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Archives: News

  • Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

    UK signs CPTPP Trade Deal

    cptttp

    Central Idea

    • The UK has formally signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a major Indo-Pacific trade deal.
    • Joining the bloc is seen as the UK’s biggest trade deal since leaving the European Union.

    What is CPTPP?

    • The CPTPP, established in 2018, reduces trade barriers among 11 countries, including Australia, Canada, Japan, Mexico, and Vietnam.
    • Objectives of CPRPP include-
    1. Tariff Reduction and Market Opening: The agreement requires countries to eliminate or significantly reduce tariffs and make commitments to open services and investment markets.
    2. Addressing Competition and Intellectual Property: The CPTPP includes rules on competition, intellectual property rights, and protections for foreign companies.
    3. Expanding Membership: While the CPTPP aims to counter China’s regional dominance, China and other countries such as Taiwan, Ukraine, Costa Rica, Uruguay, and Ecuador have applied to join.

    Importance of CPTPP for the UK

    • Cutting Tariffs and Expanding Trade: The UK government anticipates reduced tariffs for UK exports to Asia Pacific countries. Joining the CPTPP expands trade opportunities, as the bloc represents 15% of global trade and a combined GDP of £12 trillion.
    • Post-Brexit Trade Strategy: After leaving the EU, the UK seeks to deepen trade ties with the Pacific region through its “Global Britain” strategy.
    • Seeking Faster-Growing Economies: The UK aims to establish trade deals with countries and blocs with faster-growing economies than the EU, given limitations in achieving agreements with major powers like China and the United States.

    Challenges and Criticisms

    • Economic Impact of Brexit: Critics argue that trade deals like the CPTPP will struggle to compensate for the economic damage caused by leaving the EU, which remains the UK’s largest trading bloc.
    • Long-Term Productivity Forecast: Brexit is projected to reduce the UK’s long-term productivity by 4%, according to the Office for Budget Responsibility.
    • Existing Trade Deals and Economic Boost: The UK already has trade deals with most CPTPP members, and the projected economic boost from joining the agreement is relatively modest at 0.08% annually.

    Recent Developments

    • Information Gathering Process: CPTPP members are assessing aspiring economies’ ability to meet the bloc’s high standards as part of the decision-making process for future membership.
    • Collective Decision-Making: The decision on new members and the timeline for their inclusion will be made collectively by existing CPTPP participants.
  • Disasters and Disaster Management – Sendai Framework, Floods, Cyclones, etc.

    Lightning not a Natural Disaster: Centre

    light

    Central Idea

    • A senior government official stated that lightning deaths can be prevented through education and awareness, and thus, the government is against declaring it a natural disaster.

    Why discuss this?

    • State Demands: States like Bihar and West Bengal have requested that lightning-related deaths be considered natural disaster, making victims eligible for compensation from the State Disaster Response Fund (SDRF).
    • Increased fatalities: According to the National Crime Records Bureau, lightning caused 2,880 deaths in 2021, accounting for 40% of all accidental deaths from “forces of nature.”

    What is Lightning?

    Lightning is a rapid and powerful discharge of electricity in the atmosphere, often directed towards the Earth.

    • Genesis: Lightning discharges occur in giant, moisture-bearing clouds that are several kilometers tall.
    • Ice Crystal Formation: Water vapor in the clouds condenses into small ice crystals as temperatures drop below 0°C.
    • Electron Release and Collision: Collisions between ice crystals generate a release of electrons, leading to a chain reaction and the formation of a positive and negative charge within the cloud.
    • Types: Lightning can occur within clouds (inter-cloud and intra-cloud) or between the cloud and the ground (cloud-to-ground).

    Intensity of Lightning Strikes

    • Voltage and Amperage: A typical lightning flash can reach around 300 million volts and 30,000 amps, significantly higher than household current.
    • Comparisons: Household current is 120 volts and 15 amps, highlighting the immense power of lightning.

    Mitigating Lightning Incidents

    • Early Warning System: India has established an early warning system for lightning, saving numerous lives.
    • Focus on Rural Areas: Over 96% of lightning deaths occur in rural areas, necessitating mitigation and awareness programs targeted at these communities.
    • Deployment of Protection Devices: Low-cost lightning protection devices need to be deployed more widely, especially in rural areas.
    • Lightning Action Plans: States are encouraged to develop and implement lightning action plans, similar to heat action plans, to mitigate lightning-related risks.
    • International Centre for Excellence: Efforts are underway to establish an international center for excellence in lightning research to enhance detection and early warning systems.

     

  • Governor vs. State

    Does India really need State Governors?

    Central Idea

    • The recent termination of a state minister’s appointment by Tamil Nadu Governor R N Ravi has sparked renewed debates on the role and necessity of Governors in Indian states.
    • While conflicts between state governments and the Governor’s office are not new, it is important to examine the position of the Governor and its constitutional implications.

    Who is a State Governor?

    • In India, the position of State Governors is established by the Constitution of India.
    • The constitutional provisions regarding State Governors can be found primarily in Articles 153 to 162 of the Indian Constitution.

    Here are the key aspects of the constitutional position of State Governors in India:

    • Appointment: The Governor of a state is appointed by the President of India. The President acts on the advice of the Council of Ministers headed by the Prime Minister.
    • Executive Power: The Governor is the head of the state executive and exercises executive powers on behalf of the President. The Governor is the representative of the President at the state level.
    • Constitutional Head: The Governor acts as the constitutional head of the state and performs ceremonial functions such as the opening and closing of the state legislature, giving assent to bills, and issuing ordinances.
    • Administrative Role: The Governor plays a crucial role in the administration of the state. The Governor appoints the CM and other members of the Council of Ministers, as well as certain high-ranking state officials.

    Powers and Functions

    • Legislative Functions: The Governor has a role in the legislative process. The Governor summons and prorogues the state legislature, addresses the legislature at the beginning of its first session after each general election, and gives assent to bills passed by the state legislature.
    • Discretionary Powers: The Governor has certain discretionary powers. For example, the Governor can reserve certain bills passed by the state legislature for the consideration of the President. The Governor can also withhold assent to bills under certain circumstances.
    • Emergency Powers: In cases of breakdown of constitutional machinery in a state, the Governor can recommend the imposition of President’s Rule, where the state government is temporarily suspended, and the Governor acts as the executive head of the state.
    • Link with Central Government: The Governor serves as a vital link between the state government and the central government. The Governor communicates with the President and the central government on various matters related to the state.

    Arguments for the Existence of the Governor’s Post

    • Preservation of Provincial Autonomy: The Constituent Assembly aimed to maintain the Governor as the constitutional representative of states in post-independence India.
    • Need for Centralization and Impartiality: Supporters argue that a certain level of centralized power is essential for a developing nation like India, and the Governor ensures impartiality in governance.
    • Continuity and Stability: The Governor’s presence provides stability and continuity in governance, and they play a significant role in administering oaths and delivering inaugural addresses.

    Arguments against the Governor’s Post

    • Interference and Politicization: Critics claim that Governors often interfere in the functioning of state governments, especially those led by opposing political parties, leading to politicization of the office.
    • Lack of Impartiality: Concerns arise about the impartiality of Governors appointed from political backgrounds, potentially influencing their decisions and actions.
    • Redundancy and Inefficiency: Some argue that the role of the Governor can be carried out by alternative mechanisms, and the office incurs unnecessary expenditure.

    Supreme Court’s Stand and Judicial Review

    • Limited Powers and Aid-Advice: The Supreme Court has established that Governors are required to exercise their powers upon the aid and advice of their ministers, except in exceptional circumstances.
    • Judicial Oversight: Through landmark cases, the Supreme Court has set limits on gubernatorial powers, ensuring their actions adhere to the Constitution and the law.

    Recommendations by Commissions and Committees

    • Administrative Reforms Commission (ARC): The ARC, in its report in 1969, emphasized harmonious relations between Governors and state governments, suggesting enhanced cooperation and limited interference.
    • Sarkaria Commission (1983): The commission proposed modifications to augment the responsibilities and influence of Governors while emphasizing impartiality and fixed tenures.
    • Punchhi Commission (2010): Recommendations included consultation with the Chief Minister during the appointment of Governors and expanding their responsibilities in specific areas.
    • Other Proposals: Various recommendations have been made, such as appointing Governors through a collegium, limiting their role to ceremonial duties, or abolishing the post in smaller states or union territories.

    Conclusion

    • The debate surrounding the role of Governors in Indian states continues to evolve.
    • While arguments for the existence of the Governor’s post revolve around preserving provincial autonomy, centralization, and stability, critics highlight concerns of interference, politicization, and redundancy.
    • Judicial oversight and recommendations from commissions and committees have aimed to strike a balance between the Governor’s constitutional responsibilities and the need for impartiality.
  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    Standing Committee on Statistics (SCoS) to review all NSO Data

    Central Idea

    • Revamping the SCES: Standing Committee on Economic Statistics (SCES) set up in late 2019 faced criticism for data quality issues in previous surveys.
    • Broader Mandate: The government establishes the Standing Committee on Statistics (SCoS) to replace the SCES, with a mandate to review all surveys conducted under the National Statistical Office (NSO).

    Standing Committee on Statistics (SCoS): Composition and Mandate

    • Chairperson: Pronab Sen, India’s first chief statistician and former chairman of the National Statistical Commission (NSC), appointed as the chair of the new committee.
    • Membership: SCoS consists of 10 official members and four non-official members, including eminent academics.

    Need for SCoS

    • Concerns from Economic Advisory Council: Members, including Bibek Debroy, called for an overhaul of India’s statistical machinery.
    • Lack of technical Expertise: SCoS aims to address critiques by providing technical advice on survey design and methodology.
    • Issues with Indian Statistical Service: Questions raised about the expertise of the Indian Statistical Service in survey design.

    Roles and Responsibilities of the SCoS

    • Reviewing Framework and Results: SCoS is responsible for reviewing the framework and results of all surveys conducted under the NSO.
    • Data Gap Identification: SCoS identifies data gaps in official statistics and develops strategies to fill those gaps.
    • Use of Administrative Statistics: Committee mandated to explore the use of administrative statistics to improve data outcomes.

    Back2Basics: National Statistical Office (NSO)

    (a) Historical Background:

    • The NSO was established in 1950 as the Central Statistical Office (CSO) under the Ministry of Planning.
    • It was later renamed the National Sample Survey Office (NSSO) in 1970 and subsequently became the NSO in 2019.
    • Over the years, it has evolved to become the primary statistical agency in India.

    (b) Organizational Structure:

    • The NSO consists of several divisions and units responsible for different statistical functions.
    • These include the Survey Design and Research Division, Field Operations Division, Data Processing Division, National Accounts Division, Price Statistics Division, and Social Statistics Division, among others.

    (c) Key organizations under NSO: Central Statistical Office (CSO)

    • The CSO is a part of the NSO and focuses on macroeconomic statistics and national income accounting.
    • It is responsible for producing key economic indicators such as the Gross Domestic Product (GDP), Index of Industrial Production (IIP), Consumer Price Index (CPI), and Wholesale Price Index (WPI).

    (d) Important Surveys Conducted

    • Population Census: The NSO conducts a decennial Population Census in collaboration with the Registrar General and Census Commissioner of India. The census collects data on population size, composition, and other demographic characteristics.
    • National Sample Survey (NSS): The NSS is a large-scale household survey conducted by the NSO to collect data on various socio-economic aspects. It provides valuable information on employment, consumer expenditure, poverty, education, health, and other important indicators.
    • Economic Census: The NSO conducts the Economic Census periodically to collect data on the number of business establishments, their distribution across sectors and regions, employment, and other relevant economic variables.
    • Annual Survey of Industries (ASI): The ASI is conducted by the NSO to collect data on the performance and structure of the industrial sector in India. It covers various aspects such as employment, wages, production, and financial indicators.
    • Agricultural Census: The NSO conducts the Agricultural Census periodically to collect comprehensive data on agricultural holdings, cropping patterns, land use, irrigation, livestock, and other relevant agricultural variables.
    • Health and Morbidity Survey: The NSO conducts surveys on health and morbidity to gather data on healthcare utilization, access to healthcare services, prevalence of diseases, and other health-related indicators.
  • Right To Privacy

    An unacceptable verdict in the constitutional sense

    constitutional

    What is the news?

    • A recent judgment by the Allahabad High Court in the case of Kiran Rawat vs State of UP.
    • The court declined the prayer of an inter-faith couple in a live-in relationship for protection from police harassment.
    • The court deemed the live-in relationship as a “social problem” and relied on personal laws on marriage

    Central Idea

    • A recent judgment by the Allahabad High Court has garnered significant national attention. The ruling in Kiran Rawat vs State of UP undermines the principles of constitutional morality in personal relationships, a notion repeatedly affirmed by the Supreme Court of India. The judgment, has been criticised for its departure from constitutional principles, disregard for precedent, and reliance on irrelevant personal laws.

    What is the case?

    • The case of the petitioners, a Muslim man and a Hindu woman, was short and simple. They are around 30 years of age, living together and their relation is based on mutual love and affection.
    • They alleged that the local police have been torturing them while living in a rented house, and sought protection from police harassment, allegedly done on the basis of a complaint made by a family member

    What is mean by constitutional morality?

    • Constitutional morality refers to the principles and values embedded in a constitution that guide the interpretation and application of its provisions.
    • It encompasses the spirit and objectives of the constitution, promoting justice, equality, freedom, and the protection of fundamental rights.
    • Constitutional morality goes beyond conventional social norms and customs, emphasizing the adherence to constitutional principles even in the face of opposition or prevailing societal beliefs.

    What is personal liberty?

    • Personal liberty refers to the individual’s freedom to make choices, decisions, and actions without undue interference or coercion from external forces, including the state or other individuals.
    • It is a fundamental right that is protected by various legal frameworks, including constitutions and human rights declarations.
    • Personal liberty encompasses various aspects of an individual’s life, including physical, mental, and emotional well-being, as well as their autonomy and privacy.
    • However, personal liberty is not an absolute right and may be limited in certain circumstances,

    Main factors that make the judgment unacceptable in the constitutional sense

    • Prioritizing Conventional Social Morality: The High Court is accused of being influenced by conventional social morality rather than upholding constitutional principles. This undermines individual autonomy and personal liberty, which are essential components of constitutional morality.
    • Disregard for Supreme Court Judgments: Despite citing Supreme Court judgments on live-in relationships, the High Court rejects their intended purpose without providing sound reasons. This undermines the binding nature of Supreme Court judgments and the consistency of legal interpretation.
    • Irrelevant Reliance on Personal Laws: The judgment relies on personal laws related to marriage that are deemed irrelevant to the case. By doing so, the High Court deviates from the constitutional framework and fails to prioritize the fundamental rights of individuals.

    How the judgement shows an inclination towards orthodoxy?

    • Assuming Marriage as a Condition Precedent: Though there were many deficits in the petition, the High Court could not have assumed that marriage is a condition precedent for constitutional protection and the exercise of fundamental rights.
    • Acting as a Theological Court: In effect, The High Court acted as a theological court, as if the very idea of individual liberty and autonomy are alien to the writ jurisdiction. The verdict shows a clear inclination towards social orthodoxy and religious revivalism.
    • Reiteration of Traditional Beliefs:
    • The court tried to reiterating traditional beliefs on marriage and morals, rather than embracing a progressive and inclusive approach. By relying on and reinforcing traditional views, the court fails to accommodate changing societal norms and the importance of personal choices and freedoms
    • Rejection of Supreme Court Precedents: The law laid down by the Supreme Court is binding on all the courts in the country, as in Article 141 of the Constitution. The judgment of the Allahabad High Court rejects the precedential value of Supreme Court verdicts on live-in relationships, such as D. Velusamy (2010), Indra Sarma (2013), and Dhanu Lal (2015). By doing so, the High Court disregards the guidance provided by the apex court, which has recognized and protected the rights of individuals in live-in relationships.

    The Judgements by the Supreme Court which upholds personal liberty

    • Decriminalization of Adultery in Joseph Shine vs Union of India (2018): In the case of Joseph Shine vs Union of India (2018), the Supreme Court decriminalized adultery defined under Section 497 of the Indian Penal Code (IPC). The court held that individual moral aberrations should not be punished by the state’s police power. The judgment emphasized that fidelity is a value, but not one that the state should police.
    • Striking Down of Section 377: In the case of Navtej Singh Johar (2018), the Supreme Court substantially struck down Section 377 of the IPC, which dealt with same-sex relations. The court’s judgment was a constitutional adjudication rather than a mere moral judgment. It recognized the importance of personal choices and limited the state’s power in the realm of personal relationships.
    • In Lata Singh (2006) case: The SC t directed police authorities throughout the country to see to it that any adult undergoing inter caste or inter religious marriage is not harassed by anyone.
    • Khushboo vs Kanniammal & Anr. (2010): The Supreme Court held, while it is true that the mainstream view in our society is that sexual contact should take place only between marital partners, there is no statutory offence that takes place when adults willingly engage in sexual relations outside the marital setting.

    Note: Note down these judgements to support your argument when question asks you to critically analyse

    Way forward

    • Clear Guidance on Live-in Relationships: The Supreme Court should provide clear guidelines and legal recognition for live-in relationships, emphasizing the protection of individuals’ rights and dignity. This would prevent confusion and inconsistent interpretations by lower courts in the future.
    • Judicial Training and Sensitization: There is a need to conduct training programs and sensitization workshops for judges at all levels. This would ensure a better understanding of constitutional principles, fundamental rights, and the evolving nature of societal norms, enabling judges to make informed and unbiased decisions.
    • Public Awareness Campaigns: Public awareness campaigns should be conducted to educate people about the rights and legal protections available to individuals in live-in relationships. This would help dispel social stigmas and promote acceptance of diverse personal choices.
    • Legislative Reforms: The legislature should consider enacting specific laws or amending existing ones to address the legal rights and responsibilities of individuals in live-in relationships. This would provide clarity and protection to couples in such relationships and ensure equal treatment under the law.
    • Strengthening Precedent: It is crucial to emphasize the binding nature of Supreme Court judgments on all courts in the country. Lower courts should be vigilant in adhering to established precedents, respecting the hierarchy of judicial decisions, and avoiding interpretations that deviate from constitutional principles.
    • Dialogue and Engagement: Societal dialogue and engagement with stakeholders, including legal experts, activists, and religious leaders, can help promote a better understanding of individual rights, personal choices, and the importance of constitutional values in a diverse society

    Conclusion

    • The Allahabad High Court’s judgment in Kiran Rawat vs State of UP reflects a regressive view on personal relationships and disregards constitutional morality. By neglecting Supreme Court judgments, relying on irrelevant personal laws, and failing to uphold personal liberties, the High Court has erred in its duty to provide justice. It is crucial that the Supreme Court rectifies this judicial indiscipline and reaffirms the significance of constitutional tenets in safeguarding individual rights and personal choice

    Also read:

    (more…)

  • Forest Conservation Efforts – NFP, Western Ghats, etc.

    Why is there a controversy on the forest Bill?

    forest

    What’s the news?

    • The Forest (Conservation) Amendment Bill, 2023 is set to be presented during the upcoming monsoon session of Parliament.

    Central idea

    • Recently, a Joint Parliamentary Committee (JPC) which was looking at amendments to the Bill has approved the version sent by the government with almost no comment, revisions or suggestions. However, multiple objections have been raised over the proposed amendments.

    Definition- Forest (Conservation) Amendment Bill, 2023

    • The Forest (Conservation) Amendment Bill is a proposed legislation aimed at amending the Forest Conservation Act of 1980 in India.
    • The proposed amendments seek to address certain issues and introduce changes to enhance forest conservation efforts and promote sustainable development.

    Background-Forest Conservation Act, 1980 

    • The Forest Conservation Act, 1980 was enacted to protect the country’s forests and empower the central government to regulate the extraction of forest resources, including timber, bamboo, coal, and minerals, by industries and forest-dwelling communities.
    • Prior to the implementation of the Forest Conservation Act, extensive deforestation and diversion of forest land for non-forestry purposes were prevalent.
    • From 1951 to 1975, approximately four million hectares of forest land were diverted. However, after the Act came into effect, from 1980 to 2023, only around one million hectares have been diverted.

    The key objectives of the Forest (Conservation) Amendment Bill, 2023

    • Definition and Demarcation of Forests: The amendments aim to provide a clear and comprehensive definition of forest and establish criteria for demarcating forest areas.
    • Renaming of the Act: The proposed amendments include changing the name of the Act from Forest (Conservation) Act to Van (Sanrakshan Evam Samvardhan) Adhiniyam, which translates to Forest Conservation and Augmentation.
    • Applicability of the Act: The amendments specify that the Act will apply only to lands officially notified as forest in government records on or after 1980.
    • Exemptions and Strategic Projects:
    • The proposed amendments introduce certain exemptions from the Act’s provisions.
    • Forest land located within 100 km of international borders and intended for strategic projects of national importance, as well as land ranging from 5 to 10 hectares for security and defense projects, would be exempted.
    • Encouraging Reforestation and Carbon Sink Development:
    • The amendments address the issue of disincentives faced by private parties interested in developing plantations in degraded forests or restoring tree patches.
    • The proposed changes seek to incentivize reforestation efforts and support India’s commitment to developing a carbon sink of three billion tonnes by 2030, as per its obligations under the Paris Agreement.

    Objections to the changes

    • Impact on Ecologically Sensitive Areas:
    • The exemptions introduced in the amendments could have detrimental effects on significant forests in the Himalayan, trans-Himalayan, and northeastern regions.
    • Clearing these forests without proper assessment and mitigation plans may threaten the biodiversity of vulnerable ecological and geologically sensitive areas and potentially trigger extreme weather events.
    • Exclusion of Forest Land:
    • Limiting the Act’s applicability only to forest areas recorded on or after 1980 may leave out substantial forest land and biodiversity hotspots.
    • This exclusion could potentially lead to the sale, diversion, clearance, and exploitation of these areas for non-forestry purposes, undermining forest conservation efforts.
    • Renaming of the Act:
    • Dissent has been expressed regarding the renaming of the Act as Van (Sanrakshan Evam Samvardhan) Adhiniyam.
    • The use of sanskritik terminology in the name is untenable and may not be in alignment with the linguistic and cultural diversity of the country.
    • Balance of Power:
    • Concerns have been raised about the balance of power between the central and state governments.
    • They argue that forest conservation falls under the concurrent jurisdiction of both levels of government, and the amendments may shift the balance towards the central government, potentially undermining the authority of state governments in forest conservation matters.

    Environment Ministry’s stand on the issue

    • Addressing Concerns: The Environment Ministry has submitted detailed explanations to the JPC to address the concerns that have been raised. The Ministry aims to clarify and alleviate the apprehensions surrounding the proposed amendments.
    • Protection of Godavarman Judgment: The Ministry asserts that the new amendments do not dilute the Godavarman Thirumulpad judgment, indicating that the changes are consistent with the principles laid down in the landmark Supreme Court ruling.
    • Preventing Misuse of Land: The Ministry emphasizes that there are provisions in place to ensure that forest land will not be misused. The amendments include safeguards to prevent unauthorized exploitation or inappropriate utilization of forest land.
    • Specific Exemptions: The Ministry clarifies that the exemptions introduced in the amendments would be limited to specific linear projects of strategic importance identified by the Central government.

    Way forward

    • Inclusive dialogue: Facilitate inclusive dialogue with stakeholders, including Opposition parties, NGOs, tribal communities, and experts, to address concerns and objections.
    • Impact assessment: Conduct thorough environmental impact assessments (EIAs) to assess potential consequences of the amendments and develop mitigation plans for ecological sensitivity.
    • Strengthen safeguards: Enhance safeguards for significant forest areas and develop clear definitions of forest to ensure effective conservation measures.
    • Balance conservation and development: Promote sustainable practices like private plantations and reforestation while regulating industrial and mining use of forest tracts.
    • Central-state collaboration: Foster collaboration and coordination between Central and state governments to harmonize forest conservation efforts.
    • Transparent implementation: Allocate resources for monitoring, prevention of illegal activities, and ensure transparency and accountability in forest-related activities.

    Conclusion

    • The Forest (Conservation) Amendment Bill, 2023, set to be introduced in the monsoon session of Parliament. As the bill moves forward for debate, it is crucial to consider the concerns raised and ensure a balanced approach that protects both forests and the rights of forest-dependent communities.

    Also read:

    Wildlife (Protection) Amendment Bill and the Forests rights

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

    Cash Transfers vs Foodgrain Distribution

    Central idea

    • Three years ago, financial constraints prevented the Centre and states from providing cash transfers to vulnerable households during pandemic lockdowns. However, there was an abundance of wheat and rice in FCI’s warehouses, allowing distribution to 813.5 million people. However, the current scenario has reversed, with governments having funds but limited grain stocks, raising concerns for future provisions.

    Grain Distribution and Export Scenario

    Grain Distribution:

    • During the pandemic-enforced lockdowns the government distributed 10 kg of grain per month practically free to 813.5 million people from April 2020 to December 2022.
    • This distribution was made possible through the public distribution system (PDS) and aimed to support poor and vulnerable households suffering from job and income losses.

    Offtake of Grains:

    • 2020-21 (April-March): The offtake of wheat and rice totalled 92.9 million tonnes, surpassing the annual average of 62.5 million tonnes during the first seven years after the National Food Security Act (NFSA) implementation.
    • 2021-22: The offtake further increased to 105.6 million tonnes.
    • 2022-23: The offtake remained high at 92.7 million tonnes.

    Grain Exports:

    • Rice: In 2021-22, India exported 21.2 million tonnes of rice, valued at $9.66 billion. In 2022-23, rice exports reached 22.3 million tonnes, valued at $11.14 billion.
    • Wheat: Wheat exports accounted for 7.2 million tonnes ($2.12 billion) in 2021-22 and 4.7 million tonnes ($1.52 billion) in 2022-23

    Karnataka Case: Shift from Grain to Cash Transfers

    • Change in Financial Situation: As economic activities resumed, the financial situation improved for both the Centre and the states. Gross GST revenues grew, indicating increased financial resources available to the governments.
    • Reduction in Grain Quota: From January 2023, the monthly grain quota under the National Food Security Act (NFSA) was reduced from 10 kg to 5 kg per person.
    • Additional grain demand: The government in Karnataka sought additional grain from the FCI to fulfill its election promise of providing 10 kg of free rice per month to all members of below-poverty-line (BPL) households.
    • Centre’s Refusal: The Centre did not allow the state government to distribute the extra rice beyond the 5 kg provided under the National Food Security Act (NFSA)
    • Resort to Cash Transfers: As a result the Karnataka government started giving cash transfers instead. They started transferring Rs 170 to the bank accounts of the BPL family heads in lieu of the extra 5 kg of rice

    Implications of cash transfers 

    • Inflationary Pressures:
    • When households receive cash instead of free grain, they have the flexibility to use the money for various purposes, including purchasing rice or other goods.
    • Increased demand for rice in the market can lead to higher prices, potentially contributing to inflationary pressures.
    • Deflationary Impact of Free Grain Distribution:
    • When surplus grains are distributed without a monetary transaction, it can help stabilize or reduce the prices of grains in the market.
    • This can mitigate inflationary pressures and ensure affordable access to essential food items for vulnerable populations.
    • Budgetary Considerations:
    • This allocation needs to be carefully managed to ensure that it aligns with overall fiscal goals and priorities.
    • The availability of adequate financial resources for cash transfers can be a determining factor in choosing between cash transfers and free grain distribution.
    • Flexibility for Beneficiaries:
    • Instead of receiving a predetermined amount of grain, households can decide how to allocate the cash according to their priorities.
    • This flexibility allows households to address their unique requirements beyond food, such as healthcare, education, or other essential expenses.
    • Market Dynamics:
    • Cash transfers can stimulate economic activity by injecting money into local markets. This can have positive multiplier effects, benefiting various sectors and local businesses.
    • On the other hand, free grain distribution may limit the market demand for grains, potentially affecting the livelihoods of farmers and traders.

    Depleted grain stocks and uncertain monsoon

    • Depleted Grain Stocks:
    • The total stocks of wheat and rice in the Central pool today stands at a five-year-low.
    • While these stocks are still above the normative minimum required, there are concerns about the monsoon and its impact on this year’s rice crop, which may affect procurement and future stocks.
    • Monsoon Impact on Production:
    • The poorly distributed rain has resulted in lower-than-usual rice cultivation, with farmers having planted only 123.18 lakh hectares out of the normal total of 399.45 lakh hectares under rice during the monsoon season. Additionally, the cumulative area sown is 6.1% lower than the previous year.
    • Insufficient rainfall in the monsoon’s second half can impact not only the kharif rice but also the upcoming rabi wheat crop.

    The Export conundrum

    • Record Export Quantities: Despite the imposition of restrictions on grain exports, India witnessed record-breaking exports of rice, wheat, and other cereals. Specifically, total exports amounted to 32.3 million tonnes in 2021-22 and 30.7 million tonnes in 2022-23, valued at $12.87 billion and $13.86 billion, respectively.
    • Inflationary Pressures:  The rising demand for rice, coupled with reduced domestic availability due to exports, can lead to higher prices for consumers within the country.
    • Limited Import Capability for Rice: As India is the world’s largest rice exporter, importing rice in case of domestic production shortfalls becomes challenging. Unlike wheat, which can be imported due to ample global supplies, rice imports are restricted.
    • Price Volatility and Potential Export Restrictions: The rising rice prices globally, indicating potential price volatility. Given concerns over depleted grain stocks and uncertainties related to the monsoon, the government is considering additional export restrictions.

    Way forward: A balanced approach

    • Targeted Cash Transfers: Implement focused cash transfer programs to support the most vulnerable households affected by economic hardships.
    • Optimal Grain Procurement: Strengthen grain procurement mechanisms to ensure an adequate supply of grains for the Public Distribution System (PDS) and strategic reserves.
    • Strategic Stock Management: Develop effective strategies to balance grain distribution for immediate consumption while maintaining sufficient reserves for emergencies.
    • Diversify Food Sources: Explore diverse food options, such as millets, pulses, and vegetables, to reduce reliance on a single crop and enhance food and nutritional diversity.
    • Enhance Food System Resilience: Improve supply chain efficiency, reduce food waste, and enhance coordination among stakeholders for a resilient food system.
    • Continuous Monitoring and Evaluation: Establish robust monitoring and evaluation systems to track the effectiveness of cash transfer programs, grain procurement strategies, and food security initiatives.

    Conclusion

    • The current state of depleted grain stocks, coupled with the uncertainties surrounding monsoon performance and global market dynamics, presents a significant challenge for the government. Balancing the need for cash transfers to alleviate the plight of vulnerable households while ensuring adequate grain reserves to sustain the country’s food security is a delicate task.
  • Modern Indian History-Events and Personalities

    Who was Nawab Wajid Ali Shah (1822-1887)?

    nawab

    Central Idea

    • An exhibition, heritage walk, and talk will be held in Kolkata to commemorate the bicentenary year of Nawab Wajid Ali Shah, the last king of Awadh.

    Nawab Wajid Ali Shah

    • Mirza Wajid Ali Shah (30 July 1822 – 1 September 1887) was the eleventh and final King of Awadh, reigning from 13 February 1847 to 11 February 1856.
    • He is remembered as a poet, playwright, dancer, and patron of the arts who made significant contributions during his rule.

    Reign and fall

    • Ascension to the Throne: Wajid Ali Shah became the King of Awadh in February 1847, assuming the position during a period of decline for the kingdom.
    • British Annexation: The British East India Company annexed Awadh on 11 February 1856, just two days before the ninth anniversary of Wajid Ali Shah’s coronation. He was subsequently exiled to Garden Reach in Metiabruz, near Kolkata, living on a pension.

    Patron of the Arts

    • Contributions to Music: Wajid Ali Shah was a generous patron of music and a talented composer. He nurtured the Lucknow Gharana of Kathak dance and enriched the light classical form of thumri. He composed ghazals and introduced new ragas, leaving a lasting impact on Hindustani music.
    • Kathak Dance: Wajid Ali Shah’s patronage elevated Kathak dance in Lucknow. He emphasized artistic expression, incorporating drama, emotion, and literature. The king popularized Kathak as a court dance and made it accessible to the common people.
    • Hindustani Theatre: The king established the Jogia Jashan, a grand pageant, and staged Rahas (dance-dramas) filled with poetry, lyrical compositions, and Kathak performances. His contributions laid the foundation for the development of Hindustani theatre.

    Literary Pursuits

    • Prose and Poetry: Wajid Ali Shah was a prolific writer in both Persian and Urdu. His works covered various subjects, including history, literature, and personal reflections. Notable works include “Huzn-i-Akhtar,” an autobiographical piece, and “Bani,” a treatise on music and dance.
    • Patronage of Writers: The king patronized numerous poets and writers in his court, including Mirza Ghalib. He granted pensions to renowned literary figures and encouraged the production of works that reflected the culture and life of the era.

    Exile Years and Legacy (1856-1887)

    • Exile in Metiabruz: After losing his kingdom, Wajid Ali Shah settled in Metiabruz near Kolkata. He created a miniature version of Lucknow and maintained his lavish lifestyle. Matiya Burj, a magnificent complex, served as a reminder of his beloved city.
    • Enduring Impact: Wajid Ali Shah’s compositions, including his famous thumri “Babul Mora Naihar Chhooto Jaay,” remain influential and have been performed by various artists. His contributions to music, dance, literature, and theatre continue to shape the cultural landscape, preserving his legacy.

    Conclusion

    • Mirza Wajid Ali Shah, the last King of Awadh, reigned from 1847 to 1856 before being exiled.
    • His patronage of the arts, including music, dance, theatre, and literature, left an indelible mark on the cultural heritage of Awadh.
    • Despite the challenges he faced and the loss of his kingdom, Wajid Ali Shah’s artistic endeavors and enduring legacy continue to inspire and enrich the region’s cultural identity.
  • Indian Air Force Updates

    India to buy Rafale Marine Jet from France

    rafale

    Central Idea

    • DAC Approval for Rafale: The Defence Acquisition Council (DAC) cleared proposals to procure 26 Rafale Marine fighter jets and three Scorpene submarines for the Indian Navy.

    Rafale Marine Fighter Jets

    • Naval Variant: Rafale Marine fighters are the naval version of the Rafale jets, with the Indian Air Force operating 36 of them.
    • Advanced Multirole Fighters: Manufactured by Dassault Aviation, the Rafales are advanced twin-engine, multirole fighter jets equipped with modern sensors, radar, and the latest weapon systems.
    • India-Specific Enhancements: The jets feature India-specific enhancements and have the capability to carry out various missions.
    • Differences in Marine Version: The naval variant has foldable wings, a longer airframe for carrier landings, a tail hook for arrested landing, and reinforced landing gear suitable for aircraft carriers’ conditions.
    • Expanded Weapon Capabilities: Rafale Marine jets can carry a wider range of weapons, including anti-ship and air-to-surface missiles, and have specialized radar for maritime operations.

    Current Fleet and Need for Additional Fighters

    • MiG-29Ks: The Indian Navy currently operates MiG-29Ks from INS Vikramaditya aircraft carrier, which are carrier-based multirole fighter aircraft.
    • Procurement Requirement: With some MiG-29Ks expected to retire in a decade and the Navy having two operational carriers, additional deck-based fighters were needed to meet operational requirements until the indigenous Twin Engine Deck-Based Fighter (TEDBF) is developed.
    • Criteria and Selection: Only Boeing’s F/A-18 E/F Super Hornet and Dassault Aviation’s Rafale-M met the Navy’s criteria, with Rafale-M having an advantage due to common spares and support with the Indian Air Force’s Rafale jets.

    Export and Usage of Rafale Jets

    • Importance for France: The Rafale is a key component of France’s nuclear deterrence capabilities.
    • Orders and Deliveries: France has ordered a total of 192 Rafales, with 153 already delivered by the end of 2022.
    • Future Orders: Plans for a further order of 30 fighters and additional Rafales to offset those sold to Greece and Croatia are in the pipeline.
    • Flight and Operational Hours: The aircraft has accumulated a total of 405,000 flight hours, including 63,500 operational hours flown by French pilots since 2007.

    Conclusion

    • The Rafale Marine jets, with their advanced features and expanded weapon capabilities, will strengthen the Navy’s deck-based fighter fleet.
    • This procurement decision marks another step towards bolstering India’s defense preparedness and self-reliance in defense manufacturing.
  • Capital Markets: Challenges and Developments

    What are AT-1 Bonds?

    Central Idea

    • Subscription Disappointment: State Bank of India (SBI)’s additional tier-1 (AT-1) bond issue saw a very low response from investors, raising ₹3,101 crore against an issue size of ₹10,000 crore.
    • Market Sentiment Impact: The lackluster response is expected to dampen market sentiment and make fundraising more challenging for other PSU banks, potentially leading to delays in their fundraising plans.

    What are AT1 Bonds?

    • Definition: AT-1 bonds, or Additional Tier-1 bonds, are unsecured, perpetual bonds issued by banks to strengthen their core capital base in compliance with Basel-III norms.
    • Complex Hybrid Instruments: AT-1 bonds are complex instruments suited for institutions and knowledgeable investors who can analyze their terms and determine if the higher rates compensate for the higher risks involved.
    • Face Value: Each AT-1 bond typically carries a face value of ₹10 lakh.
    • Acquisition Routes: Retail investors can acquire these bonds through initial private placement offers by banks or by purchasing already-traded AT-1 bonds in the secondary market based on broker recommendations.

    Key Features and Importance of AT1 Bonds

    • Perpetual Nature: AT-1 bonds do not have a maturity date. Instead, they include call options that allow banks to redeem them after a specific period, usually five or ten years. Banks can choose to pay only interest indefinitely without redeeming the bonds.
    • Flexibility in Interest Payments: Banks issuing AT-1 bonds can skip interest payouts or even reduce the bonds’ face value if their capital ratios fall below certain thresholds specified in the offer terms.
    • Regulatory Intervention: If a bank faces financial distress, the RBI has the authority to ask the bank to cancel its outstanding AT-1 bonds without consulting the investors.

    Back2Basics: Basel Norms

    • Basel is a city in Switzerland and the headquarters of the Bureau of International Settlement (BIS).
    • The BIS fosters cooperation among central banks to achieve financial stability and common standards of banking regulations.
    • Basel guidelines are broad supervisory standards formulated by the Basel Committee on Banking Supervision (BCBS).
    • The Basel accord is a set of agreements by the BCBS that primarily focuses on risks to banks and the financial system.
    • The purpose of the Basel accord is to ensure that financial institutions maintain sufficient capital to meet obligations and absorb unexpected losses.
    • India has accepted the Basel accords for its banking system.

     

    Basel I Basel II Basel III
    Year Introduced 1988 2004 2010
    Focus Credit Risk Credit, Market, Operational Risks Capital, Leverage, Funding, Liquidity
    Capital Requirement Fixed at 8% of Risk-Weighted Assets (RWA) Minimum Capital Adequacy Requirement of 8% of Risk Assets Strengthening capital requirements
    Pillars 1. Capital Adequacy Requirements 2. Supervisory Review 3. Market Discipline
    Objective Define capital and risk weights for banks Encourage better risk management and disclosure Promote a more resilient banking system
    Implementation in India Adopted in 1999 Yet to be fully implemented March 2019 (postponed to March 2020 due to COVID-19)
    Key Parameters Capital: 12.9% capital adequacy ratio, Tier 1 and Tier 2 capital ratios, capital conservation buffer, and counter-cyclical buffer; Leverage: minimum 3% leverage rate; Funding and Liquidity: LCR and NSFR ratios

     

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