raise revenue and increase interest rates to control inflation.
  • Economic reforms: It has to implement structural reforms to make the economy more open to trade and investment and allow market forces to determine resource allocation.
  • National consensus on IMF program: It has to build national consensus on implementing the IMF programme and reforms by explaining that this is the only solution to the crisis.
  • Anti-corruption policies: It has to restore the rule of law and enforce strong anti-corruption policies (including asset declarations for all parliamentarians and a strong anti-corruption office supported by the United Nations).
  • Reset foreign policy: It has to reset foreign policy towards a more neutral direction.

Conclusion

With political will and the right set of policies, Sri Lanka stands a sporting chance of achieving some economic normalcy within the next three years. India stands to gain by supporting Sri Lanka in its hour of need. A friend in need is a friend indeed.

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Need for a debate on freebies

op-ed snap | Governance | Mains Paper 2: Government Scheme/Policies
Note4Students

From UPSC perspective, the following things are important :

Prelims level: PM-Kisan

Mains level: Paper 2- Phasing out the unwarranted subsidies

Context

Many in India have been lamenting for quite some time the culture of political populism and “freebies”

Fiscal stress due to subsidies

  • Technically, a subsidy is the unrecovered cost of any service (or good) provided by the government.
  • Freebies such as distribution of televisions, free cycles or laptops are the most highly visible and discussed freebies, but they are fiscally insignificant compared to the much larger subsidies on food, fertiliser and petroleum.
  • Though curbed in recent years, these “visible” subsidies in government budgets remain a major source of fiscal stress.
  • Then there is a range of “invisible” subsidies, especially in state government budgets, not always recognised as such, but which are also very large.
  • The deficit between the receipts and expenditure of a government department in providing a service is the unrecovered cost of providing that service, that is, a subsidy, even if not recognised as such in the budget.
  • Examples include the unrecovered cost of providing public education, healthcare, irrigation, power, water supply and sanitation.

Some facts about the subsidies

  • Relation with per capita income: The volume of subsidies as a proportion of GDP comes down with rising per capita incomes, but very gradually.
  • The total volume of subsidies came down from 13 per cent of GDP way back in 1987-88 to a little over 10 per cent by 2015-16, almost 30 years later.
  • Contribution of central government: The central government accounts for less than 30 per cent of total subsidies, provided mainly for economic services including food.
  • Merit subsidies: From the total volume there is a very small number of “merit subsidies” which might be warranted in public interest.
  • All governments have provided a food subsidy for poor households by bi-partisan consensus for decades.
  • Then there is basic education and health services which have large benefits for society beyond the benefit accruing to the immediate recipient of the service, what economists call “externalities”.
  • Also in case of expenditure on water supply and sanitation, where again the benefit to society is much larger than that accruing to the immediate recipient of the service — for example, prevention of infectious diseases.
  • These four “merit” subsidies account for only a third of total subsidies.
  • Unwarranted freebies: Thus, two-thirds of total subsidies, about 6 per cent of GDP, are unwarranted freebies which should be eliminated.

Way forward

  • Phasing out the unwarranted freebies: If central and state governments could step beyond their business as usual budgets and take bold measures to phase out these unwarranted freebies, along with much of the tax exemptions and concessions, which amount to about 5 per cent of GDP, that would free up huge fiscal space.
  • Universal basic income: There is a growing demand in many advanced countries, which already have large social security schemes, to provide a minimum “Universal Basic Income” for all.
  •  Providing a small safety net for the poor in countries like India, which have no social security system, is the least that any caring government can do.
  • MGNREGA is the largest and longest-standing income support programme in India for the unemployed in rural areas.
  • But it is often not regarded as such as it entails payment against performance of work.
  • The usual complaint against such schemes is that they artificially raise rural wages, reduce the incentive to search for work, and that the poor blow up these freebees on liquor etc.
  • Since MGNREGA and similar schemes in the states pay much less than the minimum wage, they obviously cannot raise rural wages beyond what is the legal minimum wage anyway.

Conclusion

Phasing out the unwarranted subsidies will enable a massive reduction in the combined fiscal deficit of the Centre and the states, while at the same time stepping up required expenditure on education, health and infrastructure.

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Parliament – Sessions, Procedures, Motions, Committees etc

Droupadi Murmu elected 15th President of India

| Polity | Mains Paper 2: Indian Constitution - historical underpinnings, evolution, features, amendments, significant provisions and basic structure
Note4Students

From UPSC perspective, the following things are important :

Prelims level: President of India

Mains level: Read the attached story

Former Jharkhand Governor Droupadi Murmu was elected the 15th President of India, the first (santhal) tribal woman to be appointed to the position and the youngest as well.

Here’s a look at some interesting facts about the past Presidents of India:

* Rajendra Prasad was the first President of India. He is also the only President to have served two consecutive terms.

* Dr. Sarvepalli Radhakrishnan was the second President. He was the first to have served as Vice President before being elected to the top post.

* Zakir Hussain was the third President of India, and the first Muslim President. He also was the first President to die in office. He was the shortest serving President of India (less than two years).

* On his election, fourth President V.V. Giri became the first one to have also been an acting President.

* Fakhruddin Ali Ahmed was the fifth President and the second Muslim to hold the post. The Emergency was declared during his tenure. He is the second President to have died in office.

* Neelam Sanjiva Reddy was the sixth President. He became the youngest to take the post at the age of 64. He is also the only one to have been elected unopposed.

* Giani Zail Singh was the seventh President of India and the first Sikh President.

* Eighth President Ramaswamy Venkataraman was the first President to have worked with four Prime Ministers and appointed three: V. P. Singh, Chandra Shekhar and P. V. Narasimha Rao.

* Shankar Dayal Sharma was the 9th President. He also worked with four PMs and appointed three of them in his last year: Atal Bihari Vajpayee, H. D. Deve Gowda, I. K. Gujral.

* Kocheril Raman Narayanan was the 10th President of India and the first Dalit President. At 76 years and 271 days, he was the oldest President to be elected.

* APJ Abdul Kalam was the 11th President and first Muslim President to serve an entire term.

* Elected as the 12th President, Pratibha Patil was the first woman President of India.

* Pranab Mukherjee, the 13th President, was the first Bengali to hold the post.

* 14th President Ram Nath Kovind was the first BJP candidate to be elected to the post.

* 11 Presidents have been members of a political party before being elected. 8 were from Congress, 2 from BJP, 1 from Janata Party, and the rest were Independents.

The President of India

  • The President of India is recognized as the first citizen of the country and the head of the state.
  • The elected President of India is a part of the Union Executive along with several other members of the parliament including the Prime Minister, Attorney-General of India and the Vice – president.

Electing the President

  • The provisions of the election of the President are laid down in Article 54 of the Constitution of India.
  • The Presidential and Vice-Presidential Election Act 1952 led to the establishment of this Constitutional provision.

Qualifications to become the President of India

The qualification of being the President of India are given below:

  • He/ She must be an Indian citizen
  • A person must have completed the age of 35.
  • A person must be qualified for election as a member of the House of the People.
  • Must not hold a government (central or state) office of profit
  • A person is eligible for election as President if he/she is holding the office of President or Vice-President.

Actual course of election

  • The President of India is elected indirectly by an Electoral College following the system of proportional representation utilizing a single transferable vote system and secret ballots.
  • MPs and MLAs vote based on parity and uniformity values.

Electoral College composition-

(1) Legislative Assemblies of the States:

  • According to the provision of Article 333, every state’s Legislative Assembly must consist of not less than 60 members but not more than 500 members.

(2) Council of States:

  • 12 members are nominated by the President of India based on skills or knowledge in literature, arts, science, and social service to act as the members of the Council of States.
  • In total, 238 represent act as representatives from both the States and Union Territories.

(2) House of the People:

  • The composition of the House of People consists of 530 members (no exceeding) from the state territorial constituencies.
  • They are elected through direct election.
  • The President further elects 20 more members (no exceeding) from the Union Territories.

Uniformity in the scale of representation of states

To maintain the proportionality between the values of the votes, the following formula is used:

Value of vote of an MLA= total no. of the population of the particular state/ number of elected MLAs of that state divided by 1000.

Single vote system

  • During the presidential election, one voter can cast only one vote.
  • While the MLAs vote may vary state to state, the MPs vote always remain constant.

MPs and MLAs vote balance

  • The number of the total value of the MPs votes must equal the total value of the MLAs to maintain the State and the Union balance.

Quotas:

  • The candidate reaching the winning quota or exceeding it is the winner.
  • The formula sued is ‘Winning quota total number of poll/ no.of seats + 1’.

Voters’ preference:

  • During the presidential election, the voter casts his vote in favor of his first preferred candidate.
  • However, in case the first preference candidate does not touch the winning quota, the vote automatically goes to the second preference.
  • The first preferred candidate with the lowest vote is eliminated and the votes in his/her favor are transferred to the remaining candidates.

Why need Proportional representation?

  • The President of India is elected through proportional representation using the means of the single transferable vote (Article 55(3)).
  • It allows the independent candidates and minority parties to have the chance of representation.
  • It allows the practice of coalition with many voters under one government.
  • This system ensures that candidates who are elected don’t represent the majority of the electorate’s opinion.

Why is President indirectly elected?

If Presidents were to be elected directly, it would become very complicated.

  • It would, in fact, be a disaster because the public doesn’t have absolute clarity of how the president-ship runs or if the candidate fits the profile of a president.
  • Another reason why the direct election system isn’t favorable is that the candidate running for the president’s profile will have to campaign around the country with the aid of a political party.
  • And, this will result in massive political instability.
  • Moreover, it would be difficult and impossible for the government to hand out election machinery (given the vast population of India).
  • This will cost the government financially and may end up affecting the economy as well.
  • The indirect election system is a respectable system for the First Man of India (rightly deserving).
  • The system/method of indirect electing of the president also allows the states to maintain neutrality and minimize hostility.

 

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Women empowerment issues – Jobs,Reservation and education

Women have Right to Safe Abortion: SC

SC Judgements | Polity | Mains Paper 2: Indian Constitution - historical underpinnings, evolution, features, amendments, significant provisions and basic structure
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Right to Safe Abortion

Mains level: MRTP Act

Denying an unmarried woman the right to a safe abortion violates her personal autonomy and freedom, the Supreme Court held in an order.

What did the SC say?

  • A woman’s right to reproductive choice is an inseparable part of her personal liberty under Article 21 of the Constitution.
  • She has a sacrosanct right to bodily integrity, the court quoted from precedents.
  • The court said forcing a woman to continue with her pregnancy would not only be a violation of her bodily integrity but also aggravate her mental trauma.

Indispensable clause of safety

  • The court ordered a medical board to be formed by the AIIMS to check whether it was safe to conduct an abortion on the woman and submit a report in a week.

What is the case?

  • A Bench led by Justice D.Y. Chandrachud was hearing the appeal of a woman who wanted to abort her 24-week pregnancy after her relationship failed and her partner left her.
  • The lower court had taken an “unduly restrictive view” that her plea for a safe abortion was not covered under the Medical Termination of Pregnancy Act.
  • This was since the pregnancy arose from a consensual relationship outside wedlock.

What was the last amendment?

  • The court noted that an amendment to the Act in 2021 had substituted the term ‘husband’ with ‘partner’, a clear signal that the law covered unmarried women within its ambit.

Reiterating the live-in recognition

  • Chastising the lower court, the Bench said live-in relationships had already been recognised by the Supreme Court.
  • There were a significant number of people in social mainstream who see no wrong in engaging in pre-marital sex.
  • The law could not be used to quench “notions of social morality” and unduly interfere in their personal autonomy and bodily integrity.

Back2Basics: Medical Termination of Pregnancy (MTP) Act

  • Abortion in India has been a legal right under various circumstances for the last 50 years since the introduction of the Medical Termination of Pregnancy (MTP) Act in 1971.
  • The Act was amended in 2003 to enable women’s access to safe and legal abortion services.
  • Abortion is covered 100% by the government’s public national health insurance funds, Ayushman Bharat and Employees’ State Insurance with the package rate for surgical abortion.

The idea of terminating your pregnancy cannot originate by choice and is purely circumstantial. There are four situations under which a legal abortion is performed:

  1. If continuation of the pregnancy poses any risks to the life of the mother or mental health
  2. If the foetus has any severe abnormalities
  3. If pregnancy occurred as a result of failure of contraception (but this is only applicable to married women)
  4. If pregnancy is a result of sexual assault or rape

These are the key changes that the Medical Termination of Pregnancy (Amendment) Act, 2021, has brought in:

  1. The gestation limit for abortions has been raised from the earlier ceiling of 20 weeks to 24 weeks, but only for special categories of pregnant women such as rape or incest survivors. But this termination would need the approval of two registered doctors.
  2. All pregnancies up to 20 weeks require one doctor’s approval. The earlier law, the MTP Act 1971, required one doctor’s approval for pregnancies upto 12 weeks and two doctors’ for pregnancies between 12 and 20 weeks.
  3. Women can now terminate unwanted pregnancies caused by contraceptive failure, regardless of their marital status. Earlier the law specified that only a “married woman and her husband” could do this.
  4. There is also no upper gestation limit for abortion in case of foetal disability if so decided by a medical board of specialist doctors, which state governments and union territories’ administrations would set up.

 

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Russian Invasion of Ukraine: Global Implications

Russia resumes gas supplies to Europe via Nord Stream Pipeline

| International Relations | Mains Paper 2: International Institutions
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Nord Stream Pipelines

Mains level: Energy implications of Russia-Ukraine War

Russia restored critical gas supplies to Europe through Germany via the Nord Stream pipeline after 10 days of uncertainty in guise of maintenance.

Nord Stream Pipeline

  • It is a system of offshore natural gas pipelines running under the Baltic Sea from Russia to Germany.
  • It includes two active pipelines running from Vyborg to Lubmin near Greifswald forming the original Nord Stream, and two further pipelines under construction running from Ust-Luga to Lubmin termed Nord Stream 2.
  • In Lubmin the lines connect to the OPAL line to Olbernhau on the Czech border and to the NEL line to Rehden near Bremen.
  • The first line Nord Stream-1 was laid and inaugurated in 2011 and the second line in 2012.
  • At 1,222 km in length, Nord Stream is the longest sub-sea pipeline in the world, surpassing the Langeled pipeline.

Why in news?

  • Germany, which is heavily dependent on Russian gas, had feared that Moscow would not reopen the pipeline after the scheduled work and accused Moscow of using energy as a “weapon”.
  • The showdown came amid the worst tensions in several years over Russia’s invasion of Ukraine.
  • Germany believes Russia is squeezing supplies in retaliation for Western sanctions over the war.

Why is Russian gas so important?

(1) Major chunk of energy

  • Russia supplied some 40% of Europe’s natural gas before the war.
  • That has dropped to around 15%, sending prices through the roof and straining energy-intensive industries.

(2) Everyday use

  • Gas is used across a range of processes that most people never see – to forge steel to make cars, make glass bottles and pasteurise milk and cheese.
  • Companies warn that they often can’t switch overnight to other energy sources such as fuel oil or electricity to produce heat.

(3) Fuel inflation

  • High energy prices are already threatening to cause a recession in Europe through record inflation, with consumers having less to spend as costs rise for food, fuel and utilities.
  • A complete cutoff could deal an even heavier blow to an already troubled economy.

What is visible in Russia’s game plan?

  • Since the invasion, Russia’s revenue from exporting oil and gas to Europe has doubled over the average from recent years, to $95 billion.
  • So Putin has cash in hand and could calculate that painful utility bills and an energy recession could undermine public support for Ukraine in Europe and increase sentiment for a negotiated settlement in his favour.
  • It would be unwise to exclude the possibility that Russia could decide to forgo the revenue it gets from exporting gas to Europe in order to gain political leverage.

What alternatives does Europe have?

  • The EU has turned to more-expensive liquefied natural gas, or LNG, which comes by ship from places like the US and Qatar.
  • Germany is fast-tracking construction of LNG import terminals on its North Sea coast, but that will take years.
  • But LNG alone can’t make up the gap.
  • Conservation and other energy sources are key.

Could people freeze this winter?

  • Its unlikely homes, schools and hospitals will lose heat because governments are required to impose rationing first on businesses.
  • The German government also could allow gas suppliers to immediately pass on increases to customers.
  • The choices could include torpedoing industry and/or socking consumers with even higher bills.
  • The IEA recommends that European countries step up campaigns for people to conserve at home and plan to share gas in an emergency.

 

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Promoting Science and Technology – Missions,Policies & Schemes

Indian Antarctic Bill, 2022

Bills/Act/Laws | Science Tech | Mains Paper 3: S&T - Applications In Everyday Life
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Indian Antarctic Bill, 2022

Mains level: Read the attached story

The Lok Sabha deferred the consideration and passing of the Indian Antarctic Bill, 2022 as the Opposition benches were empty due to the ongoing protests outside of Parliament.

Indian Antarctic Bill, 2022

Aims and objectives:

  • To provide for national measures to protect the Antarctic environment and associated ecosystems and to give effect to the Antarctic Treaty
  • To provide a harmonious policy framework for India’s Antarctic activities through a well-established legal mechanism
  • Facilitate activities of the Indian Antarctic programme, including management of Antarctic tourism and sustainable development of fisheries
  • To prohibit carrying of certain activities without a permit or the written authorisation of another party to the protocol
  • To provide for inspection in India by an officer designated by the Central government as an Inspector and to constitute an inspection team to carry out inspections in Antarctica
  • To prohibit drilling, dredging, excavation or collection of mineral resources or even doing anything to identify where such mineral deposits occur.

Key feature: Committee on Antarctic governance

  • It will empower the government to establish a committee on Antarctic governance and environmental protection to monitor, implement and ensure compliance with the relevant international laws, emissions standards and rules of protection.
  • The panel is to be headed by the secretary of the Ministry of Earth Sciences, as ex officio chairperson.
  • Among other roles, he/she has also been the vice-president of the Scientific Committee on Antarctic Research of the International Science Council since 2018.
  • The committee will have ten members from various ministries, departments and organizations of the Union government, plus two experts on the Antarctic environment or other relevant areas.

Prohibited activities

The Bill prohibits certain activities in Antarctica including:

  • Nuclear explosion or disposal of radioactive wastes,
  • Introduction of non-sterile soil, and
  • Discharge of garbage, plastic or other substance into the sea which is harmful to the marine environment

About Antarctica Treaty

  • Antarctica has a geographical area of 14 million sq. km and has had no indigenous population (i.e. “Antarcticans” don’t exist).
  • However, a few thousand people reside there, in some 40 research stations spread across the continent, throughout the year.
  • In 1959, 12 countries – Argentina, Australia, Belgium, Chile, France, Japan, New Zealand, Norway, South Africa, the USSR, the UK and the US signed the Antarctic Treaty.
  • Their aim was to prevent the continent from being militarised and to establish it as a center of peaceful activities.
  • Later, more countries, including India, have become party to the treaty, and today it counts more than 54 members.

Significance of the treaty

  • The treaty requires each party to take appropriate measures within its competence, including the adoption of laws and regulations, administrative actions, and enforcement measures, to ensure compliance with the protocol.
  • Countries also signed the ‘Protocol on Environmental Protection to the Antarctic Treaty in 1991, which designates Antarctica as a “natural reserve, devoted to peace and science”.

Need for the Antarctic Legislation

  • The growing presence of Indian scientists in Antarctica and the commitment to Antarctic research and protection prompted the government to adopt domestic legislation consistent with its obligations as a member of the Antarctic Treaty system.
  • These laws will enable India’s courts to deal with disputes or crimes committed in parts of Antarctica, and help build credibility vis-Ă -vis India’s participation.

 

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Innovation Ecosystem in India

Karnataka tops India Innovation Index List

DOMR | Science Tech | Mains Paper 3: Achievements Of Indians In S&T
Note4Students

From UPSC perspective, the following things are important :

Prelims level: India Innovation Index

Mains level: Not Much

Karnataka has bagged the top rank in NITI Aayog’s India Innovation Index, 2022, which determines innovation capacities and ecosystems at the sub-national level.

India Innovation Index (III)

  • The release of the second edition of the index—the first was launched in October 2019—demonstrates the Government’s continued commitment to transforming the country into an innovation-driven economy.
  • The index attempts to create an extensive framework for the continual evaluation of the innovation environment of all states and UTs in India.
  • It intends to perform the following three functions-
  1. Ranking of states and UTs based on their index scores
  2. Recognizing opportunities and challenges, and
  3. Assisting in tailoring governmental policies to foster innovation
  • The states have been bifurcated into three categories: major states, northeast and hill states, and union territories/city-states/small states.

Significance

  • The study examines the innovation ecosystem of Indian states and union territories.
  • The aim is to create a holistic tool that can be used by policymakers across the country to identify the challenges to be addressed and strengths to build on when designing policies.

Highlights of the 2022 index

  • Karnataka has held this position, under the Major States category, in all three editions of the Index so far.
  • It was followed by Telangana, Haryana, Maharashtra and Tamil Nadu. Chhattisgarh, Odisha, Bihar and Gujarat were at the bottom of the index.
  • In the Index, Manipur secured the lead in the Northeast and Hill States category, while Chandigarh was the top performer in the Union Territories and City States category.

 

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Water Management – Institutional Reforms, Conservation Efforts, etc.

Kali Bein and its cultural significance

Prelims Only | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Kali Bein

Mains level: River water management issues

Punjab CM has been admitted to hospital, days after he had drunk a glass of water directly from the Kali Bein, a holy rivulet in Sultanpur Lodhi.

What is the Kali Bein?

  • The 165-km rivulet starts from Hoshiarpur, runs across four districts and meets the confluence of the rivers Beas and Sutlej in Kapurthala.
  • Along its banks are around 80 villages and half a dozen small and big towns.
  • Waste water from there as well as industrial waste used to flow into the rivulet via a drain, turning its waters black, hence the name Kali Bein (black rivulet).
  • Dense grass and weeds grew on the water until a cleaning project started.

Why did Punjab CM drink water from it?

  • The occasion was the 22nd anniversary of the cleaning project, which had started on July 16, 2000.
  • The project has been slow for years after having made remarkable progress in the initial years.
  • Nevertheless, when Mann drank water from it directly, it was a much cleaner Kali Bein than it was before 2000.

Cultural significance

  • The Kali Bein is of great significance to Sikh religion and history, because the first Guru, Nanak Dev, is said to have got enlightenment here.
  • When Guru Nanak Dev was staying at Sultanpur Lodhi with his sister Bebe Nanki, he would bathe in the Kali Bein.
  • He is said to have disappeared into the waters one day, before emerging on the third day.
  • The first thing he recited was the “Mool Mantra” of the Sikh religion.

How did the cleaning project start?

  • It was started by environmentalist Baba Balbir Singh Seechewal with a handful of followers, without government help.
  • They removed weeds, treated the water and spread awareness among residents.
  • Six years of hard work paid off when then President A P J Abdul Kalam visited the site in 2006 and praised them for their effort.
  • The then government in Punjab then announced that it would take up the project to stop the discharge of untreated water into the rivulet.

What is its national significance?

  • At one stage, the project had become a role model for river cleaning missions.
  • The ‘Kali Bein Model’ was cited as the blueprint for the National Mission for Clean Ganga.
  • Uma Bharti, then Union Minister for Water Resources, River Project and Ganga Rejuvenation, visited the Kali Bein in 2015, and called it a Guru Sthan for the Ganga project.

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