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  • ISRO Missions and Discoveries

    ISRO’s goal for Venus Mission

    Prelims Only | Science Tech | Mains Paper 3: Achievements Of Indians In S&T

    India’s Venus mission has been conceived. The project report for ‘Shukrayaan-I’ – the name given to ISRO’s Venus mission

    About Venus

    • Venus is the second planet from the Sun and is Earth’s closest planetary neighbor.
    • It’s one of the four inner, terrestrial (or rocky) planets, and it’s often called Earth’s twin because it’s similar in size and density.
    • Venus has a thick, toxic atmosphere filled with carbon dioxide and it’s perpetually shrouded in thick, yellowish clouds of sulphuric acid that trap heat, causing a runaway greenhouse effect.
    • It’s the hottest planet in our solar system, even though Mercury is closer to the Sun.
    • Surface temperatures on Venus are about 900 degrees Fahrenheit (475 degrees Celsius) – hot enough to melt lead.
    • Venus has crushing air pressure at its surface – more than 90 times that of Earth – similar to the pressure you’d encounter a mile below the ocean on Earth.

    Do you know?

    Venus rotates on its axis backward, compared to most of the other planets in the solar system. This means that, on Venus, the Sun rises in the west and sets in the east, opposite to what we experience on Earth. (It’s not the only planet in our solar system with such an oddball rotation – Uranus spins on its side.)

    What is Shukrayaan-I Mission?

    • Shukrayaan will be India’s first orbiter mission to Venus after sending similar missions to the Moon and Mars.
    • The mission aims to study the surface of the hottest planet in our solar system and unravel the mysteries under the Sulphuric Acid clouds enveloping it.
    • The orbiter is the third mission announced to the inferno world of Venus after NASA announced two probes followed by a spacecraft by the European Space Agency.
    • The probes will investigate the world looking for clues to understand the destructive past of Earth’s mysterious twin, which scientists believe once had vast reserves of water similar to our planet.

    Stated objectives

    • Investigation of the surface processes and shallow sub-surface stratigraphy, including active volcanic hotspots and lava flows
    • Studying the structure, composition, and dynamics of the atmosphere
    • Investigation of solar wind interaction with the Venusian Ionosphere

    Delay with the launch

    • The ISRO is eyeing the December 2024 window for launch with orbital maneuvers planned for the following year.
    • This is when earth and Venus would be so aligned that the spacecraft could be put in the neighboring planet’s orbit using a minimum amount of propellant.
    • The next similar window would be available in 2031.

     

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

    India must seize the trade opportunity opening now

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

    Context

    Slower global growth, an adverse geopolitical environment, the shadow of recurring waves of the pandemic and prolonged supply chain issues are likely to weigh on export growth this year.

    Trade growth in 2021 and uncertainties in 2022

    • The year 2021 was a record one for trade despite the pandemic.
    • In terms of volumes, merchandise trade rose 9.8 per cent, while in dollar terms, it grew 26 per cent.
    • The value of commercial services trade was also up 15 per cent.
    • India has had a good export run in line with global trends, witnessing record goods exports of $419 billion, while touching $250 billion in services exports.
    • However, global growth forecasts have now been pared down.
    • Slower global growth, an adverse geopolitical environment, the shadow of recurring waves of the pandemic and prolonged supply chain issues are likely to weigh on export growth this year.

    Taping into opportunities

    • Ukraine and Sri Lanka are major exporters of agricultural products and the vacuum created by their limited presence in global trade will open up agricultural export opportunities for India.
    • This will not only spur overall exports but will also help to support the recovery of the agrarian economy through higher realisations.
    • Tea and wheat: As many as 25 African countries import more than one-third of their wheat from Russia and Ukraine and for 15 of them, the share exceeds 50 per cent.
    • Sri Lanka is also a major player in the global tea market and produces around 300 million kg annually.
    • Almost 98 per cent of its annual production is exported.
    • India, the second-largest producer of tea with an annual production of 900 million kg, is in a good position to exploit the opportunity and fill the gap.
    • Textile: Apart from tea and wheat, newer export opportunities have arisen for textiles.
    • Sri Lanka exports $5.42 billion worth of garments and prolonged power cuts in the island nation will hurt its production and export capacity.

    Suggestions

    • 1] Work on non-tariff barriers: One, work on non-tariff barriers for agricultural trade with a special focus on harmonising the sanitary and phytosanitary (SPS) requirements.
    • 2] Autonomy in tea sector: To support tea exports, traditional tea boards are seeking a greater role and autonomy for optimising the development, promotion, and research in the sector.
    • Quicker implementation of the proposed Tea Promotion and Development Act is of utmost importance.
    • 3] Integration with global supply chains: India must double down on its integration with global supply chains.The commerce ministry has negotiated a slew of trade deals.
    • 4] Reduce tariff rates for intermediate inputs: Tariff rates for intermediate inputs should be reduced to either zero or should be negligible for India to become an attractive location for assembly activities.
    • 5] Realignment of specialisation patterns: India must persist with the creation of an enabling ecosystem that realigns its specialisation patterns towards labour-intensive processes and product lines.
    • The labour market reforms must be taken to their logical conclusion.
    • 6] Pro-active FDI policy: A continuous and pro-active FDI policy is also critical as foreign capital and technology are key enablers for entry into global production networks even as local firms play a role as subcontractors and suppliers of intermediate inputs to MNEs.
    • 7]Power supply and logistical bottlenecks: Lastly, exports could suffer if basic issues such as availability of power and logistical bottlenecks keep rearing their ugly heads.
    • The Economic Survey 2019 had recommended that low levels of service link costs (costs related to transportation, communication, and other tasks involved in coordinating the activity etc) are prerequisites to strengthen their participation in GVCs.
    • This should not be neglected.

    Conclusion

    If India were to tap export opportunities in developed markets, it must act on the suggestions above.

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  • Absence of Roe v Wade won’t just impact the US

    op-ed snap | Polity | Mains Paper 2: Comparison Of The Indian Constitutional Scheme With That Of Other Countries,Effect Of Policies & Politics Of World On India’S Interests

    Context

    The leak of an initial draft majority opinion of the US Supreme Court voting to overturn the decision in Roe v Wade has sent shockwaves across liberal and conservative quarters alike, globally.

    Background of the Roe v Wade case

    • Right to abortion: While locating the right of privacy within the guarantee of personal liberty enshrined in the fourteenth amendment of the American constitution, Roe embodies a supervening constitutional right to abortion emanating from this right of privacy.
    • The right to abort was held to be a constitutionally protected right within the right of privacy.
    • Roe, the 1973 outcome of an unmarried woman’s crusade for bodily autonomy, had declared overbroad, and consequently unconstitutional, a provision of the Texas Penal Code which permitted only those abortions that were “procured or attempted by medical advice to save the life of the mother”.
    • The decision simultaneously recognised the state’s interest in protecting the life of the foetus as also the life of the mother. 
    • Roe is not only relevant as a progressive trailblazer for reproductive rights in the United States but is also fundamental to constitutional jurisprudence globally for the interpretative tools it employed.

    Implications of overturning Roe v Wade

    • Political considerations vs judicial responsibility: The overturning of Roe is more than the mere abdication of the judicial responsibility to protect individual rights — it signals a dangerous trend of courts making long-standing determinations of legal rights based on transient political considerations.
    • Incursion into women’s right to abort: It would also mean legitimisation of state incursions into women’s right to abort and consequently their right to bodily autonomy and liberty, in addition to forcing them to move to states with enabling laws to procure abortions, leading to issues of access and affordability of abortions.
    • While the impact of Roe’s absence would most profoundly be felt in the US, it is likely to embolden conservative anti-abortion voices across the world.
    • Limits of judicial activism: It will inevitably also raise fundamental questions on the limits of judicial activism aimed at protecting the rights of persons and classes, which do not find explicit mention within a country’s constitutional framework.
    • Possibility of a conservative approach to abortion cases: In 2021, the abortion laws in India underwent substantial changes, with the introduction of the Medical Termination for Pregnancy (Amendment) Act, 2021 which, in addition to destigmatising pregnancies outside marriage by introducing the nomenclature of “any woman or her partner”, also increased the upper gestational limits within which pregnancies are legally terminable.
    • The Act, however, carries ambiguities and leaves room for both judicial and executive interpretation.
    • As cases of subjective determination arise, the Indian judiciary will be called upon to reconcile the right to privacy recognised in Puttaswamy with the permissible limits of abortion in the Act.

    How does Roe v Wade apply in the Indian context?

    • In KS Puttaswamy v Union of India, Justice Chandrachud referred to Roe and Planned Parenthood while reading the right to privacy into the existing framework of constitutionally protected fundamental rights subject to “just, reasonable and fair” restrictions.
    • Recognising derivative rights: In the lifetime of the Indian Supreme Court, recognising derivative rights within the existing framework of fundamental rights has been regularly witnessed — be it rights during arrest and detention, the right to express one’s sexual and gender identity, or rights against harassment at the workplace, to cite a few.
    • Setback to transformative constitutionalism: In the Indian context, the overturning could be seen as a setback to the celebrated doctrine of transformative constitutionalism, which sees the Indian Constitution as a “living document” that moulds, adapts and responds to changing times and circumstances.

    Conclusion

    The likelihood of the overturning of Roe leading to more conservative approaches to judicial interpretation in abortion rights cases, cannot be ruled out.

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  • Goods and Services Tax (GST)

    Let’s make GST a good and simple tax

    | Economics | Mains Paper 3: Indian Economy

    Context

    The GST has been a remarkable achievement and a unique experiment in cooperative federalism. In this, both the Union and the state governments gave up their tax autonomy in favour of harmonising domestic trade taxes.

    Multiple rates: A major shortcoming in the structure of GST

    •  One of the most important shortcomings in the structure of GST is multiple rates.
    • The committee headed by the Chief Economic Adviser estimated the tax rate at 15-15.5 per cent.
    • It further recommended that in keeping with growing international practice, India should strive towards a single rate in the medium-term to facilitate administrative simplicity and compliance, but in the immediate context, it should have a three-tier structure (excluding zero).
    • The structure finally adopted was to have four rates of 5, 12, 18, and 28 per cent besides zero, though almost 75 per cent of the revenues accrue from the 12 and 18 per cent slabs.
    • Why single rate structure? The reasons for adopting a single rate structure in most countries are to have a simple tax system, prevent misclassifications and litigations arising therefrom, and to avoid an inverted duty structure of taxes on inputs exceeding those on outputs requiring detailed scrutiny and refunds.
    • Why multiple rates? The main reason for rate differentiation is equity.
    • But it is argued that this is an inefficient way of targeting benefits for the poor. 
    • Although the exempted and low-rated items are consumed relatively more by the poor, in absolute terms, the consumption may be more by the rich. 

    Suggestions

    • Focus on the expenditure side: The ideal way of targeting the benefits to the poor is on the expenditure side, through targeted cash transfers to vulnerable groups and providing quality education and healthcare.
    • Of course, unprocessed food items have to be exempted for reasons of administrative difficulty, but the list should be kept small.
    • Right time to rationalise the rates: Now, in fact, is the opportune time to rationalise the rate structure.
    • The economy is in recovery mode and more importantly, GST revenues have shown reasonably high buoyancy with collections of over Rs 1 lakh crore in the last 10 months and touching a record of Rs 1.68 lakh crore in April 2022.
    • Role of e-invoicing: The revenue increase has not come about only due to the economic recovery.
    •  The more important reason seems to be that at last, the GSTN has been able to stabilise the technology platform.
    • Mandating the issue of e-invoicing for all businesses above Rs 100 crore has enabled better invoice matching and detection of fake invoices that were used to claim the input tax credit.
    • This has helped to improve tax compliance and has also enabled better enforcement.
    • With time, the GSTN should be able to enforce e-invoice requirements on all businesses above Rs 10 crore, which will cover more than 95 per cent of taxpayers.
    • Dealing with the excessive rate differentiation: The GST council is concerned about the problems arising from excessive rate differentiation and has set up a seven-member ministerial panel .
    • But it has been widely reported that the committee is thinking of increasing the lower tax rate from 5 per cent to 8 per cent and moving some essential items from the 5 per cent category to the 3 per cent slab.
    • This will be retrograde because a rate category will be added. The need of the hour is to reduce the rate categories.
    • Merge 12 and 18 per cent categories: It would be preferable to merge the 12 per cent and 18 per cent categories into a 15-16 per cent slab and move the items in the 5 per cent category to the 8 per cent slab and remove the 28 per cent category altogether. 

    Conclusion

    The merger of 12 and 18 per cent categories will result in the GST structure with two rates and as the cesses will cease after 2026 when the compensation requirement is over, it will really become a “good and simple tax”.

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  • Foreign Policy Watch: India – EU

    The challenge for Middle Powers like India, France and Germany

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

    Context

    Prime Minister Narendra Modi’s visit to European capitals should help both sides acquire a better understanding of each other’s security concerns. Whether it will fundamentally alter equations remains to be seen.

    New India-EU equation

    • As “Middle Powers”, countries like France, Germany and India should seek policy space for themselves and not be forced into taking positions by the Big Powers — the United States, China and Russia.
    • The EU is understandably concerned about Russian aggressiveness in Europe.
    •  ndia is equally concerned about Chinese aggressiveness in Asia. 
    • Even after Russia has sought to tear down the post-Cold War security structure in Europe, India has stayed the course in its equations both with Russia and the European Union.

    Division of national and group agenda and its implications for India

    • While Russia’s invasion of Ukraine is the context in which Modi visited Europe and the head of the European Union visited India, the fact is that the agenda at bilateral meetings with individual European countries has generally been very different from the agenda that the EU prefers to focus on.
    • While individual European nations, especially Germany and France, focus on their own strategic and business interests, including defence equipment sales, the EU retains the remit for negotiating trade and investment rules.
    • Problem for India: This division of national and group agendas has often posed a problem for India because individual countries cannot offer bilateral market access in exchange for bilateral defence deals.
    • So the French will sell Rafale jets in the name of strategic partnership but they cannot offer a trade and investment deal that Brussels will not allow Paris to strike with India.
    • While the EU and G7 may now wish to derisk, if not decouple, from aggressively rising China, how much they would be able to do in this regard and what they would be willing to do to help a slowly rising India remains to be seen.

    Way forward

    • For India’s part, it is not clear at the moment how much and what it can unilaterally offer Europe beyond the promise of standing up to China or reducing dependence on Russia.
    • Challenge for the three middle powers lies in combine their “strength and stability” to ensure “peace and tranquillity” in their respective neighbourhoods.
    • If middle powers like Brazil, France, Germany, India, Indonesia, Japan, South Africa and others can work together they may well be able to impose some discipline on the three big powers — China, Russia and the US.

    Conclusion

    At a time when big powers lurking behind in seeking to stabilise and shape the global order middle powers need to act to balance the influence exerted by the big powers.

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  • J&K – The issues around the state

    Panel notifies new J&K Assembly Constituencies

    | Polity | Mains Paper 2: Federalism

    The Jammu and Kashmir Delimitation Commission has notified the new boundaries, names and number of Assembly constituencies in Jammu and Kashmir, paving the way for the first-ever Assembly election in the Union Territory.

    What is Delimitation and why is it needed?

    • Delimitation is the act of redrawing boundaries of an Assembly or Lok Sabha seat to represent changes in population over time.
    • The Delimitation Commission is appointed by the President of India and works in collaboration with the Election Commission of India.
    • This exercise is carried out by a Delimitation Commission, whose orders have the force of law and cannot be questioned before any court.
    • The objective is to redraw boundaries (based on the data of the last Census) in a way so that the population of all seats, as far as practicable, be the same throughout the State.
    • Aside from changing the limits of a constituency, the process may result in a change in the number of seats in a state.

    How is it carried out?

    • Under Article 82, the Parliament enacts a Delimitation Act after every Census.
    • Article 170 provides that States also get divided into territorial constituencies as per Delimitation Act after every Census.
    • Once the Act is in force, the Union government sets up a Delimitation Commission.
    • The first delimitation exercise was carried out by the President (with the help of the Election Commission) in 1950-51.
    • The Delimitation Commission Act was enacted in 1952.
    • Delimitation Commissions have been set up four times — 1952, 1963, 1973 and 2002 under the Acts of 1952, 1962, 1972 and 2002.
    • There was no delimitation after the 1981 and 1991 Censuses.

    Delimitation in J&K

    • Assembly seats in J&K were delimited in 1963, 1973 and 1995.
    • Prior to August 5, 2019, carving out of J&K’s Assembly seats was carried out under the J&K Constitution and Jammu and Kashmir Representation of the People Act, 1957.
    • Until then, the delimitation of Lok Sabha seats in J&K was governed by the Constitution of India.
    • However, the delimitation of the state’s Assembly was governed by the J&K Constitution and J&K Representation of the People Act, 1957.
    • There was no census in the state in 1991 and hence no Delimitation Commission was set up by the state until 2001 census.

    Why is it in the news again?

    • After the abrogation of J&K’s special status in 2019, the delimitation of Lok Sabha and Assembly seats in the newly-created UT would be as per the provisions of the Indian Constitution.
    • On March 6, 2020, the government set up the Delimitation Commission, headed by retired Supreme Court judge Ranjana Prakash Desai, which was tasked with winding up delimitation in J&K in a year.
    • As per the J&K Reorganization Bill, the number of Assembly seats in J&K would increase from 107 to 114, which is expected to benefit the Jammu region.

    Next step: Assembly polls

    • With the final order now notified, all eyes will be on the EC and the Union government regarding the timing of Assembly elections.
    • Though mainstream parties in the Valley have criticised the report, it is likely that this will make space for political engagement in the UT.

    What changes have been made?

    • ASSEMBLY: The Commission has increased seven Assembly seats — six in Jammu (now 43 seats) and one in Kashmir (now 47). It has also made massive changes in the structure of the existing Assembly seats.
    • LOK SABHA: The Commission has redrawn the boundaries of Anantnag and Jammu seats. Jammu’s Pir Panjal region, comprising Poonch and Rajouri districts and formerly part of Jammu parliamentary seat, has now been added to Anantnag seat in Kashmir. Also, a Shia-dominated region of Srinagar parliamentary constituency has been transferred to Baramulla constituency, also in the Valley.
    • KASHMIRI PANDITS: The Commission has recommended provision of at least two members from the community of Kashmiri Migrants (Kashmiri Hindus) in the Legislative Assembly.
    • Seats for POK migrants: It has also recommended that Centre should consider giving representation in the J&K Legislative Assembly to the displaced persons from Pakistan-occupied Kashmir, who migrated to Jammu after Partition.

    Why has the exercise been controversial?

    • Jammu vs. Kashmir: Concerns had been expressed over how the delimitation process may end up favoring the Jammu region over Kashmir in terms of the seats.
    • Under-representation of Ladakh: Arguments have been made on how Ladakh has been underrepresented, with demands for statehood/sixth schedule.
    • Non-proportionate reservations: It is argued that seats for STs should’ve been divided in both Jammu province & Kashmir province, as the ST population is almost equal.
    • Frozen till 2026: Constituency boundaries are being redrawn only in J&K when delimitation for the rest of the country has been frozen until 2026. The last delimitation exercise in J&K was carried out in 1995.
    • Issue over reorganization: Again, political parties in Jammu and Kashmir have been pointing out that the Delimitation Commission is mandated by the Reorganisation Act, which is sub judice.

     

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  • Cyber Security – CERTs, Policy, etc

    How India’s new VPN rules change the Status Quo?

    Prelims Only | Security Issues | Mains Paper 3: Cyber Security

    Recently, the Indian Computer Emergency Response Team (Cert-In) issued new directives that require Virtual Private Network (VPN) providers to store user data for five years.

    What is VPN?

    • VPN describes the opportunity to establish a protected network connection when using public networks.
    • It encrypts internet traffic and disguise a user’s online identity.
    • This makes it more difficult for third parties to track your activities online and steal data.
    • The encryption takes place in real time.

    How does a VPN work?

    • A VPN hides your IP address by letting the network redirect it through a specially configured remote server run by a VPN host.
    • This means that if you surf online with a VPN, the VPN server becomes the source of your data.
    • This means your Internet Service Provider (ISP) and other third parties cannot see which websites you visit or what data you send and receive online.
    • A VPN works like a filter that turns all your data into “gibberish”. Even if someone were to get their hands on your data, it would be useless.

    Why do people use VPN?

    • Secure encryption: A VPN connection disguises your data traffic online and protects it from external access. Unencrypted data can be viewed by anyone who has network access and wants to see it. With a VPN, hackers and cyber criminals can’t decipher this data.
    • Disguising whereabouts: VPN servers essentially act as your proxies on the internet. Because the demographic location data comes from a server in another country, your actual location cannot be determined.
    • Data privacy is held: Most VPN services do not store logs of your activities. Some providers, on the other hand, record your behaviour, but do not pass this information on to third parties. This means that any potential record of your user behaviour remains permanently hidden.
    • Access to regional content: Regional web content is not always accessible from everywhere. Services and websites often contain content that can only be accessed from certain parts of the world.
    • Secure data transfer: If you work remotely, you may need to access important files on your company’s network. For security reasons, this kind of information requires a secure connection. To gain access to the network, a VPN connection is often required.

    What does the new CERT-IN directive say?

    • VPN providers will need to store validated customer names, their physical addresses, email ids, phone numbers, and the reason they are using the service, along with the dates they use it and their “ownership pattern”.
    • In addition, Cert is also asking VPN providers to keep a record of the IP and email addresses that the customer uses to register the service, along with the timestamp of registration.
    • Most importantly, however, VPN providers will have to store all IP addresses issued to a customer and a list of IP addresses that its customers generally use.

    What does this mean for VPN providers?

    • VPN services are in violation of Cert’s rules by simply operating in India.
    • That said, it is worth noting that ‘no logs’ does not mean zero logs.
    • VPN services still need to maintain some logs to run their service efficiently.

    Does this mean VPNs will become useless?

    • The Indian government has not banned VPNs yet, so they can still be used to access content that is blocked in an area, which is the most common usage of these services.
    • However, journalists, activists, and others who use such services to hide their internet footprint will have to think twice about them.

    Why such move?

    • Crime control: For law enforcement agencies, a move like this will make it easier to track criminals who use VPNs to hide their internet footprint.
    • Curbing dark-net activities: Users these days are shifting towards the dark and deep web, which are much tougher to police than VPN services.

    Back2Basics: Indian Computer Emergency Response Team (CERT-IN)

    • CERT-IN is an office within the Ministry of Electronics and Information Technology.
    • It is the nodal agency to deal with cyber security threats like hacking and phishing. It strengthens the security-related defense of the Indian Internet domain.
    • It was formed in 2004 by the Government of India under the Information Technology Act, 2000 Section (70B) under the Ministry of Communications and Information Technology.

     

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  • Monetary Policy Committee Notifications

    Inflation control needs another model

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

    Context

    At the conclusion of the April meeting, the Monetary Policy Committee had already warned that the focus will henceforth be on inflation. Yesterday it raised the repo rate somewhat sooner than was expected by the market.

     Discourse on inflation engaged in by the western central banks

    • Inflation reflects an excess of output over its ‘natural’ level.
    • Inflation targeting refers to the policy of controlling inflation by raising the interest rate over which the central bank has control, i.e. the rate at which it lends to commercial banks, the ‘repo rate’.
    • This, it is argued, will induce firms to stay their investment plans and reduce inventories, lowering production.
    • As economy-wide output declines, becoming equal to the natural level of output, inflation will cease.
    • This story does not just legitimise a policy of output contraction for inflation but sees it as optimal.
    • The natural level of output itself is the productive counterpart of the natural level of employment, the level that obtains in a freely functioning labour market.
    • So, at the natural level of output, the economy is deemed to be at full employment.
    • Salient in the context is the fact that the natural level of output is unobservable.
    • Hence inflation as a reflection of an “overheating” economy is something that must be taken on trust.

    Inflation control in India

    • Not surprisingly for a theory based on an unobservable variable, the proposition that inflation is due to an overheating economy fares poorly when put to a statistical test for India. 
    • There is not a single demonstration of the empirical validity of the model of inflation presented in the RBI report of 2014, which recommended a move to inflation targeting.
    • On the other hand inflation in India can be explained in terms of the movement of the prices of agricultural goods and, to a lesser extent, imported oil.
    • How effective is monetary policy in controlling inflation: The implication of this finding is damaging for the claim that monetary policy can control inflation, for neither the price of agricultural goods nor that of imported oil is under the central bank’s control.
    • The only route by which monetary policy can, in principle, control inflation is by curbing the growth of non-agricultural output, which would in turn lower the growth of demand for agricultural goods.
    • As the demand for agricultural goods slows, so will inflation, but this comes at the cost of output and employment.
    • At least, this is the theory.
    • Whether this takes place in practice depends upon the extent to which changes in the repo rate are transmitted to commercial bank lending rates.

    Way forward

    • Focus on supply of agricultural goods: The implication for the policymaker that inflation is driven by agricultural goods prices, as is the case in India presently, is that the focus should be on increasing the supply of these goods.
    • Growing per capita income in India has shifted the average consumption basket towards foods rich in minerals, such as fruits and vegetables, and protein, such as milk and meat.
    • But the expansion of the supply of these foods has been lower than the growth in demand for them.
    • So a concerted drive to increase the supply of food other than rice and wheat holds the key.
    • Costly food threatens the health of the population, as people economise on their food intake, and holds back the economy, as only a small part of a household’s budget can be spent on non-agricultural goods.

    Conclusion

    Monetary policy manoeuvres, typified by the RBI’s raising of the repo rate is not an efficient solution for agricultural price-driven inflation. Any lasting inflation control would require placing agricultural production on a steady footing, with continuously rising productivity.

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  • RBI Notifications

    With repo rate hike, RBI has done what’s necessary

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

    Context

    The RBI has decided to take the bull by the horns. It has raised the repo rate by 40 basis points and the cash reserve ratio (CRR) by 50 basis points to fight inflation.

    Why major central banks across the world are hiking rates?

    • Across the world, major central banks have of late gone on a rate hike spree, waking up to the realisation of inflationary pressures not being transitory in nature.
    • Record high inflation in the US: The US Fed has been on the offensive battling a 40-year high surge in prices.
    • It has tapered its bond purchase programme drastically while suggesting in no uncertain terms the pace of rate hikes needed to combat inflation.
    • The European Union has been slow to respond but voices are growing to correct the path at the earliest.
    • Banks like the Central Bank of Brazil or the Russian Central Bank have increased the interest rate to double digits.
    • Emerging economies have been doubly hit — the days of easy liquidity are well behind them even as their economic resources remain constrained to support an uneven proportion of population hit by pandemic.
    • Including the RBI’s decision today to push the benchmark rate to align with the current market realities, 21 countries have increased interest rates so far.

    Analysing the RBI’s decision to hike interest rates

    • To this extent, the decision by the RBI to frontload the rate hikes ahead of the Fed decision is again an attempt to stem capital outflows.
    • Accommodative policy stance; The most interesting aspect of the rate hike today is the continuation of the accommodative policy stance.
    • The CRR hike may be just an attempt to build up a war chest on the liquidity front.
    • Liquidity inflows to the financial system could be either policy induced by the central bank for example changes in reserves, open market operations etc or non-policy induced such as foreign exchange reserves, government cash balances, and currency in circulation.
    • Given that non-policy induced liquidity inflows have been recently impacted (outflows of portfolio capital) and given the huge size of the government borrowing programme, the RBI also needs to support the market through some means.
    • Impounding bank reserves through the CRR (Rs 87,000 crore) could give some space to the central bank to conduct open market purchases of bonds from banks and thus inject concomitant liquidity some time in the future if the need so arises.
    •  The CRR rate hike is thus an important tool to possibly manage G-sec yields.

    Inflation dynamics in India

    • The inflationary pressures can be attributed mainly to adverse cost-push factors, coming from supply-side shocks in food and fuel prices.
    • The RBI statement thus cites food inflation as a major source of discomfort.
    • Additionally, nominal rural wages for both agricultural and non-agricultural labourers picked up during the second half 2021-22.
    • However, such wage growth has remained soft.
    • Measures to ameliorate supply-side cost pressures would be thus critical at this juncture, especially in terms of a calibrated reduction of taxes on petrol and diesel.
    • On the policy side, however, it would mean that even after rate hikes, inflation may continue to remain high for some time.
    • The MCLR (Marginal Cost of Funds based Lending Rate) linked loans have a share of around 53 per cent in the overall loan kitty.
    • With the rise in CRR and expected future hikes in the benchmark rates, there would be an increase in MCLR due to a negative carry.

    Conclusion

    The RBI has acted prudently in responding to market forces that could impact India’s growth prospects if inflationary concerns were not addressed now. At the same time, by pledging to remain accommodative to spur, and reinvigorate growth, it has reaffirmed its commitment to being a trusted partner in the growth of the country.

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  • Death Penalty Abolition Debate

    President has no role to play in Perarivalan’s plea: SC

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

    The Supreme Court has disagreed with the Central government’s suggestion that the court should wait till the President took a call on former PM’s assassination case convict A.G. Perarivalan’s mercy plea referred to him by the Tamil Nadu Governor for a decision.

    Why in news now?

    • The Bench of the Supreme Court said that the Centre had missed the obvious question posed by the court by a mile.
    • The pertinent question was whether the Governor had, in the first place, the authority to refer the mercy plea to the President.
    • Under Article 161 of the Constitution, the Governor was bound by the aid and advice given by the TN Council of Ministers in September 2018.
    • The Governor prima facie had no authority to transfer the mercy plea to the President.

    What does Pardon mean?

    • A pardon is a government/executive decision to allow a person to be absolved of guilt for an alleged crime or other legal offense as if the act never occurred.

    Why need a Pardon?

    • Pardons can be granted when individuals are deemed to have demonstrated that they have “paid their debt to society”, or are otherwise considered to be deserving of them.
    • Pardons are sometimes offered to persons who were either wrongfully convicted or who claim that they were wrongfully convicted.
    • Pardons are sometimes seen as a mechanism for combating corruption, allowing a particular authority to circumvent a flawed judicial process to free someone that is seen as wrongly convicted.

    What does Article 161 say?

    • Article 161 of the Constitution provides the Governor with the power to remit or commute the sentence of any prisoner.
    • The Governor’s decision will be subject to judicial review by the constitutional courts.

    Supreme court’s observations

    • The Constitution Bench in 2015, in a majority decision, had held that the States cannot unilaterally remit the sentences of life convicts in cases investigated by a Central agency under a Central law.
    • The assassination case was probed by the CBI.
    • In compliance with the 2015 verdict, the Tamil Nadu government wrote to the Centre in 2016, proposing the grant of remission to the convicts. The State wanted the Centre to concur.
    • After a wait of over two years, the Centre rejected the State’s proposal, saying this was an unparalleled act in the annals of crimes committed in this country.

    Arguments in Perarivalan’s petition seeking pardon

    • Perarivalan had been pleading for release citing that he was 19 when he was arrested.
    • He was the only male child of his parents, there were no records of criminal antecedents, and that he had excellent conduct in his entire prison life.
    • His petition also cited UG and PG degrees, and that he was the university topper, Gold medalist in diploma in DTP, and that he completed more than eight diploma and certificate courses during his prison term.
    • His probation officer gave a report about lapses in recording his confession statement that handed out maximum punishment in his case.

    Basis of his innocence

    • Perarivalan cannot be called innocent before the law as he continues to be a convicted prisoner serving imprisonment.
    • He was accused of having bought two battery cells for the LTTE man who masterminded the conspiracy.
    • He was sentenced to death based on this crucial confession statement.

    Significance of the convicts’ release

    • The release of seven convicts is a demand raised by not only the ruling party of TN but the main opposition too.
    • All TN politicians voiced that the judiciary should be able to reform and let them live as good citizens to uphold the high values of reformatory justice and restitution.

    Back2Basics: Pardoning Powers in India

    • Under the Constitution of India (Article 72), the President of India can grant a pardon or reduce the sentence of a convicted person, particularly in cases involving capital punishment.
    • A similar and parallel power vests in the governors of each state under Article 161.

    (1) President

    • Article 72 says that the president shall have the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted of any offence.
    • The pardoning powers of the Indian President are elucidated in Art 72 of the Indian Constitution. There are five different types of pardoning which are mandated by law.
    1. Pardon: means completely absolving the person of the crime and letting him go free. The pardoned criminal will be like a normal citizen.
    2. Commutation: means changing the type of punishment given to the guilty into a less harsh one, for example, a death penalty commuted to a life sentence.
    3. Reprieve: means a delay allowed in the execution of a sentence, usually a death sentence, for a guilty person to allow him some time to apply for a Presidential Pardon or some other legal remedy to prove his innocence or successful rehabilitation.
    4. Respite: means reducing the quantum or degree of the punishment to a criminal in view of some special circumstances, like pregnancy, mental condition etc.
    5. Remission: means changing the quantum of the punishment without changing its nature, for example reducing twenty-year rigorous imprisonment to ten years.

    (2) Governor

    • As per Article 161, the Governor of a State has the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted of any offence against any law.
    • It must be relating to a matter to which the executive power of the state extends.
    • Please note that President can grant pardon to a person awarded death sentence. But a governor of a state does not enjoy this power.

     

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