💥UPSC 2027,2028 Mentorship (April Batch) + Access XFactor Notes & Microthemes PDF

Archives: News

  • Foreign Policy Watch: India-China

    Chinese hydro-hegemony over Brahmaputra

    brahmaputra

    India has planned to build a buffer reservoir in the proposed Arunachal hydropower project to counter China’s proposed 60,000 MW Medog hydropower project on the Brahmaputra River.

    Brahmaputra hydrology: A tool of aggression for China

    • China has continued to use the water of river Brahmaputra for its interest and has intentionally created hazardous conditions for downstream states like India and Bangladesh.
    • Concerns over China’s proposed 60,000 MW hydropower in Medog, Tibet are influencing the design of a proposed hydropower project in Arunachal Pradesh’s Upper Siang district.
    • Still only in the planning stage, a ‘pre-feasibility report’ on the 11,000 MW project, or more than five times the size of the largest such projects in India – has been submitted.

    What is Medog super-dam Project?

    • China is planning a mega dam in Tibet able to produce triple the electricity generated by the Three Gorges—the world’s largest power station.
    • The structure will span the Brahmaputra River before the waterway leaves the Himalayas and flows into India.
    • It is billed as able to produce 300 billion kilowatts of electricity each year and said to be largest dam in the world once completed.

    India’s plan: To build buffer reservoir

    • The design of the proposed project incorporates a buffer storage” of 9 billion cubic metres (or about 9 billion tonnes of water) during monsoonal flow.
    • This could act as a store of water worth a year’s flow that would normally be available from the Brahmaputra or buffer against sudden releases.

    Threats posed by Medog Project

    Chinese dams can hold large amounts of water, during times of droughts China could stop the flow of the river, jeopardizing the lives of millions of people in Arunachal Pradesh, Assam, and Bangladesh.

    • Reduced flow in the Brahmaputra: The 60,000 MW dam in Medog could reduce the natural flow of water from the Brahmaputra.
    • Triggering artificial floods: Away from India during lean patches, it might be used to trigger “artificial floods” in the Brahmaputra basin.
    • Degradation of the entire basin: Silt carried by the river would get blocked by dams leading to a fall in the quality of soil and eventual reduction in agricultural productivity.
    • Seismic threats: Seismologists consider the Himalayas as most vulnerable to earthquakes and seismic activity.
    • Ecological threats: The cumulative impact of these two megaprojects might aggravate ecological degradation, converting lotic ecosystems into lentic ones.
    • Water security: Damming Brahmaputra would result in water security in an era of unprecedented shifting climate patterns.
    • Catastrophic threat: Any damage to the mega dam, if constructed here, will cause dam breaching and consequent flood havoc in India and Bangladesh.

    Why are such issues unaddressed?

    • No treaty on water sharing: We do not have any bilateral or multilateral treaty or any other effective and formal instrument of understanding for collaborative management of the Brahmaputra River.
    • Hostility over borders: Undemarcated borders are at the core of all hostilities between India and China.

    India’s dilemma

    • Flood control dichotomy: India’s hydropower projects, while potentially beneficial in controlling flooding from the Brahmaputra in Assam and Arunachal Pradesh.
    • No deterrence to China: This might not necessarily serve as a strategic deterrent to China.
    • Resentment to Bangladesh: A large dam in India may help control floods within India but might open fresh disputes over water sharing with Bangladesh downstream.

    Way forward

    • There must be collaborative management of our shared rivers.
    • Hydro-diplomacy should form an important ingredient of Indian foreign policy, especially as India shares river basins with neighbors.

    Brahmaputra River

    brahmaputra

    • Origin → Chemayungdung Glacier (Kailash Range, Tibet)
    •     In Tibet, known as TSANG – PO
    •     In China, known as YARLUNG ZANBO
    •     Forms grand canyon in Tibet
    •     Turns southward near Namcha – Barwa
    •     Enters Arunachal Pradesh as Dihang River at Sadiya, emerging from the mountains
    •     Joined by Dibang river from the north & Lohit river from the south → Known as Brahamputra
    •     Turns at Dhubri to enter into Bangladesh
    •     After joining Teesta, known as Jamuna in BD
    •     Joins Ganga & Megna → Merges to BOB.
    •     Forms many river island of which Majuli is world 2nd largest one
    •     Major tributaries → Dihang, Lohit, Subansiri, Teesta, Meghna (Barack in Assam), Manas

     

    Crack Prelims 2023! Talk to our Rankers

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • Indian Army Updates

    Agnipath Scheme game changer says PM

    unsc

    The Agnipath scheme for recruitment is a “transformative policy” which will be a “game changer” in strengthening the armed forces, said the Prime Minister.

    What is Agnipath Scheme?

    • This will be the only form of recruitment of soldiers into the three defence services from now.
    • Recruits under the scheme will be known as ‘Agniveers’.
    • After completing the four-year service, they can apply for regular employment in the armed forces.
    • They may be given priority over others for various jobs in other government departments.
    • The move is expected to decrease the average age profile of armed forces personnel from the current 32 to 24-26 years over a period of time.

    Working of the scheme

    • The process of recruitment will commence in 90 days with a planned intake of 46,000 young men and women this year.
    • Enrolment to all three services will be through a centralized online system, with special rallies and campus interviews at recognized technical institutes.
    • Recruitment will be carried out on an “All India All Class” basis with the eligibility age ranging from 17.5 to 21, with medical and physical fitness standards in accordance with existing norms.

    Payouts of the Agniveers

    • The ‘Agniveers’ will receive an annual package of ₹4.76 lakh in the first year to ₹6.92 lakh in the fourth year, apart from risk and hardship and other allowances as applicable.
    • Under the ‘Seva Nidhi’ package, they will receive about ₹11.71 lakh, including contribution and interest, on completion of service.
    • The recruits will have to contribute 30% of their monthly emoluments to Seva Nidhi, with a matching contribution made by the government.
    • There will be no entitlement to gratuity and pension benefits under the scheme.
    • However, the ‘Agniveers’ will be provided a non-contributory life insurance cover of ₹48 lakh during their service.

    Why are aspirants protesting?

    • Contractualisation of armed forces: The foundation of this scheme is a four-year contract.
    • Jobs for the majority: States such as Bihar, Jammu & Kashmir, Punjab, Himachal Pradesh, Haryana, Uttar Pradesh, Uttarakhand and Rajasthan, are where the bulk of the Army recruitment takes place.
    • Perks and benefits: Many of these people value job stability, which includes retirement benefits and pensions over competitive salaries.
    • Uncertainty after end of commission: Most of them will be forced to leave the job within four years, which doesn’t fit into their hopes and aspirations.
    • Casualization of Training: It reportedly takes two to three years to train a member of the army, but as a part of the Agnipath, soldiers will only be trained for six months.
    • Threats to national security: Defence analysts have allegedly pointed out that the Russian soldiers who were trained for a limited amount of time before they went to war have performed disastrously.
    • Conflicts of interest: Apprehensions have been voiced against how the new recruits will be adjusted in the existing system under which most of the Army units are region, caste or class-based.

    Reasons behind aspirants’ frustration

    • Unemployment: Analysts always cite the crunch of gazetted officers in the Armed forces and there has been no recruitment for the last two years.
    • Pandemic impact: Many aspirants lost their chance to join the Armed forces as they are now overage.’
    • Unanticipated reforms: In guise of a push for “major defence policy reform”, the scheme is a fuss.
    • Coaching mafias: Coaching mafias have played a significant role in sparking and provoking protesters.

    Need for the Scheme: Official explanation

    • Budgetary efficiency: With the largest volunteer army in the world, paying an increased salary and pension bill, given rising incomes all around, has steadily eroded the capital side of the defence budget.
    • Preferential treatment: For job-seekers, the government has already said they will get priority in the Central Armed Police Forces.
    • Promotional avenues: One significant advantage of this scheme would be the much lower age profile of the service. It will increase the promotional avenues of the permanent cadre.
    • Diverse career options: Once retired, aspirants will be free to pursue other careers, with several departments and governments.
    • Selective skilling: Aspirants will get preference, educational credits, skill certificates, to help them rehabilitate in other fields.
    • Financial assistance: Those wishing to be entrepreneurs will get a financial package and bank loans and those wishing to study further will be given 12 class equivalent certificate.

    Way forward

    • Longer contract term: Make the period of the contract for new recruits longer than four years. The present clarification fails to address this issue.
    • Continuance of the commission: Relook the 25 per cent re-enlistment at the end of the contractual period. Ideally, it should be over 50 per cent retention for long-term posts.
    • Policy commitment for reabsorption: For those leaving after their short service, do obtain a binding commitment from CAPFs, states’ police forces and other organisations that they are willing to absorb this trained military manpower.
    • Gradual shift in recruitment policy: Continue with existing regular enrolment, in reduced numbers, and gradually shift to the Tour of Duty once it stabilizes after five to ten years.

    Conclusion

    • A nation should never compromise with the personnel who make up the fighting sinews of its armed forces.
    • The best way to prevent such an impression is to look upon them not as a burden to the exchequer, but as rough diamonds, to be cut and polished to their maximum capabilities and then deployed in the defence of the nation.
    • A diamond is forever, our future men and women in uniform too deserve to serve to their maximum for the betterment of the nation and their own lives.

     

    Crack Prelims 2023! Talk to our Rankers

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • Terrorism and Challenges Related To It

    UNSC bans LeT’s Makki after China lifts its hold

    makki

    The ISIL and Al Qaida Sanctions Committee of the UN Security Council (UNSC) has placed Abdul Rehman Makki, a fundraiser and key planner of the Pakistan-based terrorist outfit Lashkar-e-Taiba (LeT), on its sanctions list.

    Blacklisting Maki: Under UNSC 1267 list 

    • The UNSC resolution 1267 was adopted unanimously on 15 October 1999.
    • It came to force in 1999, and strengthened after the September, 2001 attacks.
    • It is now known as the Da’esh and Al Qaeda Sanctions Committee.

    What is UNSC 1267 committee?

    • It comprises all permanent and non-permanent members of the United Nations Security Council (UNSC).
    • The 1267 list of terrorists is a global list, with a UNSC stamp.
    • It is one of the most important and active UN subsidiary bodies working on efforts to combat terrorism, particularly in relation to Al Qaeda and the Islamic State group.
    • It discusses UN efforts to limit the movement of terrorists, especially those related to travel bans, the freezing of assets and arms embargoes for terrorism.

    How is the blacklisting done?

    (1) Submission of Proposal

    • Any member state can submit a proposal for listing an individual, group, or entity.
    • The proposal must include acts or activities indicating the proposed individual/group/entity had participated in the financing, planning, facilitating, preparing, or perpetrating of acts or activities linked to the said organizations.

    (2) Actual decision

    • Decisions on listing and de-listing are adopted by consensus.
    • The proposal is sent to all the members, and if no member objects within five working days, the proposal is adopted.
    • An “objection” means rejection for the proposal.

    (3) Putting and resolving ‘Technical Holds’

    • Any member of the Committee may also put a “technical hold” on the proposal and ask for more information from the proposing member state.
    • During this time, other members may also place their own holds.
    • The matter remains on the “pending” list of the Committee.
    • Pending issues must be resolved in six months, but the member state that has placed the hold may ask for an additional three months.
    • At the end of this period, if an objection is not placed, the matter is considered approved.

    How China supports Terror in Pakistan?

    • China has exposed its double standards on the issue of terrorism for consistently stopping the listing of Pakistan-based terrorists.
    • This time, Beijing has argued that the blacklisting is in fact a “recognition” of Pakistan’s record of fighting terrorism.

    Here is a timeline of how China disrupts the global efforts against terrorism:

    • 2009: After the 26/11 Mumbai attacks, India moved an independent terror designation proposal against Masood Azhar but China blocked the move.
    • 2016: After seven years, India proposes listing of Masood Azhar as a global terrorist and is supported by the US, the UK and France. China blocks the move again.
    • 2017: The trio moves a third proposal only to be blocked by China again.
    • 2019: After the attacks on the CRPF personnel in J-K’s Pulwama, India calls 25 envoys of different countries to highlight the role Islamabad plays in funding, promoting and strengthening global terrorism. India moves the fourth proposal demanding Masood Azhar’s listing. China lifted its technical hold.
    • June 2022: China blocked a proposal by India and the US to list Pakistan-based terrorist Abdul Rehman Makki as a ‘Global Terrorist’
    • August 2022: China blocks India-US joint proposal to list Jaish-e-Mohammad (JeM) deputy chief Abdul Rauf Azhar as UNSC designated terrorist.

    Why China shields Pak-based terrorists?

    • Rewarding Pakistan: China rewards Pakistan to keep India engaged in regional battles and internal conflicts.
    • Oppressing the Uighurs: The quid pro quo is that Pakistan does not utter a word against Uighur Muslim oppression by China in restive Xinjiang province.

    Conclusion

    • China’s actions expose its double speak and double standards when it comes to the international community’s shared battle against terrorism.
    • This clearly depicts its care for its vassal state Pakistan.

    Back2Basics: United Nations Security Council (UNSC)

    • The UNSC is one of the six principal organs of the United Nations and is charged with the maintenance of international peace and security.
    • Its powers include the establishment of peacekeeping operations, the establishment of international sanctions, and the authorization of military action through Security Council resolutions.
    • It is the only UN body with the authority to issue binding resolutions to member states.
    • The Security Council consists of fifteen members. Russia, the United Kingdom, France, China, and the United States—serve as the body’s five permanent members (P5).
    • These permanent members can veto any substantive Security Council resolution, including those on the admission of new member states or candidates for Secretary-General.
    • The Security Council also has 10 non-permanent members, elected on a regional basis to serve two-year terms. The body’s presidency rotates monthly among its members.

     

    Crack Prelims 2023! Talk to our Rankers

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • Banking Sector Reforms

    UPI for NRIs: What it means for India and Indians abroad

    upi

    The National Payments Corp. of India (NPCI) has allowed Indians abroad to use fast payments network UPI, if their domestic bank accounts are linked to their foreign mobile numbers.

    What is UPI?

    • UPI is an instant real-time payment system developed by National Payments Corporation of India (NPCI) facilitating inter-bank transactions.
    • The interface is regulated by the Reserve Bank of India and works by instantly transferring funds between two bank accounts on a mobile platform.

    What exactly has NPCI allowed on UPI?

    • NPCI issued a circular that paved the way for wider adoption of homegrown payments platform UPI.
    • So far, only Indian phone numbers were allowed on UPI, leaving out non-resident bank accounts linked to their phone numbers abroad.
    • In the first phase, phone numbers from 10 countries including Singapore, Australia, Canada, Hong Kong, Oman, Qatar, the US, Saudi Arabia, United Arab Emirates, and the UK have been allowed to be used on UPI.
    • NPCI said it could extend this to other nations as well.

    How will it benefit Indians abroad?

    • Once the systems are in place, non-resident Indians will be able to transact using UPI, irrespective of whether they are in India or abroad.
    • To use UPI, non-residents need to have either a non-resident external (NRE) account or a non-resident ordinary (NRO) account in India.
    • It would, of course, be more useful when account holders visit India, given the scale of UPI merchant infrastructure in India.
    • While abroad, they can use UPI to transfer funds to families in India and use it on e-commerce portals that allow such payments.

    What are the prerequisites for this facility?

    • NPCI has asked banks to onboard only those accounts that meet the Foreign Exchange Management Act guidelines and instructions issued by the departments of the Reserve Bank of India (RBI).
    • Apart, the remitter, as well as beneficiary banks, will have to ensure they comply with anti-money laundering (AML) and combating of financial terrorism (CFT) checks.

    Does it help the plan to take UPI global?

    • NPCI has been attempting to make UPI a global phenomenon and the idea to tap NRIs is a step towards that.
    • 10 countries are just to begin with and the list will expand in future.
    • NPCI has been trying to push homegrown payment systems in other countries through NPCI International Payments Ltd, a subsidiary it set up in 2020.
    • It has already tied up with payment system operators in Nepal, UAE, France, UK and others to allow UPI usage there.
    • There is also a plan to link UPI with Singapore’s Paynow.

    How will it help the UPI ecosystem?

    • UPI is almost synonymous with digital payments in India, clocking over ₹12.8 trillion worth of transactions in December.
    • After a slow start in 2016, UPI payments have grown at a rapid pace. Given there are over 13.5 million NRIs, the availability of UPI is expected to raise transaction volumes.
    • Industry experts said that just like resident Indians do not have to pay for UPI, it will also be available to NRIs at no extra cost.
    • That said, it might be off to a slow start as the acceptance infrastructure abroad is still being developed.

     

    Crack Prelims 2023! Talk to our Rankers

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • ISRO Missions and Discoveries

    [pib] First evidence of Solitary Waves near Mars

    In a first-of-its-kind discovery, a team of Indian scientists from the Indian Institute of Geomagnetism (IIG) reported the first evidence of the presence of solitary waves around Mars.

     

    Mars

    mars

    • Of the largest Mars is the fourth planet from the Sun and the second-smallest planet in the Solar System, being larger than only Mercury.
    • In English, Mars carries the name of the Roman god of war and is often referred to as the “Red Planet”.
    • The latter refers to the effect of the iron oxide prevalent on Mars’s surface, which gives it a reddish appearance distinctive among the astronomical bodies visible to the naked eye.
    • Mars is a terrestrial planet with a thin atmosphere, with surface features reminiscent of the impact craters of the Moon and the valleys, deserts and polar ice caps of Earth.
    • The days and seasons are comparable to those of Earth, because the rotational period, as well as the tilt of the rotational axis relative to the ecliptic plane, is similar.
    • Mars is the site of Olympus Mons, the largest volcano and highest known mountain on any planet in the Solar System, and of Valles Marineris, one canyons in the Solar System.

     

    What are Solitary Waves?

    • Solitary waves are distinct electric field fluctuations (bipolar or monopolar) that follow constant amplitude-phase relations.
    • Their shape and size are less affected during their propagation.
    • Solitary waves are known to be responsible for the plasma energization and its transport in Earth’s magnetosphere.

    Unveiling the undercover solitary waves

    • Earth is a giant magnetic entity, wrapped in a magnetosphere generated by the motion of molten iron in its core.
    • This magnetosphere casts a protective layer around our home planet, shielding us from the solar winds coughed towards us by the Sun.
    • But unlike Earth, Mars lacks a robust intrinsic magnetic field, which effectively allows the high-speed solar wind to interact directly with the Martian atmosphere.
    • This interaction suggests that even with a weak and flimsy magnetosphere, the frequent occurrences of solitary waves on Mars remain a possibility.

    Why this is a significant feat for India?

    • Despite several missions to Mars, their presence has never been detected — until now.
    • However, Indian Scientists have successfully identified and reported the first-ever solitary waves detected on Mars.
    • They arrived at this result by analyzing about 450 solitary wave pulses observed by the Langmuir Probe and Waves instrument on NASA’s Mars Atmosphere and Volatile EvolutioN (MAVEN) spacecraft.

    Decoding the data

    • Their analysis revealed distinct electric field fluctuations, which lasted for about 0.2-1.7 milliseconds.
    • Such signals were predominant during dawn or between afternoon to dusk at an altitude of 1000-3500 km from Mars’ surface.
    • Further investigation is needed to determine exactly why these waves are dominant during a fixed time of the day.

    Significance of such waves on Mars

    • These pulses are dominantly seen in the dawn and afternoon dusk sectors at an altitude of 1000–3500 km around Mars.
    • Researchers are further exploring their role in the particle dynamics in the Martian magnetosphere and whether such waves play any role in the loss of atmospheric ions on Mars.
    • The study of these waves is crucial as they directly control particle energization, plasma loss, transport, etc., through wave-particle interactions.

     

    Crack Prelims 2023! Talk to our Rankers

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • Human Rights Issues

    Voting Rights of Migrant Workers

    Voting

    Context

    • It is very worrying that a third of the eligible voters, a whopping 30 crore people, do not vote. Among the many reasons, including urban apathy and geographical constraints, one prominent reason is the inability of internal migrants to vote for different reasons.

    Crack Prelims 2023! Talk to our Rankers

    Voting

    What are the efforts by election commission to address the problem?

    • Committee of Officers on Domestic Migrants: The Election Commission had earlier formed a “Committee of Officers on Domestic Migrants” to address this issue. The Committee’s report submitted in 2016 suggested a solution in the form of “remote voting”.
    • All party representative: To further address this serious problem, the EC invited representatives from all recognised national and state political parties to discuss the legal, administrative, and statutory changes to resolve the issue.
    • All party consensus: The discussion took place in the presence of a technical expert committee. It is important to recall that the last major decision about the voting system was the introduction of Voter Verifiable Paper Audit Trail (VVPAT), with the consensus of all political parties in 2010.

    Migrant workers and their voting rights

    • Least represented group: The Constitution guarantees freedom of movement to every citizen and freedom to reside in any part of the country. However, migrant workers, especially circular or short-term migrants, constituting tens of millions of citizens are some of the least represented groups in the ballot.
    • Lack of access to vote: The issue of disenfranchisement faced by migrant workers is not one arising out of deliberate denial of the right to vote, but for lack of access to vote.
    • Fundamental right: The Supreme Court, in a series of cases, has conclusively interpreted the freedom to access the vote as within the ambit of Article 19(1)(a).

    Voting

    Problems related to migrant workers and Voting

    • Large scale migration: According to the 2011 Census, the number of internal migrants stands at 450 million, a 45 per cent surge from the 2001 census. Among these, 26 per cent of the migration (117 million) occurs inter-district within the same state, while 12 per cent of the migration (54 million) occurs inter-state.
    • Alienation by residency criteria: The root cause of the migrant voters’ issue is that the individual’s inalienable right to vote is conditioned by a rather strict residency qualification. As a consequence, it tends to disenfranchise the migrant population.
    • 60% migrants could not vote: In the survey report, ‘Political inclusion of Seasonal Migrant Workers in India: Perceptions, Realities and Challenges’ by Aajeevika Bureau, it was found that “close to 60 per cent of respondents had missed voting in elections at least once because they were away from home seeking livelihood options”.

    What is the way forward?

    • Electronically Transmitted Postal Ballot System: Section 60(c) of the Representation of People Act, 1951 empowers the Election Commission of India, in consultation with the government, to notify “classes” of voters who are unable to vote in person at their constituencies owing to their physical or social circumstances. Once notified, the voters are eligible for the ETPB system (Electronically Transmitted Postal Ballot System). In the 2019 general elections, the ETPB system was accessed by 18 lakh defence personnel across the country.
    • Postal ballots for migrants: In 2019, in the backdrop of a PIL before the Supreme Court, a bill was floated to extend a similar remote voting possibility to over 10 million adult NRIs in order to “boost their participation in nation-building”. In the 2019 Lok Sabha elections, more than 28 lakh votes were received via postal ballots.
    • Migrants are also equal citizens: In the existing system, remote voting within the constituency by voting via postal ballot is available to senior citizens, people with disabilities, and Covid-affected personnel. The postal ballot voting outside the constituency is available only to service voters, persons on election duty and persons on preventive detention. The Indian migrant worker too deserves the secured right to have access to vote through some mechanism.
    • Remote electronic voting machine: The Election Commission has proposed the use of remote voting for migrant workers wherein a modified version of the existing model of M3 EVMs will be placed at remote polling stations. In fact, the Electronic Corporation of India Ltd. has already developed a prototype of a Multi-constituency Remote EVM (RVM) a modified version of the existing EVM which can handle 72 constituencies in a single remote polling booth. Technical details will be available only after the crucial demonstration.

    Voting

    Conclusion

    • Migrant workers are also the equal citizens of the country. Social-economic and structural barriers should not the hurdle in there right to vote. Election commission of India has taken the step in the right direction. However, consensus needs to be built over the voting rights of migrants.

    Mains Question

    Q. What are the problems faced by migrant workers in exercise of there voting rights? What is the way forward towards ensuring voting rights to migrants?

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

     

  • Tax Reforms

    Making The Case for Wealth Tax

    Wealth Tax

    Context

    • The discourse on efficient, effective and equitable public spending often takes us into the realm of limited resources facing competing demands. India definitely needs to widen its revenue collection as well as base. In this context, it is important to discuss the need for levying a wealth tax, and levying it now.

    Crack Prelims 2023! Talk to our Rankers

    Why wealth needs to be taxed?

    • Accumulation of wealth: The most compelling reason stems from evidence that there has been massive accumulation of wealth in a few hands. A small section of people has access to a large share of economic assets and resources that remain almost completely untaxed and thus unavailable for public allocation.
    • Wealth without hard work: Wealth, much less than even income, has little to do with one’s education, merit or efforts; it is largely dependent on inheritance and opportunities that come with the advantages associated with belonging to one of India’s privileged classes and castes.
    • Income inequality: India’s top 10% population owns 65% of the country’s wealth, while the bottom 10% owns only 6%, according to the World Inequality Database, 2022.
    • Wealth of rich doubled in pandemic: An Oxfam report has highlighted how India’s richest doubled their wealth during the pandemic. This happened for a variety of reasons, including profits made on vaccines and commodity and asset price movements.
    • Wealth doesn’t translate into productive resources: But the fact remains that India, despite facing grave financial and economic challenges, has no means to convert any of this growing wealth into productive resources that can generate employment opportunities and push up the incomes of multitudes, which in turn can drive demand for goods something that is needed to counter an economic drag-down.

    What is the government’s attitude towards wealthy?

    • Rich knows how to invest: One may argue and it is common to hear this that wealth is better left to the wealthy, as they know best how to invest. This has not been in sufficient evidence, at least in India.
    • Corporate tax lowered: The government lowered the corporate tax rate significantly from 30% to 22% in 2019-20, which has continued despite the economic crises caused by the pandemic. However, this did not elicit much private investment.

    Wealth Tax

    History of Wealth taxation in India

    • Wealth tax: Wealth tax, which is a direct tax unlike the goods and services tax or value-added tax, can take several forms, such as property tax, inheritance or gift tax and capital gains tax.
    • Capital gains tax: Capital Gains tax exists in India, but applies only to transactions and hence is limited in its base.
    • Estate duty: India scrapped its estate duty in 1985 and has no inheritance tax. Although the receipt of gifts is subject to income tax in the beneficiary’s hands, it has various exemptions; it is almost entirely exempt if received from within the family, including the extended family of self and spouse.
    • Exemption leads to accumulation: These exemptions shrink the base significantly, as most accumulated wealth is acquired through family, and that remains outside the gift tax’s ambit. Given the cultural context of wealth inheritance, some exemptions make sense, but upper thresholds can be easily added to make it more effective.

    Present status of wealth taxation

    • No wealth tax: India presently does not have any wealth tax i.e., a tax levied on one’s entire property in all forms.
    • One time solidarity tax: It did not impose a one-time ‘solidarity tax’ on wealth in post-covid budgets that could have generated resources for essential public investment.
    • Example of developing countries: A number of Latin American countries, including Argentina, Peru and Bolivia, have either introduced or are introducing a progressive annual wealth tax levied on the wealth gains of each year or a one-time covid ‘solidarity’ tax.

    Wealth Tax

    Conclusion

    • Idea of wealth tax appear good on paper however; it may negatively impact the domestic and foreign investment in the country. Direct tax slab for superrich in India is already among the highest in the world. The idea of wealth taxation needs careful deliberation before implementation.

    Mains Question

    Q. Comment on history of wealth tax in India. why wealth tax is necessary in India? elaborate.

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

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

    Supreme Court to hear petitions for Criminalization of Marital Rape

    marital rape

    The Supreme Court is set to begin hearing a series of petitions seeking to criminalize marital rape from March 14.

    What is Marital Rape?

    • Marital rape is the act of sexual intercourse with one’s spouse without her consent.
    • It is no different manifestation of domestic violence and sexual abuse.
    • It is often a chronic form of violence for the victim which takes place within abusive relations.

    Status in India

    • Historically considered as right of the spouses, this is now widely classified as rape by many societies around the world.
    • In India, marital rape is not a criminal offense (as protected under IPC section 375).
    • India is one of fifty countries that have not yet outlawed marital rape.

    Reasons for disapproval of this concept

    • The reluctance to define non-consensual sex between married couples as a crime and to prosecute has been attributed to:
    1. Traditional views of marriage
    2. Interpretations of religious doctrines
    3. Ideas about male and female sexuality
    4. Cultural expectations of subordination of a wife to her husband
    • It is widely held that a husband cannot be guilty of any sexual act committed by himself upon his lawful wife on account of their mutual matrimonial consent.

    Why it must be a crime?

    • Associated physical violence: Rape by a spouse, partner or ex-partner is more often associated with physical violence and sexual mutilation.
    • Mental harassment: There is research showing that marital rape can be more emotionally and physically damaging than rape by a stranger.
    • Compulsive relationship: Marital rape may occur as part of an abusive relationship.
    • Revengeful nature: Furthermore, marital rape is rarely a one-time event, but a repeated if not frequent occurrence.
    • Obligation on women: In the case of marital rape the victim often has no choice but to continue living with their spouse.

    Violation of fundamental rights

    • Marital rape is considered as a violation of FR guaranteed under Article 14 of the Indian constitution which guarantees the equal protection of laws to all persons.
    • By depriving married women of an effective penal remedy against forced sexual intercourse, it violates their right to privacy and bodily integrity, aspects of the right to life and personal liberty under Article 21.

    Problems in prosecuting marital rape

    • Lack of awareness: A lack of public awareness, as well as reluctance or outright refusal of authorities to prosecute is common globally.
    • Gender norms: Additionally, gender norms that place wives in subservient positions to their husbands, make it more difficult for women to recognize such rape.
    • Acceptability of the concept: Another problem results from prevailing social norms that exist.

    Present regulations in India

    • Indian Penal Code criminalizes rape in most cases, although marital rape is not illegal when the woman is over the age of 18.
    • However, until 2017, men married to those between 15 and 18 could not be convicted of rape.
    • Marital rape of an adult wife, who is unofficially or officially separated, is a criminal offence punishable by 2 to 7 year in prison; it is not dealt by normal rape laws which stipulate the possibility of a death sentence.
    • According to the Protection of Women From Domestic Violence Act (2005), other married women subject to such crime by their husband may demand for financial compensation.
    • They also have the right to continue to live in their marital household if they wish, or may approach shelter or aid homes.

    However, marital rape is still not a criminal offense in this case and is only a misdemeanor.

    Arguments against criminalization

    • Subjective: It is very subjective and intricate to determine whether consent was acquired or not.
    • Prone to Misuse: If marital rape is criminalized without adequate safeguards it could be misused like the current dowry law by the dissatisfied wives to harass and torture their Husbands.
    • Burden on Judiciary: It will increase the burden of judiciary which otherwise may serve other more important causes.

    Way forward

    • Sanctioning marital rape is an acknowledgment of the woman’s right to self-determination (i.e., control) of all matters relating to her body.
    • In the absence of any concrete law, the judiciary always finds it difficult to decide the matter of domestic rape in the absence of solid evidence.
    • The main purpose of marriage is procreation, and sometimes divorce is sought on the ground of non-consummation of marriage.
    • Before giving a final interpretation, the judiciary must balance the rights and duties of both partners.

     

    Crack Prelims 2023! Talk to our Rankers

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • RBI Notifications

    RBI proposes Expected Loss-based Approach for Loan Provisioning

    The Reserve Bank of India (RBI) has proposed a framework for the adoption of an expected loss-based approach for loan provisioning by banks.

    What is Loan-Loss Provision?

    • The RBI defines a loan loss provision as an expense that banks set aside for defaulted loans.
    • Banks set aside a portion of the expected loan repayments from all loans in their portfolio to cover the losses either completely or partially.
    • In the event of a loss, instead of taking a loss in its cash flows, the bank can use its loan loss reserves to cover the loss.
    • Since the bank does not expect all loans to become impaired, there is usually enough in the loan loss reserves to cover the full loss for any one or a small number of loans when needed.
    • An increase in the balance of reserves is called loan loss provision.
    • The level of loan loss provision is determined based on the level expected to protect the safety and soundness of the bank.

    And what is the expected loss-based approach?

    • Under this practice, a bank is required to estimate expected credit losses based on forward-looking estimations, rather than wait for credit losses to be actually incurred before making corresponding loss provisions.
    • As per the proposed framework, banks will need to classify financial assets (primarily loans, including irrevocable loan commitments, and investments classified as held-to-maturity or available-for-sale) into one of three categories — Stage 1, Stage 2, or Stage 3.
    • This depends upon the assessed credit losses on them, at the time of initial recognition as well as on each subsequent reporting date, and make necessary provisions.
    1. Stage 1 assets are financial assets that have not had a significant increase in credit risk since initial recognition or that have low credit risk at the reporting date. For these assets, 12-month expected credit losses are recognised and interest revenue is calculated on the gross carrying amount of the asset.
    2. Stage 2 assets are financial instruments that have had a significant increase in credit risk since initial recognition, but there is no objective evidence of impairment. For these assets, lifetime expected credit losses are recognised, but interest revenue is still calculated on the gross carrying amount of the asset.
    3. Stage 3 assets include financial assets that have objective evidence of impairment at the reporting date. For these assets, lifetime expected credit loss is recognised, and interest revenue is calculated on the net carrying amount.

    What are the benefits of this approach?

    • The forward-looking expected credit losses approach will further enhance the resilience of the banking system in line with globally accepted norms.
    • It is likely to result in excess provisions as compared to shortfall in provisions as seen in the incurred loss approach.

    What is the problem with the incurred loss-based approach?

    • The incurred loss approach requires banks to provide for losses that have already occurred or been incurred.
    • The delay in recognising expected losses under an “incurred loss” approach was found to exacerbate the downswing during the financial crisis of 2007-09.
    • Faced with a systemic increase in defaults, the delay in recognising loan losses resulted in banks having to make higher levels of provisions which ate into the capital maintained precisely at a time when banks needed to shore up their capital.
    • This affected banks’ resilience and posed systemic risks.
    • Further, the delays in recognising loan losses overstated the income generated by the banks which, coupled with dividend payouts, impacted their capital base

     

    Which banks are covered under this approach?

    • The proposed norms are for all scheduled commercial banks, excluding regional rural banks.
    • Regional rural banks and smaller cooperative banks (based on a threshold to be decided based on comments) are proposed to be kept out of the framework.

     

    Crack Prelims 2023! Talk to our Rankers

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • World Economic Forum (WEF) Summit at Davos

    davos

    The World Economic Forum has begun its annual summit in Davos, Switzerland,

    World Economic Forum (WEF)

    • Headquartered in Geneva, Switzerland, WEF is an international not-for-profit organization, focused on bringing the public and private sectors together to address the global political, social, and economic issues.
    • It was founded in 1971 by Swiss-German economist and Professor Klaus Schwab in a bid to promote the global cooperation on these most pressing problems.
    • The first meeting of WEF was held more than five decades ago in Davos, which has been the home of the annual gathering almost ever since, also becoming the shorthand for the event.

    Tap to read more about important reports published by the World Economic Forum (WEF).

    WEF partners

    • The WEF is largely funded by its partnering corporations.
    • These are generally global enterprises with an annual turnover greater than $ 5 billion.
    • For these corporations, the WEF provides a platform “to shape the future, accessing networks and experts to ensure strategic decision-making on the most pressing world issues.”
    • Partners range from Apollo Tyres to Apple – they can be from any industry, as long as they wish to engage using WEF’s platforms.
    • WEF also partners with public subsidies.

    Why are the summits held at Davos?

    • Sometimes described as Europe’s highest town, Davos has been the venue for the WEF’s annual meeting every year since its inception – with one exception.
    • Davos, a ski resort, and the annual host of WEF’s meeting is a quaint town located on the lap of the Swiss Alps.
    • In many ways, it is a surprising choice for a meeting of global economic giants and geopolitical leaders.
    • The meeting was held in New York in 2002 in a gesture of solidarity following the 9/11 attacks.

    Who are the attendees and what actually happens in Davos?

    • Typically, Davos attracts global business executives and policymakers – and it’s strictly invite-only.
    • Usually attending will be the sitting U.S. president, top EU and UN leaders, business leaders and entrepreneurs, academics, heads of NGOs and charities, the media, activists and even some celebrities.
    • Donald Trump, Jens Stoltenberg, Ursula von der Leyen, Greta Thunberg, Elton John and many other high-profile names have all previously attended Davos.
    • The conference includes hundreds of discussions, keynote speeches and panels, and all-important networking sessions, usually behind closed doors in five-star hotels.
    • CEOs and investors seize the opportunity for face-to-face deal-makings.

    Davos 2023: What’s on this year’s agenda?

    • This year’s annual meeting in Davos will take place January 16–20, 2023.
    • The theme is “cooperation in a fragmented world” and within that are five sub-themes, including the energy and food crises, inflation, technology for innovation, social vulnerabilities and geopolitical risks.

     

    Crack Prelims 2023! Talk to our Rankers

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

Join the Community

Join us across Social Media platforms.