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  • [Sansad TV] Perspective: National Logistics Policy

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    Context

    • The National Logistics Policy (NLP), rolled out on September 17, will play a big role in providing a boost to the logistics sector in India.
    • It’s expected to bring down the logistics cost, which currently is quite high in India compared to other developed countries, and also make India a global logistics hub with enhanced economic activity.

    What is Logistics?

    logistics
    • Logistics refers to the overall process of managing how resources are acquired, stored, and transported to their final destination.
    • It involves identifying prospective distributors and suppliers and determining their effectiveness and accessibility.

    India’s logistics sector: A backgrounder

    Logistics is the backbone of the economy. It affects all industries in three sectors – agriculture, manufacturing, and services. In India, the logistics sector has been marred with inefficiencies, depriving the industry of achieving its full potential.

    (1) Road Transport

    • The country faces a skewed logistic modal mix with nearly 71% of all freight transport being done by roads.
    • Highways only account for 2.2 % of the entire road network but carry 40% of all freight traffic, thereby putting immense strain on the highway network of the nation.

    (2) Railways  

    • The Railways’ share in freight transport has dropped from 89% in 1950-51 to only 18%in 2020.
    • The average speed of a freight train in India is only 25 km/hour with a permitted axle load (freight capacity of wagons) of around 20 tonnes.
    • The US, which has a vast rail network like India, runs its freight trains at an average speed of 38 mph (60 kmph) and permits an axle load of nearly 30 tonnes.

    (3) Air Cargo  

    • The picture is similar in terms of the air cargo handled.
    • According to the Ministry of Civil Aviation’s Annual report 2019-20, India has 23 domestic cargo terminals and 20 international cargo terminals which handled a total of 3.56 million tonne (mt) of cargo in 2018-19.
    • In contrast, the Shanghai Pudong International Airport in China alone handled 3.63 mt of cargo in 2019.

     What is National Logistics Policy, 2022?

    • First introduced in 2020 during Finance Minister’s Budget speech, the policy will bring in an integrated and tech-enabled approach to logistics operations to bridge the efficiency gap.
    • A comprehensive action plan is proposed under the policy, with major features including:
    • Integrated digital logistics systems;
    • Unified logistics interface platform;
    • Ease of logistics and standardization of physical assets and
    • Benchmarking service quality standards, state engagement,
    • Human resource development and capacity building,
    • Export-import logistics
    • Sectoral plans for efficient logistics, and facilitation of the development of logistics parks.

    Why need a logistics policy?

    • Organizing and consolidating the sector: India’s logistics sector is largely unorganized and fragmented. As per estimates, the worth of Indian logistics market is over $200 billion.
    • Reducing logistics cost: This is why the country’s logistics costs are as high as 14-15% of the GDP, against 7-8% in developed nations such as the Singapore and the US, who leverage it to boost exports. The NLP aims to bring down India’s logistics cost to 8% in the next five years.
    • Preventing waste of perishable items: As per some estimates in India, about 16% of agri-production is wasted at different stages of the supply chain.
    • Warehousing development: Moreover, due to factors such as limited capacity and availability of warehouses, the cost of transaction increases.
    • Multi-modal integration: The new policy is going about simplification, technology and will have a multimodal approach that will combine rail, water, and air — all modes of transport.
    • Reducing operational complexities: The sector is complex with more than 20 government agencies, 40 PGAs (Partner Government Agencies), 37 export promotion councils, 500 certifications, over 10,000 commodities.
    • Employment generation: The sector provides livelihood to more than 22 million people and improving it will facilitate 10 per cent decrease in indirect logistics cost leading to the growth of 5 to 8 per cent in exports.

    What are the focus areas?

    According to several reports, the policy is expected to touch upon four main steps:

    1. Integration of Digital System (IDS): This system will look forward to integrating 30 different systems of seven different departments, which are road transport, railway, customs, aviation, foreign trade, and commerce ministries. The digital data from these departments will be integrated under IDS. This will directly affect shorter cargo movement in a positive way.
    2. Unified Logistics Interface Platform (ULIP): This system will monitor smooth cargo movement.
    3. Ease of Logistics (ELOG): Under this, the new policy will simplify the rules, which is expected to simplify basic business.
    4. System Improvement Group (SIG): This system will be used to monitor all logistics-related projects regularly and will facilitate the removal of any hurdle. An empowered group of secretaries (EGoS), constituted under the PM Gati Shakti, would monitor and review the implementation of the policy.  

    How will the NLP increase the participation of state governments?

    • Under the policy, every state in India will have to set up a State Logistics Coordination Committee/Cell.
    • The policy will also annually review the performance of every state through the Logistics Ease Across Different States (LEADS) index.
    • The central government will also let states develop their logistics ecosystems and provide a roadmap for improving logistics efficiency.
    • The SIG will also carry out the annual LEADS performance index of states and union territories in India.
    • The agency will work closely with the states and prepare a comprehensive annual State Engagement Report covering the above-mentioned aspects.

    Policy measures till now

    • Mission Gati-Shakti: This mission has been launched as a national master plan for multi-modal connectivity.
    • Bharatmala Pariyojana: The 34,000 km of road infrastructure works would be undertaken, of which, 11,000 km have been targeted to be completed by March 2022. (Also read about Sagarmala, Parvatmala etc.)
    • High budgetary allocation: The government allocated Rs5.54 trillion towards capital expenditure across various ministries in the Union Budget 2021-22, a 34.5% jump from the previous year.
    • Dedicated freight corridor: There is Eastern and Western Dedicated Freight Corridors commissioned which can be a game-changer for boosting railway freight share
    • National Air Cargo Policy: This has also been formulated that seeks to build air transport shipment hubs in all major airports by 2025.

    Way forward

    • Third-party logistics services such as warehouse building and management, and last mile transport provisioning would help bridge critical gaps in the logistics sector.
    • A comprehensive national policy for the logistics sector is critical as it will help the country understand how it can reach its economic goals.
    • The policy needs to address prevailing concerns in India’s logistics sector from an international lens.

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  • Government approves 50% incentive of project cost for setting up Semiconductor Units

    The Union Cabinet has approved a uniform incentive of 50% of the project cost for setting up semiconductor, display and compound semiconductor fabrication units.

    Why in news?

    incentive

    • Maharashtra is witnessing a political firestorm.
    • The Vedanta Limited shifted its decision to set up a $20 billion Vedanta-Foxconn semiconductor manufacturing facility in neighbouring Gujarat, despite finalising its location near Pune (Mh).
    • Foxconn is a major chip supplier to Apple. It has suspended its operations in the Chinese tech hub of Shenzhen and is now shifting to India.
    • Bigger companies, such as Intel, TSMC, Samsung, etc., have announced such plans.

    Spats between states over the location of critical industries display the grim picture of competitive bidding in India. This portrays India’s negative image as against ease of doing business.

    About the Incentive Scheme

    • The scheme has been named the “Programme for Development of Semiconductors and Display Manufacturing Ecosystem.”
    • Previously, the three schemes had an incentive range of 30-50%.
    • While incentives for setting up semiconductor fabrication were based on the size of the chip, for display fabrication and compound semiconductor fabs, the incentives were largely 30% of the total cost of the project.
    • This scheme aims to project India’s position as global hub for electronics manufacturing with semiconductors as the foundational building block.

    Why need such an incentive?

    • Huge Investments involved: Semiconductor Fabrication facility requires many expensive devices to function. Complex tools and equipment are required to test quality and move silicon from location to location within the ultra-clean confines of the plant.
    • Economy of scale:   In semiconductor fabrication, a high volume production is required to be maintain so as to meet the increasing demand of the marketplace, at the same time, a strong financial backing as Indian market is very much uncertain about financial fluctuations.
    • Requirement highly skilled labour:   Semiconductor fabrication is a multiple-step sequence of photolithographic and chemical processing steps during which electronic circuits are gradually created on a wafer made of pure semiconducting material. This actually requires high skills.
    • Scarcity of raw materials: From a value-chain perspective, it needs silicon, Germanium & Gallium arsenide and Silicon carbide which are not available in India and needs to be imported.
    • Uncertain Indian market: A semiconductor fabrication facility in India cannot independently rely on Indian customers for their entire sales structure. They have to maintain overseas customer base to balance inflections from Indian market due to market trends, government policies etc.
    • Disposal of hazardous waste: Many toxic materials are used in the fabrication process such as arsenic, antimony, and phosphorus. Hazardous impact on the environment by the industry may act as an impediment to India’s commitment to mitigate climate change.

    Other supportive initiatives in India

    • India Semiconductor Mission (ISM): It was announced with the aim to attract large-scale investments for manufacturing facilities in the midst of a global chip crisis.
    • Make in India: This aims to transform India into a global hub for Electronic System Design and Manufacturing (ESDM).
    • PLI scheme: In December 2021 the Centre sanctioned ₹76,000 crore under the production-linked incentive (PLI) scheme to encourage the manufacturing of various semiconductor goods within India.
    • DLI scheme: It offers financial incentives, design infrastructure support across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design.
    • Digital RISC-V (DIR-V) program: It intends to enable the production of microprocessors in India in the upcoming days achieving industry-grade silicon and design wins by December 2023.
    • India Semiconductor Mission (ISM): The vision is to build a vibrant semiconductor and display design and innovation ecosystem to enable India’s emergence as a global hub for electronics manufacturing and design

    Way forward

    • Policy framework: As foundry setup is highly Capital intensive, it must be supported with a solid long term plan and financial backing. This backing is required from the entrepreneur & the government both.
    • Fiscal sustenance: In text of Indian Government as tax holiday, subsidy, zero duty, financial investment etc. will play an important role in promoting the Fab along with the semiconductor industry in India; this will put further pressure on already large Fiscal Deficit.
    • Support Infrastructure: World class, sustainable infrastructure, as required by a modern Fab be provided, with swift transportation, large quantity of pure water, uninterrupted electricity, communication, pollutant free environment etc.

     

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  • What is the Dharavi Redevelopment Project?

    The Maharashtra government gave the go-ahead for fresh tenders in the Dharavi redevelopment project, almost two decades after it was first proposed.

    About Dharavi

    • Dharavi, infamous as one of the world’s largest slums, is located in the heart of India’s financial capital – Mumbai.
    • A city within a city, it is one unending stretch of narrow dirty lanes, open sewers and cramped huts.
    • While the land (area of 535 acres) is owned by the government, the houses are maintained by individuals.
    • The Dharavi slum came into being in 1884. It was originally inhibited by fisherfolk when the area was still creeks, swamps.
    • It became attractive to migrant workers from South Mumbai and others when the swamp began to fill in due to natural and artificial causes.
    • The area grew as poor rural Indians migrated to urban Mumbai.
    • Today, an estimated 600,000 to 1 million people live crammed in Dharavi.

    Economic significance of Dharavi

    • Dharavi stands near to India’s richest business district, the Bandra-Kurla Complex, where commercial office premiums are among the highest in the country.
    • The slum sprawl, spread over 2.8 sq.km. is home to an informal leather and pottery industry which employs over a lakh people.

    What is the Dharavi Redevelopment Project all about?

    • The state had envisaged this sprawl be transformed into a cluster of high-rises with improved urban infrastructure.
    • It entailed resettling 68,000 people, including slum dwellers and those with commercial establishments.
    • The state was to provide 300-sqft houses for free to residents with proof that their slum structure was in existence before January 1, 2000.
    • The project was initially mooted in 2004, but never got off the ground due to various reasons.

    When redevelopment was first proposed?

    • In 1999, the government first proposed to redevelop Dharavi.
    • Thereafter, the government of Maharashtra in the year 2003-04 decided to redevelop Dharavi as an integrated planned township.
    • An action plan for redevelopment was approved by issuing a government resolution.
    • It was decided to develop Dharavi by using land as a resource to cross-subsidie the cost of development through a sale component on the basis of the Slum Rehabilitation Scheme.
    • The government also decided to notify the whole of Dharavi as an undeveloped area and to appoint a Special Planning Authority for its development.
    • In 2011, the government cancelled all tenders and drew up a master plan.

     

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  • 21st September 2022| Daily Answer Writing Enhancement(AWE)

    Topics for Today’s questions:

    GS-1       Salient features of Indian Society, Diversity of India.

    GS-2       Bilateral, regional and global groupings and agreements involving India and/or affecting  India’s interests.

    GS-3       Inclusive growth and issues arising from it.

    GS-4        Attitude: content, structure, function; its influence and relation with thought and behaviour; moral and political attitudes; social influence and persuasion.

    Question 1)

     

    Q.1 Indian politics has deep imprints of identity politics but meaning and nature of identity has oscillated and varied. Discuss. (10 Marks)

     

    Question 2)

    Q.2 It is argued that policymakers in New Delhi do not appear to appreciate the inescapable linkages between geopolitics and geoeconomics. Analyse in the context of Indo-Pacific region. (15 Marks)

    Question 3)

    Q.3 Inclusive growth approach is focussed mostly towards education, skilling and job creation. Critically examine the success of various post-liberalization policies of the Indian government in this regard. (10 Marks)

    Question 4)  

    Q.4 Distinguish between the following terms with examples: (i) Persuasion and Manipulation (ii) Attitude and Aptitude (10 Marks)

     

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    2. A Mentor’s Comment will be available for all answers. This can be used as a guidance tool but we encourage you to write original answers.

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  • On reservations for disempowered Dalit Christians and Muslims, a question of government’s intent

    dalitContext

    • Union government intends to appoint a national commission to study the status of Dalits (ex “untouchable” castes) belonging to the Muslim and Christian communities. Aim of study to check the socio-economic condition of Muslims and Christian Dalits on par with Hindu, Sikh, Buddhist Dalits.

    Current reservation policy

    • At present, scheduled caste reservation is applicable only to schedule caste (Dalit) belongs to Hindu, Sikh, Buddhist. Currently it is unavailable for schedule caste belongs to Muslims and Christians.

    Why Muslim and Christian Dalit needs reservation?

    • In 2008 review-study commissioned by the National Commission of Minorities (NCM) and housed in the Sociology Department of Delhi The remit of the study was to conduct a comprehensive review of already existing social-scientific evidence that might offer answers to three questions.
    1. What is the contemporary status of Dalit Muslims (DMs) and Dalit Christians (DCs) in terms of their material well-being and social status?
    2. How does their situation compare with that of: a) non-Dalits of their own communities, and b) Dalits of other communities?
    3. Do the caste disabilities suffered by these groups justify state intervention?

    dalitWhat were the findings of study?

    • The study reviewed two main kinds of available evidence, ethnographic-descriptive and macro-statistical, in addition to semi-academic NGO reports and publications.
    • The survey of ethnographic materials began with the finding that the existence of caste divisions – including the presence of ex-untouchable castes recognised as such – among both Muslims and Christians – was beyond dispute.
    • DMs and DCs were identified and segregated much like their counterparts in the Hindu or Sikh communities.
    • Evidence was tabulated on five forms of caste-based social discrimination – the practice untouchability; enforced ban on inter-marriage; occupational segregation; social and cultural segregation and finally, economic discrimination.
    • The most common instances were separate mosques or churches (or hierarchically segregated seating); separate burial grounds; strict prohibition on inter-marriage with very severe punishments (sometimes extending to murder) for breaking this taboo; and general avoidance of social interaction and cooperation.
    • The main findings were that DMs are clearly the worst off among all Dalits, while DCs are somewhat better off than other Dalits except Sikh Dalits (who are by far the best off, especially in the rural sector).

    Why DMs and DCs doesn’t have reservation?

    • The courts accept that “caste survives conversion” but complain about the lack of reliable data. No recognition, no data; no data, no recognition.
    • Informal guesstimates (based on the 2001 Census and the 2004-05 NSSO survey) place the proportion of DMs at 1 per cent or less of the Muslim population, and DCs as anything between 40-50 per cent of the Christian population of India.
    • As per the 2011 Census, Muslims are 14.2 per cent and Christians 2.3 per cent of our population. Taken together, DMs and DCs are likely to form less than 2 per cent of the total Dalit population of India, more than 90 per cent of which is Hindu.
    • According to experts Adding DMs and DCs will not rock the boat of reservation, since the increment will be roughly one-fifth of the 10 per cent reservation readily granted to the upper castes as the Economically Weaker Sections.

    What efforts have been made to include Muslims and Christians of Dalit origin among SCs?

    • After 1990, a number of Private Member’s Bills were brought in Parliament for this purpose.
    • In 1996, a government Bill called The Constitution (Scheduled Castes) Orders (Amendment) Bill was drafted, but in view of a divergence of opinions, the Bill was not introduced in Parliament.
    • Then government headed by PM Manmohan Singh set up two important panels:
    1. Ranganath Misra Commission: The National Commission for Religious and Linguistic Minorities, popularly known as the Ranganath Misra Commission, in October 2004 and
    2. Sachar Committee: A seven-member high-level committee headed by former Chief Justice of Delhi High Court Rajinder Sachar to study the social, economic, and educational condition of Muslims in March 2005.

    What did they recommend?

    • The Sachar Committee Report observed that the social and economic situation of Dalit Muslims and Dalit Christians did not improve after conversion.
    • The Ranganath Misra Commission, which submitted its report in May 2007, recommended that SC status should be completely de-linked from religion and Scheduled Castes should be made fully religion-neutral like Scheduled Tribes.

    dalitReception to these recommendations

    • The report was tabled in Parliament in 2009, but its recommendation was not accepted in view of inadequate field data and corroboration with the actual situation on the ground.
    • Few studies, commissioned by the National Commission for Minorities, was also not considered reliable due to insufficient data.

    Conclusion

    • Schedule caste community from all religion India suffers from same fate of untouchability. Change of religion unfortunately, have change their social status. If 70+ year of reservation of Dalit in Hindu haven’t substantially change their social destiny, we have to think beyond reservation for social dignity and economic empowerment of schedule castes in India.

    Mains question

    Q. Reservation policy in India is religion based and not based on overall social discrimination. Comment in the context of demand for Dalit reservation extension to Christians and Muslims Dalits.

     

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  • The heavy rainfall and the crazy Banglore flood: A case to study

    floodContext

    • The recent events of heavy downpours in short period of time and the recent example of Banglore flood, highlights how cities in India and elsewhere need to adapt to climate change as it brings more extreme rainfall in the future.

    What is heavy downpour?

    • A downpour or cloudburst is a sudden and unexpected heavy fall of rain.
    • It is usually local in nature and of brief duration. Most so-called cloudbursts occur in connection with thunderstorms.
    • Heavy downpour in short period causes flood, damage to buildings and infrastructure can disrupt transport, communications and connectivity, loss of crops and livestock.

    The heavy rainfall and the Banglore flood causes

    • Rise in built up area: Lakes and natural depressions may not always fill up during many monsoons so the people who are unaware of hydrology tempts to build and buy in the catchment areas of water-bodies, which will be disastrous when it rains heavily as there is rise in the quantity.
    • Water-logging: rainwater and sewage water are forced to build up, which results in water-logging. The highway acts as a dam for the water ,Garbage frequently clogs drains, which limits the flow of sewage, and they are too small to support the weight of the expanding population.
    • Physical shrinkage of water-bodies: Destruction of lakes is a major issue .lakes can store the excess water and regulate the flow of water however the pollution of natural water bodies and converting them for development purposes has increased the risks of floods. Unplanned growth, Rise in population, rise in the built up areas along streams, canals, around the lakes, leaving no storage capacity.
    • Compromised runoff potential and health hazards: Choked and encroached drains and lakes, ill designed infrastructure and missing pipes compromising run off potential. Not only the physical quantity of the runoff that poses a hazard. When polluted drains and lakes overflow, the flood can pose a health hazard especially to vulnerable and exposed marginal communities living in informal settlements.
    • Zero or limited ability to allow infiltration of water: Encroachments in and around wetlands and green lands harming the natural way of water infiltration and ground water recharge.
    • Lack of vision in rain water harvesting: Ignorance towards the tradition rain water harvesting techniques and no or limited vision for creating new systems of rain water harvesting. Exceptionally heavy monsoon rains have been exacerbated by poor urban planning in the Indian tech hub, showing the need for improved water systems.

    floodWhat are the reasons behind the frequent floods in urban areas?

    • Meteorological factors: change in the weather patterns, increase in the temperature leading to heavy rainfall, sudden downpour, cloudburst, thunderstorms, hailstorms etc.
    • Hydrological factors: Natural surface infiltration rate, soil moisture level, presence or absence of Overbank flows, Presence of impervious cover, the occurrence of high tides impeding the drainage in coastal cities.
    • Man-Made factors:
      • Unplanned urbanization: Unplanned settlement is one of the main cause of urban flooding. Blocking of natural drainage pathways through construction activity and encroachment on catchment areas, streams, rivers, lakebeds. Reduced infiltration and ground water recharge of water, destruction of lakes, Land-use changes (e.g. surface sealing due to urbanization, deforestation) increase runoff and sedimentation. Inefficiency or non-maintenance of infrastructure etc.
      • Outdated Drainage systems: The old and ill-maintained drainage system is one of the main factor making cities in India vulnerable to flooding
      • Encroachments on and around water-bodies: Illegal Habitations started growing into towns and cities alongside rivers and watercourses. As a result of this, the capacity of the natural drains has decreased, resulting in flooding.
      • Climate Change: Climate change due to various anthropogenic events has led to extreme weather events, increasing temperature which resulting in heavy rainfall in one part while drought and dry spells in other.
      • Poor Solid Waste Management System: Indiscriminate disposal of solid waste, poor waste management system, clogging drains because of accumulation of non-biodegradable wastes are major concerns. Domestic, commercial and industrial waste and dumping of it into the drains also contribute significantly to reducing their capacities.
      • Reduced Seepage: use of hard and non-porous construction material making the soil impervious, reducing the seepage capability in no of cities in India.
      • Weak Implementation and lack of awareness:Even with provisions of rainwater harvesting, sustainable urban drainage systems, etc, in regulatory mechanisms like the Environmental Impact Assessment (EIA), adoption at user end as well as enforcement agencies remains weak.
      • No Community Participation:Flood control measures planned without participation of the affected community are unsustainable as they do not meet the needs of relevant stakeholders.

    What can be done to prevent the urban floods and prevent losses?

    • Developing climate Resilient Infrastructure: using permeable material for roads and pavement, green roofs and harvesting systems in buildings. To reduce the burden of road infrastructure in cities Outer Ring Road should be explored. Innovative approaches like Sponge Cities wetland restoration, flushing systems using collected rooftop water, public spaces as flexible water retention facilities can be applied to Indian urban areas.
    • Use of technology in Early Warning Systems and Communication: Early-warning systems using sensors across waterbodies and drains, and a network of communication for hotspots of emerging flood risk in the wet-season should be put in place. Providing real-time data where traditional systems fail. Tools such as predictive precipitation modelingcan help do that and are also able to link it with the adaptive capacity of urban land use.
    • Proper management and regular upgrade of Urban Drainage System: drains need to be cleaned on a regular basis to permit the free flow of water .Proper management of the drainage system is necessary to ensure that the water does not get stored in one place. Watershed management and emergency drainage plan should be clearly enunciated in policy.
    • Rainwater Harvesting: It will serve the twin purposes of lowering the peak runoff and raising the groundwater table. Many municipal corporations in India have already made rainwater harvesting compulsory. 
    • Conservation of Water Bodies: Urban water bodies like lakes, tanks, and ponds also play a very important role in the management of urban flooding by reducing the flood water run-off by capturing it.
    • Holistic approach: Improved monitoring, forecasting, and decision-support systems. Find out the different method for improving the preparedness for urban flooding.
    • Responsibility on every stakeholder: Locally, citizens, local ward officials and staff will need to work together to minimize dumping of solid waste and garbage in storm-water drains. As this is a socio –political problem, public participation awareness and responsibility of citizen is the need of the hour. To develop a long-lasting solution, all parties must acknowledge the issues and adopt a thorough strategy.

    What we as citizens can do on a personal level to prevent the urban environment?

    • Raising voice at all available forums and platforms
    • Making politicians and bureaucrats accountable
    • Refuse to buy a house in the encroached lands.
    • Applying methods of rain water harvesting on individual level.

    Way ahead

    • Exceptionally heavy monsoon rains have been exacerbated by poor urban planning in the Indian tech hub, showing the need for improved water systems.
    • Urbanization is a global and inevitable process, and with cities as engines of the economy, built-up areas will continue to grow. But we need to draw upon these experiences and the growing perils of climate change and extreme rain events and change course.
    • According to UN projections, by 2050 more than 68% of the world’s population could be concentrated in urban areas.
    • In this context, resilience-based strategies should be adopted to improve the capacity to handle the crisis arising out of climate change.
    • Wetlands are the kidneys of the earth, let’s keep it healthy.

     

    Mains Question

    Q. What are the factors causing flood in the urban cities? What are the measures to prevent the urban flooding keeping in mind the sustainable development? Discuss.

     

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  • Donations to recognised Political Parties come under EC lens

    The Election Commission’s ongoing drive to clean up the electoral space has now gone beyond RUPPs (registered unrecognised political parties) to cover recognised national and State parties.

    What is Political Funding?

    • Political Funding implies the methods that political parties use to raise funds to finance their campaign and routine activities.
    • A political party needs money to pitch itself, its objectives, and its intended actions to get votes for itself. (Reference)

    Why need political funding?

    • Across the world, political parties need access to money in order to reach out to the electorate, explain their policies and receive inputs from people.
    • And in order to do the same, parties resort to political party funding.

    Generally who makes these funding?

    • Individuals: One of the primary sources of this funding is voluntary contributions made by individuals.
    • Corporates: Besides this, corporates pay hefty donations to parties in different forms.
    • Foreign aid: This is yet another source but highly controversial.

    Statutory Provisions

    • Section 29B of the Representation of the People Act (RPA) entitles parties to accept voluntary contributions by any person or company, except a Government Company.
    • Section 29C of the RPA mandates political parties to declare donations that exceed 20,000 rupees. Such a declaration is made by making a report and submitting the same to the EC. Failure to do so on time disentitles a party from tax relief under the Income Tax Act, 1961.

    Methods used by Indian Political Parties

    1. Individual Persons: Section 29B of RPA allows political parties to receive donations from individual persons.

     

    1. State/Public Funding: Here, the government provides funds to parties for election related purposes. State Funding is of two types:
    • Direct Funding: The government provides funds directly to the political parties. Direct funding by tax is prohibited in India.
    • Indirect Funding: It includes other methods except direct funding, like free access to media, free access to public places for rallies, free or subsidized transport facilities. It is allowed in India in a regulated manner.

     

    1. Corporate Funding: In India, donations by corporate bodies are governed under the Companies Act, 2013. Section 182 of the Act provides that:
    • A company needs to be at least three years old to be able to donate to a political party.
    • Companies can donate up to 7.5% of average net profits made during three simultaneous preceding financial years. (Now removed after Finance Act, 2017)
    • Such contributions must be disclosed in the company’s profit and loss account. (Removed)

     

    1. Electoral Trusts: A non-profit company created in India for orderly receipt of voluntary contributions from any person like an individual or a domestic company.
    • According to the Election Commission Guidelines, all electoral trusts formed after January 2013 are required to declare details of the money received and disbursed.
    • The Central Government rules mandate these firms to donate 95% of their total income to registered political parties in a financial year.

    Issues with Political Funding

    • Money laundering: One of the biggest disadvantages of the corporate funding is the use of fake companies to route black money.
    • Influence of contributor: Influence of people and companies over political parties to which they provide funds.
    • Election malpractices: There are various gaps in Indian rules, the benefit of which political parties take to avoid any kind of reporting.
    • Money politics: Hidden sources of funding lead to more spending of funds in election campaigns, thus impacting the economy of the country.

    Recent steps taken

    • FCRA Reforms: In March, 2018, the government passed a key amendment to the Foreign Contribution Regulation Act, 2010 allowing foreign companies to fund political parties in India.
    • Electoral Bonds Schemes: The government notified the Electoral Bond Scheme on 2nd January, 2018 to establish and cleanse the system of political funding in the country.

    What is Electoral Bond Scheme?

    • An electoral bond is a bearer instrument like a Promissory Note.
    • It can be purchased by any citizen of India or a body incorporated in India to donate to the political party of their choice.
    • Donor’s name is not there on the bond.
    • These bonds can be used for making donations to the political parties registered under Section 29A of the RP Act, 1951.
    • The party should have secured not less than one per cent of the votes polled in the last general election to the Lok Sabha or a Legislative Assembly.

    Issues with the scheme

    • Opaque funding: While the identity of the donor is captured, it is not revealed to the party or public. So transparency is not enhanced for the voter.
    • No IT break: Also income tax breaks may not be available for donations through electoral bonds. This pushes the donor to choose between remaining anonymous and saving on taxes.
    • No anonymity for donors: The privacy of the donor is compromised as the bank will know their identity.
    • Differential benefits: These bonds will help any party that is in power because the government can know who donated what money and to whom.

    Way forward

    Former Chief Election Commissioner SY Quraishi has suggested an alternative worth exploring:

    • A National Electoral Fund to which all donors can contribute.
    • The funds would be allocated to political parties in proportion to the votes they get.
    • Not only would this protect the identity of donors, it would also weed out black money from political funding.
    • There can be a tax benefit for those who donate to the fund.

     

    Try this question from our AWE Initiative

    Q.2) Examine the issues with political funding in India. How far has the introduction of electoral bonds succeeded in dealing with the issues with political funding? (10 marks)

     

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  • Pre-Pack IBC resolution

    pre-pack

    India introduced the pre-packaged insolvency resolution process (PPIRP) in April 2021, as an alternative resolution process for micro, small and medium enterprises (MSMEs). However, it has only two cases admitted under it so far.

    What is the Insolvency and Bankruptcy Code (IBC)?

    • The IBC was enacted in 2016 to simplify insolvency and bankruptcy proceedings, safeguard interests of all stakeholders (the firm, employees, debtors and especially creditors), and resolve non-performing assets.
    • From a ‘debtor in possession’ regime, it was a shift to a ‘creditor in control’ one.
    • IBC provides for a time-bound process for resolving insolvencies.
    • The Insolvency and Bankruptcy Board of India (IBBI) is the regulator implementing the code and overseeing the functioning of stakeholders.
    • The IBBI last week allowed payment of performance-linked incentives to resolution professionals.

    What are Pre-packs?

    • A pre-pack is the resolution of the debt of a distressed company through an agreement between secured creditors and investors instead of a public bidding process.
    • This system of insolvency proceedings has become an increasingly popular mechanism for insolvency resolution in the UK and Europe over the past decade.
    • Under the pre-pack system, financial creditors will agree to terms with a potential investor and seek approval of the resolution plan from the National Company Law Tribunal (NCLT).
    • The approval of a minimum of 66 percent of financial creditors that are unrelated to the corporate debtor would be required before a resolution plan is submitted to the NCLT.
    • Further NCLTs are also required to either accept or reject any application for a pre-pack insolvency proceeding before considering a petition for a corporate insolvency resolution process (CIRP).

    How does it work?

    • Unlike the CIRP, an informal understanding is reached with creditors before the application is filed.
    • PPIRP begins only after 66% of financial creditors approve the proposal and the name of resolution professional.
    • Debt resolution agreement between financial creditor and a potential investor is arrived at in consultation with the corporate debtor for which subsequent approval of the resolution plan is sought from the NCLT.

    What were the objectives behind introducing PPIRP?

    • MSMEs greatly contribute to the economy, and employ a wide section of the population.
    • The pandemic severely impacted their operations.
    • This alternative insolvency resolution process was designed to ensure quicker, cost-effective and value-maximizing outcomes for all.

    What is the progress in PPIRP so far?

    • Only two insolvency cases have been initiated under PPIRP since it was introduced.
    • The poor response has been attributed to the hesitancy on the part of financial institutions.
    • In the case of CIRP, the haircut involved is a last resort, against a voluntary one in case of PPIRP.
    • Data shows that between December 2016 and June 2022, a total of 5,636 CIRPs commenced, of which 3,637 have been closed.

    Does PPIRP defeat the purpose of IBC?

    • The IBC’s objective is to facilitate exit from failed units so that capital can be reallocated to better ones.
    • However, banks are not comfortable initiating PPIRP due to voluntary haircuts.
    • There is a fear that such a decision might be scrutinized later.
    • This means capital will remain locked up in failed units, defeating the purpose of IBC.
    • Voluntary haircuts mean fewer resources from the winding-up process and greater scope for corrupt practices.

     

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  • Explained: Lumpy Skin Disease in India

    lumpy

    The Mumbai Police have ordered the prohibition of cattle transportation in the city to prevent the spread of the lumpy skin disease (LSD).

    What is the Lumpy Skin Disease?

    • Lumpy skin disease is caused by the lumpy skin disease virus (LSDV), which belongs to the genus capripoxvirus, a part of the poxviridae family.
    • Smallpox and monkeypox viruses are also a part of the same family.
    • The LSDV shares antigenic similarities with the sheeppox virus (SPPV) and the goatpox virus (GTPV) or is similar in the immune response to those viruses.

    How does it spread?

    • It is not a zoonotic virus, meaning the disease cannot spread to humans.
    • It is a contagious vector-borne disease spread by vectors like mosquitoes, some biting flies, and ticks and usually affects host animals like cows and water buffaloes.
    • Infected animals shed the virus through oral and nasal secretions which may contaminate common feeding and water troughs.
    • Thus, the disease can either spread through direct contact with the vectors or through contaminated fodder and water.
    • Studies have also shown that it can spread through animal semen during artificial insemination.

    How does it affect the animal?

    • LSD affects the lymph nodes of the infected animal, causing the nodes to enlarge and appear like lumps on the skin, which is where it derives its name from.
    • The cutaneous nodules, 2–5 cm in diameter, appear on the infected cattle’s head, neck, limbs, udder, genitalia, and perineum.
    • The nodules may later turn into ulcers and eventually develop scabs over the skin.
    • The other symptoms include high fever, sharp drop in milk yield, discharge from the eyes and nose, salivation, loss of appetite, depression, damaged hides, wasting of animals, infertility and abortions.

    Do it kills the animal?

    • The incubation period or the time between infection and symptoms is about 28 days according to the FAO, and 4 to 14 days according to some other estimates.
    • The morbidity of the disease varies between two to 45% and mortality or rate of date is less than 10%.
    • However, the reported mortality of the current outbreak in India is up to 15%, particularly in cases being reported in the western part (Rajasthan) of the country.

    What is the geographical distribution and how did it spread to India?

    • The disease was first observed in Zambia in 1929.
    • Subsequently it got spread to most African countries, followed by West Asia, Southeastern Europe, and Central Asia, and more recently spreading to South Asia and China in 2019.
    • As per the FAO, the LSD disease is currently endemic in several countries across Africa, parts of the West Asia (Iraq, Saudi Arabia, Syrian Arab Republic), and Turkey.

    Lumpy in India

    • The spread in South Asia first affected Bangladesh in July 2019 and then reached India in August that year, with initial cases being detected in Odisha and West Bengal.
    • The long porous borders between India, Nepal and Bangladesh allow for a significant amount of bilateral and informal animal trade, including cattle and buffaloes.
    • This may have contributed to the spread of LSD in July-August 2019 between Bangladesh and India.
    • While the 2019 outbreak later subsided, the recent spread in India began in June this year.

    Is it safe to consume the milk of affected cattle?

    • Studies say that it has not been possible to ascertain the presence of viable and infectious LSDV virus in milk derived from the infected animal.
    • However, that a large portion of the milk in Asia is processed after collection and is either pasteurised or boiled or dried in order to make milk powder.
    • This process ensures that the virus is inactivated or destroyed.

    Economic implications of Lumpy on Dairy Sector

    • Milk reduction: Lumpy leads to reduced milk production as the animal becomes weak and also loses appetite due to mouth ulceration.
    • Animal wasting: The income losses can also be due to poor growth, reduced draught power capacity and reproductive problems associated with abortions, infertility and lack of semen for artificial insemination.
    • Impact of trade ban: Movement and trade bans after infection also put an economic strain on the whole value chain.

    Why India is at higher risk?

    • India is the world’s largest milk producer at about 210 million tonnes annually.
    • India also has the largest headcount of bovines
    • In Rajasthan, which is witnessing the worst impact of LSD, it has led to reduced milk production, which lessened by about three to six lakh litres a day.
    • Reports indicate that milk production has also gone down in Punjab owing to the spread of the disease.
    • According to FAO, the disease threatens the livelihoods of smaller poultry farmers significantly.
    • Notably, farmers in Uttar Pradesh and Punjab have incurred losses due to cattle deaths and are seeking compensation from their State governments.

    How bad is the current spread in India?

    • Lumpy has infected over 16 lakh cattle in 197 districts as of September 11.
    • Of the nearly 75,000 cattle that the disease has killed, more than 50,000 deaths, mostly cows, have been reported from Rajasthan.

    Remedies available in India

    • The Union Ministry of Fisheries, Animal Husbandry and Dairying informed that the ‘Goat Pox Vaccine’ is very effective against LSD.
    • It is being used across affected States to contain the spread.

    Way forward

    The FAO has suggested a set of spread-control measures for LSD, which involves:

    • Vaccination of susceptible populations with more than 80% coverage
    • Movement control of bovine animals and quarantining
    • Implementing biosecurity through vector control by sanitising sheds and spraying insecticides
    • Strengthening active and passive surveillance
    • Spreading awareness on risk mitigation among all stakeholders involved, and
    • Creating large protection and surveillance zones and vaccination zones

     

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  • Southwest Monsoon begins early Withdrawal/Retreat

    The southwest monsoon rainfall, 7% more than normal, has started to withdraw.

    What is Monsoon Withdrawal/Retreat?

    • In India, retreating monsoon is the withdrawal of south-west monsoon winds from North India.
    • The withdrawal is gradual and takes about three months.
    • With the retreat of the monsoons, the clouds disappear and the sky becomes clear. The day temperature starts falling steeply.
    • Monsoon rains weaken all over India except few southeastern states.
    • It is helpful in Rabi crop cultivation.

    Factors affecting the retreat

    Two predominant factors cause the phenomenon:

    (1) Land topography

    • First, the low mountain range in each region runs from north to south, shielding it from west-bound winds that trigger summer monsoon.
    • After summer, the range aids in the ‘orographic lift’ or rising of east-bound air mass from a lower to higher elevation, forming clouds and resulting in rain.

    (2) Atmospheric convection

    • The second factor is atmospheric convection or vertical movement of air.
    • As the earth is heated by the sun, different surfaces absorb different amounts of energy and convection may occur where the surface heats up very rapidly.
    • As the surface warms, it heats the overlying air, which gradually becomes less dense than the surrounding air and begins to rise.
    • This condition is more favorable from September to February because of the role played by sea surface temperature or water temperature.

    Immediate factors influencing withdrawal

    • The withdrawal of the monsoon is based on meteorological conditions such as-
    1. Anti-cyclonic circulation (dry air that is the opposite of a cyclone)
    2. Absence of rain in the past five days and
    3. Dry weather conditions over the region

    When does it occur?

    • The monsoon withdrawal is a long-drawn process and extends into mid-October, though the IMD considers September 30 to be the final day of the season over India.
    • The rain after that is categorised as “post-monsoon” rainfall.

    Try this PYQ:

    Q.The seasonal reversal of winds is the typical characteristic of:

    (a) Equatorial climate

    (b) Mediterranean climate

    (c) Monsoon climate

    (d) All of the above climates

     

    Post your answers here.

     

    Also read:

    Various terms related to Indian Monsoon

     

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