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

    Ridding India of food insecurity

    op-ed snap | Economics | Mains Paper 3: Issues relating growth and development, employment

    What’s the news?

    • India, touted as the world’s fastest-growing large economy, is grappling with a formidable challenge: soaring food-price inflation.

    Central Idea

    • The rise in the price of food first accelerated sharply in 2019 and has climbed in most years thereafter. In July this year, annual inflation exceeded 11%, the highest in a decade. An implication of continuing high food-price inflation is that a section of the population could face hardship in consuming food of adequate nutritional value.

    The grim reality

    • The FAO’s State of Food Security and Nutrition in the World report reveals a staggering figure: an estimated 74% of India’s population cannot afford a healthy diet as of 2021, encompassing roughly one billion individuals.
    • Given a population of 1,400 million, this makes for approximately one billion Indians.

    Factors contributing to the failure to control food-price inflation in India

    • Supply-side Challenges: Weather disruptions, infrastructure gaps, and supply chain inefficiencies hinder food production and distribution.
    • Rising Input Costs: Increased expenses for fertilizers, pesticides, and labor raise production costs, leading to higher food prices.
    • Government Policies: Distortionary policies like minimum support prices (MSPs) and export restrictions affect market dynamics and prices.
    • Ineffectiveness of Macroeconomic Policy: Traditional macroeconomic policies, which have been relied upon to control inflation, have proven ineffective in addressing food-price inflation.
    • Failure of the Reserve Bank of India (RBI): The RBI, responsible for monetary policy in India, has consistently failed to control inflation, with rates exceeding the target for four years.
    • Inadequacy of Inflation Targeting: The RBI’s approach of “inflation targeting,” involving output contraction during inflation spikes, is considered misleading and unsuitable for managing food inflation driven by supply-side issues.
    • Limitation of Central Banks: Central banks, including the RBI, are perceived as incapable of effectively addressing the problem of food-price inflation, particularly within a reasonable time frame.

    A study report: Trend in the price of food in Mumbai over 2018–2023

    • Rising Food Prices: The primary factor behind food price inflation is the significant increase in the cost of food items. Specifically, the cost of preparing a traditional thaali meal at home in Mumbai has risen by 65% from 2018 to 2023.
    • Wage Growth Lag: Although there has been wage growth for both manual and salaried workers, with manual workers’ wages increasing by 38% and salaried workers’ wages increasing by 28% during the same period, these wage increases have not kept pace with the rapid rise in food prices.
    • Purchasing Power Erosion: The households in Mumbai have experienced a substantial reduction in purchasing power. As food prices have risen considerably, households are forced to allocate a larger portion of their income to food expenses, which leaves less for other essential needs and discretionary spending.
    • Nutritional Consequences: Food price inflation has led to adverse nutritional consequences, particularly an increase in the prevalence of anemia, especially among adult women in Mumbai. This rise in anemia cases is primarily attributed to nutrient deficiencies caused by reduced access to nutritious food due to escalating prices.
    • Validity of the FAO’s Estimate: The FAO’s estimates that over half of India’s population may struggle to afford a healthy diet. Even in the event of a potential 100% overestimation by the FAO, it would still leave a staggering 500 million people in this category, surpassing the populations of most countries globally except China.

    The significance of the Green Revolution

    • Food Self-Sufficiency:
    • At the time of the Green Revolution, India was grappling with severe food shortages due to consecutive droughts.
    • The government’s supply-side response, which included providing farmers with high-yielding seeds, affordable credit, and guaranteed prices through procurement, was highly successful.
    • Within a few years, India achieved self-sufficiency in food production and was no longer dependent on food imports.
    • Economic and geopolitical significance:
    • While some mistakes were made during the Green Revolution, such as the excessive use of chemical fertilizers and a focus on cereals over pulses, the program’s success had significant economic and geopolitical implications.
    • It allowed India to assert self-reliance in a polarized Cold War era, a vital geopolitical consideration.
    • Poverty Alleviation: The Green Revolution played a pivotal role in reducing poverty in India by increasing agricultural productivity and farm incomes. The increased food production also benefited the poor, as it made food more accessible and affordable.
    • Lessons for the Future: While acknowledging past mistakes, the article suggests that the Green Revolution’s lessons can be applied to address the current challenges of food price inflation. Specifically, the focus should be on correcting past errors and launching a second agricultural revolution to lower the cost of food production while ensuring sustainability.

    Proposed initiatives to combat food price inflation and ensure access to nutritious food for all

    • Increase Public Investment in Irrigation: Address inefficiencies in public expenditure on irrigation to expand irrigated land.
    • Facilitate Land Leasing: Lift restrictions on land leasing to encourage productivity-enhancing capital investments.
    • Revitalize Agricultural Research: Reinvigorate India’s network of agricultural research institutes to harness innovation.
    • Reinstate Extension Services: Restore and strengthen agricultural extension services to disseminate best practices.
    • Focus on Protein Production: Develop a program to substantially increase protein production to address India’s protein deficiency.

    Conclusion

    • Taming India’s food-price inflation crisis demands immediate and concerted efforts. Our past achievements, such as the Green Revolution, serve as a testament to our capabilities when we address food security head-on. Let us seize this moment to launch a second agricultural revolution, ensuring that every Indian has access to affordable, nutritious food and once again reducing poverty and malnutrition on a massive scale.

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  • Global Geological And Climatic Events

    Deadly Earthquake strikes Morocco

    Prelims Only | Enviro & Biodiversity | Mains Paper 1: Geographical Features & Their Location

    morocco earthquake

    Central Idea

    • A devastating earthquake struck Morocco, resulting in significant casualties and damage.

    Details of the Moroccan Earthquake

    • Shallow Epicenter: The quake’s epicentre was near the town of Ighil, approximately 70 km southwest of Marrakech. It was considered fairly shallow, with varying depth estimates.
    • Higher Energy: Shallow earthquakes are typically more dangerous as they carry more energy, making them more destructive compared to deeper quakes.

    Major Causes

    • Tectonic Convergence: The earthquake resulted from the northward convergence of the African plate with the Eurasian plate along a complex plate boundary.
    • Faulting: The USGS attributed the quake to oblique-reverse faulting at a shallow depth within the Moroccan High Atlas Mountain range.
    • Fault Classification: Oblique-slip faults exhibit characteristics of both dip-slip and strike-slip faults, occurring in areas of compression where tectonic plates converge.

    Why discuss this?

    • Low Seismicity: Earthquakes are uncommon in North Africa, with low seismicity rates along the northern margin of the continent.
    • Historic Strength: This earthquake was the strongest ever recorded in the mountainous region, catching Morocco unprepared for such an event.
    • Construction Vulnerabilities: Many Moroccan buildings, especially in rural areas and older cities, are not constructed to withstand strong tremors.

    What is an Earthquake?

    • An earthquake is an intense shaking of the ground caused by movement under the earth’s surface.
    • It happens when two blocks of the earth suddenly slip past one another.
    • This releases stored-up ‘elastic strain’ energy in the form of seismic waves, which spreads through the earth and cause the shaking of the ground.

    morocco earthquake

    What exactly causes Earthquakes?

    • As we know, the earth’s outermost surface, crust, is fragmented into tectonic plates.
    • The edges of the plates are called plate boundaries, which are made up of faults.
    • The tectonic plates constantly move at a slow pace, sliding past one another and bumping into each other.
    • As the edges of the plates are quite rough, they get stuck with one another while the rest of the plate keeps moving.
    • Earthquake occurs when the plate has moved far enough and the edges unstick on one of the faults.
    • The location below the earth’s surface where the earthquake starts are called the hypocenter, and the location directly above it on the surface of the earth is called the epicentre.

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  • Primary and Secondary Education – RTE, Education Policy, SEQI, RMSA, Committee Reports, etc.

    Vidya Samiksha Kendras (VSKs) for Education Data Management

    Prelims Only | Governance | Mains Paper 2: Health & Education

    Vidya Samiksha Kendras (VSKs)

    Central Idea

    • Under the National Digital Education Architecture (NDEAR), the Ministry of Education is spearheading the establishment of Vidya Samiksha Kendras (VSKs) across Indian states.

    What are Vidya Samiksha Kendras (VSKs)?

    • VSKs are data repositories designed to consolidate information from various educational schemes and initiatives run by the Ministry of Education.
    • These repositories aim to streamline data management, promote data analysis, and enhance decision-making in the education sector.

    Key Components of VSKs:

    1. Comprehensive Data: VSKs will aggregate data from diverse educational programs, including:
      • PM-POSHAN mid-day meal programs
      • Teacher training records from the National Initiative for School Heads’ and Teachers’ Holistic Advancement portal
      • Textbook content from Digital Infrastructure for Knowledge Sharing
      • School dropout and attendance data via Unified District Information System for Education (UDISE+)
      • Students’ learning outcomes from National Achievement Survey
      • Performance Grading Index evaluating state-level school education systems.
    2. Central and State-Level Centers: At the central level, VSK operations are housed in the Central Institute of Educational Technology building within the National Council for Educational Research and Training (NCERT) campus. Ernst and Young, a multinational IT company, manages these operations.
    3. Advisory Role: The EkStep Foundation, a non-profit organization co-founded by Nandan Nilekani, former Chairman of the Unique Identification Authority of India (UIDAI), provides advisory support for the VSK project’s implementation.
    4. Transition to Automation: While data entry currently relies on manual processes and is available for download in Excel format, there are plans to transition to automation through Application Programming Interface (API) integration. This shift will enable seamless communication and data integration between multiple platforms at the central, state, and district levels.

    State-Level Initiatives

    • Funding Allocation: The central government has allocated funds ranging from ₹2 to ₹5 crore to each state for the establishment of VSKs. These funds cover pre-configured open-source hardware and software, as well as human resources.
    • States in Action: States like Gujarat, Maharashtra, Odisha, and Jharkhand have already initiated the setup of these technological platforms.

    Benefits of VSKs:

    • Data Correlation and Analysis: The primary objective of VSKs is to enable data analytics through correlation. With vast data from numerous educational schemes, VSKs seek to derive meaningful insights by connecting various data points.
    • Example Scenarios:
      • Attendance Patterns: Analyzing attendance data alongside student dropout rates to identify potential correlations.
      • Mid-Day Meals Impact: Investigating whether consistent mid-day meal provision in certain regions leads to increased school attendance.
      • Student Improvement Tracking: Monitoring students’ progress over time using data from weekly tests to tailor educational support.
    • Gross Access Ratio Mapping: VSKs will facilitate mapping the location of schools with population data to assess the Gross Access Ratio. This information can guide the establishment of new schools, support industry clusters in understanding skilling needs, and assist in higher education planning based on demand and future projections.

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  • Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

    Orphan Diseases in India

    Prelims Only | Governance | Mains Paper 2: Health & Education

    Central Idea

    • Health discussions often revolve around common ailments, such as diabetes, which affect a significant portion of the population.
    • However, amidst these well-known health issues, there are numerous rare/ orphan diseases that, though infrequent, can have devastating consequences for patients and their families.

    What are Orphan Diseases?

    • Rare diseases, often referred to as orphan diseases, are characterized by a low prevalence rate, typically affecting one person in a population of 10,000.

    Challenges Posed

    • Difficulty in Diagnosis: Rare diseases are challenging to diagnose, particularly for young medical practitioners who may have limited exposure to such cases. The rarity of these conditions means that many healthcare professionals may not have encountered them during their training.
    • Lack of Research: Limited prevalence has historically resulted in insufficient research efforts. With fewer cases to study, there has been a lack of scientific understanding and effective treatments for many rare diseases.
    • High Treatment Costs: While advances in medical research have led to the development of therapies for some rare diseases, the costs associated with these treatments are often exorbitant. From an Indian perspective, these costs can range from Rs. 1 million to Rs. 20 million per year, making them unaffordable for many.

    Initiatives and Progress in India

    • Increasing Awareness: Greater awareness of rare diseases and advancements in genomic technologies for diagnosis have begun to address these challenges. As awareness spreads, more cases are being identified and correctly diagnosed.
    • Regulatory Incentives: Several countries, including India, have introduced regulatory incentives to encourage pharmaceutical companies to invest in research and development for neglected diseases. This has led to increased interest in orphan drugs.
    • Patient-Driven Initiatives: Patient groups and organizations in India are actively contributing to rare disease research and treatment. One notable example is the Dystrophy Annihilation Research Trust (DART), which is conducting clinical trials for Duchenne’s muscular dystrophy.
    • Government Initiatives: The government’s National Policy for Treatment of Rare Diseases is gradually making an impact. It aims to address rare diseases prevalent in India, such as cystic fibrosis, hemophilia, lysosomal storage disorders, and sickle-cell anaemia.

    Lessons from Leprosy

    • Incidence Reduction: Leprosy, once prevalent in India, is now considered a rare disease due to successful efforts in reducing its incidence.
    • Research Benefits: Research on orphan diseases like leprosy can yield broader societal benefits. For instance, studies on synthetic antibiotics have shown a potential to curb the spread of leprosy to household relatives.
    • Government Goals: Research findings may contribute to achieving the government’s objective of making India leprosy-free by 2027.

    Conclusion

    • Rare diseases present unique healthcare challenges that have long been neglected.
    • However, recent progress in diagnosis, research, and patient-driven initiatives is gradually improving the landscape for rare disease patients in India.
    • As awareness grows and regulatory support continues, there is hope for enhanced diagnosis, treatment options, and affordability, ultimately improving the lives of those affected by these conditions.

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  • Women Safety Issues – Marital Rape, Domestic Violence, Swadhar, Nirbhaya Fund, etc.

    Bharatiya Nyaya Sanhita (BNS), 2023 on False Promise of Marriage

    Bills/Act/Laws | Governance | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections

    Central Idea

    • The proposed Bharatiya Nyaya Sanhita (BNS), 2023, seeks to address a specific issue concerning sexual relationships based on false promises of marriage.
    • Section 69 of this Bill introduces significant changes in this regard.

    Section 69 of BNS – Sexual Intercourse on False Promise of Marriage

    • Creation of Two Offenses: Section 69 within Chapter 5 of the BNS, titled “Offences against Women and Children,” defines ‘sexual intercourse by employing deceitful means etc.’ and includes two violations: one by deceitful means and one by a ‘false promise to marry.’
    • Deceitful Means: The first violation involves employing deceitful means, such as a false promise of employment, promotion, or marriage, with the intent to induce sexual relations. If a person uses such means, they could face penalties of up to ten years of imprisonment.
    • False Promise to Marry: The second violation pertains to making a false promise to marry a woman with the intention of breaking that promise, solely to obtain her consent and exploit her sexually. This offense is also subject to a penalty of up to ten years of imprisonment.

    Why Section 69 Is Introduced?

    • Historical Context: In the absence of a specific provision, cases of sexual intercourse based on false promises of marriage were previously addressed using other sections of criminal law, causing ambiguity.
    • Prevalence of Cases: Cases of sex under the “false promise of marriage” had been reported frequently, with victims often unable to seek legal remedy effectively.
    • Legal Ambiguity: The existing legal framework did not clearly distinguish between a ‘false promise’ and a ‘breach’ of promise to marry, creating complications in determining consent and intention.

    Courts’ Handling of ‘False Promise of Marriage’ Cases

    • Judicial Interpretation: Courts had traditionally relied on existing laws like Sections 375 and 90 of the Indian Penal Code (IPC) to address such cases.
    • Consent Examination: Section 375 defines consent as an unequivocal voluntary agreement, and Section 90 considers consent given under “misconception of fact.” Courts examined cases based on these provisions.
    • Distinguishing Factors: Courts differentiated between a ‘false promise’ made with the intent to deceive and a ‘breach’ of promise made in good faith but not fulfilled.
    • Crucial Judgments: The Supreme Court’s judgment in ‘Pramod Suryabhan Pawar vs. State of Maharashtra’ (2019) highlighted the importance of the promise-maker’s intent to deceive. Another significant case, ‘Dileep Singh vs. State of Bihar,’ underscored the need for establishing a lack of intention to marry for the offense to be considered rape.

    Implications and Critiques of Section 69

    • Endogamy Promotion: Critics argue that Section 69 may promote endogamy by shifting the focus from real harm and abuse to whether the man intended to marry, disregarding the complex social context in which such relationships occur.
    • Ambiguity and Discretion: The Bill’s vagueness and discretionary nature could perpetuate uncertainty and reliance on gender norms, potentially re-victimizing women.
    • Cycle of Consequences: While the Bill specifies the consequences of the crime, it may overlook the harm suffered by women, contributing to a cycle where justice remains elusive.

    Conclusion

    • Section 69 of the proposed BNS, 2023, addresses a crucial issue related to sexual relationships based on false promises of marriage.
    • However, the Bill’s implementation and interpretation will require careful scrutiny to ensure justice is served without perpetuating harmful gender norms or social biases, as indicated by crucial judgments in relevant cases.

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  • Electronic System Design and Manufacturing Sector – M-SIPS, National Policy on Electronics, etc.

    Circular Economy and E-Waste

    DOMR | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

    Central Idea

    • The Indian Cellular and Electronics Association (ICEA) recently released a report titled ‘Pathways to Circular Economy in Indian Electronics Sector.’
    • This report, developed in collaboration with NITI Aayog, explores the possibilities of harnessing electronic waste (e-waste) to create a circular economy in India’s electronics sector.
    • It highlights the significant market potential, estimated at $7 billion that could be unlocked through effective e-waste management.

    Current State of E-Waste Management in India

    • Predominantly Informal: E-waste management in India is primarily informal, with approximately 90% of e-waste collection and 70% of recycling handled by a competitive informal sector.
    • Role of Informal Sector: The informal sector excels in salvaging components from older devices and profiting from repairs. Industrial hubs like Moradabad witness the extraction of precious metals like gold and silver from printed circuit boards (PCBs).
    • Government Efforts: The Union Government introduced the E-Waste (Management) Rules, 2022, to digitize and provide visibility into e-waste movement. However, the informal sector remains a dominant force in e-waste management.

    Significance of a Circular Economy

    • Growing Demand: The demand for electronics is increasing across all price segments, resulting in resource-intensive production and high emissions.
    • Circular Economy Philosophy: A circular economy aims to reintroduce discarded electronics, their components, and precious metals back into the electronics ecosystem, reducing waste and promoting resource efficiency.
    • Wealth Creation: Viewing materials as resources rather than waste can lead to wealth creation.ry.

    Recycling E-Waste

    • Public-Private Partnerships: The ICEA report suggests public-private partnerships to establish a comprehensive “reverse supply chain.” This chain would involve collecting devices, wiping personal data, and further processing and recycling.
    • Auditable Database: Creating an auditable database of materials collected through this process and forming geographical clusters for device disassembly are proposed.
    • High Yield Recycling Centers: Incentivizing high-yield recycling centers is recommended to extract maximum value from electronic products.
    • Promoting Repair: Encouraging repair and extending product lifespans, possibly through support for a right-to-repair by users, can reduce the environmental impact of e-waste.

    Challenges in E-Waste Management

    • Informal Sector: The large and competitive informal sector is difficult to track and regulate, making adherence to environmental norms challenging.
    • Device Stockpile: An estimated 200 million devices remain unused in consumers’ homes, as people are concerned about their personal data when recycling devices.
    • Capital Intensive: Establishing large-scale recycling plants requires substantial capital investment, with challenges in securing stable materials.
    • Material Scarcity: Securing materials to stabilize recycling plants is a complex issue, as materials are scattered and supply chains are unpredictable.
    • Transition from Informal to Formal: Replicating the success of the informal sector in a formalized and reliable manner remains a significant challenge.

    Conclusion

    • The transformation of e-waste management into a circular economy is a promising venture for India’s electronics sector.
    • While the informal sector currently dominates this landscape, there is a growing need to formalize and regulate e-waste management.
    • The challenges are substantial, but with the right policies, public-private collaborations, and incentives, India can harness the $7 billion market opportunity and promote resource efficiency in its electronics sector.

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  • G20 : Economic Cooperation ahead

    India-Middle East-Europe Economic Corridor

    IOCR | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    economic corridor

    Central Idea

    • PM’s recent announcement at the G20 Leaders’ Summit regarding the India-Middle East-Europe Economic Corridor signifies an ambitious project aimed at enhancing physical and digital connectivity across a vast expanse of the Eurasian subcontinent.

    India-Middle East-Europe Economic Corridor

    • The India-Middle East-Europe Economic Corridor aims to establish connectivity across India, West Asia, and Europe, leveraging railway networks and shipping routes.
    • The project was jointly unveiled by PM Modi, US President Biden, Saudi Arabia’s Crown Prince Mohammed bin Salman Al Saud, and European Commission President Ursula von der Leyen during the G20 Summit in New Delhi.

    Key Highlights of the project

    • Scope and Ideology: This initiative, championed by the US and India, encompasses connectivity and infrastructure spanning India, Saudi Arabia, the UAE, Jordan, Israel, and the European Union. It is hailed as a sustainable alternative to existing global connectivity initiatives.
    • Extension to PGII: Additionally, it is part of the broader Partnership for Global Infrastructure Investment (PGII), introduced by G7 countries to provide a sustainable alternative to BRI and address global infrastructure needs.
    • Congestion Mitigation: The corridor may potentially bypass the congested Suez Canal, offering a more efficient route for cargo ships.
    • Trade and Economic Integration: The Memorandum of Understanding (MoU) signed by India, the US, UAE, Saudi Arabia, France, Germany, Italy, and the European Union Commission underscores the project’s commitment to enhancing connectivity, logistics, clean energy production, and economic cooperation.
    • Historical Significance: European Commission chief Ursula von der Leyen described the corridor as “historic” and expressed enthusiasm about its potential.

    Need for such project

    • Transformative Infrastructure: The project envisions a railway line across the Arabian Peninsula, with rail and shipping connectivity between India and Europe. Future expansions could include energy pipelines and optical fiber links.
    • Geopolitical Shifts: This initiative reflects emerging geopolitical trends, including India-US collaboration in the Middle East, breaking Pakistan’s veto, and evolving relations with Iran.
    • Deepening Arabian Engagement: The corridor provides an opportunity to strengthen India’s strategic ties with the Arabian Peninsula, notably with the United Arab Emirates and Saudi Arabia.
    • Historical Perspective: India’s historical role as a connector between Arabia and Europe is revitalized through this project.
    • Promoting Intra-regional Connectivity: The corridor aims to reduce tensions in the Arabian peninsula by fostering intra-regional connectivity, contributing to the concept of “Infrastructure for peace.”
    • Alternative to BRI: Positioned as an alternative to China’s BRI, the corridor’s success will depend on implementation speed and sustainability, both financial and ecological.
    • European Engagement: European Union’s involvement in the project makes it a major stakeholder, enhancing India’s integration with Arabia and Europe.
    • Trans-African Corridor: India’s growing engagement with Africa aligns with US and EU plans to create a Trans-African corridor, opening avenues for future collaboration.

    Challenges and Uncertainties

    • Official timelines for project completion and details regarding funding remain undisclosed.
    • Clarity on the project’s alignment and the use of existing railway and port infrastructure in West Asia is awaited.

    Global Implications

    • The initiative aligns with US-led efforts to scale the Partnership for Global Infrastructure Investment (PGII) and address infrastructure financing needs in low- and middle-income countries.
    • The project presents an alternative to China’s Belt and Road Initiative and could significantly strengthen connectivity between India and the Middle East.

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  • Goods and Services Tax (GST)

    Interim Stay on Taxation of Online Games

    SC Judgements | | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters

    Central Idea

    • The Supreme Court has issued an interim stay on the Karnataka High Court’s ruling that online games, such as rummy, should not be taxed as ‘betting’ and ‘gambling’ under the Central Goods and Services (GST) Act, 2017.
    • This decision follows the Union Cabinet’s approval to increase the GST rate for online games from 18% to 28%.
    • The interim stay aligns online skill games played for stakes with online gambling for taxation purposes.

    Why discuss this?

    • The GST department had issued a show-cause notice to a company for dues worth Rs 21,000 crore, which was quashed by the Karnataka High Court.
    • The Karnataka HC had ruled that online rummy is a game of skill and should not be taxed as gambling.

    Taxing Online Games

    • Karnataka High Court Ruling: The Karnataka HC had determined that online rummy is substantially a game of skill, not chance, and should not be considered gambling. This ruling was based on the Goods and Services Act, which taxes games of skill at 19% and games of chance at 28%.
    • GST Department’s Notice: The GST department had issued a notice to GamesKraft under Section 74(5) of the CGST Act, demanding a substantial sum to be deposited along with interest and penalty by September 16, 2022. This notice was challenged in the Karnataka HC and led to an interim stay.
    • Show-Cause Notice: Following the interim stay, the GST department issued a show-cause notice under Section 74(1) of the CGST Act to GamesKraft and its founders, CEOs, and CFOs. This notice sought an explanation regarding the tax evasion and penalties.
    • Distinction between Skill and Chance: The Karnataka HC emphasized the distinction between games of skill and games of chance, citing relevant legal precedents. It noted that the question of whether a game of skill could still be classified as gambling remained to be seen.

    Key takeaways

    • The Supreme Court’s interim stay temporarily taxes online skill games played for stakes on par with online gambling.
    • The Karnataka High Court’s ruling that online rummy is a game of skill and not gambling has been challenged by the GST department.
    • Legal distinctions between games of skill and games of chance remain a subject of debate and legal scrutiny in India’s taxation system.

    Prospects of online gaming

    • State List Subject:  The state legislators are, vide Entry No. 34 of List II (State List) of the Seventh Schedule, given exclusive power to make laws relating to betting and gambling.
    • Distinction in laws: Most Indian states regulate gaming on the basis of a distinction in law between ‘games of skill’ and ‘games of chance’.
    • Classification of the dominant element: As such, a ‘dominant element’ test is utilized to determine whether chance or skill is the dominating element in determining the result of the game.
    • Linked economic activity: Staking money or property on the outcome of a ‘game of chance’ is prohibited and subjects the guilty parties to criminal sanctions.
    • ‘Game of Skill’ debate: Placing any stakes on the outcome of a ‘game of skill’ is not illegal per se and may be permissible. It is important to note that the Supreme Court recognized that no game is purely a ‘game of skill’ and almost all games have an element of chance.

    Conclusion

    • This case reflects the need for a nuanced approach in crafting tax policies that adapt to the evolving landscape of online entertainment and gaming.
    • Further legal proceedings will likely shed more light on the classification of such games and their tax implications.

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  • G20 : Economic Cooperation ahead

    G-20 Summit clinches New Delhi Declaration

    IOCR | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    new delhi declaration

    Central Idea

    • At the G20 Summit in New Delhi, leaders from member countries reached a consensus and adopted the New Delhi Declaration.
    • This declaration outlines significant commitments and agreements on various global issues.

    Here are the key points from the G20 New Delhi Leaders’ Declaration:

    [1] War in Ukraine

    • Peaceful Resolution: The G20 countries emphasize the importance of peace and call on all states to uphold the principles of international law, including territorial integrity and sovereignty.
    • Humanitarian Concerns: The declaration expresses deep concern about the human suffering and adverse impacts of wars and conflicts worldwide, specifically addressing the war in Ukraine.
    • UN Charter Principles: It emphasizes that all states must act in accordance with the Purposes and Principles of the UN Charter, refraining from the threat or use of force to seek territorial acquisition.
    • Nuclear Disarmament: The use or threat of use of nuclear weapons is deemed inadmissible.

    [2] Countering Terrorism and Money Laundering

    • Condemnation of Terrorism: The G20 condemns terrorism in all its forms, including those rooted in xenophobia, racism, and intolerance or carried out in the name of religion.
    • Holistic Approach: A holistic approach based on international law is advocated to effectively counter terrorism, with an emphasis on strengthening international cooperation to deny terrorist groups safe haven, freedom of operations, and financial support.
    • Illicit Trafficking: Concerns about illicit trafficking and diversion of small arms and light weapons are addressed, with an emphasis on international cooperation among states to combat these phenomena.
    • Financial Action Task Force (FATF): The G20 leaders commit to supporting the resource needs of the FATF and FATF Style Regional Bodies to combat money laundering and terrorist financing.

    [3] Economy & Climate

    • Sustainable Growth: G20 leaders call for strong, sustainable, and inclusive growth in response to the uneven recovery from the pandemic.
    • Climate Action: Trillions of dollars will be required for countries to meet their climate goals and invest in clean energy technologies.
    • Reforming Financial Institutions: Reforms of international financial institutions are urged, along with efforts to manage debt vulnerabilities in low and middle-income countries.
    • Crypto Asset Taxation: The exchange of tax-relevant information on crypto assets is set to begin by 2027.
    • Energy Transition: The declaration calls for accelerated efforts to phase down unabated coal power and eliminate inefficient fossil fuel subsidies.
    • Financial Stability: Emphasis is placed on the need for well-calibrated monetary, fiscal, financial, and structural policies to promote growth, reduce inequalities, and maintain macroeconomic and financial stability.

    [4] Global Growth

    • Policy Coordination: The G20 leaders reiterate the need for well-calibrated monetary, fiscal, financial, and structural policies to promote growth, reduce inequalities, and maintain macroeconomic and financial stability.
    • Central Banks Commitment: They also stress that central banks remain committed to achieving price stability in line with their respective mandates.
    • Financial Stability Board (FSB): Initiatives by the FSB, Standard Setting Bodies (SSBs), and jurisdictions to examine lessons from recent banking turbulence are welcomed.

    [5] Multilateral Development Banks

    • Enhancing MDBs: G20 leaders emphasize the importance of delivering better, bigger, and more effective multilateral development banks (MDBs).
    • Leveraging Private Capital: Financial institutions are encouraged to leverage private capital through innovative financing models and partnerships for maximum development impact.
    • Capital Adequacy Frameworks (CAFs): The roadmap for implementing the recommendations of the G20 Independent Review of MDBs CAFs is endorsed.

    [6] Cross-border Payments

    • Payment Improvements: The G20 reaffirms its commitment to achieving global targets for faster, cheaper, and more transparent cross-border payments by 2027.
    • CBDC Discussion: Discussions on the potential macro-financial implications of Central Bank Digital Currencies (CBDCs) are welcomed, especially concerning cross-border payments and the international monetary and financial system.

    [7] Education

    • Digital Education: The G20 recognizes the importance of investing in human capital development and supporting digital technologies to bridge educational divides.
    • Scientific Collaboration: The promotion of open, equitable, and secure scientific collaboration and mobility of students, scholars, researchers, and scientists is encouraged.
    • Inclusive Education: Emphasis is placed on inclusive, equitable, high-quality education and skills training, with foundational learning as a primary building block.

    [8] Agriculture

    • Trade Facilitation: Rising commodity prices contributing to cost of living pressures are addressed.
    • Rules-Based Trade: The G20 leaders commit to facilitating open, fair, predictable, and rules-based trade in agriculture, food, and fertilizers, in line with relevant WTO rules.
    • Food Security: Support for developing countries’ efforts to address food security challenges is emphasized, aligning with the G20 Deccan High-Level Principles on Food Security and Nutrition 2023.

    [9] Religion

    • Religious Tolerance: The G20 strongly condemns acts of religious hatred against individuals, religious symbols, and holy books.
    • Cultural Diversity: Emphasis is placed on promoting respect for religious and cultural diversity, dialogue, and tolerance.
    • Rights Interdependence: The interdependence of freedom of religion or belief, freedom of opinion or expression, peaceful assembly, and freedom of association is recognized as a means to combat intolerance and discrimination based on religion or belief.

    [10] Corruption

    • Zero Tolerance: The G20 reaffirms its commitment to zero tolerance for corruption.
    • International Cooperation: Strengthening international cooperation and information sharing for combating corruption is urged.
    • Asset Recovery: The joint Declaration also called for strengthening asset recovery mechanisms for combating corruption.

    Conclusion

    • In essence, the New Delhi Declaration serves as a testament to the collaborative efforts of G20 member countries in addressing global challenges and striving for a more prosperous, peaceful, and sustainable world.

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  • Climate Change Impact on India and World – International Reports, Key Observations, etc.

    Redouble efforts to reduce disaster risks

    op-ed snap | Enviro & Biodiversity | Mains Paper 1: Important Geophysical Phenomena

    What’s the news?

    • In 2023, the rise in disasters is not an anomaly; it’s a disturbing trend. Headlines have been dominated by a relentless wave of bad news: severe flooding in China, devastating wildfires in Europe and Hawaii, and July marking the hottest month ever recorded.

    Central idea

    • The world is standing at a precarious crossroads, where the challenges we face are multiplying faster than our ability to mitigate them. The aftershocks of the COVID-19 pandemic, combined with a complex web of crises encompassing war, debt, and food insecurity, have placed our collective resilience to the test. All of this unfolds against the ever-looming backdrop of the climate crisis, which drives increasingly frequent and severe extreme weather events.

    Disproportionate Impact on Vulnerable Communities

    • Debt crisis: A majority of the 50 countries most vulnerable to climate change also grapple with severe debt issues. India, already one of the world’s most disaster-prone countries, is acutely experiencing this new reality.
    • Extreme weather events: In 2022, disasters or extreme weather events battered the country nearly every day, with this year’s severe monsoon causing widespread loss of livelihoods and lives.

    Solutions Within Reach

    • SDG: The Sustainable Development Goals (SDGs) continue to serve as our most comprehensive blueprint for achieving peace and prosperity.
    • Paris Agreement: Additionally, commitments made in the Paris Agreement to limit global warming to 1.5°C offer a clear path forward.
    • Sendai Framework: The Sendai Framework for Disaster Risk Reduction provides a global framework to reduce disaster risks, although progress in its implementation has been slow.
    • Accelerating Resilience Building: One valuable lesson we have learned from the COVID-19 pandemic is the importance of systemic disaster risk reduction, resilience, and adaptation. The crisis has not only exposed our vulnerability to risks but has also catalyzed innovative approaches, such as digital technologies and modeling. India’s proactive efforts in disaster risk reduction, including state-level disaster management plans and early warning systems, have demonstrated tangible results in reducing mortality from extreme weather events.
    • Financial Reforms for Disaster Preparedness: India’s 15th Finance Commission has introduced significant reforms for disaster risk financing, allocating substantial resources for preparedness, response, recovery, and capacity development. On the international stage, India is championing disaster resilience and sustainability through initiatives like the Coalition for Disaster Resilient Infrastructure and the deployment of its National Disaster Response Force.

    The Transformations We Need

    • Early detection system: Disaster risk reduction must be integrated at all levels of our societies. This includes how we build, invest, and live. One highly cost-effective method is the establishment of early warning systems for all, with India’s support for this endeavor being noteworthy. Such systems can significantly reduce the damage caused by impending disasters. However, it is crucial to recognize that over a third of the world’s population, primarily in the least developed countries and Small Island Developing States, lacks access to these life-saving systems.
    • The Path to a Global Multi-Risk Warning System: Our ultimate goal should be a global multi-risk warning system that covers all types of hazards, be they biological, tectonic, or technological. Improving global data capabilities is essential for better prediction and response to the risks we face. India’s leadership in knowledge sharing, joint data infrastructure, and risk analysis through its G-20 presidency deserves commendation.
    • Leaving No One Behind: We must strengthen international cooperation in disaster prevention, response, and recovery, particularly for countries in the Global South. No one should be left behind in our collective efforts to mitigate the impacts of disasters.

    Conclusion

    • The recent G-20 summit and the outcomes of the Disaster Risk Reduction Working Group offer a unique opportunity to shape a future where we are equipped to withstand disaster risk. As UN Secretary-General António Guterres wisely noted, Extreme weather events will happen. But they do not need to become deadly disasters. Together, through decisive action and unwavering commitment, we can forge a more resilient and sustainable world for generations to come.

     

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