Note4Students
From UPSC perspective, the following things are important :
Prelims level: Top 25 drive
Mains level: Preventive detention, Chapter proceedings
The Mumbai police have started a drive titled ‘Top 25’ aimed at keeping under check history-sheeters and those they believe could create trouble.
Preventive detention laws in India have come to be associated with gross and frequent misuse.
What is the ‘Top 25’ drive of the Mumbai police?
- The Mumbai police commissioner has asked all police stations in the city to make a list of the “top 25” criminals and ask them to sign a bond of good behavior failing which they would have to pay a fine.
- The aim is to rein in criminal elements and those the police believe could create a law and order problem in the city.
- While this practices that is termed “chapter proceedings” has been followed in the past, the amount a person would usually forfeit was around Rs 10,000 – Rs 15,000.
- Now, the amount has been raised up to Rs 50 lakh.
How is the police calculating the surety amount now?
- The police are now going through the bank details and tax returns of the person and the surety amount is set in accordance with the annual income of the offender or his family.
- The police believe that the threat of having to pay a high amount will act as a deterrent and that a few thousand as surety amount did not have the desired effect.
What are Chapter Proceedings?
- Chapter proceedings are preventive actions taken by the police if they fear that a particular person is likely to cause law and order trouble.
- These proceedings are unlike punitive action taken in case of an FIR with an intention to punish.
- Here, the police can issue notices under sections of the Code of Criminal Procedure to ensure that the person is aware that creating a nuisance could result in action against him.
- Recently, the Mumbai police initiated chapter proceedings against an extremely chauvinistic news reporter and media head.
Rights of the accuse
- On receiving such notice, a person can appeal before the courts.
- In fact, in the past, courts have come down strongly against chapter proceedings in some cases.
- In 2017, while striking down a notice issued to the owner of a bar, the Bombay High Court said: “chapter proceedings cannot be initiated on the basis of an incident of trivial nature”.
Back2Basics: Arrest vs. Preventive Detention
An ‘arrest’ is done when a person is charged with a crime. An arrested person is produced before a magistrate within the next 24 hours. In case of preventive detention, a person is detained as he/she is simply restricted from doing something that might deteriorate the law and order situation.
- Article 22 of the Indian Constitution provides safeguards against the misuse of police powers to make arrests and detentions.
- Clause (2) of Article 22 reads that every person who is arrested and detained in custody shall be produced before the nearest magistrate within a period of twenty-four hours of such arrest excluding the time necessary for the journey.
- Clause (4) of the article states that no individual can be detained for more than 3 months unless a bench of High court judges or an Advisory board decides to extend the date.
- Clause (5) states that the detained individual should be made aware of the grounds he/she has been detained (in pursuance of the order) and should provide him/her with an opportunity of making a representation against the case.
- Parliament may by law prescribe the circumstances under a person may be detained for a period longer than three months under any law.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: International Energy Agency
Mains level: Not Much
The Framework for Strategic Partnership between the International Energy Agency (IEA) members and India was signed yesterday to strengthen mutual trust and cooperation & enhance global energy security, stability and sustainability.
Try this MCQ:
Q.The Global Energy Transition Index recently seen in news is released by:
a) International Energy Agency (IEA)
b) World Economic Forum (WEF)
c) International Renewable Energy Agency (IRENA)
d) International Solar Alliance
International Energy Agency
- The IEA is a Paris-based autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the 1973 oil crisis.
- It was initially dedicated to responding to physical disruptions in the supply of oil, as well as serving as an information source on statistics about the international oil market and other energy sectors.
- At the end of July 2009, IEA member countries held a combined stockpile of almost 4.3 billion barrels of oil.
- They are required to maintain total oil stock levels equivalent to at least 90 days of the previous year’s net imports.
- The IEA acts as a policy adviser to its member states but also works with non-member countries, especially China, India, and Russia.
- The Agency’s mandate has broadened to focus on the “3Es” of effectual energy policy: energy security, economic development, and environmental protection.
Greater role play
- The latter has focused on mitigating climate change.
- The IEA has a broad role in promoting alternate energy sources (including renewable energy), rational energy policies, and multinational energy technology co-operation.
Why need a partnership with IEA?
- This partnership will lead to an extensive exchange of knowledge and would be a stepping stone towards India becoming a full member of the IEA.
- India and the IEA members will work as Energy Security, Clean & Sustainable Energy, Energy Efficiency, Enhancing petroleum storage capacity in India, Expansion of gas-based economy in India, etc.
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Note4Students
From UPSC perspective, the following things are important :
Mains level: Paper 2- India's agenda at the UNSC in its 2 year stint
The article highlights India’s challenges at the UNSC in its 2 year stint.
India’s agenda at the UNSC
- India’s two-year non-permanent stint at the UNSC should be viewed as a once-in-a-decade opportunity to clearly identify and pursue its national interests regionally and globally.
- India’s entry into the UNSC coincides with the emergence of a new world order.
- Under new world order, there is systemic uncertainty, little care for global commons, absence of global leadership, the steady division of the world into rival blocs, pursuit of narrow national interests.
- Efforts by Biden administration in the United States may go on to ameliorate some of the harsh impact of this global order.
- The UNSC has also reached a point wherein its very relevance is in serious doubt.
- India too is no longer an ardent believer in the fantastical claims about a perfect world at harmony with itself, nor is it a timid observer in global geopolitics.
- India’s pursuit of its interests at the UNSC should, therefore, reflect its material and geopolitical limitations, and its energies should be focused on a clearly identified agenda.
Factors determining India’s agenda at the UNSC
1) Rivalry with China
- India’s tenure at the UNSC comes in the wake of its growing military rivalry with China.
- China’s opposition to having India chair the Counter-Terrorism Committee (CTC) in 2022 was a precursor to the things to come ahead.
- The next two years will be key to ensure checking further Chinese incursions along the Line of Actual Control and building up enough infrastructure and mobilising sufficient forces in the forward areas.
2) Relations with Russia
- Greater Indian alignment with the West at the UNSC, an unavoidable outcome, could, however, widen the growing gulf between Russia and India.
- It might not be possible for India to sit on the fence anymore.
- Fence sitting would bring more harm than goodwill in an international system where battlelines are sharpening by the day.
3) Terrorism issue
- Terror is likely to be a major focus for India at the UNSC.
- External Affairs Minister’s statement at the UNSC Ministerial Meeting on the 20th Anniversary of Security Council Resolution 1373 and the establishment of the Counter Terrorism Committee has set the stage for New Delhi’s approach on the issue.
- India recently assumed the chair of the Taliban sanctions committee which assumes significance given the fast-moving developments in Afghanistan.
- India must formulate its policy towards terrorism with far more diplomatic finesse and political nuance especially given that it is chairing the Taliban sanctions committee while courting the very same Taliban.
4) Coalition of like-minded states and setting the agenda for next decade
- India should use the forum and its engagement there to build coalitions among like-minded states and set out its priorities for the next decade — from climate change to non-proliferation.
- India should use its bargaining power at the UNSC to pursue its national interests in other forums and domains as well.
- India’s UNSC strategy should involve shaping the narrative and global policy engagement vis-à-vis — the Indo-Pacific.
- Given India’s centrality in the Indo-Pacific region and the growing global interest in the concept, New Delhi would do well to take it upon itself to shape the narrative around it.
- In doing so, it should, through the UNSC and other means, court Moscow once again and assuage its concerns about the Indo-Pacific.
Way forward
- India’s pursuit of its national interest at UNSC must also be tempered by the sobering fact that the UNSC is unlikely to admit new members any time soon, if ever at all.
- A glance at the recent debates on UNSC reforms and the state of the international system today should tell us that bending over backwards to please the big five to gain entry into the UNSC will not make a difference.
Consider the question “What agenda should India pursue at the UNSC in its two year non-permanent stint? What are the challenges in pursuing such agenda?”
Conclusion
India must focus its energies on what it can achieve during the short period that it would be in the UNSC rather than what it wishes happened.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Off-budget borrowing
Mains level: Union Budget
Finance Minister is all set to present the Union Budget 2021 on February 1st with all eyeing on off-budget borrowings to reduce Fiscal Deficit.
Try this PYQ:
With reference to the Union Government, consider the following statements:
- The Department of Revenue is responsible for the preparation of Union Budget that is presented to the Parliament.
- No amount can be withdrawn from the Consolidated Fund of India without the authorization from the Parliament of India.
- All the disbursements made from Public Account also need authorization from the Parliament of India.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 2 only
(d) 1, 2 and 3
What are off-budget borrowings?
- Off-budget borrowings are loans that are taken not by the Centre directly, but by another public institution that borrows on the directions of the central government.
- Such borrowings are used to fulfill the government’s expenditure needs.
- Such borrowings are a way for the Centre to finance its expenditures while keeping the debt off the books — so that it is not counted in the calculation of fiscal deficit.
- But since the liability of the loan is not formally on the Centre, the loan is not included in the national fiscal deficit. This helps keep the country’s fiscal deficit within acceptable limits.
- As a result, a CAG report of 2019 pointed out that this route of financing puts major sources of funds outside the control of Parliament.
Eyes on fiscal deficit
- One of the most sought after details in any Union Budget is the level of fiscal deficit.
- It is essentially the gap between what the central government spends and what it earns. In other words, it is the level of borrowings by the Union government.
- This number is the most important metric to understand the financial health of any government’s finances.
- As such, it is keenly watched by rating agencies — both inside and outside the country. That is why most governments want to restrict their fiscal deficit to a respectable number.
- One of the ways to do this is by resorting to “off-budget borrowings”.
How much would the borrowings be?
- According to the last Budget documents, in the current financial year, the Centre was set to borrow Rs 5.36 lakh crore.
- However, this figure did not include the loans that public sector undertakings were supposed to take on their behalf or the deferred payments of bills and loans by the Centre.
How are off-budget borrowings raised?
- Issuance of Bonds: The government can ask an implementing agency to raise the required funds from the market through loans or by issuing bonds.
- Utilizing savings: For example, the food subsidy is one of the major expenditures of the Centre. In the Budget presentation for 2020-21, the government paid only half the amount budgeted for the food subsidy bill to the Food Corporation of India. The shortfall was met through a loan from the National Small Savings Fund.
- Borrowing: Other PSUs have also borrowed for the government. For instance, public sector oil marketing companies were asked to pay for subsidized gas cylinders for PM Ujjwala Yojana beneficiaries in the past.
- Bank sources: Public sector banks are also used to fund off-budget expenses. For example, loans from PSU banks were used to make up for the shortfall in the release of fertilizer subsidy.
Its implications
- Given the various sources of off-budget borrowing, the true debt is difficult to calculate.
- For instance, it was widely reported that in July 2019, just three days after the presentation of the Budget, the CAG (cumulative aggregate growth) pegged the actual fiscal deficit for 2017-18 at 5.85% of GDP instead of the government version of 3.46%.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not Much
Mains level: CSR, SSR
The Corporate Affairs Ministry has amended the rules for Corporate Social Responsibility (CSR) expenditure to allow companies to undertake multi-year projects, and also require that all CSR implementing agencies be registered with the government.
Q.What do you mean by CSR? Discuss the role of CSR activities in social transformation.
What is Corporate Social Responsibility (CSR)?
- CSR is a type of business self-regulation that aims to contribute to the societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethically-oriented practices.
- It rests on the ideology of “give and take” i.e. to take scarce resources from the environment for running a business, and in turn to contribute towards economic, social, and environmental development.
CSR in India
- India is the first country in the world to make corporate social responsibility (CSR) mandatory, following an amendment to the Companies Act, 2013 in April 2014.
- Businesses can invest their profits in areas such as education, poverty, gender equality, and hunger as part of any CSR compliance.
All companies with a net worth of Rs 500 crore or more, a turnover of Rs 1,000 crore or more, or net profit of Rs 5 crore or more, are required to spend 2 per cent of their average profits of the previous three years on CSR activities every year.
What are the new amendments?
- The amended CSR rules allow companies to set off CSR expenditure above the required 2 percent expenditure in any fiscal year against required expenditure for up to three financial years.
- There lies an ambiguity whether the rule would apply for expenditure undertaken prior to the amendment.
- The government is thus allowing corporates that have in good faith incurred excess CSR expenditure in the past to set it off against future CSR expenditure requirements.
Other key changes
- The amended rules require that any corporation with a CSR obligation of Rs 10 crore or more for the three preceding financial years would be required to hire an independent agency to conduct an impact assessment of their entire project with outlays of Rs 1 crore or more.
- Companies will be allowed to count 5 percent of the CSR expenditure for the year up to Rs 50 lakh on impact assessment towards CSR expenditure.
What are the changes required for implementing agencies?
- The new amendment restricts companies from authorizing either a Section 8 company or a registered public charitable trust to conduct CSR projects on their behalf.
- A Section 8 company is a company registered with the purpose of promoting charitable causes, applies profits to promoting its objectives, and is prohibited from distributing dividends to shareholders.
- Further, all such entities will have to be registered with the government by April 1.
Impact of the move
- The change would impact CSR programs of a number of large Indian companies that conduct projects through private trusts.
- It would mean such private trusts would either have to be converted to registered public trusts or stop acting as CSR implementing agencies.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: 'The Inequality Virus' Report
Mains level: Economic implications of COVID
The ‘Inequality Virus Report’ was recently released on the opening day of the World Economic Forum in Davos.
About the report
- The Inequality Virus Report was released by Oxfam.
- It inquired into different forms of inequities, including educational, gender and health during the pandemic.
Highlights of the report
‘Rise’ in wealth
- Indian billionaires increased their wealth by 35% during the lockdown to ₹ 3 trillion, ranking India after the U.S., China, Germany, Russia and France.
- The wealth of just the top 11 billionaires during the pandemic could easily sustain the MGNREGS or the Health Ministry for the next 10 years, stated the report.
- A person (no citation needed!) who emerged as the richest man in India and Asia, earned ₹90 crores an hour during the pandemic when around 24% of the people in the country were earning under ₹ 3,000 a month during the lockdown.
- The increase in his wealth alone could keep 40 crores, informal workers, out of poverty for at least five months, said the report.
Observations made
Health: Only 6% of the poorest 20% have access to non-shared sources of improved sanitation, compared to 93.4 % of the top 20 %.
Education: Till October, 32 crores students were hit by the closure of schools, of whom 84 % resided in rural areas and 70 %attended government schools. Dalits, Adivasis and Muslims were likely to see a higher rate of dropout. Girls were also most vulnerable as they were at risk of early and forced marriage, violence and early pregnancies, it noted.
Gender: Unemployment of women rose by 15% from a pre-lockdown level of 18 %, which could result in a loss of India’s GDP of about 8 % or ₹15 trillion. Women who were employed before the lockdown were also 23.5 percentage points less likely to be re-employed compared to men in the post lockdown phase.
Recommendations
- It recommended reintroducing the wealth tax and affecting a one-time COVID-19 cess of 4% on taxable income of over ₹10 lakh to help the economy recover from the lockdown.
- According to its estimate, a wealth tax on the nation’s 954 richest families could raise the equivalent of 1% of the GDP.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 19(2)
Mains level: Free speech related issues
The Supreme Court has decided to examine a petition seeking the framing of guidelines outlining the broad regulatory paradigm within which the right to free speech of broadcasters and electronic media can be judicially regulated.
What is the petition about?
- The petition wants the court to consider substantial questions of law, including whether the electronic media enjoys greater freedom than ordinary citizens and whether they could only be subject to self-regulation.
- It has questioned whether free speech entails misinformation, fake news, hate speech, propaganda, paid news, communal and derogatory reportage, incitement, etc.
- It has asked whether regulation will amount to the curtailment of the Press if done within the parameters specified under “reasonable restrictions” of Article 19(2) of the Constitution.
- The plea said the right to life and dignity envisaged the right of citizens to “free, fair and proportionate media reporting”.
What is Article 19(2)?
- This article authorizes the government to impose, by law, reasonable restrictions upon the freedom of speech and expression “in the interests of… public order.”
- To understand the Supreme Court’s public order jurisprudence, it is important to break down the sub-clause into its component parts and focus upon their separate meanings.
- Specifically, three terms are important: “reasonable restrictions”, “in the interests of”, and “public order”.
- Clause (2) enables the legislature to impose certain restrictions on free speech under the following heads:
- Security of the State
- Friendly relations with foreign states
- Public order
- Decency and morality
- Contempt of court
- Defamation
- Incitement to an offense and
- Sovereignty and integrity of India
- Reasonable restrictions on these grounds can be imposed only by a duly enacted law and not by executive action.
The task before the court
- The principal issue before the court is to bring about a balance between the right to freedom of speech and the expression of the media and various other rights.
- These include the competing right to information of the citizenry, the right to reputation and dignity as well as the interest of preserving peace and harmony in the nation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Serological surveys
Mains level: Herd immunity and related health concerns
The initial findings of the fifth round of serological survey conducted in Delhi suggest that over 56 percent of the people have developed antibodies against Covid-19 implying achievement of herd immunity.
Herd Immunity
- Herd immunity is when a large number of people are vaccinated against a disease, lowering the chances of others being infected by it.
- When a sufficient percentage of a population is vaccinated, it slows the spread of disease.
- It is also referred to as community immunity or herd protection.
- The decline of disease incidence is greater than the proportion of individuals immunized because vaccination reduces the spread of an infectious agent by reducing the amount and/or duration of pathogen shedding by vaccines, retarding transmission.
- The approach requires those exposed to the virus to build natural immunity and stop the human-to-human transmission. This will subsequently halt its spread.
Sero-surveys in Delhi
- The results of the latest serosurvey in Delhi have led researchers and experts to surmise that a large section of the city’s population has already developed antibodies against Covid-19.
- The presence of antibodies among a large percentage of the population could be a reason for the decline in the daily number of Covid-19 cases.
- As more people are able to resist infection, it will help to break the chain of transmission of the virus.
- Five serological surveys have been carried out in Delhi so far, including the present one, which was conducted in January.
- The survey conducted by NCDC in July last year suggested the presence of antibodies in 23 percent of those surveyed.
- In August, the survey conducted by the Delhi government showed 29.1 percent had antibodies.
The relevance of such surveys
- Carrying out repeated serological surveillance on the same population gives an idea of how the disease is behaving.
- It is always good to have surveillance regularly to understand the trends.
- Having robust surveillance is always beneficial, it may not be too close, but it may help us in giving an idea, even of the natural history of the disease.
What do the data suggest about herd immunity?
- Many researchers believe that if 60 percent or more of the population has developed antibodies against Covid-19, there is a possibility of acquiring herd immunity.
- In Delhi, it is quite indicative, as the number of cases is also going down. This shows that we are moving closer towards acquiring herd immunity.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Thought partnership for informed policymaking
Thought partnership between government and the external players can aid in informed policymaking. The article deals with these issues and suggest forging of more of such partnerships.
Government working together with external partners
- Policymaking requires multiple rounds of consultations and co-working with different entities, including collaboration between the government and external partners.
- Over the last few years, there has been increasing evidence of the government and external partners working together on complex policy problems.
- The government has formalized the induction of private individuals into the system by opening up lateral entry.
- Several central government ministries and entities, such as NITI Aayog, routinely recruit private individuals as consultants, officers on special duty, or young professionals.
- Given the staggering vacancies in the central government, such support is critical since civil servants are generally overburdened and under-resourced.
What is thought partnership and how it works
- Thought partnerships are a structured mechanism for private entities to lend relevant strategic expertise to the government on policy design, evaluation, and implementation.
- It is also not always feasible for the government itself to fund projects involving private partners, more so when such projects are unconventional thought partnerships.
- Several domestic and international philanthropies and impact investing firms are already investing in critical sectors in developing countries including India.
- However, much of this funding goes into supporting projects or interventions that work in limited, contextual settings rather than systemic or sectoral transformation programs.
- It is here that philanthropies and impact investing firms can make a huge difference.
Past thought partnerships
- In 2005, the Ashok Lahiri Committee report stated that there was not enough knowledge about external capital flows and controls in India.
- The committee’s recommendation resulted in the establishment of the National Institute of Public Finance and Policy, Department of Economic Affairs research program.
- The program led to the creation of a rich body of world-class research on capital controls and flows in India that was used to inform government policy on the matter.
- In 2015, the Ministry of Corporate Affairs constituted a research secretariat headed by the Vidhi Centre for Legal Policy, to support the Companies Law Committee to make “informed decisions”.
- The National Institute of Financial Management is working with the Department of Economic Affairs to provide legal research and technical assistance on Indian and foreign financial markets, policy analysis, formulation as well as the conduct of impact assessment studies on decisions taken by the Securities and Exchange Board of India.
Consider the question “What is thought partnership and how it could help in making informed policymaking? What are the challenges in forging thought partnerships?”
Conclusion
It is in the public interest that more thought partnerships are forged and funded to channel external expertise and skills towards finding scalable solutions to the pressing policy challenges the country faces.
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From UPSC perspective, the following things are important :
Prelims level: IGN, UNSC
Mains level: India's agenda at UNSC
Seeking urgent reform of the United Nations Security Council (UNSC), India has highlighted the failure of the Intergovernmental Negotiations (IGN) since 13 years of its establishment.
Note various countries in the various groups.
What is the news?
- India, along with Brazil, Japan and Germany are pressing for urgent reform of the UNSC and for a permanent seat in the reformed 15-member top organ of the world body.
- India has said that the UNSC is finding itself unable to act effectively to address increasingly complex issues of international peace and security.
- The UNSC lacks inclusivity of those who need to be members of the powerful organ of the world body.
What is IGN?
- The Intergovernmental Negotiations framework or IGN is a group of nation-states working within the United Nations to further reform of the UNSC.
- The IGN is composed of several different international organizations, namely:
- African Union (55 member states)
- G4 nations (Brazil, Germany, India and Japan)
- Uniting for Consensus Group (UfC), also known as the “Coffee Club” (it aims to counter the bids for permanent seats proposed by G4 nations, includes Pakistan, Turkey, Canada, Spain and Italy)
- L69 Group of Developing Countries ( it includes developing countries from Africa, Latin America and the Caribbean, Asia and the Pacific)
- Arab League (six members: Egypt, Iraq, Jordan, Lebanon, Saudi Arabia, and Syria) and
- Caribbean Community ( a group of 15 member countries called CARICOM)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Non-price competition
Mains level: Data privacy issues
Data privacy can take the form of non-price competition and abuse of dominance can lower privacy protection, a study by the Competition Commission of India (CCI) has said.
Try this PYQ:
Q.Right to Privacy is protected as an intrinsic part of Right to Life and Personal Liberty. Which of the following in the Constitution of India correctly and appropriately imply the above statements?
(a) Article 14 and the provisions under the 42nd Amendment to the Constitution
(b) Article 17 and the Directive Principles of State Policy in Part IV
(c) Article 21 and the freedoms guaranteed in Part III
(d) Article 24 and the provisions under the 44th Amendment to the Constitution
What is Non-price Competition?
- Non-price competition is a marketing strategy “in which one firm tries to distinguish its product or service from competing products on the basis of attributes like design and workmanship”.
- It often occurs in imperfectly competitive markets as it exists between two or more producers that sell goods and services at the same prices but compete through non-price measures.
- Such measures include marketing schemes and greater quality or any sustainable competitive advantage other than price.
What is CCI’s observation?
- The CCI study made observations about non-price factors such as quality of service (QoS), data speeds etc. which are likely to be the new drivers of competitive rivalry between service providers in the telecom sector.
- CCI noted that an aspect of data in the context of competition in digital communications market is the conflict between allowing access and protecting consumer privacy.
Privacy at stake
- Abuse of dominance can take the form of lowering the privacy protection and therefore fall within the ambit of antitrust as low privacy standard implies lack of consumer welfare.
- Privacy can take the form of non-price competition, said the CCI.
- On other non-price factors of competition, CCI found that consumers ranked network coverage at the top followed by customer service despite their Privacy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Sagarmala
Mains level: Paper 3- India's shipping industry and challenges
The article deals with the problems faced by India’s shipping sector and suggests the measures to improve the shipping sector.
Importance of shipping for economic growth
- The major economies of the world have always realized the potential of shipping as a contributor to economic growth.
- For instance, control of the seas is a key component of China’s Belt and Road Initiative (BRI).
- However, geographically, China is not as blessed as India, yet, seven of the top 10 container ports in the world are in China, according to the World Shipping Council.
- What aided China’s growth are strong merchant marine and infrastructure to carry and handle merchandise all over the world.
Lack of carrying capacity
- All the shipping infrastructure in peninsular India only helps foreign shipping liners.
- India has concentrated only on short-term solutions.
- Foreign ship owners carry our inbound and outbound cargo. This is the case in container shipping too.
- As a country, we have still not optimized our carrying capacity.
- Much of foreign currency is drained as transshipment and handling costs every day.
- Due to this, members of our maritime business community have also preferred to be agents for foreign ship owners or container liners rather than becoming ship owners or container liners themselves.
- As a result, there is a wide gap between carrying capacity and multi-folded cargo growth in the country.
Way forward
1) Regional cargo-specific ports
- Instead of creating regional cargo-specific ports in peninsular India, we allowed similar infrastructural developments in multiple cargo-handling ports.
- As a result, Indian ports compete for the same cargo.
- We need to make our major ports cargo-specific, develop infrastructure on a par with global standards, and connect them with the hinterlands as well as international sea routes, they will automatically become transshipment hubs.
- We need to only concentrate on developing the contributing ports to serve the regional transshipment hubs for which improving small-ship coastal operations is mandatory.
2) Sagarmala
- Sagarmala aims are port-led industrialization, development of world-class logistics institutions, and coastal community development.
- Sagarmala will help in increasing domestic carrying capacity.
- Shipbuilding, repair, and ownership are not preferred businesses in India and the small ship-owning community in India also prefer foreign registry instead of domestic registration.
- If this has to change, there needs to be a change in the mindset of the authorities and the maritime business community.
- ‘Make in India’ will result in multi-folded cargo growth in the country, we need ships to cater to domestic and international trade.
- Short sea and river voyages should be encouraged.
- Shipbuilding and owning should be encouraged by the Ministry.
- The National Shipping Board is an independent advisory body for the Ministry of Shipping, where the Directorate General of Shipping (DGS) is a member.
- The NSB should be able to question the functioning of the DGS, which is responsible for promoting carrying capacity in the country.
- Coastal communities should be made ship owners.
- This will initiate the carriage of cargo by shallow drafted small ships through coast and inland waterways.
- Sagarmala should concentrate on consolidating the strength of the coastal youth and make them contribute to the nation’s economy with pride.
Consider the question “How shipping contributes to the economic prosperity of a country? Suggest the steps need to be taken to develop its shipping sector.”
Conclusion
Shipping plays an important role in the economic development of a country. India needs to focus on developing it to achieve the economic prosperity.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Monetary policy measures
Mains level: Paper 3- Dealing with the excess liquidity
The article highlights the challenge in dealing with the excess liquidity in the economy after the central banks injected liquidity by persuing unorthodox policies.
Overview of policies adopted during 2008 financial crisis
- Days after the crash of Lehman Brothers, the United States Congress approved an emergency bailout package of $700 billion in September 2008.
- The amount was used to buy off mortgage-backed securities from banks, hedge funds and pension funds to avert further Lehman-type bankruptcies.
- As a result, fresh money was injected into the banking system for it to resume normal credit operations and clean up balance sheets.
- Subsequent actions of the US government and Federal Reserve blurred the distinction between fiscal and monetary policy.
- ‘Quantitative easing’ was a term coined to describe unorthodox measures like a central bank buying off mortgages and loans, and thus taking credit risk onto its balance sheet.
- So, quantitative easing was pursued by all the major central banks of the developed world.
- Central banks embarked upon an aggressive money-printing spree. Assets on their books ballooned.
Monetary response during pandemic subsequent liquidity glut
- During the pandemic year more than a decade after the 2008 crisis, the West’s monetary spigots have been opened even more.
- A liquidity glut has ensued.
- While the rate of monetary expansion over this period has been healthy, neither employment nor economic output grew by even a fraction of that rate.
- Central bank finds itself in the maze.
RBI in a similar situation
- The Reserve Bank of India (RBI) too finds itself in a similar predicament, where the way out of its liquidity glut is hazy.
- Due to purchases of foreign exchange externally and of government bonds domestically, RBI’s balance sheet has ballooned by more 30% by August last year.
- RBI has injected liquidity through long-term repo operations, which essentially provide long-term money at low overnight rates.
- The Indian central bank has also provided implicit liquidity support to mutual funds.
- However, the RBI has not quite ventured into taking credit risk onto its books, nor has it signalled a readiness to buy toxic assets.
Liquidity glut and challenges associated with it
- As a result of India’s liquidity glut, money is flowing in and out of the central bank to the tune of ₹7 trillion on a daily basis.
- This has resulted in an anomaly: market lending rates have gone below RBI’s reverse repo rate, which is supposed to be the de facto floor.
- Cheap money encourages to do foolish and risky things, which, if done widely and voluminously enough, can spell disaster for financial stability.
- But, any hint of reducing the rate of money expansion threatens to cause panic and burst the bubble it blew.
- So, when RBI tentatively tried to move market rates higher by announcing a reverse repo auction,the market reaction was one of panic all the same, and there was a spike in interest rates.
- This caused the central bank to rethink its strategy.
- To calm nervous bond traders, the governor has categorically said that liquidity support will continue as long as necessary.
Way forward
- We need to plan an exit from the current glut.
- One way out could be loan ₹5 trillion to the central government against shares of public sector undertakings, at a low rate of 3% for a period of five years to fund its huge deficit.
- That will bypass markets and not cause any disruption to interest rates.
Consider the question “Why the challenges posed by liquidity glut caused by the unorthodox policies adopted by the central bank in the aftermath of the pandemic? What are the challenges in reducing the liquidity?”
Conclusion
Whatever the way out of this whirlpool of liquidity, it’s not going to be easy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Agriculture Census
Mains level: Paper 3- Exclusion of small and marginal farmers from agri-credit
India’s agriculture credit increased by 500% in the last decade, however, this increase in the credit has not been reflected in the condition of the farmers. The article deals with the issues with the agri-credit in India.
Impact of credit on agriculture
- Providing credit to small farmers at a reasonable rate has been the agenda of the Centre, the States, and the Reserve Bank of India (RBI) for decades.
- However, the volume of credit has improved over the decades, its quality and impact on agriculture have only deteriorated.
- In 2011-12, the target was ₹4.75-lakh crore; now, agri-credit has reached the target of ₹15-lakh crore in 2020-21 with an allocated subsidy of ₹21,175 crores.
- Agricultural credit has become less efficient in delivering agricultural growth.
Issues with agri-credit: small farmers left-out
- In the last 10 years, agriculture credit increased by 500% but has not reached even 20% of the 12.56 crore small and marginal farmers.
- 95% of tractors and other agri-implements sold in the country are being financed by non-banking financial companies, or NBFCs, at an 18% rate of interest.
- The RBI has also questioned agricultural households with up to two hectares getting only about 15% of the subsidized outstanding loan from institutional sources (bank, co-operative society).
- As per the Agriculture Census, 2015-16, the total number of small and marginal farmers’ households in the country stood at 12.56 crore which makes up 86.1% of the total holdings.
- As in the Situation Assessment Survey of Agricultural Households by the National Sample Survey Office (NSSO), the share of institutional loans rises with an increase in land possessed.
- This shows that the bulk of subsidized agri-credit is grabbed by big farmers and agri-business companies.
What are the reasons
- A loose definition of agri-credit has led to the leakage of loans at subsidized rates to large companies in agri-business.
- The RBI had set a cap that out of a bank’s overall adjusted net bank credit, 18% must go to the agriculture sector, and within this, 8% must go to small and marginal farmers and 4.5% for indirect loans, bank advances routinely breach the limit.
- A review by the RBI’s internal working group in 2019 found that in some States, credit disbursal to the farm sector was higher than their agriculture gross domestic product (GDP) and the ratio of crop loans disbursed to input requirement was very unevenly distributed.
- This shows the diversion of credit for non-agriculture purposes.
- One reason for this diversion is that subsidized credit disbursed at a 4%-7% rate of interest is being refinanced to small farmers, and in the open market at a rate of interest of up to 36%.
Way forward
- The way forward is to empower small and marginal farmers by ‘giving them direct income support on a per hectare basis rather than hugely subsidizing credit.
- Streamlining the agri-credit system to facilitate higher crop loans to farmer producer organizations, or the FPOs of small farmers against commodity stocks can be a win-win model to spur agriculture growth’.
- With mobile phone penetration among agricultural households in India being as high as 89.1%, efforts to improve institutional credit delivery through technology-driven solutions can reduce the extent of the financial exclusion of agricultural households
- There is a need to reforming the land leasing framework and creating a national-level agency to build consensus among States and the Centre concerning agriculture credit reforms.
Consider the question “Growth in the agriculture sector in India has not been commensurate with the growth in the agriculture credit. What are the reasons for this disparity? Suggest the measures to deal with the challenges in agri-credit delivery.”
Conclusion
Improving the access to credit at a reasonable rate will help in increasing their income but to do that reforms in credit delivery is the need of the hour.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: WEF
Mains level: The Great Reset
This news card is an excerpt from the original article published in The Indian Express and is articulated by C. Raja Mohan.
The Great Reset
- The Great Reset is a proposal by the World Economic Forum (WEF) to rebuild the economy sustainably following the COVID-19 pandemic.
- It was unveiled in May 2020 by the United Kingdom’s Prince Charles and WEF director Klaus Schwab.
The basis for the said reset
- It is based on the assessment that the world economy is in deep trouble.
- Schwab has argued that the situation has been made a lot worse by many factors, including the pandemic’s devastating effects on global society, the un- folding technological revolution, and the consequences of climate change.
- He demands that the world must act jointly and swiftly to revamp all aspects of our societies and economies, from education to social contracts and working conditions.
- Every country must participate, and every industry, from oil and gas to tech, must be transformed.
Agenda behind
The agenda of The Great Reset touches on many key issues facing the world a/c to C Raja Mohan. Three of them stand out as:
First is the question of reforming capitalism
- The WEF has been at the forefront of calling for “stakeholder capitalism” that looks beyond the traditional corporate focus on maximizing profit for shareholders.
Second, it is certainly right to focus on the deepening climate crisis
- Climate skeptics have been ousted from Washington and President Biden has rejoined the 2015 Paris accord on mitigating climate change.
The third is the growing difficulty of global cooperation
- The era of great power harmony that accompanied the liberalization of the global economy at the turn of the 1990s has yielded place to intense contestation. The contestation is not just political but increasingly economic and technological.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Green tax
Mains level: Vehicular pollution and its control
The Union Minister for Road Transport and Highways has approved a proposal to levy a ‘green tax’ on old vehicles.
Do read about Green Mobility, India’s FAME-I and II Scheme.
Green Tax
- Personal vehicles will be charged a tax at the time of renewal of Registration Certification after 15 years.
- The policy will come into effect from April 1, 2022.
- The levy may differ depending on fuel (petrol/diesel) and type of vehicle.
- The proposal will now go to the States for consultation before it is formally notified.
- It includes 10-25% of road tax on transport vehicles older than eight years at the time of renewal of fitness certificate.
- The proposal on green tax also includes a steeper penalty of up to 50% of road tax for older vehicles registered in some of the highly polluted cities in the country.
- Revenue collected from this tax will be kept in a separate account and will be used for tackling pollution, and for States to set up state-of-art facilities for emission monitoring.
Why such a move?
- To dissuade people from using vehicles which damage the environment
- To motivate people to switch to newer, less polluting vehicles
- Green tax will reduce the pollution level, and make the polluter pay for pollution
Exemptions to this tax
- Vehicles like strong hybrids, electric vehicles and alternate fuels like CNG, ethanol, LPG etc to be exempted;
- Vehicles used in farming, such as tractor, harvester, tiller etc to be exempted;
Other proposals
- The Ministry also approved a watered-down policy of deregistration and scrapping of vehicles, bringing only those vehicles owned by government departments and PSUs and are older than 15 years under its ambit.
- In 2016, the Centre had floated a draft Voluntary Vehicle Fleet Modernization Programme that aimed to take 28 million decade-old vehicles off the road.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Law Commission
Mains level: Law Commission and its function
The Supreme Court has asked the Home and Law Ministries to explain the nearly three-year-long lapse in making appointments to the Law Commission.
Try this PYQ:
Q.The power to increase the number of judges in the Supreme Court of India is vested in
(a) The President of India
(b) The Parliament
(c) The Chief Justice of India
(d) The Law Commission
What is the news?
- The posts of Chairperson and Members have been vacant ever since the 21st Law Commission under the former Supreme Court judge, Justice B.S. Chauhan completed its tenure in August.
- The government approved the constitution of the 22nd Law Commission on February 19 last.
- However, it has not appointed the Chairperson and Members to date.
What is the Law Commission?
- It is an executive body established by an order of the Government of India. The first law commission of independent India was established post Independence in 1955
- Tenure: 3 Years
- Function: Advisory body to the Ministry of Law and Justice for “Legal Reforms in India”
- Recommendations: NOT binding
- First Law Commission was established during the British Raj in 1834 by the Charter Act of 1833
- Chairman: Macaulay; It recommended for the Codifications of the IPC, CrPC etc.
Composition
The 22nd Law Commission will be constituted for a period of three years from the date of publication of its Order in the Official Gazette. It will consist of:
- a full-time Chairperson;
- four full-time Members (including Member-Secretary)
- Secretary, Department of Legal Affairs as ex-officio Member;
- Secretary, Legislative Department as ex officio Member; and
- not more than five part-time Members.
Terms of reference
- The Law Commission shall, on a reference made to it by the Central Government or suo-motu, undertake research in law and review of existing laws in India for making reforms therein and enacting new legislations.
- It shall also undertake studies and research for bringing reforms in the justice delivery systems for elimination of delay in procedures, speedy disposal of cases, reduction in the cost of litigation, etc.
The Law Commission of India shall, inter-alia: –
- identify laws that are no longer needed or relevant and can be immediately repealed
- examine the existing laws in the light of DPSP and Preamble
- consider and convey to the Government its views on any subject relating to law and judicial administration that may be specifically referred to it by the Government through Ministry of Law and Justice (Department of Legal Affairs);
- Consider the requests for providing research to any foreign countries as may be referred to it by the Government through the Ministry of Law and Justice (Department of Legal Affairs);
- take all such measures as may be necessary to harness law and the legal process in the service of the poor;
- revise the Central Acts of general importance so as to simplify them and remove anomalies, ambiguities, and inequities
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Global Climate Risk Index 2021
Mains level: Climate change vulnerability and the economics behind
India was ranked the seventh worst-hit country in 2019 in the Global Climate Risk Index 2021.
The report holds much significance for prelims as well as mains. Just for the sake of information, we must be aware of India’s performance.
Global Climate Risk Index
- The GCRI is released annually by the environmental think tank and sustainable development lobbyist Germanwatch.
- It analyses to what extent countries have been affected by the impacts of weather-related loss events (storms, floods, heat waves etc.).
- It pushes for the need to support developing countries in coping with the effects of climate change.
Highlights of the 2020 year
Global prospects
- Mozambique, Zimbabwe and The Bahamas were the worst-affected countries in 2019.
- While hurricane Dorian ravaged The Bahamas; Mozambique, Zimbabwe and Malawi were affected by the single extreme weather event of cyclone Idai.
- Japan and Afghanistan were the other countries that fared worse than India on the Index, while South Sudan, Niger and Bolivia fared better in comparison but still made it to the top 10 worst-affected countries.
The burden of development
- Eight of the 10 countries most affected between 2000 and 2019 were developing countries with low or lower middle income per capita.
- Vulnerable people in developing countries suffered most from extreme weather events like storms, floods and heatwaves, whereas the impact of climate change was visible around the globe.
- Poorer countries are hit hardest because they are more vulnerable to the damaging effects of a hazard and have the lower coping capacity.
Data about India
- According to the Index floods caused by heavy rain in 2019 took 1,800 lives across 14 states in India and displaced 1.8 million people.
- Overall, the intense monsoon season affected 11.8 million people, with the economic damage estimated to be $10 billion (Rs.72,900 crore at $1=INR 72.9).
- A total of eight tropical cyclones meant that 2019 was one of the most active Northern Indian Ocean cyclone seasons on record. Six of them intensified to become “very severe”.
- The worst was Cyclone Fani in May 2019 which affected a total of 28 million people, killing nearly 90 people in India and Bangladesh, and causing economic losses of $8.1 billion (Rs.59,066 crore).
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Ayushman Bharat
Mains level: Universal health coverage
Union Home Minister has rolled out the ‘Ayushman CAPF’ scheme, extending the benefit of the central health insurance programme to the personnel of all Central Armed Police Forces (CAPFs) in the country.
Who are the CAPFs?
- The CAPFs refers to uniform nomenclature of five security forces in India under the authority of the Ministry of Home Affairs.
- Their role is to defend the national interest mainly against the internal threats.
- They are the Border Security Force (BSF), Central Reserve Police Force (CRPF), Central Industrial Security Force (CISF), Indo-Tibetan Border Police (ITBP), Sashastra Seema Bal (SSB)
Ayushman CAPF
- Under this scheme, around 28 lakh personnel of CAPF, Assam Rifles and National Security Guard (NSG) and their families will be covered by ‘Ayushman Bharat: PM Jan Arogya Yojana’ (AB PM-JAY).
- For the CAPF, the existing health coverage was not comprehensive as compared to other military forces.
Do you know?
The goal of universal health coverage (UHC) as stated in the UN Sustainable Development Goals (SDGs no. 3) is one of the most significant commitments to equitable quality healthcare for all.
About Ayushman Bharat
- PM-JAY aims to provide free access to healthcare for 40% of people in the country.
- It is a centrally sponsored scheme and is jointly funded by both the union government and the states.
- It was launched in September 2018 by the Ministry of Health and Family Welfare.
- The ministry has later established the National Health Authority as an organization to administer the program.
Key features:
- Providing health coverage for 10 crores households or 50 crores Indians.
- It provides a cover of 5 lakh per family per year for medical treatment in empanelled hospitals, both public and private.
- Offering cashless payment and paperless recordkeeping through the hospital or doctor’s office.
- Using criteria from the Socio-Economic and Caste Census 2011 to determine eligibility for benefits.
- There is no restriction on family size, age or gender.
- All previous medical conditions are covered under the scheme.
- It covers 3 days of pre-hospitalization and 15 days of post-hospitalization, including diagnostic care and expenses on medicines.
- The scheme is portable and a beneficiary can avail medical treatment at any PM-JAY empanelled hospital outside their state and anywhere in the country.
Note these features. They cannot be memorized all of sudden but can be recognized if a tricky MCQ comes in the prelims.
Must read:
[Burning Issue] Ayushmaan Bharat
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Sundarban Delta
Mains level: Not Much
Indian Sunderbans, which is part of the largest mangrove forest in the world, is home to 428 species of birds, a recent publication of the Zoological Survey of India (ZSI) States.
Sundarban Biosphere Reserve
- Sundarbans is the largest delta and mangrove forest in the world.
- The Indian Sunderbans, which covers 4,200 sq km, comprises of the Sunderban Tiger Reserve of 2,585 sq km is home to about 96 Royal Bengal Tigers (2020) is also a world heritage site and a Ramsar Site.
- The Indian Sunderbans is bound on the west by river Muriganga and on the east by rivers Harinbhahga and Raimangal.
- Other major rivers flowing through this eco-system are Saptamukhi, Thakuran, Matla and Goasaba.
- Recent studies claim that the Indian Sundarban is home to 2,626 faunal species and 90% of the country’s mangrove varieties.
What is the latest research?
- The scientists have listed 428 birds, some, like the Masked Finfoot and Buffy fish owl, are recorded only from the Sunderbans.
- India has over 1,300 species of birds and if 428 species of birds are from Sunderbans.
- The area is home to nine out of 12 species of kingfishers found in the country as well rare species such as the Goliath heron and Spoon-billed Sandpiper.
Try this PYQ:
With reference to India’s biodiversity, Ceylon frogmouth, Coppersmith barbet, Gray-chinned miniyet and White-throated redstart are–
(a) Birds
(b) Primates
(c) Reptiles
(d) Amphibians
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