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Capital Markets: Challenges and Developments

What are AT1 Bonds?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: AT1 Bonds

Mains level: Not Much

The decision of the Securities and Exchange Board of India (SEBI) to slap restrictions on mutual fund (MF) investments in additional tier-1 (AT1) bonds has raised a storm in the MF and banking sectors.

What are AT1 Bonds?

  • AT1 Bonds stand for additional tier-1 bonds. These are unsecured bonds that have perpetual tenure. In other words, the bonds have no maturity date.
  • They have a call option, which can be used by the banks to buy these bonds back from investors.
  • These bonds are typically used by banks to bolster their core or tier-1 capital.
  • AT1 bonds are subordinate to all other debt and only senior to common equity.
  • Mutual funds (MFs) are among the largest investors in perpetual debt instruments and hold over Rs 35,000 crore of the outstanding additional tier-I bond issuances of Rs 90,000 crore.

What action has been taken by the Sebi recently and why?

  • In a recent circular, the Sebi told mutual funds to value these perpetual bonds as a 100-year instrument.
  • This essentially means MFs have to make the assumption that these bonds would be redeemed in 100 years.
  • The regulator also asked MFs to limit the ownership of the bonds to 10 per cent of the assets of a scheme.
  • According to the Sebi, these instruments could be riskier than other debt instruments.

Try this PYQ:

Consider the following statements:

  1. The Reserve Bank of India manages and services the Government of India Securities but not any State Government Securities.
  2. Treasury bills are issued by the Government of India and there are no treasury bills issued by the State Governments.
  3. Treasury bills offer are issued at a discount from the par value.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 3 Only

(c) 2 and 3 only

(d) 1, 2 and 3

How MFs will be affected?

  • Typically, MFs have treated the date of the call option on AT1 bonds as the maturity date.
  • Now, if these bonds are treated as 100-year bonds, it raises the risk in these bonds as they become ultra long-term.
  • This could also lead to volatility in the prices of these bonds as the risk increases the yields on these bonds rises.
  • Bond yields and bond prices move in opposite directions and therefore, the higher yield will drive down the price of the bond, which in turn will lead to a decrease in the net asset value of MF schemes holding these bonds.
  • Moreover, these bonds are not liquid and it will be difficult for MFs to sell these to meet redemption pressure.

What’s the impact on banks?

  • AT1 bonds have emerged as the capital instrument of choice for state banks as they strive to shore up capital ratios.
  • If there are restrictions on investments by mutual funds in such bonds, banks will find it tough to raise capital at a time when they need funds in the wake of the soaring bad assets.
  • A major chunk of AT1 bonds is bought by mutual funds.

Why has the Finance Ministry asked Sebi to review the decision?

  • The FM has sought withdrawal of valuation norms for AT1 bonds as it might lead to mutual funds making losses and exiting from these bonds, affecting capital raising plans of PSU banks.
  • The government doesn’t want a disruption in the fund mobilization exercise of banks at a time when two PSU banks are on the privatization block.
  • Banks are yet to receive the proposed capital injection in FY21 although they will need more capital to face the asset-quality challenges in the foreseeable future.
  • Fitch’s own estimate pegs the sector’s capital requirement between $15 billion-58 billion under various stress scenarios for the next two years, of which state banks account for the bulk.

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International Space Agencies – Missions and Discoveries

Martian ‘Blueberries’

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Martian blueberries

Mains level: Mars mission worldwide and their success

In 2004, NASA’s Mars exploration rover ‘Opportunity’ found several small spheres on the planet, informally named Martian blueberries which find a resemblance to the similar formation in India’s Kutch region.

There have been several missions to the red planet this year. Make a note of all of them.

Martian blueberries

  • Opportunity’s mini spectrometers studied mineralogy and noted they were made of iron oxide compounds called haematites.
  • This caused excitement, as the presence of haematites suggests that there was water present on Mars.
  • The widely accepted formation mechanism of hematite concretion [hard solid mass] is precipitation from aqueous fluids.
  • Hematite is known to form in oxidizing environments hence it can be inferred that water must have played a crucial role in the formation of grey hematite on Mars.

What makes them so special?

  • Indian researchers have been studying hematite concretions in Kutch called the Jhuran formation.
  • These formations are 145 and 201 million years old.
  • Detailed geochemistry and spectroscopic investigations of the haematite concretions in this area revealed that they resemble the ones on Mars.
  • They have similar morphology – spherical, often doublet and triplet – and similar mineralogy – a mixture of haematite and goethite.
  • Hence, several types of research have shown that the Kutch area is a potential Martian analogue locality.

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Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

Raman Thermometry check on health of power lines

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Raman Thermometry

Mains level: Discom issues

Researchers at IIT Madras have demonstrated that by using Raman thermometry on fibre optic cables, they can achieve the monitoring of power transmission cables.

What is Raman Thermometry?

  • Raman spectroscopy is well known as an analytical method for identifying chemical compounds and characterizing the chemical bonding and solid-state structure of materials.
  • Perhaps less well known is the fact that one can use Raman spectroscopy to determine the temperature of the material being analyzed.

For that, we need to get familiarized with Raman Effect

  • India’s first and so far only Nobel laureate in physics, C.V. Raman, won the prize for his discovery of the Raman Effect.
  • This consisted of experimental observations on the scattering of light.
  • In the Raman Effect, when light is scattered off an object, say a molecule, two bands are observed, with a higher and lower frequency than the original light, called the Stokes and anti-Stokes bands, respectively.
  • By studying the relative intensity of the two bands, it is possible to estimate the temperature of the object that scattered the light.
  • The anti-Stokes component of Raman scattering is strongly dependent on the temperature that the material is subjected to.

Thus, by measuring the intensity of the anti-Stokes scattered light we can estimate the temperature. This is Raman thermometry.

Try this PYQ:

Q.Which Indian astrophysicist and Nobel laureate predicted rapidly rotating stars emit polarized light?

(a) Subrahmanyan Chandrasekhar

(b) CV Raman

(c) Ramanujan

(d) Amartya Sen

What has IITM achieved?

  • The temperature measurement was performed in not just one location, but in a distributed manner using an optical fibre.
  • To achieve this, a pulse of light was launched into the optical fibre and the backscattered radiation was observed.
  • The time of flight of the backscattered radiation provided an estimate of the distance from which the light is backscattered.
  • This can go up to tens of kilometres. This technique is married to Raman thermometry to get the results for actual measurements over tens of kilometres.

What makes this experiment special?

  • The distribution Sector considered the weakest link in the entire power sector.
  • We are much aware of Transmission and Distribution loss that is incurred to our DISCOMS.
  • This IITM technology helps analyze transmission efficiencies in a better way.
  • The present method devised by the team is both economical and provides real-time information.

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Innovations in Biotechnology and Medical Sciences

Genetics of Eye Color

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Human eye and the applied genetics

Mains level: NA

Researchers from London have found that eye colour in Asians with different shades of brown is genetically similar to eye colour in Europeans ranging from dark brown to light blue.

Human Eye Colour

  • Human eye colour ranges from black, brown to blue, green, and even red.
  • Eye colour is primarily determined by melanin abundance within the iris pigment epithelium, which is greater in brown than in blue eyes.
  • There are two forms of melanin – eumelanin and pheomelanin – and the ratio of the two within the iris as well as light absorption and scattering by extracellular components are additional factors that give irises their colour.
  • Absolute melanin quantity and the eumelanin–pheomelanin ratio is higher in brown irises, while blue or green irises have very little of both pigments and relatively more pheomelanin.

Try this PYQ:

Q.Recently, LASIK (Lasser Assisted In Situ Keratomileusis) procedure is being made popular for vision correction. Which one of the following statements in this context is not correct?

(a) LASIK procedure is used to correct refractive errors of the eye

(b) It is a procedure that permanently changes the shapes of the cornea

(c) It reduces a person’s dependence on glasses or contact lenses

(d) It is a procedure that can be done on the person of any age

What has the research found?

  • Previously a dozen genes (mainly HERC2 and OCA2) were found to influence eye colour.
  • The researchers have now identified 50 new genes for eye colour.
  • Genetic analysis of nearly 0.2 million people across Europe and Asia helped the researchers to identify the new genes.
  • The findings collectively explain over 53% of eye colour variation using common single-nucleotide polymorphisms.

Outcome of the research

  • Overall, the study outcomes demonstrate that the genetic complexity of human eye colour considerably exceeds previous knowledge and expectations.
  • These findings will help improve our understanding of eye diseases such as pigmentary glaucoma and ocular albinism where pigment levels play a role.

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FDI in Indian economy

Need for national security shield in FDI

Note4Students

From UPSC perspective, the following things are important :

Prelims level: FEMA

Mains level: Paper 3- Security imperatives of FDI

 

Relaxation on Chinese FDI

  • Last April, India had subjected all Chinese FDI to mandatory government screening.
  • The aim was to curb opportunistic takeovers of Indian companies, a concern fuelled by sharp corrections in equity markets in March 2020.
  • Several economies including the US, Australia, Canada and Germany faced similar concerns.
  • They blocked specific takeover attempts, using special laws for national security screening of inward FDI.
  •  In the absence of similar legislation, India did not differentiate between investments which raised genuine national security concerns and those that did not.
  • This is a crucial shortcoming.
  • With market indices now hovering at their peaks, reportedly India may allow Chinese FDI up to 25 per cent in equity under the automatic route.

Regulation of FDI and issues with it

  • India regulates foreign investments primarily through FEMA.
  • FEMA clearly provides two specific macro-prudential objectives — facilitating external trade and payments; and promoting orderly development and maintenance of foreign exchange markets in India.
  • Accordingly, it empowers the central government and the RBI, acting in consultation with each other, to regulate capital account transactions.
  • These regulations determine who can invest through the FDI route, in which sector and how much.
  • In practice, however, FEMA regulations have often responded to concerns not strictly related to macro-prudential objectives.
  • One such concern has been national security.

Need for the law to scrutinise FDI from national security angle

  • Shortcoming of FEMA underscores the need for India to emulates its western peers and enact a statute specifically designed for national security screening of strategic FDI.
  • Unlike FEMA, this new statute must explicitly lay down legal principles for determining when a foreign acquisition of an Indian company poses genuine national security threats.
  • In this regard, a policy paper published by the Peterson Institute for International Economics three types of legitimate threats from foreign acquisitions.

3 Types of threat from foreign acquisitions

1) Dependency on foreign supplier

  • The first threat arises if a foreign acquisition renders India dependent on a foreign-controlled supplier of goods or services crucial to the functioning of the Indian economy.
  • For this threat to be credible, it needs to be further established that the industry in which the acquisition is supposed to take place is tightly concentrated, the number of close substitutes limited, and the switching costs are high.

2) Technology transfer

  • The second threat emanates from a proposed acquisition transferring a technology or an expertise to a foreign-controlled entity that might be deployed by that entity or a foreign government in a manner harmful to India’s national interests.
  • The credibility of this threat again depends on whether the market for such technology or expertise is tightly concentrated or if they are readily available elsewhere.

3) Threat of infiltration, surveillance or sabotage

  • The third threat arises if a proposed acquisition allows insertion of some potential capability for infiltration, surveillance or sabotage via human or non-human agents into the provision of goods or services crucial to the functioning of Indian economy.
  • This threat is particularly credible when the target company supplies crucial goods or services to the Indian government, its military or even critical infrastructure units and the switching costs are high.

Way forward

  • The above stated 3 types of threats could provide conceptual clarity in the new statute could make national security assessments objective, transparent and amenable to the rule of law.
  • On procedure, the statute must empower only the finance minister to reject certain strategic foreign acquisitions on national security grounds.
  • Both the power and accountability mechanisms should be hardcoded into the statute itself, as is the case in some mature parliamentary democracies.
  • For instance, the Australian Foreign Acquisitions and Takeovers Act, 1975 empowers the treasurer to block certain foreign acquisitions on national security grounds.
  • Similarly, the Investment Canada Act, 1985 empowers a minister to reject certain foreign acquisitions.

Consider the question “India needs to recognise the national security threat emanating from strategic FDI. This requires identifying threats. In lights of this, examine the types of threats and suggest the ways to deal with it.” 

Conclusion

Overall, India’s tryst with Chinese FDI underscores the importance of identifying specific national security threats emanating from strategic FDI and addressing them objectively. This is too sensitive a matter to be left to capital controls under FEMA. A dedicated statute for national security screening of inward FDI would be best suited for handling such issues.

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Foreign Policy Watch: India-Middle East

Factors driving India’s growing security footprints in West Asia

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- India's growing security footprints in West Asia

The article examines the factors that are leading to a growing footprint of Asian economies in West Asia.

Growing interest of Asian Economies  in West Asia

  • This month, a contingent of the Indian Air Force participated in a multi-nation exercise hosted by the United Arab Emirates (UAE) named Desert Flag (March 3-27).
  • Other than India and the UAE, Bahrain, France, Saudi Arabia, South Korea and the United States are also participating.
  • While joint exercises in West Asia between Arab states and their western counterparts is common, the 2021 edition’s involvement of contingents from India and South Korea.
  • This showcases the growing interests of Asian economies.
  • As net importers of crude oil, these Asian economies rely heavily on the West Asian states for their supplies,
  • And, by association, Asian economies have increased stakes in the safety and security of the region from the perspective of political and economic stability.
  • And more importantly, in the protection of vital sea lanes in areas such as the Strait of Hormuz, the Gulf of Aden and the Red Sea stretching out into the Arabian Sea and the wider Indian Ocean.

Declining U.S. influence

  • In April 2020, Saudi Arabia was India’s top supplier of oil followed by Iraq.
  • For South Korea, in late 2019, it was also Saudi Arabia as the top supplier.
  • The participation of both India and South Korea in these exercises in the Persian Gulf is reflective of these trends and growing concerns in Asian capitals over an eroding U.S. security blanket in the region.

Tension in Iran-U.S. relations

  • Both India and South Korea have found themselves caught in regional tensions as the pressure on Iran to restart the 2015 nuclear agreement (Joint Comprehensive Plan of Action, or JCPOA) increases.
  • Both India and South Korea have faced carbon-copy consequences over the past decade as the West first negotiated with Iran, and later tried to manage the fallout of the JCPOA collapse.

India’s role in protecting it’s energy interests

  • The idea of Asian nations having to band together to protect their energy interests in West Asia is not new.
  • Former Indian diplomats have even suggested an idea equitable to an ‘importers OPEC’ led by Asian states which today have a much larger stake in West Asia’s oil than the West.
  • The Indian Navy has made multiple port calls from the UAE and Kuwait to Iran and Qatar in recent years.
  • In 2020, India had also planned its first bilateral naval exercise with Saudi Arabia.

Consider the question “Examine the factors responsible for India’s growing security footprint in West Asia and how India is achieving its objectives?”

Conclusion

Regional states will become more responsible for their own security, and as Asian economies become stronger stakeholders, their geopolitics will become more visible across this geography.

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Electoral Reforms In India

Bureaucrats cannot be State Election Commissioners: SC

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Election Commission

Mains level: Autonomy of the State Election Commission

The Supreme Court gas held that independent persons and not bureaucrats should be appointed State Election Commissioners.

No bureaucrats in SEC

  • The judgment came on an appeal against an order of the Bombay High Court which had set aside the election notification issued by the Goa State Election Commission in some municipalities.
  • Justice F. Nariman, in a judgment, said giving government employees the additional charge of State Election Commissioners is a “mockery of the Constitution”.
  • It said government employees holding the post of State Election Commissioners as additional charge should give up the post.
  • The Supreme Court said its direction should be followed strictly.

Why such a move?

  • Under the constitutional mandate, it is the duty of the State to not interfere with the functioning of the State Election Commission.
  • The independence of Election Commissions cannot be compromised at any cost, the Bench said.

State Election Commission

  • Under the 73rd and 74th constitutional amendment acts, State Election Commissions were created for every state to conduct elections to panchayats and municipalities.
  • The SECs came into as envisaged in Articles 243K and 243ZA of the Constitution of India.
  • The above Articles provide that the superintendence, direction and control of the preparation of electoral rolls for, and the Conduct of all elections to the Panchayats and Municipalities shall vest in the SEC.
  • The Constitution itself has facilitated provision for smooth, free and fair, regular elections to the Local bodies and has, therefore, entrusted the SEC with the responsibility for holding such elections.
  • In the domain of the elections to the local bodies, the SEC functions independently and has the same powers and duties as that of the Election Commission of India.

Try this PYQ:

Q.The Constitution (Seventy-Third Amendment) Act, 1992, which aims at promoting the Panchayati Raj Institutions in the country, provides for which of the following?

  1. Constitution of District Planning Committees.
  2. State Election Commissions to conduct all panchayat elections.
  3. Establishment of State Finance Commissions.

Select the correct answer using the codes given below:

(a) Only 1

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

The Election Commissioner

  • The State Election Commissioner is appointed by the Governor.
  • It has the status, salary and allowance of a Judge of a High Court and cannot be removed from office except in the like manner and on the like grounds as a Judge of a High Court.
  • The Election Commissioner is also the Chairman of the Delimitation Commission.

Its duties

  • The first and foremost duty of the SEC is to prepare the elector rolls of Panchayats, Municipalities and Municipal Corporation and conduct their elections.

In addition to the above functions, the State Election Commission has also the following functions:

  1. Conduct of elections to the offices of the Mayor/Chairman/President/Deputy Mayor/Vice Chairman/Vice President and the no-confidence motion against them.
  2. Conduct of the Elections to various Standing Committees and their Chairpersons
  3. Determination of disqualification of elected members/Councilors.
  4. Determination of disqualification of elected members on the ground of defection.

Back2Basics: Election Commission of India (ECI)

  • ECI is an autonomous and permanent constitutional authority responsible for administering election processes in India at the national and state level.
  • The body administers elections to the Lok Sabha, Rajya Sabha, State Legislative Assemblies, State Legislative Councils and the offices of the President and Vice President of the country.
  • The EC operates under the authority of the Constitution per Article 324 and subsequently enacted the Representation of the People Act.
  • The commission has the powers under the Constitution, to act in an appropriate manner when the enacted laws make insufficient provisions to deal with a given situation in the conduct of an election.
  • Being a constitutional authority, EC is amongst the few institutions which function with both autonomy and freedom, along with the country’s higher judiciary, the UPSC and the CAG.

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

Places of Worship Act, 1991

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not Much

Mains level: Places of Worship Act, 1991

The Supreme Court has asked the Centre to respond to a plea challenging the Places of Worship (Special Provisions) Act, 1991. The court has opened the doors for litigation in various places of worship across the country including Mathura and Varanasi.

Take this ‘wonderful’ question from CS Mains 2019:

Q.What are the challenges to our cultural practices in the name of secularism?

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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Air Pollution

Curbing Benzene Emission

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Benzene pollution

Mains level: Not Much

A joint committee appointed by the National Green Tribunal (NGT) to study air pollution in Kerala has pointed out that petrol refuelling stations were a major source of benzene emissions and volatile organic compounds (VOCs).

Why such a move?

  • Benzene is a major constituent of evaporative emission due to its high volatility.

Try this PYQ:

Q.Consider the following:

  1. Carbon monoxide
  2. Methane
  3. Ozone
  4. Sulphur dioxide

Which of the above are released into atmosphere due to the burning of crop/biomass residue?

(a) 1 and 2 only

(b) 2, 3 and 4 only

(c) 1 and 4 only

(d) 1, 2, 3 and 4

What is Benzene?

  • Benzene is a chemical that is a colourless or light yellow liquid at room temperature. It has a sweet odour and is highly flammable.
  • It evaporates into the air very quickly. Its vapour is heavier than air and may sink into low-lying areas.
  • It dissolves only slightly in water and will float on top of the water.

Its formation and uses

Benzene is formed from both natural processes and human activities.

  • Natural sources of benzene include volcanoes and forest fires. Benzene is also a natural part of crude oil, gasoline, and cigarette smoke.
  • Some industries use benzene to make other chemicals that are used to make plastics, resins, and nylon and synthetic fibres.
  • It is also used to make some types of lubricants, rubbers, dyes, detergents, drugs, and pesticides.

Benzene emission

  • The major sources of benzene exposure are tobacco smoke, automobile service stations, exhaust from motor vehicles, and industrial emissions.
  • Benzene is present in both exhaust and evaporative emissions. Motor vehicles account for approximately 85% of the total benzene emissions.
  • However, ingestion and dermal absorption of benzene can also occur through contact with contaminated water.

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Global Geological And Climatic Events

2001 FO32: the largest asteroid passing by Earth

Note4Students

From UPSC perspective, the following things are important :

Prelims level: 2001 FO32

Mains level: Study of asteroids and meteors

On March 21, the largest asteroid predicted to pass by Earth in 2021 will be at its closest. It is called 2001 FO32.

Try this PYQ:

Q.Which of the following is/are cited by the scientists as evidence/evidence for the continued expansion of the universe?

  1. Detection of microwaves in space
  2. Observation of redshirt phenomenon in space
  3. Movement of asteroids in space
  4. Occurrence of supernova explosions in space

Codes:

(a) 1 and 2 only

(b) 2 only

(c) 1, 3 and 4

(d) None of the above can be cited as evidence.

2001 FO32

  • There is no threat of a collision with our planet now or for centuries to come.
  • Scientists know its orbital path around the Sun very accurately since it was discovered 20 years ago and has been tracked ever since.
  • It won’t come closer than 2 million km to Earth, but it will present a valuable scientific opportunity for astronomers who can get a good look at a rocky relic that formed at the dawn of our Solar System.

Proximity to Earth

  • For comparison, when it is at its closest, the distance of 2 million km is equal to 5¼ times the distance from Earth to the Moon.
  • Still, that distance is close in astronomical terms, which is why 2001 FO32 has been designated a “potentially hazardous asteroid”.
  • The reason for the asteroid’s unusually speedy close approach is its highly eccentric orbit around the Sun, an orbit that is tilted 39° to Earth’s orbital plane.
  • This orbit takes the asteroid closer to the Sun than Mercury, and twice as far from the Sun as Mars.
  • Later, the asteroid slows after being flung back out into deep space and swinging back toward the Sun. It completes one orbit every 810 days (about 2¼ years).

Studying the visitor

  • This asteroid will provide an opportunity for astronomers to get a more precise understanding of the asteroid’s size and albedo (i.e. how bright, or reflective, its surface is), and a rough idea of its composition.
  • When sunlight hits an asteroid’s surface, minerals in the rock absorb some wavelengths while reflecting others.
  • By studying the spectrum of light reflecting off the surface, astronomers can measure the chemical “fingerprints” of the minerals on the surface of the asteroid.

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Plantation Agriculture – RISPC, Tea Act, etc.

Seabuckthorn plantations in Himachal Pradesh

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Seabuckthorn

Mains level: Not Much

The Himachal Pradesh government has decided to start planting Seabuckthorn in the cold desert areas.

What is Seabuckthorn?

  • It’s a shrub that produces an orange-yellow coloured edible berry.
  • In India, it is found above the tree line in the Himalayan region, generally in dry areas such as the cold deserts of Ladakh and Spiti.
  • In Himachal Pradesh, it is locally called Himalayan chharma and grows in the wild in Lahaul and Spiti and parts of Kinnaur.
  • According to the Seabuckthorn Association of India, around 15,000 hectares in Himachal, Ladakh, Uttarakhand, Sikkim and Arunachal Pradesh are covered by this plant.

Try this PYQ from CSP 2019:

Q.Recently, there was a growing awareness in our country about the importance of Himalayan nettle (Girardinia diversifolia) because it is found to be a sustainable source of

(a) anti-malarial drug

(b) biodiesel

(c) pulp for paper industry

(d) textile fibre

Benefits of the Seabuckthorn plant

(1) Medicinal benefits

  • As a folk medicine, Seabuckthorn has been widely used for treating stomach, heart and skin problems.
  • In the last few decades, scientific research worldwide has backed many of its traditional uses.
  • Its fruit and leaves are rich in vitamins, carotenoids and omega fatty acids, among other substances, and it can help troops in acclimatizing to high-altitude.

(2) Ecological benefits

  • Besides being an important source of fuelwood and fodder, Seabuckthorn is a soil-binding plant that prevents soil-erosion, checks siltation in rivers and helps preserve floral biodiversity.
  • In the Lahaul valley, where willow trees are dying in large numbers due to pest attack, this hardy shrub is a good alternative for protecting the local ecology.

(3) Commercial benefits

  • Seabuckthorn also has commercial value, as it is used in making juices, jams, nutritional capsules etc.
  • But wild Seabuckthorn cannot sustainably supply raw material to the industry, and the plant needs to be cultivated on a large scale as is being done in China.

What is the latest project?

  • The Seabuckthorn association wants the forest departments of various Himalayan states/UTs to plant Seabuckthorn on arid and marginal lands using compensatory afforestation or CAMPA funds.
  • Recently, the union ministry of environment, forest and climate change asked these states to submit proposals for taking up such plantations.
  • This is in the light of reduced water flow from Himalayan glaciers and their impact on ecology.

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Climate Change Negotiations – UNFCCC, COP, Other Conventions and Protocols

Working towards climate justice in a non-ideal world

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NEF

Mains level: Paper 3- Climate change negotiations

The new U.S. administration has renewed its commitment to climate actions by reconvening the Major Economies Forum. This has several implications for India and the developing countries. The article deals with this issue.

Reconvening MEF and its implications for developing countries

  • The election of Joe Biden as U.S. President has catapulted climate change to the top of the global agenda.
  • Interestingly, the U.S. is not just striding back to the Obama signature achievement of the Paris Accord with its voluntary commitments but also to the Bush days [which was not necessarily voluntary].
  • This change is best evidenced by the presidential call to reconvene the Major Economies Forum (MEF).
  • The MEF, which was first convened in March 2009, originated in the Bush-era U.S. efforts to rope in major emitters.
  • It was also to push a way forward on climate change without heed to the principle of differentiated responsibilities and recognition of historical responsibilities.
  • These two are hallowed principles of the climate discourse given the decades of staying power of greenhouse gases (GHGs) in the atmosphere.

Changing approach implications for India

  • All countries have been told to commit to net zero (GHG emissions) by 2050 with credible plans to ensure meeting this domestic target.
  • Taking a cue from the new U.S. Administration, the UN Secretary-General has even called on countries to declare national climate emergencies apart from building a coalition for a carbon-neutral world by 2050.
  • As of today, countries representing around 65% of global CO2 emissions have already agreed to this.
  • These plans and their implementation will, undoubtedly, be subject to international reviews and verification.
  • Historical responsibilities and differentiation have no place in this discourse; but neither does the level of development.
  • India can easily be in the crosshairs of such a discourse no matter its extraordinarily small carbon footprint in per-capita terms and huge development imperatives.

Possibility of carbon border levies

  • Adding to the challenges is the distinct possibility of the EU imposing carbon border levies on those who do not take on high carbon cut-down targets and do so unilaterally if there is no global agreement.
  • While as of now the U.S. Administration appears ambivalent on these border levies, the possibility of their coming around cannot be ruled out.
  • In such a scenario, World Trade Organization rules that presently exclude the use of tariffs on environmental grounds will certainly get modified.

A fund pay-in idea

  • To deal with the issue of climate finance, Raghuram Rajan has recently put forward a proposal for India to consider.
  • The proposal calls on countries to pay into a global fund amounts based on their carbon emissions over and above the global per-capita average of five tons.
  • This obviously disincentives coal in a big way while incentivising renewables.
  • Those above the global average would pay, while those below would receive the monies.
  • While this would suggest a certain equity, it may be unacceptable to the developed countries even though Mr. Rajan has gone along with the drumbeat to forget historical responsibility.
  • For India, such a proposal may appear attractive as India today has per capita CO2 emission of only 2 tons and is a global record setter in pushing renewables.
  • The long-term implications of such a proposal require examination in detail, quite apart from factoring in the twists and turns that negotiations could give to such an idea.
  • And then, of course, there are alternatives such as emission trading. 

Implications for developing countries

  • The proposal of fund pay-in allows practical considerations to trump fairness by not only giving a short shrift to historical responsibility but also denying priority access to the remaining carbon space for developing countries.
  • In that sense, it double penalises them while giving developed countries a certain free pass.
  • Here it bears noting that more than 75% of the carbon space available to humankind to keep global temperature rises to 1.5° C has already been taken up by the developed world and China.

Consider the question “As the world seeks to tackle the climate change through climate action, delivering climate justice should also be the priority. In light of this, discuss the challenges faced by the developing countries in this regard.”

Conclusion

Climate justice is an imperative for India, which needs to leverage its green and pro-nature commitment to ensure carbon and policy space for its developmental and global aspirations. India’s diplomatic and negotiating efforts must be quickly geared to that end.

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

India as a factory for the Quad

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- India's manufacturing capacity

The article highlights how India could offer the solution to the tactical issue faced by the Quad: matching China’s manufacturing capacity.

Strategic case for the Quad

  • The strategic case for the Quadrilateral Security Dialogue, better known as the Quad, has always been sound.
  • A rising China, with its authoritarian one-party system, is a challenge to the democratic order.
  • The strategic case for the Quad has, however, always faced a tactical hurdle.
  • China was the factory of the world.
  • It had become an almost indispensable cog in the global supply chain owing to its low-cost manufacturing prowess at a mass scale.
  • How could any grouping hope to challenge China’s power-play dynamics while at the same time being dependent on its factories to sustain its economies?

Two recent development that changed the dynamic

  • Two recent developments have completely changed the dynamic.
  • First, Australia returned to the Malabar Naval exercises in 2020, after 13 years.
  • Second, on March 12, the first summit-level meet of the Quad — comprising the US, India, Japan and Australia — is scheduled to take place.

Rise in India’s manufacturing ability

  • What has changed between 2007 and 2020 that Quad 2.0 has become viable is the globally visible rise in India’s manufacturing ability.
  • Consider the following examples.

1) PPE Kit manufacturing

  • First, the success in PPE kits.
  • At the beginning of the COVID-19 pandemic, India was manufacturing zero PPE kits.
  • India not just created an overnight world-class manufacturing capacity to meet its own needs but also started exporting PPE kits.

2) Vaccine Maitri

  • Second, the soft power of Vaccine Maitri.
  • The developed countries are scrambling to secure vaccines for their domestic population.
  • India is not only vaccinating its own people faster than any other country but is also exporting millions of vaccines to countries in need.
  • From Canada to Pakistan and from the Caribbean Islands to Brazil — Made in India vaccines have been a life vest across the globe.

3) India’s private industry

  • Third, the enterprise of India’s private industry — a hallmark of the deepening manufacturing base.
  • As a recent New York Times report noted, when it came to syringes — without which the vaccines were useless — the global scramble again led to Indian manufactures.
  • Hindustan Syringes alone has ramped up its manufacturing capacity to almost 6,000 syringes a minute.

4) Precision high-end manufacturing

  • The PLI scheme launched for electronics’ manufacturing evinced unprecedented global interest with 22 top companies, including the top manufactures for Apple and Samsung mobile phones.
  • Over the next five years, a manufacturing capacity of over $150 billion and exports of $100 billion have been tied up through this scheme.

5) Figher plane manufacturing

  • Fifth, the success of India’s fourth-generation fighter jet programme and the orders placed by the Indian Air Force for 83 Tejas jets.
  • India’s success is one more milestone in its journey towards emerging as a global manufacturing destination.

Policy changes to make India manufacturing destination

  • Concurrently, India has been reforming its economic policies to make it even more attractive as a manufacturing destination.
  • India has the lowest tax rate anywhere in the world — 15 per cent for new manufacturing units.
  • FDI norms have been relaxed across the board and automatic approval processes instituted for FDI even up to 100 per cent.
  • Privatisation of PSUs is now an established process.
  • Labour laws have been finally reformed and compliance burdens significantly eased.
  • Taxation is now faceless, thus ending the spectre of rent-seeking.
  • A well-functioning, world-class bankruptcy law is in place. Interest rates are low.
  • And India’s digital infrastructure rivals the best in the world and in many cases beats it.

Consider the question “India’s growing prowess as the manufacturing hub could provide the Quad tactical basis by replacing China. Comment.

Conclusion

The only arrow that was missing in the quiver of the Quad has now been attained. The strategic case for the Quad was never in doubt. The dependence on China’s factories is what kept the grouping of democracies from emerging. India has raised its hand to solve that problem.

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Higher Education – RUSA, NIRF, HEFA, etc.

How to grow better colleges

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Improving the colleges

The article highlights the important role students can play in improving the quality of colleges and institution in India.

Improving the colleges

  • The global QS ranking is out and India has 12 universities and institutions in the top-100 in particular subjects.
  • We have many colleges offering higher education but typically they are not very good.
  • Today, with a huge number of students going to college, education is tied strongly to career prospects.
  • If studying and thinking harder do not lead to even a decent chance of career improvement, it is natural for most students to lose academic ambition.

Career prospects in various colleges

  • For admission in IIT, many work extremely hard to secure admission, but then lose motivation and drift towards near-certain graduation.
  • IIT admission is a value signal to future employers who do not see much relevance in the actual syllabus.
  • The entry wall is high, the exit wall is low, and the four-year syllabus is an obstacle course between the student and an employer with whom eye contact was made from atop the entry wall itself.
  • Students of varied subjects thus remain uninterested in their core syllabi.
  • Lower-ranked colleges may attract a slightly different mix of employment prospects, some in core areas.
  • In many colleges, both good and bad ones, high grades correlate only loosely with career outcomes. 

Improving the college

  • Very few jobs actually require the highest quality education — the best academic and research jobs.
  • In such a system, it may not be worthwhile or even practical for a mediocre college to unilaterally improve itself.
  • Having improved, it remains to convince society that it deserves to displace the pre-eminent colleges at the top.
  • For lower-ranking colleges to improve itself, its students must first see useful value in a better education.
  • That requires system-wide growth in opportunity.

How to achieve system-wide growth in opportunity

  • Such growth cannot be legislated from above. It must occur organically, from below.
  • There are several stakeholders involved in such transition.
  • 1) At the top are policymakers.
  • Policymakers are trying and have achieved many things.
  • In recent years, however, our demographics have caught up with us.
  • We have more than 650 million people under age 25.
  • No other country is close. We need more than policies.
  • 2) Next is industry. It faces a learning curve for technology.
  • Countries that wish to lead must develop their own technology, even at high cost.
  • Indian industry can often choose between importing slightly older technology from outside or developing things in-house.
  • A slow growth in the latter has begun and may pull our college system upward over time.
  • 3) Our next stakeholders are college teachers.
  • For a college to flourish, it needs many students who compete to enroll.
  • Our entrance exams for good engineering colleges are hard.
  • Our nationally renowned degree colleges which admit based on board marks are frequently forced to set very high cutoffs.
  • The need for more engineering colleges, for many students who are clearly good enough, has led to the creation of several private colleges that teach well in large volumes.
  • Quality of teachers’ is improving.
  • College teachers improve as their employers aim higher, and as their students bring more into the classroom.
  • 4) Finally, we have students. If students demand better instruction, colleges will sooner or later supply it.

Way forward for students

  • Students must aim to relate their learning to society.
  • They must see their learning not as an obstacle course but as an initiation into a process that yields tangible long-term value.
  • Indian society does not merely have people looking for work.
  • It also has work looking for people: Work in food, health, design, manufacturing, transport, safety, garbage, water, energy, farming, and a hundred other things that we can do better.
  • Room for improvement is plentiful, though the market models may not be efficient or mature yet.
  • The walls between our classrooms and our lives must be broken, if our colleges are to flourish.
  • In recent decades, India has also attracted much work from overseas. Growth in that direction may well be sustained.

Consider the question “India has many colleges and institutions offering higher education but few could get the spot in the list of top global institutes. Examine the factors responsible for this. Suggest the measures to deal with this issue.”

Conclusion

Such change, driven by student aspirations, will be organic, bottom-up, and unstoppable.

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Modern Indian History-Events and Personalities

The legacy and return of the Bamiyan Buddhas

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Bamiyan Buddhas

Mains level: Spread and decline of Buddhism

Two decades later after its destruction, the Bamiyan Buddhas have been brought back to life in the form of 3D projections in an event called “A Night with Buddha”.

Bamiyan Buddhas

  • In their Roman draperies and with two different mudras, the Bamiyan Buddhas were great examples of a confluence of Gupta, Sassanian and Hellenistic artistic styles.
  • They are said to date back to the 5th century AD and were once the tallest standing Buddhas in the world.
  • Salsal and Shamama, as they were called by the locals, rose to heights of 55 and 38 metres respectively, and were said to be male and female.
  • Salsal means “the light shines through the universe”; Shamama is “Queen Mother”.
  • The statues were set in niches on either end of a cliffside and hewn directly from the sandstone cliffs.

Try this PYQ from CSP 2014:

Q.Lord Buddha’s image is sometimes shown with a hand gesture called ‘Bhumisparsha Mudra’. It symbolizes-

a) Buddha’s calling of the Earth to watch over Mara and to prevent Mara from disturbing his meditation

b) Buddha’s calling of the Earth to witness his purity and chastity despite the temptations of Mara

c) Buddha’s reminder to his followers that they all arise from the Earth and finally dissolve into the Earth and thus this life is transitory

d) Both the statements ‘a’ and ‘b’ are correct in this context

The significance of Bamiyan

  • Bamiyan is situated in the high mountains of the Hindu Kush in the central highlands of Afghanistan.
  • The valley, which is set along the line of the Bamiyan River, was once integral to the early days of the Silk Roads, providing passage for not just merchants, but also culture, religion and language.
  • When the Buddhist Kushan Empire spread, acting as a crucible of sorts, Bamiyan became a major trade, cultural and religious centre.
  • As China, India and Rome sought passage through Bamiyan, the Kushans were able to develop a syncretic (mix) culture.
  • In the rapid spread of Buddhism between the 1st to 5th centuries AD, Bamiyan’s landscape reflected the faith, especially its monastic qualities.

Taliban’s destruction of the Buddhas

  • The hardline Taliban movement, which emerged in the early 1990s, was in control of almost 90 per cent of Afghanistan by the end of the decade.
  • The destruction of the Bamiyan Buddhas was part of this extremist culture.
  • In February 2001, the Taliban declared its intention to destroy the statues, despite condemnation and protest from governments and cultural ambassadors’ world over.

The aftermath of the destruction

  • The Taliban’s destruction of the Bamiyan Buddhas met with global criticism, many of whom saw it as a cultural crime not just against Afghanistan but also against the idea of global syncretism.
  • Following the fall, UNESCO included the remains in its list of world heritage sites in 2003, with subsequent efforts made to restore and reconstruct.

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Promoting Science and Technology – Missions,Policies & Schemes

Genome Mapping of the Indian Ocean

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Genome Mapping

Mains level: India's deep ocean mission

A team of scientists and researchers from the National Institute of Oceanography (NIO) onboard its research vessel Sindhu Sadhana will work on a research project to reveal the internal working of the body of the ocean at a cellular level.

Genome Mapping of the Indian Ocean

  • The first-of-its-kind research project in the country is aimed at understanding the biochemistry and the response of the ocean to climate change, nutrient stress and increasing pollution.
  • The researchers will collect samples from various stretches of the ocean at an average depth of about 5 km.
  • Just like gene mapping is carried out on blood samples collected from humans, the scientists will map these in the bacteria, microbes found in the ocean.
  • The mapping of the Deoxyribonucleic acid (DNA) and Ribonucleic acid (RNA) will show the nutrients present in them, and also those lacking in different parts of the ocean.

Objectives of the mission

  • This project will help scientists understand the internal working of the ecosystem of the Indian Ocean.
  • The research will enable scientists to identify the factors controlling the changes in RNA, DNA in the oceans, and various stressors impacting them.
  • The ocean has several micronutrients like nitrates, sulphates and silicates, minerals like iron ore and zinc, and trace metals like cadmium or copper.
  • The genome mapping will show the presence of which these microbes have adapted to, in addition to their reaction to atmospheric carbon dioxide.
  • This will help in identifying which part of the ocean has a greater concentration of which mineral or element.
  • Scientists will then use these as tracers to tackle the causative factors for excess or lack of a certain mineral or element and suggest possible solutions for their mitigation.
  • In addition, the large pool of RNA, DNA library of the oceans will be utilized for using the Indian Ocean for human benefit in the future.

Studying the interactions of trace metals

  • Trace metals are the metals subset of trace elements; that is, metals normally present in small but measurable amounts in animal and plant cells.
  • Trace metals like cadmium or copper are supplied to oceans via continental run-offs, atmospheric deposition, hydrothermal activities and continental shelf interaction.
  • They are essential for ocean productivity for having a holistic understanding of nutrient cycling and productivity of the oceans.
  • Isotopic forms of trace metals can be utilized to track the movement of water masses responsible for ocean circulation and as tools to study the biological, geochemical and ecosystem processes and food web analyses.

Also read

https://www.civilsdaily.com/news/explained-indias-deep-ocean-mission/

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ISRO Missions and Discoveries

Lunar Polar Exploration (LUPEX) Mission

Note4Students

From UPSC perspective, the following things are important :

Prelims level: LUPEX Mission

Mains level: Not Much

India and Japan are working together on a joint lunar polar exploration (LUPEX) mission that aims to send a lander and rover to the Moon’s the South Pole around 2024.

Try this PYQ from CSP 2020:

Q.The experiment will employ a trio of spacecraft flying in formation in the shape of an equilateral triangle that has sides one million km long, with lasers shining between the craft.” the experiment in the question refers to?

(a) Voyager-2

(b) New horizons

(c) LISA pathfinder

(d) Evolved LISA

LUPEX Mission

  • The LUPEX is a robotic lunar mission concept by the Indian Space Research Organisation (ISRO) and Japan Aerospace Exploration Agency (JAXA).
  • It would send a lunar rover and lander to explore the South Pole region of the Moon in 2024.
  • JAXA is likely to provide the under-development H3 launch vehicle and the rover, while ISRO would be responsible for the lander.
  • The mission concept has not yet been formally proposed for funding and planning.
  • The Lunar Polar Exploration mission would demonstrate new surface exploration technologies related to vehicular transport and lunar night survival for sustainable lunar exploration in Polar Regions.

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Food Procurement and Distribution – PDS & NFSA, Shanta Kumar Committee, FCI restructuring, Buffer stock, etc.

[pib] 17 States implement One Nation One Ration Card System

Note4Students

From UPSC perspective, the following things are important :

Prelims level: ONORC

Mains level: Welfare of the migrant workers

Seventeen (17) States have successfully operationalised the “One Nation One Ration Card system” with Uttarakhand being the latest State to complete the reform.

Practice question for mains:

The ‘One nation one ration card ‘scheme would bring perceptible changes to the lives of India’s internal migrant workers. Comment.

One Nation One Ration Card

  • This scheme aims to ensure all beneficiaries, especially migrants get ration (wheat, rice and other food grains) across the nation from any Public Distribution System (PDS) shop of their own choice.
  • Under the existing system, a ration cardholder can buy food grains only from the fair price shop (FPS) in the locality where he or she lives.
  • It was also launched with the purpose that no poor person should be deprived of getting subsidised food grains under the food security scheme when they shift from one place to another.
  • It aims to reduce instances of corruption by middlemen and fraudulence in ration cards to avail benefits from different states.

Who is eligible under this scheme?

  • Any citizen, who is declared under the Below Poverty Line (BPL) category, will be eligible to get the benefit of this scheme across the country.
  • The beneficiaries will be identified on the basis of their Aadhar based identification through the electronic point of sale (PoS) device.
  • All the PDS shops will have the facility of electronic PoS devices.

Impact on states

  • The reform enables the States to better targeting of beneficiaries, elimination bogus/ duplicate/ineligible cardholders resulting in enhanced welfare and reduced leakage.
  • An additional borrowing limit of 0.25 per cent of the Gross State Domestic Product (GSDP) is allowed to the States only on completion of both of the following actions:
  1. Aadhar Seeding of all the ration cards and beneficiaries in the State
  2. Automation of all the FPSs in the State.

Back2Basics: Public distribution system (PDS)

  • The public distribution system (PDS) is an Indian food Security System established under the Ministry of Consumer Affairs, Food, and Public Distribution.
  • PDS evolved as a system of management of scarcity through the distribution of food grains at affordable prices.
  • PDS is operated under the joint responsibility of the Central and the State Governments.
  • The Central Government, through the Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation and bulk allocation of food grains to the State Governments.
  • The operational responsibilities including allocation within the State, identification of eligible families, issue of Ration Cards and supervision of the functioning of FPSs etc., rest with the State Governments.
  • Under the PDS, presently the commodities namely wheat, rice, sugar and kerosene are being allocated to the States/UTs for distribution.
  •  Some states/UTs also distribute additional items of mass consumption through PDS outlets such as pulses, edible oils, iodized salt, spices, etc.

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Food Procurement and Distribution – PDS & NFSA, Shanta Kumar Committee, FCI restructuring, Buffer stock, etc.

A case for a revamped, need-based PDS

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NFSA 2013

Mains level: Paper 3- Reforming the PDS

The article highlights the factors governing the food subsidy bill and suggests ways to reduce it.

Growing food subsidy bill

  • The Economic Survey, tabled in Parliament in January, rightly flagged the issue of a growing food subsidy bill.
  • During 2016-17 to 2019-20, the subsidy amount, clubbed with loans taken by the Food Corporation of India (FCI) under the National Small Savings Fund (NSSF) towards food subsidy, was in the range of ₹1.65-lakh crore to ₹2.2-lakh crore.
  • In future, the annual subsidy bill of the Centre is expected to be about ₹2.5-lakh crore.
  • During the three years, the quantity of food grains drawn by States (annually) hovered around 60 million tonnes to 66 million tonnes.
  • The National Food Security Act (NFSA) 2013, covered two-thirds of the country’s population, this naturally pushed up the States’ drawal.
  • Based on an improved version of the targeted Public Distribution System (PDS), the law requires the authorities to provide to each beneficiary 5 kg of rice or wheat per month.

How politics influenced the issue price

  • Economic Survey has hinted at an increase in the Central Issue Price (CIP).
  • Central Issue Price has remained at ₹2 per kg for wheat and ₹3 per kg for rice for years, though the NFSA, even in 2013, envisaged a price revision after three years.
  • What makes the subject more complex is the variation in the retail issue prices of rice and wheat, from nil in States such as Karnataka and West Bengal for Priority Households (PHH) and Antyodaya Anna Yojana (AAY) ration card holders.
  • In Tamil Nadu, rice is given free of cost for all categories; this includes non-PHH.
  • A mere increase in the CIPs of rice and wheat without a corresponding rise in the issue prices by the State governments would only increase the burden of States.
  • Political compulsions are perceived to be coming in the way of the Centre and the States increasing the prices.

Relook at food subsidy system

  • An official committee in January 2015 called for decreasing the quantum of coverage under the law, from the present 67% to around 40%.
  • For all ration cardholders drawing food grains, a “give-up” option, as done in the case of cooking gas cylinders, can be made available.
  •  Even though States have been allowed to frame criteria for the identification of PHH cardholders, the Centre can nudge states into pruning the number of such beneficiaries.
  • As for the prices, the existing arrangement of flat rates should be replaced with a slab system.
  • Barring the needy, other beneficiaries can be made to pay a little more for a higher quantum of food grains.

Consider the question “There is a pressing need for revamping the food subsidy system. In light of this, suggest the measures to improve the system.”

Conclusion

These measures, if properly implemented, can have a salutary effect on retail prices in the open market. A revamped, need-based PDS is required not just for cutting down the subsidy bill but also for reducing the scope for leakages. Political will should not be found wanting.

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Freedom of Speech – Defamation, Sedition, etc.

The IT Rules 2021 seek regulatory parity, but threaten to curb creative freedom

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Section 69A of IT Act

Mains level: Paper 2- Issues with the IT Rules 2021

The article argues that IT Rules 2021 far exceeds the rulemaking power granted under Section 69A of the IT Act.

Censoring online video streaming

  • Online video streaming platforms have marked a new dawn for the Indian entertainment industry.
  • The spectre of government regulation and criminalisation haunts this fledgling industry.
  • There have been various efforts to censor online video streaming platforms by petitioning the courts for a long time.
  • At least 23 petitions were being heard by different high courts on the issue of regulation of online video streaming platforms.
  • The grievances range from wounded religious sentiments to moral outrage against depictions of sexuality but the common thread that unites them is a desire to control what other citizens may watch in the privacy of their homes.
  • In addition to petitions seeking heavy-handed regulation, criminal proceedings have been initiated against employees of companies like Netflix and Amazon Prime.
  • While such FIRs may be in the context of specific films or shows, they cause substantial harassment and threaten the personal liberty of content creators and company executives.

IT Rules 2021 exceeds the rulemaking power under Section 69A of IT Act

  • The imposition of any kind of criminal liability under the IT Rules 2021 would far exceed the central government’s rule-making power under Section 69A of the IT Act.
  • The existing three-tier regulatory mechanism and content classification system prescribed under the rules are also unconstitutional for the same reason.
  • The following three issues need to be considered while considering the IT Rules 2021.
  • First, the powers under Section 69A can be exercised only in the interest of the sovereignty, defence, security of the State, friendly relations with foreign States or public order or for preventing incitement etc.
  • The implication is that the powers under Section 69A cannot be used to regulate online content which may be obscene or sexually explicit.
  • Second, Section 69A states that the central government may direct “any agency of the Government or intermediary” to block access to online content but online video streaming platforms do not fall into either of these two categories.
  • Companies like Netflix and Amazon Prime commission or license the films and shows available on their platforms, and they are not an “intermediary” under the IT Act.
  • Third, Section 69A only grants the central government the power to “block for access by the public or cause to be blocked for access by the public any information generated, transmitted, received, stored or hosted in any computer resource.”
  • However, the range of powers granted under the IT Rules 2021 is much broader and includes requiring an apology or disclaimer, re-classification of content and deletion or modification of content.
  • As a result, the IT Rules 2021 significantly expand the scope of powers available under Section 69A.

Issues with the three-tier regulatory framework

  • The three-tier regulatory framework created under the rules suffers from the substantive problem of lack of independence.
  • The third tier, which is the Inter-Departmental Committee, comprises entirely of bureaucrats and there is no guaranteed representation from the judiciary or civil society.
  • The Review Committee constituted under Rule 419A of the Indian Telegraph Rules, 1951 also solely consists of officials belonging to the executive branch.

Way forward

  • The solution is to start afresh with publication of a white paper which clearly outlines the harms that are sought to be addressed through regulation of online video streaming platforms and meaningful public consultation which is not limited to industry representatives.
  • If regulation is still deemed to be necessary, then it must be implemented through legislation that is debated in Parliament instead of relying upon Section 69A of the IT Act.

Consider the question “The IT Rules 2021 have been criticised for exceeding the rulemaking power under Section 69A of the IT Act. Examine the scope of the criticism.”

Conclusion

Many of the changes that the central government seeks to implement through the IT Rules 2021 may be well-intentioned and desirable. However, constitutional due process cannot be sacrificed at the altar of expediency

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