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  • RTI – CIC, RTI Backlog, etc.

    RTI Act and Armed Forces

    | Polity | Mains Paper 2: Indian Constitution – historical underpinnings, evolution, features, amendments, significant provisions and basic structure

    Veterans of the Indian Armed Forces have urged PM against exempting defense services from purview of RTI (Right to Information) Act, 2005.

    Why in news?

    • Last year, late CDS Rawat had urged the government making a pitch for defence services to be exempted from the RTI Act.
    • He had stated that none of the Central Armed Police Forces (CAPF) are under its purview and defence services, being even more sensitive, should be fully exempted too.

    What is RTI?

    • RTI is an act of the parliament which sets out the rules and procedures regarding citizens’ right to information.
    • It replaced the former Freedom of Information Act, 2002.
    • Under the provisions of RTI Act, any citizen of India may request information from a “public authority” (a body of Government or “instrumentality of State”) which is required to reply expeditiously or within 30.
    • In case of the matter involving a petitioner’s life and liberty, the information has to be provided within 48 hours.
    • The Act also requires every public authority to computerize their records for wide dissemination and to proactively publish certain categories of information so that the citizens need minimum recourse to request for information formally.

    Constitutional status of RTI

    • Since RTI, is implicit in the Right to Freedom of Speech and Expression under Article 19 of the Indian Constitution, it is an implied FR.
    • These are backed by the right to constitutional remedies that is, the right to approach the supreme court and high court under Article 32 and 226 respectively in case of infringement of any of FRs.

    Benefits of RTI

    • Greater accessibility of information: A person can seek information from any public authority in the form of copies, floppy disks, sample material etc under RTI.
    • Efficient governance: RTI Act helps us in knowing the efficiency of the government’s functioning.
    • Citizen’s participation: Information under RTI can be sought easily by requesting the public officer and assistant public officer in any public authority.
    • Government obligation: Obtaining information from any public authority is obligatory for them.
    • Maintenance of public record: Under RTI Act, it is the duty of public authorities to maintain records for easy access and to publish within 120 days the name of the particular officers who should give the information and in regard to the framing of the rules, regulations etc.
    • Empowerment of Citizens: Every citizen has been empowered to be informed about anything that affects their life directly or indirectly.

    Why do Veterans want RTI?

    • The RTI has remained a powerful tool with the veterans and serving community to obtain information and documents concerning their service and pensioner issues.
    • RTI Act has ensured maximum transparency in official establishments dealing with such cases.
    • Even innocuous documents such as medical board proceedings concerning disabled soldiers and old service records of veterans are only made available through the RTI Act.
    • Requesting that defence services are not be placed in Schedule 2 of the RTI Act, 2005, the lobby said that adequate protection is already available in Sections 8 and 9 of the Act.
    • Armed forces can hold back information related to operational and security-related issues.

    Necessity for RTI in armed forces

    • Any such move will be a blow to transparency and will lead to an exponential increase in litigation and grievances.
    • And any irregularities in defence procurements would also go under the carpet, besides massive discrepancies in promotions.
    • Already they are so opaque and have faced so many strictures by the courts.
    • Denying such a right of a powerful public-oriented tool to military personnel, veterans, military widows and their families would place them at a sharp disadvantage compared to citizens.
    • This would also result in litigation blast with affected persons approaching judicial forums for minor issues.

     

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  • Oil and Gas Sector – HELP, Open Acreage Policy, etc.

    Green Hydrogen: Fuel of the Future

    | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    India aspires to emerge as the leader of green hydrogen by taking advantage of the current energy crisis across the globe.

    Why in news?

    • Oil India Limited (OIL) has commissioned India’s first 99.99% pure green hydrogen plant in eastern Assam’s Jorhat.
    • Powered by a 500 KW solar plant, the green hydrogen unit has an installed capacity to produce 10 kg of hydrogen per day and scale it up to 30 kg per day.

    What is Hydrogen?

    • Hydrogen is the lightest, simplest and most abundant member of the family of chemical elements in the universe.
    • It is colourless, odourless, tasteless, non-toxic and highly combustible gaseous substance.

    What is Green hydrogen?

    • Green hydrogen is the one produced with no harmful greenhouse gas emissions.
    • It is made by using clean electricity from surplus renewable energy sources, such as solar or wind power, to electrolyse water.
    • Electrolysers use an electrochemical reaction to split water into its components of hydrogen and oxygen, emitting zero-carbon dioxide in the process.
    • Green hydrogen currently makes up a small percentage of the overall hydrogen, because production is expensive.

    Why is India pursuing green hydrogen?

    • Under the Paris Agreement of 2015, India is committed to reducing its greenhouse gas emissions by 33-35% from the 2005 levels.
    • It is a legally binding international treaty on climate change with the goal of limiting global warming to below 2°C compared to pre-industrial levels.
    • At the 2021 CoP in Glasgow, India reiterated its commitment to move from a fossil and import-dependent economy to a net-zero economy by 2070.
    • India’s average annual energy import bill is more than $100 billion .
    • The increased consumption of fossil fuel has made the country a high CO2 emitter which accounts for nearly 7% of the global CO2 burden.

    Various policy moves

    • In order to become energy independent by 2047, the government stressed the need to introduce green hydrogen as an alternative fuel that can make India the global hub and a major exporter of hydrogen.
    • The National Hydrogen Mission was launched on August 15, 2021, with a view to cutting down carbon emissions and increasing the use of renewable sources of energy.

    How much green hydrogen is India producing?

    • India has just begun to generate green hydrogen with the objective of raising non-fossil energy capacity to 500 gigawatts by 2030.
    • It was on April 20, 2022 that the public sector OIL, which is headquartered in eastern Assam’s Duliajan, set up India’s first 99.99% pure green hydrogen pilot plant.
    • Research and development efforts are ongoing for a reduction in the cost of production, storage and the transportation of hydrogen.

    What are the advantages of hydrogen as a fuel?

    • Hydrogen can be used to produce electricity using fuel cells.
    • Hydrogen, thus, can act as an energy storage device and contribute to grid stability.
    • The oxygen, produced as a by-product (8 kg of oxygen is produced per 1 kg of hydrogen), can also be monetised by using it for industrial and medical applications or for enriching the environment.

    Limitations to Hydrogen

    • Despite being the most abundant element in the Universe, hydrogen does not exist on its own so needs to be extracted from water via electrolysis or separated from carbon fossil fuels.
    • Hydrogen fuel cells need huge investment to be developed to the point where they become a genuinely viable energy source.
    • This will also require the political will to invest the time and money into development in order to improve and mature the technology.
    • Precious metals such as platinum and iridium are typically required as catalysts in fuel cells meaning unfeasibly high cost.
    • There are also barriers around regulatory issues concerning the framework that defines commercial deployment models.
    • Storage and transportation of hydrogen is more complex than that required for fossil fuels due to its high inflammability.

    Back2Basics:  Colours spectrum of Hydrogen

    (1) Green hydrogen

    (2) Blue hydrogen

    • It is produced mainly from natural gas, using a process called steam reforming, which brings together natural gas and heated water in the form of steam.
    • The output is hydrogen – but also carbon dioxide as a by-product.
    • That means carbon capture and storage (CCS) is essential to trap and store this carbon.
    • Blue hydrogen is sometimes described as ‘low-carbon hydrogen’ as the steam reforming process doesn’t actually avoid the creation of greenhouse gases.

    (3) Grey hydrogen

    • Currently, this is the most common form of hydrogen production.
    • Grey hydrogen is created from natural gas, or methane, using steam methane reformation but without capturing the greenhouse gases made in the process.

    (4) Black and brown hydrogen

    • Any hydrogen made from fossil fuels through the process of ‘gasification’ is sometimes called black or brown hydrogen interchangeably.
    • They are the most environmentally damaging.

    (5) Pink hydrogen

    • Pink hydrogen is generated through electrolysis powered by nuclear energy.
    • Nuclear-produced hydrogen can also be referred to as purple hydrogen or red hydrogen.
    • In addition, the very high temperatures from nuclear reactors could be used in other hydrogen productions by producing steam for more efficient electrolysis or fossil gas-based steam methane reforming.

     

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

    Global Chip Shortage and Related Issues

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

    CEOs of AMD, Nvidia and Intel have said at different forums last year that the chip situation will remain tight for the rest of 2022.

    Genesis of shortage

    • After reaching its peak in 2011, the laptop market growth slowed down with the rise of alternatives such as smartphones and tablets.
    • Then, the pandemic hit.
    • People switched to work from home, children connected to schools through laptops, and get-togethers happened over video calls.
    • This shift led to a surge in demand for laptops and tablets.
    • The stay-at-home rules also made several people pick up console-based learning and gaming.
    • Each of these devices were in high demand and are run on thumbnail-sized semiconductors, performing various functions on a single device.

    Also read:

    [Sansad TV] Perspective: Semiconductor Industry & India

    What led to the production anomaly?

    • Manufacturers produce them as 200mm or 300mm wafers. These are further split into lots of tiny chips.
    • While the larger wafers are expensive and mostly used for advanced equipment, the devices that were in high demand needed smaller diameter wafers.
    • But the manufacturing equipment needed to make them were in short supply even before the pandemic began.
    • Industry is moving in the direction of 5G and advanced communication, which requires expensive wafers.
    • High consumer demand for low-end products, coupled with large orders from tech firms chocked chip makers whose factories were also closed during lockdowns.
    • As the industry gradually tried to pull itself out of the supply crunch, and logistical complexities have exacerbated the problem.

    Impact of Ukrainian War

    • Separately, Russia’s invasion of Ukraine has strained exports of essential commodities used to make chip sets.
    • Moscow supplies rare materials like palladium, and Kyiv sells rare gases to make semiconductor fab lasers.
    • This combination is required to build chipsets that power a range of devices, from automobiles to smartphones.

    Global supply chain

    • About a decade and half back, semiconductors barely drew attention from large companies that have now come to rely on the thumbnail-sized semiconductor piece.
    • During this period, firms developed a system to make chip sets.
    • The system was made by interconnecting several parts of the world to make a single device.
    • It is what we now call as the global supply chain.

    How intricate is this network?

    • Semiconductor manufacturing involves roughly 25 countries in the direct supply chain, and 23 countries in allied functions, according to a joint study by Global Semiconductor Alliance and Accenture.
    • The report estimates a semiconductor-based product could cross international borders about 70 times before finally making it to the end customer.
    • Wafer fabrication is the most globally dispersed, with 39 countries directly involved in the supply chain and 34 involved in allied activity.
    • They provide services like photolithography, etching and cleaning.
    • Designing happens across 12 countries; product testing and manufacturing each are done across 25 countries.

    COVID is the only raison d’être

    • Supply chain dynamics back fired due to the pandemic, and the recent geopolitical events.
    • When the pandemic began, carmakers stopped requesting chips from suppliers due to low demand for new vehicles.
    • And now, as they ramp up production to meet consumer demand, chip makers are down on supply because they have cut deals with other industries.
    • As the geopolitical events in Central Europe and production shutdowns in China continue to add pressure to the already complicated semiconductor supply chain.

     

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  • Important Judgements In News

    Why transfer of case to district judge by Supreme Court sends the wrong signal

    op-ed snap | Polity | Mains Paper 2: Executive & Judiciary

    Context

    The Supreme Court order of May 20, transferring the suit on the Gyanvapi Masjid dispute from the civil judge (senior division) Varanasi to the district judge casts aspersion, though unintended, on the competence of civil judges in general.

    Background

    • The matter had reached the Supreme Court on a petition filed by the Mosque Management Committee, which challenged the civil judge’s orders.
    • The order permitted inspection, survey, and videography of the mosque’s complex to collect evidence about the alleged existence of idols of Hindu deities inside the mosque, which is adjacent to the Kashi Vishwanath Temple.
    • The Mosque Management Committee had filed an application before the civil judge seeking the rejection of the plaint on the ground that it was barred by the Places of Worship (Special Provisions) Act, 1991.
    • Places of Worship (Special Provisions) Act, 1991 prohibits individuals and groups of people from converting, in full or in part, a place of worship of any religious denomination into a place of worship of a different religious denomination, or even a different segment of the same religious denomination.
    • It was argued before the SC that given the said Act, the suit was liable to be rejected at the threshold as the civil judge had no jurisdiction to entertain the same, much less to pass the aforesaid interim orders.
    • The SC has not found any fault with the order of the civil judge, though there is also a view that it was mandatory on the part of the civil judge to have first passed an order on whether he had the jurisdiction to entertain the suit.
    • However, it appears that in the SC’s view, this was not a serious infraction.
    • So, in a way, the SC has affirmed the orders of the civil judge.
    • The civil court had territorial and pecuniary jurisdiction to deal with the matter.
    • The question that arises is: Why has the Supreme Court transferred the matter to the court of the district judge?

    Issues with the SC transferring the case to the district judge

    • The SC has seemingly declared civil judges to be not competent to decide a matter alleged to be complex.
    • When the Civil Procedure Code, the High Court Rules and Orders invest a civil judge with jurisdiction, why take it away merely on the plea that the matter is complex?
    • Unhealthy precedent: Fransfer of the case to the district judge has set an unhealthy precedent and will have a demoralising effect on the subordinate judiciary.
    • In the recent past, many lower-level judicial officers have passed outstanding orders in matters concerning the liberties of the citizens, which are under threat as never before.
    • The subordinate judiciary provides the foundation of our judicial system.

    Conclusion

    Supreme Court order inadvertently casts aspersions on competence of subordinate judiciary. District court should not be weighed down by SC observation.

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  • Goods and Services Tax (GST)

    Supreme Court’s ruling on GST deepens the churn in the tax regime

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

    Context

    Last week, the Supreme Court ruled that the decisions taken by the GST Council are merely recommendations with “persuasive value” and are not binding.

    GST as a advisory body

    • The court has rejected the Centre’s contention that the entire structure of GST would crumble if the Council’s decisions were not treated as enforceable.
    • In some ways, the verdict states the obvious.
    • Article 246-A inserted after the 122nd constitutional amendment states, “Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every state, have the power to make laws with respect to the GST imposed by the Union or by such state.”
    • Thus, the power to levy the central GST (CGST) vests with Parliament, the power to levy state GST (SGST) vests with state legislatures and Parliament has exclusive power to make laws with respect to the GST on items that are part of inter-state trade or commerce.
    •  Thus, the GST Council is only an advisory body and the actual decisions regarding model GST levies, principles of levy, apportionment of GST levied on inter-state supplies, principles relating to place of supply, exemptions and rate structure and any special provisions will have to be taken by either Parliament in the case of CGST and IGST or the states in the case of SGST.
    • In effect, decisions on the structure and operation of the tax can be made by the Centre and individual states without discussion and deliberation in the Council and both can ignore any recommendation made by the Council.
    • The judgment reiterates that the sovereign right to levy the tax still exists with the Union and state governments and it is for them to consider the recommendations of the Council.
    • The chance of having a harmonised GST and reforms in the tax regime will crucially depend upon continued negotiation and bargaining between the Union and states.
    • Intergovernmental cooperation has been kept alive to ensure a harmonised GST and unless both the Centre and the states see the gains, reforms will be hard to come by and if the Centre desires the reforms more than the states, it will have to ensure a “buy in” from the states to agree for the reform.

    Implications of the judgement

    • Given that the GST Council has been declared as only an advisory body with a persuasive value, what happens to the dream of having a harmonised one nation, one tax, if a state or a group of states decides to deviate?
    • But the judgment paves the way for more intensive bargaining and negotiations, placing states on an equal footing with the Centre in taking decisions on the structure and operations of the tax.
    • At present, decisions get approved in the GST Council when passed by a majority of three-fourths of the weighted votes of the members present and voting, with the Centre having one-third weight and individual states (and UTs) having an equal share of the remaining two-thirds weight.
    • However, in the past, all decisions in the Council have been taken by consensus (except in the case of determining the rate on lotteries), and the Supreme Court decision reinforces this convention.
    • The immediate impact of this will be bargaining by states for extending the period of compensation for the loss of revenue.
    •  As the five-year period of compensation gets over at the end of June, this decision will now help the states to bargain hard for the extension.

    Way forward

    •  Though the period of collecting compensation cess has been extended till March 2026 to meet the interest and repayment requirements of the funds borrowed from the RBI to meet the compensation requirements, the lasting solution lies in increasing the revenue productivity of the tax by pruning the list of exempted items, rationalising the rates and taking administrative measures.
    • These reforms will require strengthening the cooperative spirit.

    Conclusion

    This has come at a time when reforms have to be set in motion and hopefully, the Court’s decision will strengthen the cooperative spirit in reforming the domestic consumption tax system in the country.

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  • Foreign Policy Watch: India-China

    Understanding the nature of US-Taiwan Relations

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

    The US President made a controversial statement on whether the US will come to the aid of Taiwan militarily in case of an invasion by China.

    What is the Taiwan issue?

    • Taiwan is an island territory located off the coast of mainland China, across the Taiwan Strait.
    • After their defeat to the communist forces in the Chinese civil war (1945-1949), the ruling Kuomintang (Nationalist) government of China fled to Taiwan.
    • They transplanted the Republic of China (ROC) government in Taiwan, while the Communist Party of China (CPC) established the People’s Republic of China (PRC) in the mainland.
    • Since then, the PRC considers the island as a renegade province awaiting reunification by peaceful means, if possible.

    Game changer: Cold war affiliations

    • Meanwhile, the ROC retained its membership at the United Nations and its permanent seat at the UN Security Council (UNSC).
    • The cross-strait relations became strained as a result of the Cold War, with the PRC allying itself with the Soviet Union (USSR) and ROC with the U.S.
    • This resulted in the two Taiwan Strait crises of the 1950s.

    The US and One-China Principle

    • With the shifting geopolitics of the Cold War, the PRC and the U.S. were forced to come together in the 1970s to counter the growing influence of the USSR.
    • This led to the US-China rapprochement demonstrated by the historic visit of then US President Richard Nixon to PRC in 1972.
    • The same year, the PRC displaced ROC as the official representative of the Chinese nation at the UN.
    • Diplomatic relations with the PRC became possible only if countries abided by its “One China Principle” — recognizing PRC and not the ROC as China.

    Rise of Taiwan

    • Taiwan transitioned from a single party state to a multi-party democracy.
    • At the same time that China reformed its economic system under Deng Xiaoping, and by the end of the Cold War they became economically entangled.
    • Nevertheless, they continue to compete for international recognition and preparing themselves for the worst possible scenario.

    How has the US’s stance on the Taiwan question evolved vis-à-vis China?

    • The very foundation of the US rapprochement as well as its recognition of the PRC is a mutual understanding on the Taiwan question.
    • This has been outlined in three documents — the Shanghai Communique (1972), the Normalisation Communique (1979) and the 1982 Communique.
    • According to the 1972 communique, the US agreed to the ‘one China principle’, with an understanding that it “acknowledges” and “does not challenge” that all Chinese on either side of the Taiwan Strait.
    • It maintained that there is one China and Taiwan is a part of China.
    • However, the US also established unofficial relations with Taiwan through this communique in the name of the people of both the countries.

     Why is the issue significant today?

    • As Taiwan’s democracy flourished, the popular mood drifted towards a new Taiwanese identity and a pro-independence stance on sovereignty.
    • The past decade has seen considerable souring of ties across the Strait, as the Democratic People’s Party (DPP) became the most powerful political force in Taiwan.
    • The DPP government has been catering to the pro-independence constituency in Taiwan and seeks to diversify economic relations away from China.
    • China has always seen Taiwan as a territory with high geopolitical significance.
    • This is due to its central location in the First Island Chain between Japan and the South China Sea, which is seen as the first benchmark or barrier for China’s power projection.

    Why is China so obsessed with Taiwan?

    • Taiwan is at China’s geostrategic calculus.
    • Moreover, its reunification will formally bury the remaining ghosts of China’s “century of humiliation”.
    • China under Xi Jinping seems to have lost its patience and currently sees very slim chances of a peaceful reunification.
    • China usually makes aerial transgressions in Taiwan’s Air Defence Identification Zone (ADIZ).
    • Also, this build-up of tensions is happening simultaneously and drawing parallels with the Russo-Ukrainian conflict.

    Is US strategy towards Taiwan witnessing a major transformation?

    • The US strategy towards Taiwan in light of the unresolved nature of the cross-Strait relations has been marked by what has been called “strategic ambiguity”.
    • This is under the Taiwan Relations Act (TRA) of 1979.
    • As per the TRA, the US has stated clearly that the establishment of bilateral relations with the PRC rests upon “the expectation that the future of Taiwan will be determined by peaceful means”.
    • It also states the US policy to maintain the capacity to resist any resort to force or other forms of coercion that would jeopardise the security, or the social or economic system, of the people on Taiwan.
    • Hence, there is no clear guarantee here that the US will militarily involve in a situation where China attempts to invade Taiwan, short of supplying “defensive weapons”.

    Enjoying the ambiguity

    • The US has for long utilized this strategic ambiguity with its own interpretation of the ‘one China principle to maintain its strategic interests in the Western Pacific.
    • It is in this context that Mr. Biden’s statements have made controversy.

     

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

    Monkeypox Virus: Origins and Outbreaks

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

    With cases being reported from across the world, monkeypox has caught everyone’s attention.

    What is Monkeypox?

    • Monkeypox is not a new virus.
    • The virus, belonging to the poxvirus family of viruses, was first identified in monkeys way back in 1958, and therefore the name.
    • The first human case was described in 1970 from the Democratic Republic of Congo.
    • Many sporadic outbreaks of animal to human as well as human to human transmission has occurred in Central and West Africa in the past with significant mortality.
    • After the elimination of smallpox, monkeypox has become one of the dominant poxviruses in humans, with cases increasing over years along with a consequent reduction in the age-group affected.

    How is it transmitted?

    • Since the transmission occurs only with close contact, the outbreaks have been in many cases self-limiting.
    • Since in the majority of affected people, the incubation period ranges from five to 21 days and is often mild or self-limiting, asymptomatic cases could transmit the disease unknowingly.
    • The outbreaks in Central Africa are thought to have been contributed by close contact with animals in regions adjoining forests.
    • While monkeys are possibly only incidental hosts, the reservoir is not known.
    • It is believed that rodents and non-human primates could be potential reservoirs.

    Does the virus mutate?

    • Monkeypox virus is a DNA virus with a quite large genome of around 2,00,000 nucleotide bases.
    • While being a DNA virus, the rate of mutations in the monkeypox virus is significantly lower (~1-2 mutations per year) compared to RNA viruses like SARS-CoV-2.
    • The low rate of mutation therefore limits the wide application of genomic surveillance in providing detailed clues to the networks of transmission for monkeypox.
    • A number of genome sequences in recent years from Africa and across the world suggest that there are two distinct clades of the virus — the Congo Basin/Central African clade and the West African clade.
    • Each of the clades further have many lineages.

    What do the genomes say?

    • With over a dozen genome sequences of monkeypox, it is reassuring that the sequences are quite identical to each other suggesting that only a few introductions resulted in the present spread of cases.
    • Additionally, almost all genomes have come from the West African clade, which has much lesser fatality compared to the Central African one.
    • This also roughly corroborates with the epidemiological understanding that major congregations in the recent past contributed to the widespread transmission across different countries.

    Does it have an effective vaccine?

    • It is reassuring that we know quite a lot more about the virus and its transmission patterns.
    • We also have effective ways of preventing the spread, including a vaccine.
    • Smallpox/vaccinia vaccine provides protection.
    • While the vaccine has been discontinued in 1980 following the eradication of smallpox, emergency stockpiles of the vaccines are maintained by many countries.
    • Younger individuals are unlikely to have received the vaccine and are therefore potentially susceptible to monkeypox which could partly explain its emergence in younger individuals.

     

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  • Goods and Services Tax (GST)

    What is the Service Charge levied by Restaurants on Customers?

    Prelims Only | Economics | Mains Paper 3: Food Processing & Related Industries In India

    The Centre has called a meeting of restaurant owners over service charge levied by them on customers.

    Why in news?

    • The restaurants are collecting service charges from consumers by default, even though collection of any such charge is voluntary and at the discretion of consumers and not mandatory as per law.

    What are the components of a food bill?

    • A restaurant bill in India comprises food charge (from the menu), with an addition of service charge (anywhere between 5 to 15 per cent) and a 5 per cent GST on this amount (IGST+SGST).
    • This is for all kinds of standalone restaurants.
    • In case a restaurant is located inside a hotel wherein room rate is upwards of Rs 7,500 (mostly in case of five-stars), the GST would be 18 per cent.

    Nature of Service charge

    • While the GST is a mandatory component as per law, the service charge is supposed to be optional.
    • It is the equivalent of what is known as gratuity around the world, or tip, in casual parlance.
    • Most restaurants decide the service charge on their own, and print it at the bottom of the menu with an asterisk.

    Policy measures

    • The Ministry of Consumer Affairs had come out with “Guidelines on Fair Trade Practices Related to Charging of Service Charge from Consumers by Hotels/ Restaurants”.
    • Here it was clearly mentioned that a component of service is inherent in the provision of food and beverages ordered by a customer.
    • Hence the pricing of the product is expected to cover both the goods and service components.
    • It said that the bill “may clearly display that service charge is voluntary, and the service charge column of the bill may be left blank for the customer to fill up before making payment.”

    What do the restaurants say?

    • The levy of service charge by a restaurant is a matter of individual policy to decide if it is to be charged or not.
    • There is no illegality in levying such a charge.
    • Once the customer is made aware of such a charge in advance and then decides to place the order, it becomes an agreement between the parties, and is not an unfair trade practice.
    • GST is also paid on the said charge to the Government.

    Where does the fund go?

    • Restaurants claim that a major chunk of the service charge thus collected goes to the staff, while the rest goes towards a welfare fund to help them out during good and bad times.
    • It’s a default billing option, even as customers can choose not to pay it if they don’t want to.
    • Of course, they are paid the salaries but the service charge works as an incentive for them.
    • Restaurateurs also say that patrons can decide not to pay the charge and tip the server directly, but in this case, the backroom staff doesn’t get anything.
    • A service charge ensures all staff members are rewarded evenly.

    What is the issue then?

    • The issue is that almost all restaurants have put service charge (fixed at their own accord) as a default billing option.
    • And if a consumer is aware that it is not compulsory and wants it removed or wants to tip the server directly, the onus is on them to convince the management why they don’t want to pay it.
    • The department says they received several complaints saying it leads to public embarrassment and spoils the dining experience since at the end of it, they either pay the charge quietly and exit the place feeling cheated, or have to try hard to get it removed.
    • Also, there is no transparency as to where this charge goes.
    • The officials also say that collecting service charge on their own and paying GST on it to the government doesn’t make it authorised.

    Problems faced by customers

    • It is this component which has come under dispute from time to time, with consumers arguing they are not bound to pay it.
    • It also said that hotels and restaurants charging tips from customers without their express consent in the name of service charges amounts to unfair trade practice.

     

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

    The message from the government’s wheat export ban

    op-ed snap | Agriculture | Mains Paper 3: Agriculture and related issues,Issues Related To Farm Subsidies & Msp

    Context

    The ban on the export of wheat was not unexpected. The rather ambivalent approach to agriculture comes out clearly with this move.

    Understanding how this ban has come about

    • We are not comfortable with market forces operating in agriculture.
    • Nor are we quite sure whether we want the farmer to get a better price or the consumer to pay less.
    • Governments spend a lot of money in the form of subsidies to ensure farmers are enthused to produce more wheat.
    • The Centre keeps increasing the MSP for this purpose and states often pay a bonus for procurement.
    • There are political reasons too as the farmer lobby needs to be placated.
    •  There are political reasons too as the farmer lobby needs to be placated.
    • We have been taking credit for the production of wheat and every year we set a new record.
    • This year, the Ministry announced that wheat production will touch a record of 111 million tonnes, which has recently been revised downwards.
    • With the war, conditions have changed. Russia and Ukraine are large producers of wheat and their supply to world markets has been cut off due to sanctions and supply chain disruptions.
    • With supplies interrupted, there is an opportunity for other surplus nations to step in.
    • But the disruption has caused world prices to rise significantly.

    Opportunity for India

    • The World Bank data indicates that the price of US (soft red winter) wheat has gone up from $328/tonne in December to $672/tonne while US (hard red winter) wheat is up from $377 to $496/tonne.
    • Countries that produce abundant wheat now have a chance to leverage this opportunity to export.
    • However, in case of India it does appear that production will be lower than expected.
    • Low wheat stock: The government has also not been able to procure wheat as farmers are no longer selling at MSP (which is at Rs 2,015/quintal) as they are getting higher prices in mandis.
    • As of May 10, procurement was just 18 million tonnes against 43 million tonnes last year.
    • This is a significant fall.
    • But stocks with the Centre and other state agencies are 30.3 million tonnes, way above the buffer norms of 27.6 million tonnes.
    • The ban on wheat exports is because of this.

    Two constraints on the wheat economy

    • In 2007 and again in 2021, the government banned futures trading in wheat on grounds that it led to speculative pressure on prices even though the quantity traded and the open interest were minuscule.
    • At that time, it was a decline in expected output which triggered this action.
    • It does look like the wheat economy will continue to operate within two constraints that have become barriers to commercialisation.
    • MSP and government procurement: The first is MSP and government procurement, which feeds into the public distribution system.
    • Arhatiya system: The second is the arhatiya system of trading where middlemen have come in the way of any reform.

    Suggestions

    • Abolish MSP and procurement system: The MSP and procurement system needs to be dismantled.
    • Cash transfers: As the government has successfully expanded both the Aadhaar and Jan Dhan programmes, there should be simple cash transfers to beneficiaries.
    • Buffer stocks can be held to ease distress during a crisis, but government involvement should stop there.
    • Procuring unlimited quantities of wheat and keeping huge stocks has distorted the wheat matrix.
    • The mandi system too needs to be revisited and alternatives have to be made available so that farmers can choose the point of sale.

    Conclusion

    We have been talking about being a part of global supply chains to augment value addition and accelerate growth. But when it comes to agriculture it is a blow-hot blow-cold approach. This not only affects our credibility but also sends confusing signals to producers as to what is the best way out for them.

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  • Indian Ocean Power Competition

    How the Quad can become more than an anti-China grouping

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

    Context

    On May 23, before the Quad leaders’ summit in Tokyo, the United States launched the Indo-Pacific Economic Framework (IPEF).

    Significance IPEF

    • The Indo-Pacific Economic Framework (IPEF) will consist of a diverse group of 12 countries initially — Australia, Brunei, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam.
    • The IPEF — which covers fair trade, supply chain resilience, infrastructure, clean energy, and decarbonisation, among others — is likely to complement the other Indo-Pacific projects like the Supply Chain Resilience Initiative (SCRI)  that also seeks to build resilient and secure trade linkages by reducing dependence on China.
    • Decoupling from Chinese over-dependence: The US-led economic engagement is a salient attempt to allow countries to decouple from Chinese over-dependence in order to ultimately strengthen the existing free and open rules-based global order.
    • Extension of plus grouping: The launch of IPEF signifies the essence of the Quad and its extension as a “plus” grouping.
    •  It brings together seven critical countries of the Association of Southeast Asian Nations (ASEAN), all Quad states, and dialogue partners, including South Korea, solidifying a case for the “plus” characterisation of the Quad process.
    • Thus, it is an encouraging sign that the Quad countries are investing their strategic orientation in this regard.
    • Importantly, both the IPEF launch, and the Tokyo summit dispel any remaining misgivings about the Quad disintegrating and certify that it is a cohesive unit where it matters.
    •  It would potentially represent an amalgamation of the eastern and western “like-minded” countries.
    • The expanded grouping and the related Quad initiatives will build a comprehensive and integrated approach to combating shared challenges arising out of Chinese aggression.
    • A hallmark of Biden’s latest Asia visit has been South Korea’s embrace of the Indo-Pacific framework.
    • This is a long-awaited turn that could potentially lead to South Korea participating in a more meaningful manner in the Quad in the near future.

    Importance of Taiwan

    • Taiwan is a major economy in the Indo-Pacific region (as also the US’s eighth-largest trading partner in 2021 and a critical partner in diversifying the US supply chains), which is already engaged in the US-Taiwan Economic Prosperity Partnership Dialogue that includes many of the issues proposed in the IPEF.
    • The inclusion of Taiwan, which already has a critical role in the global semi-conductor supply chain network, in the SCRI and the IPEF as well as, by extension, in the Quad format, in some manner would be a welcome addition.
    • Geopolitical statement against coercive tactics: Importantly, Taiwan’s inclusion would also be a geopolitical statement against coercion tactics by international actors.

    Inclusivity characteristics based on a  commitment to the existing international order

    • In its current abstract framework, the plus framework includes a wide array of states (which also comprise the IPEF) — developing and developed economies as well as middle and major powers that are committed to maintaining an inclusive, rules-based and liberal institutional order.
    • The inclusivity angle is suspect as the grouping is essentially what China calls a US-led “anti-China” tool.
    • Therefore, what interested states must envision is a broad, all-embracing, and comprehensive framework that can stand as a pillar for regional security and stability, multilateralism, and defence of global institutionalism and the status quo.

    Conclusion

    States are showing their willingness, and now it is incumbent on the Quad states to allow for the creation of a “corridor of communication” that ultimately leads to a “continental connect” to strengthen a rules-based order.

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