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  • ISRO Missions and Discoveries

    Counting down: Launch of Chandrayaan-3 Mission

    Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    chandrayaan

    Central Idea

    • The Indian Space Research Organisation (ISRO) is set to launch the Chandrayaan 3 mission on July 14 from the Satish Dhawan Space Centre, Sriharikota.
    • This mission follows the Chandrayaan 2, which encountered technical issues and crash-landed on the moon in September 2019.

    Chandrayaan-3: Mission Details and Landing

    • Launch Vehicle: Chandrayaan 3 will be launched aboard the Geosynchronous Satellite Launch Vehicle Mark III (GSLV Mk III) rocket.
    • Landing Site: The spacecraft is expected to land near the moon’s South Pole.
    • Operational Duration: Chandrayaan 3 will operate on the lunar surface for one lunar day, equivalent to 14 Earth days.

    Significance of the Lunar South Pole

    • Scientific Interest: The lunar South Pole is a compelling location due to the presence of towering massifs and permanently shadowed craters that may contain volatile compounds and water-ice deposits.
    • Planetary Formation Insights: Studying the South Pole-Aitken Basin’s age and impact melt could provide insights into planetary formation.
    • Valuable Resource: Volatile deposits at the South Pole could serve as a valuable resource for future exploration and astrobiology investigations.
    • Solar Power Potential: Some mountain peaks near the pole receive extended periods of sunlight, making them potential sites for continuous solar power supply.
    • Fossil Record: Craters at the South Pole may contain a fossil record of the early Solar System, providing valuable scientific data.

    Choosing the South Pole over the North Pole

    • Permanent Darkness: The larger shadowy region at the lunar South Pole, which remains in permanent darkness, makes it suitable for studying unilluminated areas.
    • Aitken Basin Edge: The South Pole is located at the edge of the Aitken Basin, the largest impact basin in the Solar System.
    • Lunar Reconnaissance Orbiter: NASA’s Lunar Reconnaissance Orbiter collects data over the South Pole region, enhancing the scientific understanding of the area.
    • Longer Lunar Day-Night Cycle: The Moon’s longer rotation cycle (around 30 days) results in extended periods of day and night, making the South Pole more accessible.

    Trajectory and Landing Procedure

    • Similar to Chandrayaan 2: Chandrayaan 3 will follow a trajectory similar to Chandrayaan 2, utilizing a propulsion module to orbit Earth before heading to the moon.
    • Lunar Orbit and Landing: Once within the moon’s gravitational pull, the module will lower itself to a 100 x 100 km circular orbit. The lander will then detach and descend to the lunar surface.

    Scientific Payloads

    • The Lander: The lander, named ‘Vikram,’ will deploy four scientific payloads to study the moon’s surface temperature and subterranean characteristics.
    • The Rover: The rover, named ‘Pragyan,’ will conduct chemical and visual tests as it roves around the lunar surface.

    Objectives of Chandrayaan 3

    • Safe Landing Demonstration: Chandrayaan 3 aims to demonstrate safe and soft landing on the lunar surface.
    • Rover Roving Capability: The mission will showcase the capability of the rover to traverse the lunar surface.
    • In-situ Scientific Experiments: Chandrayaan 3 will conduct in-situ scientific experiments on the moon.

    Development and Delay

    • Development Phase: The development phase for Chandrayaan 3 began in January 2020, with scientists and engineers working on the spacecraft’s design and assembly.
    • Manufacturing Delays: The COVID-19 pandemic caused delays in the manufacturing and testing of the propulsion systems.
    • Launch Schedule: The launch, initially planned for early 2021, was postponed due to the pandemic. The spacecraft is now set to launch in July 2023.

    Importance of Chandrayaan 3

    • India’s Third Lunar Mission: Chandrayaan 3 is India’s third lunar mission and the second attempt at a soft landing on the moon.
    • Renewed Interest in Lunar Exploration: In recent years, there has been a renewed interest in exploring the moon following Chandrayaan-1’s discovery of water on the lunar surface.

    Conclusion

    • Chandrayaan 3 represents India’s continuous efforts to explore the moon and achieve a soft landing.
    • The mission’s success will contribute to scientific advancements and further our understanding of the lunar surface.
    • As space agencies around the world plan future lunar missions, humanity’s return to the moon seems imminent after more than five decades.

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  • Global Geological And Climatic Events

    World past Holocene Epoch: Anthropocene began in 1950

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

    anthropocene

    Central Idea

    • AWG’s Proposal: The Anthropocene Working Group (AWG) proposes a new geological epoch called the Anthropocene.
    • Reference Point: The unique reference point for the Anthropocene is Crawford Lake near Toronto in Canada’s Ontario Province.

    Understanding the Anthropocene Epoch

    • Coined Term: The Anthropocene epoch was first coined by Nobel Prize-winning chemist Paul Crutzen and biology professor Eugene Stoermer in 2000.
    • Human Impact: The Anthropocene represents the geological time interval characterized by radical changes in the Earth’s ecosystem due to human impact, particularly since the onset of the Industrial Revolution.
    • Environmental Changes: Numerous phenomena associated with the Anthropocene include global warming, sea-level rise, ocean acidification, mass-scale soil erosion, deadly heat waves, and environmental deterioration.
    • Geological Strata: The AWG’s website states that these changes are reflected in a distinctive body of geological strata, with the potential to be preserved into the far future.

    Evidence from Crawford Lake

    img

    • Selected Site: Crawford Lake in Canada’s Ontario Province was chosen by geologists for examination over 11 other potential sites.
    • Preserved Sediments: The lake’s layers of sediment have preserved the annual impact of human activities on the Earth’s soil, atmosphere, and biology.
    • Shift in Mid-20th Century: The analysis of Crawford Lake’s bottom sediments reveals a clear shift from the mid-20th century, surpassing the bounds of the previous Holocene epoch.
    • Captured Fallout: Over the years, the lake’s sediments have captured the fallouts of large-scale burning of fossil fuels, explosion of nuclear weapons, and dumping of plastic and fertilizers on land and in water bodies.

    Debate and Disagreements

    • Scientific Community Disagreements: Not all geologists agree on the reality of the Anthropocene epoch.
    • Debate Points: Disagreements revolve around the precise start of the epoch, whether it has already begun, and the sufficiency of evidence to prove its advent.

    The Geological Time Scale

    • Divisions and Categories: The Earth’s geological time scale is divided into five broad categories: eons, eras, periods, epochs, and ages.
    • Fossil-Based Boundaries: Boundaries on the geological time scale correspond to the origination or extinction of specific types of fossils.
    • Current Classification: Currently, we are in the Phanerozoic eon, Cenozoic era, Quaternary period, Holocene epoch, and Meghalayan age.

    AWG’s Findings and Next Steps

    • Selection of Crawford Lake: Crawford Lake was chosen due to its preserved sediment layers that provide an annual record of human impact.
    • Overwhelming Effects: Distinct and multiple signals in the lake’s sediments starting around 1950 demonstrate that the effects of human activity overwhelm the Earth system.
    • Unique Global ‘Fingerprint’: The presence of plutonium resulting from nuclear weapon detonations serves as a stark indicator of humanity’s dominant influence on the planet.
    • Approval Process: The AWG plans to present a proposal to the Subcommission on Quaternary Stratigraphy (SQS) and the International Commission on Stratigraphy (ICS) for approval.
    • Final Approval: The final approval is expected to be granted at the 37th International Geological Congress in Busan, South Korea, next year.

    Conclusion

    • Compelling Evidence: Geologists’ examination of Crawford Lake provides compelling evidence for the existence of the Anthropocene epoch.
    • Challenging Conventional Timeline: The proposal for the Anthropocene epoch challenges the conventional understanding of the Earth’s official geological timeline.
    • Future Determination: Further discussions and approvals by international geological bodies will determine the recognition and acceptance of the Anthropocene epoch.

    Back2Basics: Geological Time Scale

    anthropocene

    • The Geological Time Scale is a system used by geologists and palaeontologists to divide Earth’s history into distinct time intervals based on significant geological and biological events.
    • It provides a framework for organizing and understanding the vast expanse of time since the formation of the Earth, approximately 4.6 billion years ago, up to the present day.
    • The Scale is divided into several hierarchical units, including eons, eras, periods, epochs, and ages.

    Here is a simplified overview of the major divisions:

    (1) Eon: The largest division of time on the Geological Time Scale. The history of Earth is typically divided into four eons:

    • Hadean Eon: Represents the earliest stage of Earth’s history, from its formation to around 4 billion years ago.
    • Archean Eon: Covers the period from around 4 billion to 2.5 billion years ago. It includes the formation of the Earth’s crust, the emergence of life, and the development of the first continents.
    • Proterozoic Eon: Encompasses the time between 2.5 billion and 541 million years ago. It includes significant evolutionary developments, such as the emergence of complex multicellular life.
    • Phanerozoic Eon: The current eon, spanning from 541 million years ago to the present. It is further divided into eras.

    (2) Era: The second-largest division of time, encompassing longer periods of geological history within an eon. The Phanerozoic Eon is divided into three eras:

    • Paleozoic Era: Covers the time from 541 million to 252 million years ago. It is known for the diversification of life, including the appearance of complex marine organisms, fish, insects, and the first terrestrial plants.
    • Mesozoic Era: Spans from 252 million to 66 million years ago. It is often referred to as the “Age of Reptiles” and includes the dominance of dinosaurs, as well as the rise of mammals and birds.
    • Cenozoic Era: Extends from 66 million years ago to the present. It is sometimes called the “Age of Mammals” and includes the diversification and proliferation of mammals, the appearance of humans, and the development of modern ecosystems.

    (3) Period: A subdivision of an era, representing a distinct interval of time characterized by specific geological and biological events. For example:

    • The Paleozoic Era is divided into periods such as the Cambrian, Ordovician, Silurian, Devonian, Carboniferous, and Permian.
    • The Mesozoic Era is divided into periods including the Triassic, Jurassic, and Cretaceous.
    • The Cenozoic Era is divided into periods such as the Paleogene, Neogene, and Quaternary.

    (4) Epoch: A smaller subdivision of a period, representing a shorter interval of time. Epochs are defined by more localized geological and biological changes.

    (5) Age: The smallest division of time on the Geological Time Scale. Ages represent relatively brief periods, often defined by specific fossil or rock layers.

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  • Finance Commission – Issues related to devolution of resources

    Why normative recommendations of finance commissions remain on paper

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

    finance

    What is the news?

    • This article critically examines the historical outcomes of the 13th FC and underscores the need for realistic expectations regarding the forthcoming 16th FC

    Central idea

    • The Finance Commissions (FC) in India play a crucial role in determining the fiscal framework for resource allocation between the Union and state governments. Established under Article 280 of the Constitution, the FCs provide recommendations on vertical devolution, horizontal distribution, and grants-in-aid. However, the effectiveness of these recommendations in achieving their intended objectives remains a matter of contention

    Purpose and Scope of Finance Commissions

    • Finance Commissions are constituted under Article 280 of the Constitution and their recommendations encompass three key areas: vertical devolution, horizontal distribution, and grant-in-aid.
    • Vertical devolution focuses on Union to state transfers
    • Horizontal distribution involves the allocation of resources between states based on a specific formula.
    • Grant-in-aid, covered under Article 275, provides financial assistance to states deemed in need.
    • It is important to note the distinction between grants and grant-in-aid, as the latter operates at arm’s length and offers more flexibility in terms of control.

    Recommendations of the previous Finance Commission

    13th Finance Commission Recommendations:

    • Increase the number of court working hours using existing infrastructure.
    • Enhance support to Lok Adalats.
    • Provide additional funding to State Legal Services Authorities to enhance legal aid for the marginalized.
    • Promote the use of Alternative Dispute Resolution (ADR) mechanisms.
    • Enhance the capacity of judicial officers and public prosecutors through training programs.
    • Support the creation of a judicial academy in every state for training purposes.
    • Allocate funds for the setting up of specialized courts.

    15th Finance Commission Recommendations:

    • Gather quantifiable data on the level of various services available in different states.
    • Collect corresponding unit cost data to estimate cost disabilities among states.
    • Fill gaps in statistical data through the efforts of the Ministry of Statistics.

    Challenges encountered in the implementation of Finance Commission recommendations

    • Lack of Implementation of Homilies: The recommendations made by Finance Commissions, both at the Union and state levels, are often ignored as mere pious intentions. This indicates a lack of commitment and follow-through in translating the recommendations into concrete actions.
    • Conditionalities and Expenditure Restrictions: The objections raised by some states in the article indicate challenges related to conditionalities attached to grants. Conditionalities may restrict the expenditure options of states, creating obstacles in implementing the recommended reforms.
    • Inadequate Resource Allocation: The allocated funds for specific reforms may not be sufficient, leading to inadequate implementation. Financial constraints and competing budgetary priorities can limit the availability of resources needed to effectively execute the recommended measures.
    • Lack of Coordination: The implementation of Finance Commission recommendations requires cooperation between the Union and state governments. Any lack of coordination or disagreements between these entities can hinder the execution of reforms

    Way forward: Need for realistic expectations regarding the forthcoming 16th FC

    • Acknowledging Implementation Challenges: Recognize the challenges and complexities involved in implementing Finance Commission recommendations, such as coordination issues, administrative capacity, and resistance to change. This understanding will help shape realistic expectations and strategies for addressing these challenges.
    • Strengthening Implementation Mechanisms: Focus on improving the implementation mechanisms and processes. This includes enhancing coordination and cooperation between the Union and state governments, strengthening administrative capacity at all levels, and streamlining the implementation of conditionalities to facilitate smoother execution.
    • Robust Monitoring and Evaluation: Establish effective monitoring and evaluation mechanisms to track the progress and outcomes of implemented reforms. Regular assessment will help identify implementation gaps and provide opportunities for course correction and improvement.
    • Building Stakeholder Consensus: Foster stakeholder engagement and consensus-building to ensure the buy-in and ownership of recommended reforms. Engage relevant stakeholders, including government departments, civil society organizations, and local communities, to create a shared vision and collective commitment towards implementation.
    • Learning from Past Experiences: Analyze past experiences and identify the reasons behind the limited implementation of previous recommendations. This will help inform future strategies, learning from the challenges faced and replicating successful implementation models.
    • Advocacy and Public Awareness: Create awareness among the public about the importance of Finance Commission recommendations and their impact on governance and development. Foster advocacy efforts to generate public support and hold governments accountable for implementing the recommended reforms.

    Conclusion

    • Finance Commissions in India fulfill a critical role in determining fiscal transfers between the Union and state governments. However, the implementation of their recommendations often falls short of expectations due to various challenges and limitations. By critically analyzing the past experiences of Finance Commissions, it becomes evident that a more pragmatic approach is necessary to align expectations with the actual outcomes.

    Also read:

    Finance Commission and the Challenges of Fiscal Federalism

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  • Foreign Policy Watch: India-Southeast Asia

    Quiet diplomacy could ease South China Sea tensions

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

    South China Sea

    What is the news?

    • During the fifth meeting of the Philippines-India Joint Commission on Bilateral Cooperation in New Delhi on June 29, the Foreign Ministers of India and the Philippines, S. Jaishankar and Enrique Manalo, respectively, discussed enhancing the bilateral partnership between the two countries. The meeting focused on maritime cooperation and addressing the South China Sea issue

    Central Idea

    • With a shared history of diplomatic relations spanning nearly 75 years and common maritime interests, the External Affairs Minister of India, S. Jaishankar, and the Secretary for Foreign Affairs of the Philippines, Enrique Manalo, laid out a roadmap to enhance the bilateral partnership in the 21st century.

    Significance and developments emerged from the meeting

    • Establishment of a resident defense attaché office in Manila: The decision to open a resident defense attaché office in Manila reflects a deeper commitment to defense cooperation between India and the Philippines. This move will facilitate closer coordination, information sharing, and joint defense initiatives.
    • Increased collaboration between the Coast Guards: The Coast Guards of India and the Philippines will enhance their collaboration, aiming to strengthen maritime security in the region. This includes joint patrols, information exchange, and joint operations to combat maritime threats.
    • Manila’s acquisition of naval assets with concessional credit from India: To bolster its maritime capabilities, the Philippines will acquire naval assets with the help of a concessional line of credit extended by India. This support will enhance the Philippines’ maritime defense capabilities and contribute to maintaining regional stability.
    • Expanded training and joint exercises on maritime security and disaster responses: Both countries will expand their training programs and conduct joint exercises focused on maritime security and disaster response. This cooperation will enhance operational readiness and preparedness to address maritime challenges, including disaster relief efforts.

    The South China Sea issue: A significant topic of discussion

    1. Agreement on regional and multilateral issues: Both India and the Philippines reached an agreement on regional and multilateral matters, particularly emphasizing the importance of maritime highways like the South China Sea.
    2. India’s position on international law and the 2016 Arbitral Award:
    • India reiterated its consistent position of adhering to international law, including the United Nations Convention on the Law of the Sea (UNCLOS).
    • Notably, India made an unambiguous call to respect the 2016 Arbitral Award on the South China Sea, which represents a departure from India’s previous stance.
    • This shift signifies India’s recognition of the legitimacy of the Arbitral Award.
    1. Background of the Arbitration Case: The Philippines had submitted a case for arbitration to the Permanent Court of Arbitration (PCA) to address its disputes with China in the South China Sea. Despite China’s formal withdrawal from the arbitration, the proceedings continued under UNCLOS guidelines.
    2. Key findings of the Arbitral Award:
    • The PCA’s Award, released on July 12, 2016, rejected China’s claims of historical rights in the South China Sea.
    • The tribunal determined that any claims to resources within the nine-dash line were unfounded.
    • It also found that China had violated the Philippines’ sovereign rights in its Exclusive Economic Zone (EEZ) through various actions, including interfering with fishing and petroleum exploration, constructing artificial islands, and failing to prevent Chinese fishermen from operating in the zone.

    What is Quiet diplomacy?

    • Quiet diplomacy refers to a diplomatic approach that focuses on behind-the-scenes negotiations and discussions conducted discreetly, away from public attention and media scrutiny.
    • It involves engaging in diplomatic efforts through confidential channels, informal dialogues, and private meetings to address sensitive issues and resolve conflicts.

    How Quiet diplomacy could ease South China Sea tensions

    • Confidence-Building Measures: Quiet diplomacy can facilitate the implementation of confidence-building measures among the claimant states. This can include agreements on joint military exercises, information sharing, or cooperative initiatives aimed at reducing tensions and building trust.
    • Open Communication: Quiet diplomacy allows for confidential and discreet communication between stakeholders, such as China and the claimant states. It provides a platform for open dialogue where concerns and perspectives can be expressed, leading to better understanding and the potential for resolving differences.
    • Mediation and Facilitation: Quiet diplomacy may involve the engagement of neutral third-party mediators or facilitators who can assist in bridging differences and guiding the negotiation process. These mediators can provide a neutral perspective, offer expertise, and help facilitate constructive dialogue among the stakeholders.
    • Informal Track-II Diplomacy: Quiet diplomacy encourages informal exchanges and dialogues between academic experts, think tanks, and non-governmental organizations. These interactions can provide alternative perspectives, generate innovative ideas, and contribute to a deeper understanding of the issues at hand.
    • Crisis Management: Quiet diplomacy can be applicable during times of crisis or heightened tensions in the South China Sea. It allows for confidential crisis management talks between relevant parties, enabling swift and discreet negotiations to de-escalate tensions and seek temporary agreements

    South China Sea

    Way forward

    • Dialogue for Conflict Resolution: The South China Sea issue requires a political framework and dialogue for resolution. Leaders of ASEAN nations are encouraged to engage in “quiet diplomacy to find a political solution, as legal methods may have limitations. Dialogue provides an opportunity for peaceful conflict resolution through negotiations and diplomatic channels.
    • Emphasis on a Code of Conduct: The establishment of a legally binding code of conduct is crucial for managing the South China Sea issue. ASEAN leaders are called upon to work towards developing and implementing such a code. A code of conduct can provide guidelines and rules to manage disputes, reduce tensions, and promote stability in the region.
    • Regional Unity and Cooperation: Regional cooperation and unity among ASEAN nations are essential to address the South China Sea issue effectively. Greater understanding and coordination among ASEAN members can strengthen their negotiating position and foster a united front in dealing with challenges related to territorial claims and maritime security.
    • Respect for International Law: Upholding international law, including UNCLOS, is emphasized in the article. Countries are encouraged to respect legal and diplomatic channels, adhere to their obligations under UNCLOS, and uphold the rights of coastal states. Adherence to international law is essential for maintaining stability, resolving disputes, and promoting a rules-based order in the South China Sea.

    Conclusion

    • By committing to a rules-based order and emphasizing the significance of international law, India underscores its commitment to regional stability and peace. The need for dialogue, political frameworks, and unity among ASEAN nations is crucial to achieving a peaceful resolution in the South China Sea, protecting vital maritime commons, and ensuring the uninterrupted flow of global trade.

    Also read:

    India’s Initiative for ASEAN Women in UN Peacekeeping

     

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  • Poverty Eradication – Definition, Debates, etc.

    India sees significant reduction in Multidimensional Poverty

    IOCR | Governance | Mains Paper 2: Government Scheme/Policies

    Central Idea

    What is MPI?

    • The global Multidimensional Poverty Index (MPI) is an international measure of acute multidimensional poverty covering over 100 developing countries.
    • It complements traditional monetary poverty measures by capturing the acute deprivations in health, education, and living standards that a person faces simultaneously.
    • The global MPI was developed by Oxford Poverty and Human Development Initiative (OPHI) with the UN Development Programme (UNDP) for inclusion in UNDP’s flagship Human Development Report in 2010.
    • It has been published annually by OPHI and in the HDRs ever since.

    Components of MPI

    poverty, mpi

    Rapid Progress and Halving MPI Values

    • Achieving rapid progress: The report showcases that 25 countries, including India, successfully halved their global MPI values within 15 years, indicating that substantial progress is attainable.
    • Countries with notable progress: Besides India, other countries that achieved this feat include Cambodia, China, Congo, Honduras, Indonesia, Morocco, Serbia, and Vietnam.
    • Significance of halving MPI values: Halving the MPI values demonstrates a substantial reduction in multidimensional poverty, reflecting improvements across multiple indicators of well-being.

    Poverty Reduction: Key Stats

    • Decline in multidimensional poverty: In India, the number of people in multidimensional poverty decreased from approximately 645 million in 2005-06 to about 370 million in 2015-16 and further to 230 million in 2019-21.
    • Improvements across indicators: Deprivation in various indicators, such as nutrition, child mortality, cooking fuel, sanitation, drinking water, electricity, and housing, witnessed significant declines in India.
    • Fastest progress among the poorest: The report highlights that the poorest states and disadvantaged groups, including children and individuals from marginalized castes, experienced the fastest progress in reducing poverty.

    Factors Contributing to Multidimensional Poverty

    • Multiple disadvantages: Poverty encompasses various factors such as poor health, lack of basic amenities, limited livelihood options, limited education, disempowerment, and vulnerability to climate change.
    • Holistic approach: Focusing solely on income as an indicator of poverty is insufficient. Multidimensional poverty measures offer a more comprehensive understanding of poverty by considering a range of disadvantages individuals face.
    • Targeting and priority setting: Multidimensional poverty measures provide valuable insights into different areas and sub-groups affected by poverty, aiding in the identification of national priorities and targeted interventions.

    Government Interventions for Poverty Alleviation

    • Food Security: The National Food Security Act of 2013 aims to provide subsidized food grains to two-thirds of India’s population.
    • Employment and Skilling: Initiatives such as the National Rural Livelihood Mission and the Mahatma Gandhi National Rural Employment Guarantee Act provide employment opportunities and regular income for the rural poor.
    • Income Support: Schemes like the Pradhan Mantri Jan Dhan Yojana and the Pradhan Mantri Kisan Samman Nidhi aim to provide direct benefit transfers and minimum income support to the poor and farmers.

    Challenges Ahead

    • Pauperization and migrant workers: The COVID-19 pandemic has exacerbated poverty, leading to increased pauperization of migrant workers.
    • Regional disparities: Rural areas continue to face a higher incidence of extreme poverty compared to urban areas.
    • Jobless growth: Despite economic development, a significant proportion of the population still suffers from multidimensional deprivation.
    • Resource limitations: Adequate allocation of resources for anti-poverty programs remains a challenge, and the availability of funds often dictates target curtailment.
    • Implementation bottlenecks: Proper implementation and targeting of poverty alleviation schemes have been persistent issues in India, with overlapping programs leading to inefficiencies.

    Conclusion

    • India’s progress in reducing multidimensional poverty is commendable, with substantial improvements across indicators.
    • However, the challenges of pauperization, regional disparities, job creation, resource allocation, and implementation bottlenecks must be addressed to achieve sustained poverty reduction and inclusive development.

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  • Electoral Reforms In India

    Electoral Bonds chief source of donations for parties: Report

    Prelims Only | Polity | Mains Paper 2: Representation Of People’s Act

    bond

    Central Idea

    • Electoral bonds have emerged as the primary source of donations for political parties in India, with the BJP securing the majority share.
    • A report by the Association of Democratic Reforms reveals that between 2016-17 and 2021-22, national and regional parties received a total donation of ₹9,188.35 crore through electoral bonds.
    • The BJP received ₹5,271.97 crore, while other national parties collectively received ₹1,783.93 crore.

    Political Donations under Electoral bonds scheme

    • Breakdown of donations: Over the six-year period, the 31 analyzed political parties received a total of ₹16,437.63 crore in donations. Of this, 55.9% came from electoral bonds, 28.07% from the corporate sector, and 16.03% from other sources.
    • BJP leads the pack: The BJP declared donations worth ₹5,271.97 crore through electoral bonds, surpassing the total donations of all other national parties combined.
    • Congress and regional parties: The Congress received the second-highest amount through electoral bonds, with ₹952.29 crore (61.54% of total donations). The Trinamool Congress received ₹767.88 crore (93.27% of total donations).
    • Regional parties’ reliance on bonds: Regional parties such as the BJD, DMK, and TRS received a significant portion of their total donations from electoral bonds.
    • Surge in bond donations: National parties witnessed a 743% increase in donations through electoral bonds between 2017-18 and 2021-22, while corporate donations only rose by 48%.

    Key features of Electoral Bonds Scheme

    • Introduction of Electoral Bond Scheme: The Electoral Bond Scheme 2018 was introduced for electoral funding during the crucial time period analyzed in the report.
    • Removal of donation limit: The Finance Act, 2017 eliminated the previous cap of 7.5% of a company’s average three-year net profit for political donations.
    • Purchase and Donation: Any Indian citizen or company incorporated in India can purchase Electoral Bonds from select branches of the State Bank of India. The bonds can be bought in denominations of ₹1,000, ₹10,000, ₹10 lakh, and ₹1 crore. The purchaser can then donate the bonds to an eligible political party of their choice.
    • Eligibility and KYC: To purchase Electoral Bonds, the buyer must fulfill the Know Your Customer (KYC) norms and make the payment from a bank account. Only individuals and companies with Indian citizenship or incorporation can participate in the scheme.
    • Bond Validity: Electoral Bonds have a life of 15 days, ensuring that they do not function as a parallel currency.
    • Anonymity and Disclosure: Donors who contribute less than ₹20,000 to political parties through Electoral Bonds are not required to provide their identity details, such as the Permanent Account Number (PAN). However, the identity of the donor is known to the bank.
    • Redemption and Eligible Parties: Only political parties registered under Section 29A of the Representation of the People Act, 1951, and securing at least one percent of the votes in the last general election are eligible to receive Electoral Bonds. The bonds can be encashed only through a bank account with the authorized bank.

    Issues with the Scheme

    • Lack of Transparency: The scheme has faced criticism for enabling opaque political funding. While the identity of the donor is captured, it is not revealed to the party or the public, limiting transparency.
    • Limited Tax Benefits: Donations made through Electoral Bonds may not qualify for income tax breaks, potentially discouraging donors from participating in the scheme.
    • Privacy Concerns: The privacy of donors may be compromised as the bank will have knowledge of their identity.
    • Differential Benefits: The scheme can potentially favor parties in power, as the government can access information about the donors and the funds received.
    • Unlimited Donations: Amendments in the Finance Act of 2017 allow for unlimited donations from individuals and foreign companies to political parties without disclosing the sources of funding, raising concerns about the influence of money in politics.

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  • Police Reforms – SC directives, NPC, other committees reports

    SC upholds Extensions for CBI and ED Directors

    Prelims Only | Governance | Mains Paper 2: Civil Service

    cbi ed

    Central Idea

    • The Supreme Court has upheld statutory amendments that permit the extension of tenures for Directors of the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).
    • The court also directed the current ED Director, Sanjay Kumar Mishra, to resign four months before his third extension ends in November.

    Amendments and Tenure Extensions

    • Tenure of CBI and ED chiefs: The CBI and ED directors traditionally have fixed tenures of two years.
    • Amendments enacted in 2021: Amendments were made to the Central Vigilance Commission Act, the Delhi Special Police Establishment Act, and the Fundamental Rules. These amendments allow directors to receive a maximum of three annual extensions, expanding their tenure beyond the two-year limit.
    • Overcoming the court’s directive: The amendments were introduced shortly after the Supreme Court directed the government to cease granting extensions to Sanjay Kumar Mishra. These amendments provided a way for the government to grant Mishra two additional extensions.

    Supreme Court’s Ruling

    • Ruling on back-to-back service extensions: The Supreme Court deemed the consecutive service extensions granted to Mishra in 2021 and 2022 as illegal.
    • Resignation deadline: The court ordered Mishra to resign by July 31, allowing for a smooth transition of responsibilities to his successor. Mishra has served as the ED Director for five years.
    • Disagreement with amicus curiae: The court disagreed with the submissions made by its own amicus curiae, who urged the court to strike down the amendments. The amicus curiae argued that the prospect of service extensions could influence the directors to work in accordance with the government’s desires, undermining the agencies’ independence.

    High-Level Committees and Justification

    • Role of High-Level Committees: The amendments require High-Level Committees to recommend directors for service extensions.
    • Committee composition and recommendations: The committees consist of members such as the Central Vigilance Commissioner, Vigilance Commissioners, Prime Minister, Opposition Leader, and Chief Justice of India, depending on the agency. These committees recommend whether an extension is warranted in the public interest.
    • Recording reasons for recommendations: The committees are obligated to provide written justifications for their recommendations.

    Constitutionality of Amendments

    • Legislative authority: The court emphasized that the amendments were enacted by Parliament and should not be easily declared unconstitutional.
    • Role of elected representatives: The court stated that the amendments were passed by elected representatives who possess knowledge of the needs and interests of the people.
    • Judicial restraint: The court acknowledged that it should not question the wisdom of the elected representatives unless there is a clear violation of constitutional provisions.

    Back2Basics:

    Central Bureau of Investigation (CBI) Enforcement Directorate (ED)
    Mandate Investigates and solves major crimes in India Enforces economic and financial regulations
    Jurisdiction Nationwide Nationwide
    Legal Authority Delhi Special Police Establishment Act, 1946 Prevention of Money Laundering Act, 2002
    Functional Focus Criminal investigations Economic and financial offenses
    Investigative Powers Arrest, search, seizure, and interrogation Attachment, confiscation, and arrest
    Collaboration Works closely with state police and agencies Coordinates with various agencies and banks
    Reporting Authority Department of Personnel and Training, GOI Department of Revenue, Ministry of Finance
    Corruption Investigations Has an Anti-Corruption Division Has a separate Economic Offenses Division
    Notable Cases 2G Spectrum Scam, Bofors Scandal, etc. Vijay Mallya extradition, PNB fraud case

     

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  • Capital Markets: Challenges and Developments

    Supreme Court seeks SEBI’s explanation FPI Amendments

    Prelims Only | Economics | Mains Paper 3: Indian Economy

    sebi

    Central Idea

    • The Supreme Court has asked the Securities and Exchange Board of India (SEBI) to clarify why amendments were made in 2018 to the Foreign Portfolio Investors (FPI) Regulations.
    • These amendments had eliminated crucial clauses aimed at preventing opacity in FPI ownership structures.

    Why discuss this?

    • A judicial inquiry report has stated that SEBI’s investigation into allegations against the Adani Group by Hindenburg Research had been hindered by FPI ownership amendments.
    • The report highlighted the challenges faced by SEBI in determining the “ownership” of 13 overseas entities, including the FPIs mentioned in the Hindenburg report, due to the lack of clarity in their ownership chain.

    What are FPIs?

    • Foreign Portfolio Investments (FPI) refer to investments made by foreign individuals, institutional investors, pension funds, sovereign wealth funds, and other entities in financial instruments of a foreign country.
    • These investments typically involve the purchase of securities such as stocks, bonds, mutual funds, exchange-traded funds (ETFs), and other tradable financial assets.

    Key characteristics of foreign portfolio investments include:

    • Indirect Ownership: FPIs involve indirect ownership of financial instruments rather than direct ownership of physical assets or businesses. Investors hold portfolios of securities issued by companies, governments, or other entities in the target country.
    • Diversification: FPIs allow investors to diversify their investment portfolios internationally. By investing in different countries and asset classes, investors can reduce risks associated with a concentration in a single market or asset type.
    • Liquidity: FPIs offer high liquidity as they involve trading in financial instruments that can be easily bought or sold in the secondary market. Investors have the flexibility to enter or exit their positions quickly based on market conditions or investment objectives.
    • Market Access: FPIs provide foreign investors with access to the securities markets of other countries. This enables them to participate in the economic growth and potential returns of different markets and take advantage of investment opportunities that may not be available domestically.
    • Regulatory Framework: FPIs are subject to regulations and guidelines set by the regulatory authorities of the target country. These regulations may include registration requirements, investment limits, disclosure obligations, and compliance norms to ensure market integrity and investor protection.
    • Market Impact: Large FPI flows can have a significant impact on the target country’s financial markets. They can influence stock prices, bond yields, exchange rates, and overall market sentiment. As a result, FPIs are closely monitored by regulatory bodies and policymakers.

    Key Issue: FPI Regulations Amendment

    The Foreign Portfolio Investors (FPI) Regulations were first introduced in 2014 by the Securities and Exchange Board of India (SEBI).

    • Removal of “opaque structure” provision: The 2018 amendments eliminated provisions in the FPI Regulations that addressed opaque structures and required FPIs to disclose every ultimate natural person in the ownership chain.
    • Justice Sapre panel’s observations: The expert committee report stated that the removal of these provisions had put SEBI in a “chicken-and-egg situation” in its investigation of the 13 overseas entities suspected of having opaque structures.
    • Need for information on ultimate economic ownership: The report emphasized that SEBI’s investigation required information about the ultimate economic ownership, rather than just beneficial owners, of the entities under scrutiny.

    Supreme Court’s Query and SEBI’s Response

    • Court’s inquiry on the amendments: The Chief Justice asked SEBI to explain the circumstances and reasons behind the changes made to the provisions dealing with opaque structures.
    • SEBI’s assertion on ongoing investigation: The Solicitor General, representing SEBI, stated that the investigation was progressing at full speed and that the agency was working diligently to meet the extended deadline set by the court.
    • Petitioners’ arguments on fatal impact: The petitioners argued that the amendments made in 2018 had rendered SEBI’s current investigation ineffective, as the definition of opaque structure was removed. They claimed that these amendments were intended to prevent fraud exposure.

    Court’s Concerns and Request for Explanation

    • Court’s curiosity about the amendments: The Chief Justice expressed the court’s interest in understanding the reasons behind the changes made by SEBI in 2018.
    • Potential impact on the investigation: The court acknowledged the argument that the amendments might restrict SEBI from delving into the layers of transactions, potentially hindering the investigation.

    Conclusion

    • The court seeks clarification on the circumstances surrounding these changes and their impact on SEBI’s investigation into the Adani Group.
    • The court’s concern lies in understanding the potential limitations these amendments may have imposed on SEBI’s ability to explore the ownership chain and layers of transactions.

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  • Goods and Services Tax (GST)

    In news: GST Council Decisions

    Prelims Only | Economics | Mains Paper 3: Indian Economy

    Central Idea

    • The Goods and Services Tax (GST) Council convened its 50th meeting on July 11, announcing significant revisions and clarifications to tax rates.
    • Additionally, the council discussed the establishment of GST Appellate Tribunals.
    • It sought to address the concerns surrounding inclusion of the GST Network under the Prevention of Money Laundering Act (PMLA).

    What is GST Council?

    • The Goods and Services Tax (GST) Council is a crucial body established under the 101st Constitutional Amendment in 2016 to oversee the implementation of the GST regime in India.
    • Comprised of representatives from the central government and the states, the Council plays a pivotal role in making recommendations and decisions related to GST.

    Composition of the GST Council

    • Joint forum: The GST Council is a joint forum consisting of members from the Centre (Union Finance Minister and Union Minister of State for Finance) and representatives from the states.
    • State representation: Each state nominates a minister in charge of finance, taxation, or any other relevant minister to be a member of the Council.

    Objectives of the GST Council

    • Recommendation-making authority: The Council is responsible for making recommendations to the Union and the states on important GST-related issues. This includes suggestions on the goods and services that should be subjected to or exempted from GST, as well as the formulation of model GST laws.
    • Decision-making on tax rates: The Council determines the various rate slabs under the GST regime. It has the authority to decide the applicable tax rates for different goods and services.

    Recent Tax Rate Changes proposals

    • Uncooked and unfried snack pellets and fish soluble paste: The tax rate on these items was reduced from 18% to 5%.
    • Imitation zari threads or yarn: The GST rate on these items was reduced from 12% to 5%.
    • Food and beverages consumed inside cinema halls: The GST rate for these items was reduced to 5% without any input tax credits, compared to the previous 18% levied on cinema services.
    • Special utility vehicles (SUVs): The tax treatment for SUVs was clarified, ensuring that the higher GST compensation cess does not affect sedans. The conditions for classifying a vehicle as an SUV were revised to exclude the requirement of being popularly seen as an SUV. The ground clearance of 170 mm should now be for an unladen vehicle.
    • Exemption for satellite launch services: The Council offered an exemption on GST for satellite launch services provided by private organizations.

    Other recommendations: GST Appellate Tribunals

    • Proposal for setting up GST Appellate Tribunals: States’ proposals to establish 50 Benches of GST Appellate Tribunals were examined. These tribunals will play a crucial role in resolving GST disputes.
    • Operational timeline: The government aims to make the tribunals operational within four to six months, starting with the establishment of Benches in State capitals and places where High Courts have Benches.
    • Appointment and service conditions: The Council cleared the appointment and service conditions for tribunal members and the president, which will come into effect from August 1.

    Inclusion of GST Network under PMLA

    • Concerns raised by non-BJP ruled states: Representatives from states not governed by the BJP criticized the decision to bring the GST Network under the purview of the Prevention of Money Laundering Act (PMLA) administered by the Enforcement Directorate (ED).
    • Tamil Nadu’s opposition: Tamil Nadu expressed opposition to the move, stating that it is against the interests of taxpayers and goes against the objective of decriminalizing offenses under the GST law.
    • Explanation and clarification: Revenue Secretary presented an explanation of the provision, stating that it is a requirement of the Financial Action Task Force (FATF) and not directly related to the GST law.
    • Information sharing: The GSTN will not share information about private businesses with other law enforcement agencies. The ED will neither receive nor provide information, but the director of the Financial Intelligence Unit may provide information to the GSTN to empower tax authorities in combating tax evasion and money laundering.

     

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

    Why Indian manufacturing’s productivity growth is plummeting and what can be done?

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

    What is the news?

    • According to a recent study Productivity growth in Indian manufacturing has been slowing since the 1990s, with a more pronounced decline in the years leading up to the Covid-19 pandemic. Exploring the causes behind this decline is crucial to develop effective strategies for revitalizing the sector.

    Central idea

    • India’s manufacturing sector has long been a matter of concern for policymakers and the subject of extensive academic research. The government has consistently aimed to increase the share of manufacturing in the country’s GDP. However, despite efforts to promote manufacturing, the sector’s contribution and overall employment has remained stagnant.

    Key Facts about Manufacturing Productivity in India

    • Slowing Growth: Productivity growth in India’s manufacturing sector has been declining since the 1990s, with a significant acceleration in the mid-2010s and leading up to the Covid-19 pandemic.
    • Gap with the United States: India’s manufacturing productivity per worker is considerably lower compared to the United States. In 2020, it was only around a fifth of the productivity level in the US.
    • Regional Disparities: There are wide variations in manufacturing productivity across Indian states. Western and Central Indian states tend to have higher average productivity, while Southern and Eastern states have lower productivity levels. This contrasts with the GDP per capita rankings, where Southern states generally have higher incomes than their Western and Central counterparts.

    Potential reasons behind the decline in manufacturing productivity

    • Slow Manufacturing Sector Growth: The overall growth rate of India’s manufacturing sector has been decreasing, particularly since around 2015. This sluggish growth can limit the opportunities for productivity improvement and hinder overall sector performance.
    • Insufficient Investments: Inadequate investments in technology, infrastructure, and research and development (R&D) can hamper productivity growth. Limited capital expenditure by firms may result in outdated machinery, inefficient processes, and lower productivity levels.
    • Skill Mismatch: The manufacturing sector requires a specific skill set, and a mismatch between the skills possessed by the labor force and the skills demanded by the industry can impede productivity. The lack of trained and skilled workers in areas such as advanced manufacturing techniques, automation, and specialized operations may contribute to lower productivity levels.
    • Informality and Informal Labor Market: The prevalence of informal employment in the manufacturing sector can hinder productivity growth. Informal workers often lack access to training, social security benefits, and stable employment conditions, which can lead to lower productivity levels compared to formal employment arrangements.
    • Regulatory Challenges: Cumbersome regulatory processes, including complex labor laws, bureaucratic red tape, and regulatory compliance burdens, can hamper productivity growth. These challenges may discourage investment and hinder the adoption of efficient production practices.
    • Infrastructure Deficiencies: Inadequate infrastructure, such as poor transportation networks, unreliable power supply, and limited access to technology and connectivity, can negatively impact manufacturing productivity. Insufficient infrastructure can increase costs, disrupt supply chains, and hinder efficiency in production processes.
    • Inefficient Supply Chains: Weak linkages and coordination within supply chains can contribute to lower productivity in manufacturing. Challenges such as fragmented value chains, inefficient logistics, and inadequate coordination between suppliers, manufacturers, and distributors can result in delays, increased costs, and reduced overall productivity.
    • Lack of Innovation and Technology Adoption: Limited emphasis on innovation, research, and development, as well as a slower adoption of advanced technologies, can constrain productivity growth in the manufacturing sector. Insufficient investment in technological upgrades and a reluctance to adopt new manufacturing techniques can lead to lower productivity compared to global standards.

    Implications of Declining manufacturing productivity 

    • Economic Growth: Declining manufacturing productivity can hinder overall economic growth.
    • Reduced Competitiveness: Declining productivity in manufacturing can erode a country’s competitiveness in the global market. This can lead to a decline in exports and an increase in imports, negatively impacting the trade balance and potentially affecting the overall economic stability of a nation.
    • Employment and Labor Market Challenges: Lower productivity can result in reduced job creation within the manufacturing sector, leading to unemployment or underemployment.
    • Technological Progression: When productivity declines, the incentives for firms to invest in research and development or adopt new technologies may diminish, leading to a slower pace of technological advancement within the manufacturing sector.
    • Industrial Development and Diversification: A decline in productivity can hinder the growth and diversification of the manufacturing sector, limiting its ability to contribute to overall industrial development.
    • Investment and Innovation: Declining productivity in manufacturing can discourage investment and innovation within the sector.
    • Sectoral Shifts: Declining manufacturing productivity may result in a shift towards other sectors of the economy. If manufacturing becomes less competitive and less productive, resources and investments may be redirected to other sectors such as services.

    What can be done? 

    • Boost Investments: Encouraging both domestic and foreign investments in the manufacturing sector can help upgrade infrastructure, improve technology adoption, and enhance productivity. This can be achieved through attractive investment policies, tax incentives, and easing of regulatory procedures.
    • Skill Development and Training: Focusing on skill development programs tailored to the manufacturing sector can address the skill mismatch and enhance the capabilities of the workforce. Collaborating with educational institutions and industry associations to design training programs and apprenticeships can ensure a skilled labor force.
    • Infrastructure Development: Prioritizing infrastructure development, including transportation networks, power supply, logistics, and digital connectivity, is essential for improving productivity. Investment in infrastructure projects can create an enabling environment for manufacturing activities and reduce operational inefficiencies.
    • Regulatory Reforms: Streamlining regulatory processes, reducing bureaucratic complexities, and simplifying labor laws can create a business-friendly environment. Establishing a favorable regulatory framework can attract investments, foster innovation, and enhance productivity in the manufacturing sector.
    • Research and Development (R&D): Encouraging R&D activities and innovation in the manufacturing sector can lead to technological advancements and productivity gains. Collaborations between industry, research institutions, and academia can facilitate knowledge transfer and promote innovation-driven manufacturing.
    • Entrepreneurship and Start-up Ecosystem: Supporting entrepreneurship and nurturing a vibrant start-up ecosystem in manufacturing can bring fresh ideas, innovation, and competitiveness. Providing access to finance, mentorship programs, and incubation support can encourage entrepreneurial growth and drive productivity.
    • International Collaborations: Strengthening international collaborations and partnerships can facilitate knowledge exchange, technology transfer, and best practice sharing. Engaging with global manufacturing networks can help Indian manufacturers learn from successful models and adapt to global standards.

    Conclusion

    • The findings of this study underscore the urgent need for policy interventions to address the challenges faced by India’s manufacturing sector. Encouraging investments in workers, improving labor market conditions, and promoting a conducive business environment are crucial steps that can help revitalize India’s manufacturing sector, enhance productivity, and lift millions out of poverty.

    Also read:

    Revisiting India’s Manufacturing Dilemma: A Call for Comprehensive Ecosystem Development

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