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  • James Webb Space Telescope

    NASA has unveiled images from the James Webb Space Telescope, the largest and most powerful orbital observatory ever launched.

    What is the image about?

    • NASA released a deep field photo of a distant galaxy cluster, SMACS 0723, revealing the most detailed glimpse of the early universe recorded to date.
    • The collection also included fresh images of another galaxy cluster known as Stephan’s Quintet, first discovered in 1877.

    James Webb Space Telescope

    • JWST is a joint NASA–ESA–CSA space telescope that is planned to succeed the Hubble Space Telescope as NASA’s flagship astrophysics mission
    • It is the most powerful space telescope ever built.
    • It will enable a broad range of investigations across the fields of astronomy and cosmology, including observing some of the most distant events and objects in the universe,
    • It would help understand events such as the formation of the first galaxies, and detailed atmospheric characterization of potentially habitable exoplanets.

    Its significance

    • Some have called JSWT the “telescope that ate astronomy.”
    • It is said to look back in time to the Dark Ages of the universe.

    What does the ‘Dark Ages’ of the universe mean?

    • Evidence shows that the universe started with an event called the Big Bang 13.8 billion years ago, which left it in an ultra-hot, ultra-dense state.
    • The universe immediately began expanding and cooling after the Big Bang.
    • One second after the Big Bang, the universe was a hundred trillion miles across with an average temperature of an incredible 18 billion F (10 billion C).
    • Around 400,000 years after the Big Bang, the universe was 10 million light-years across and the temperature had cooled to 5,500 F (3,000 C).
    • Throughout this time, space was filled with a smooth soup of high-energy particles, radiation, hydrogen and helium.
    • There was no structure. As the expanding universe became bigger and colder, the soup thinned out and everything faded to black.

    This was the start of what astronomers call the Dark Ages of the universe.

    How will JWST study this?

    Ans. Looking for the first light

    • The Dark Ages ended when gravity formed the first stars and galaxies that eventually began to emit the first light.
    • Astronomers aim to study this fascinating and important era of the universe, but detecting first light is incredibly challenging.
    • Compared to massive, bright galaxies of today, the first objects were very small and due to the constant expansion of the universe, they’re now tens of billions of light years away from Earth.
    • Also, the earliest stars were surrounded by gas left over from their formation and this gas acted like fog that absorbed most of the light.
    • It took several hundred million years for radiation to blast away the fog. This early light is very faint by the time it gets to Earth.

     

     

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  • Species in news: Kannimara Teak

    The legendary Kannimara teak of the Parambikulam Tiger Reserve is still growing in height and girth.

    What is the news?

    • Over the last five years, the centuries-old teak has grown by 1.85 metres in height and 9 cm in girth.
    • This might be one of the largest and oldest teak tree in the world.

    Kannimara teak

    • Worshipped by the tribes of Parambikulam, the Kannimara teak remains a flagship of the tiger reserve offering a spectacular view to visitors.
    • For the tribespeople of Parambikulam, it is still a ‘virgin tree’.
    • That was why they named it Kannimara (meaning virgin tree).
    • The tribal legend has it that the tree had bled when people tried to cut it.
    • So they protected it and started worshipping the tree by offering annual pujas.
    • The Kannimara tree had won the Union government’s Mahavriksha Puraskar in its first year of introduction in 1994.

     

     

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  • [Sansad TV] Perspective: Online Gaming- Landscape & Regulation

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    Context

    • Last month, the government announced setting up of a committee to regulate online gaming and to identify a ministry to oversee it.
    • In this article, we will discuss about the growing landscape of the online gaming industry in India and the need for regulation.

    Why in news?

    • During the Budget session of Parliament, The Online Gaming (Regulation) Bill, 2022 was introduced in Lok Sabha a member from Kerala as a Private Member’s Bill.
    • The Bill sought to maintain integrity in online gaming and introduce a regulatory regime for online gaming.

    Online gaming sector in India

    • In the past few years, India’s nascent online gaming industry witnessed an unprecedented rise, catapulting it to the top five mobile gaming markets in the world.
    • Registering a growth rate of 38%, online gaming is the next sunrise industry.
    • Currently, there are more than 400 gaming companies in India, and it is home to 420 million online gamers, second only to China, according to an analysis by KPMG.

    Types of gaming

    • The types of online gaming include:
    1. E-sports (well-organized electronic sports which include professional players) ex. Chess
    2. Fantasy sports (choosing real-life sports players and winning points based on players’ performance) ex. MPL cricket
    3. Skill-based (mental skill) ex. Archery
    4. Gamble (based on random activity) ex. Playing Cards, Rummy

    Why is the gaming industry booming in India?

    1. Digital India boom in the gaming industry
    2. Narrowing of the digital divide
    3. IT boom

    Other factors promoting the boom

    1. Growing younger population
    2. Higher disposable income
    3. Inexpensive internet data
    4. Introduction of new gaming genres, and
    5. Increasing number of smartphone and tablet users

    Prospects of online gaming

    • State List Subject:  The state legislators are, vide Entry No. 34 of List II (State List) of the Seventh Schedule, given exclusive power to make laws relating to betting and gambling.
    • Distinction in laws: Most Indian states regulate gaming on the basis of a distinction in law between ‘games of skill’ and ‘games of chance’.
    • Classification on dominant element: As such, a ‘dominant element’ test is utilized to determine whether chance or skill is the dominating element in determining the result of the game.
    • Linked economic activity: Staking money or property on the outcome of a ‘game of chance’ is prohibited and subjects the guilty parties to criminal sanctions.
    • ‘Game of Skill’ debate: Placing any stakes on the outcome of a ‘game of skill’ is not illegal per se and may be permissible. It is important to note that the Supreme Court recognized that no game is purely a ‘game of skill’ and almost all games have an element of chance.

    Need for regulation

    • No comprehensive regulation:  India currently has no comprehensive legislation with regards to the legality of online gaming or boundaries that specify applicable tax rates within the betting and gambling industry.
    • Ambiguity of the sector: The gaming sector is nascent and is still evolving, and many states are bringing about legislation seeking to bring about some order in the online gaming sector.
    • State list subject: Online gaming in India is allowed in most parts of the country. However, different states have their own legislation with regards to whether online gaming is permitted.
    • Economic advantage: Well-regulated online gaming has its own advantages, such as economic growth and employment benefits.

    Issues with online gaming

    • Gaming addiction: Numerous people are developing an addiction to online gaming. This is destroying lives and devastating families.  
    • Compulsive gaming: Gaming by children is affecting their performance in schools and impacting their social lives & relationships with family members. Ex. PUBG
    • Impact on psychological health: Online games like PUBG and the Blue Whale Challenge were banned after incidents of violence and suicide.  
    • Threat to Data privacy: Inadvertent sharing of personal information can lead to cases of cheating, privacy violations, abuse, and bullying.
    • Betting and gambling: Online games based on the traditional ludo, arguably the most popular online game in India, have run into controversy, and allegations of betting and gambling.

    Why hasn’t a comprehensive law yet materialized?

    • Earlier, states like Tamil Nadu, Telangana, Andhra Pradesh, and Karnataka also passed laws banning online games.
    • However, they were quashed by state High Courts on grounds that an outright ban was unfair to games of skill:
    1. Violation of fundamental rights of trade and commerce, liberty and privacy, speech and expression;
    2. Law being manifestly arbitrary and irrational insofar as it did not distinguish between two different categories of games, i.e. games of skill and chance;
    3. Lack of legislative Competence of State legislatures to enact laws on online skill-based games.

    Way forward

    • Censoring: Minors should be allowed to proceed only with the consent of their parents — OTP verification on Aadhaar could resolve this.
    • Awareness: Gaming companies should proactively educate users about potential risks and how to identify likely situations of cheating and abuse.
    • Regulating mechanism: A Gaming Authority in the central government should be created.
    • Accountability of the gaming company: It could be made responsible for the online gaming industry, monitoring its operations, preventing societal issues, suitably classifying games of skill or chance, overseeing consumer protection, and combatting illegality and crime.
    • All-encompassing legislation: the Centre should formulate an overarching regulatory framework for online games of skill. India must move beyond skill-versus-chance debates to keep up with the global gaming industry.

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  • NCERT Books for UPSC

    ‘If You Love UPSC, Love NCERTS’- Civilsdaily.


    Table of Content:


    Hello Students,

    Are you preparing for UPSC Civil Service Exam? Then you must start your preparation as soon as possible because only a graduate degree is enough to become an IAS officer. Let’s explore why NCERTs are the part and parcel of the UPSC journey!

    UPSC-CSE exam is fair and just for all the aspirants of the country. So, the Commission follows the Universal and best sources which are easily accessible to every single student. And that’s why NCERTs books are highly recommendable to start with before Advanced Books. But, at the same time, we shouldn’t cover all the NCERT books from cover to cover. Very selective studies are needful. 


    NCERTs Books for Prelims & Mains:

    History: 

    For a basic preparation for the prelims and mains, students can start with the NCERT history book to begin their history preparation. These books have proven to be extremely useful for students coming from business or science backgrounds.

    For History, you have to follow old NCERTs

    • Ancient India (Class XII) by RS Sharma: This covers the ancient Indian history syllabus completely.
    • Medieval India (Class XI) by Satish Chandra
    • Modern India (Class XII) by Bipin Chandra: Best book for UPSC Medieval History.

    And the questions from Art & Culture are asked from ancient and medieval history so, you have to read overlapping with History

    Art & Culture Books: 

    • Class-11: an introduction to Indian Art.
    • Class-11: living Craft Traditions of India  (Chapters 9 and 10)
    • Class-12: Crafts Traditions of India

    Geography:

    Knowing Indian and world geography is very important. The maps and information provided about the different climatic zones in the NCERT Geography book help to give many answers about geography.

    If you’re a science background student, you should start from very basic.

    • Class 6: The Earth: Our Habitat
    • Class 7: Our Environment
    • Class 8: Resources and Development
    • Class 9: Contemporary India-I
    • Class 10: Contemporary India-II

    If you’re an arts background student, just read the above NCERTs 1 or 2 times.

    The Geography NCERTs all of you read, revise and take notes:

    • Class 11: Fundamentals of Physical Geography
    • Class 11: India- Physical Environment
    • Class 12: Fundamentals of Human Geography
    • Class 12: People and Economy

    Polity: 

    Political science covers the legal and fundamental aspects of the country, which makes it a very important subject. 

    • Class 9: Demographic Politics I
    • Class 10: Demographic politics II
    • Class 11: Indian Constitution at work
    • Class 11: Political Theories
    • Class 12: Contemporary World Politics
    • Class 12: Politics in India since Independence

    Economics: 

    The subject of the Indian economy covers the present and past economic aspects of India, which makes it an important subject. It is very important to know the basics of the UPSC exam. 

    • Class 9: Economics
    • Class 10: Understanding Economic Development
    • Class 11: Indian Economic Development
    • Class 12: Introductory Microeconomics
    • Class 12: Introductory macroeconomics

    Indian Society: 

    Understanding the science behind the activities of society is very important especially when you are aspiring to be a government employee. Download the NCERT Sociology book from here.

    • Indian Society: NCERT Class VI- Social Science; Social & Political Life I
    • Indian Society: NCERT Class VII- Social Science; Social & Political Life II
    • Indian Society: NCERT Class VIII- Social Science; Social & Political Life III
    • Indian Society: NCERT Class XI- Sociology: Understanding Society
    • Indian Society: NCERT Class XII- Indian Society
    • Indian Society: NCERT Class XII- Social Changes and Development in India

    Science and Technology:

    It is important to have adequate knowledge of general science in UPSC. To be able to answer science and technology-related questions you must look at NCERT science books because they cover a lot of information.

    If you’re a non-science background student, start from Class VI NCERTs.

    Final Lines: There is no doubt that NCERT books are a bundle of information, although created for school students, they also cover relevant topics that are a vital part of the UPSC curriculum. Helps UPSC candidates to learn significant subjects, they are among the most renowned books that must be read for UPSC preparation. From biodiversity to geography and thousands of years of history to current politics, NCERT authors have compiled everything important in their books.

    But, whenever selective studies are concerned, you will need a hand-holding support of a personalized mentor.

  • Reasons for splits and switches in political parties

    Context

    In Maharashtra, recently, and in Madhya Pradesh, a while ago, splits in the ruling party and a subsequent realignment of legislators inaugurated new governments.

    Challenges to the effectiveness of anti-defection law

    • Splits and switches are commonplace in legislatures across the globe, and India has witnessed at least three distinct waves.
    • The first wave occurred towards the latter half of the 1960s when challengers to the Congress attempted to displace it in the States.
    • An attempt to end defections: The next phase was inaugurated with an attempt to end the free movement and regulate the behaviour of legislators through the anti-defection law.
    • Law incentivise collective defection: While the law discouraged individual movement, it incentivised a collective movement of legislators since it laid down specific numbers to legitimise and validate party switches.
    • Defeating the purpose: When legislators switch in groups, the costs are shared, and the move also appears less opportunistic, which in many ways defeats the purpose of the legislation.
    • The third phase was inaugurated in 2014 when already-dominant parties began to use splits and switches to weaken and destroy their competitors.
    • Therefore, the current phase is bizarre when compared to the past because dominant parties appear to be actively cheering splits and shifts and having no respect for the basic rules of the game.
    • The anti-defection law and control of institutions are now weaponised by dominant parties to intervene in the internal working of Opposition parties, and sometimes make and break them.
    • Furthermore, legislators are switching support even if it does not count to the making or maintenance of governments.

    Argument against the split

    • Violation of trust: Switchers violate the trust relationship with their constituents as voters get something other than what they bargained for.
    • Difficulty in ensuring accountability: Assuming voters vote for parties and not candidates, the argument is that uncohesive parties make it difficult for voters to draw definitive lines of responsibility.
    • Consequently, it is difficult for voters to hold party governments accountable for their actions during elections.

    Why do legislators split and switch parties?

    • Changes and transformation in parties: While we keep track of party system change, we ignore the point that the component parts, parties which make up the system, too change and transform.
    • Parties constantly adapt new modes to sustain and find success for themselves.
    • Our popular image of a party is that of the classical mass party, which rises from societal movements and is essentially internally democratic.
    • This is what even the Election Commission of India imagines a party should be since many of its guidelines lay stress on the ‘democratic spirit’ and the need for transparency and participation in internal decision-making.
    • Centralised structure: Today’s parties are centralised vote-getting machines which primarily work to ensure the return of political leaders to office.
    • Focus on getting votes: Mass inputs and ideas do not matter, and it is the central leadership that counts. All party activities begin and end with elections.
    • Since parties are mainly concerned with electoral success, anyone who enjoys the confidence of the top leadership and can help increase the seat share is likely to get a ticket.
    • Dominance of financial power: Moreover, we now know that parties prefer candidates who bring in their own money, fund other candidates and raise resources for the party. All this puts the party on the ground in the shade.
    • Closeness of parties to state: the most significant change is that parties are more closely aligned with the state rather than civil society.
    • Parties as a source of services: Parties exchange material and psychological rewards, and goods and services the state provides for electoral advantage.
    • Voters also see parties as a supplier of services.
    • This connection pushes legislators and parties to be in government or at least close to the government.
    • On the supply side, the party on the ground no longer calls the shots; parties are election vehicles and a supplier of services. The party bond exists only as long as it ensures success for the legislator
    •  On the demand side, the voter does not appear to have any problem, as long as “services” are available.

    Conclusion

    Splits and switches are not seen as objectionable by legislators and are not punished by voters as well. Legislators will, therefore, be willing to do anything if the benefits exceed the costs.

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  • Get access: PDF and Video Recording | Grand Webinar #UPSCskill: Writing awesome introductions and conclusions to UPSC Mains answers by Sumit sir, senior IAS mentor | Register for Telegram group link, FREE Prelims package, and mentorship call

    Get access: PDF and Video Recording | Grand Webinar #UPSCskill: Writing awesome introductions and conclusions to UPSC Mains answers by Sumit sir, senior IAS mentor | Register for Telegram group link, FREE Prelims package, and mentorship call


    14th July, 7 pm | Learn and master the skill of writing UPSC intros and conclusions. Submit your query, and get Telegram group + access to FREE resources.


    Aspirants, we have started the #UPSCskill series for webinars by UPSC toppers and senior IAS mentors from CivilsDaily. As a part of this initiative, we will be taking up another super important skill that an aspirant must master.

    Feedback for the last #UPSCskill Webinar

    Webinar: Master Introductions and Conclusions for UPSC Mains Answers

    Webinar on 14th July, 7 pm – Thursday

    Sumit sir will be taking a LIVE webinar on coming Thursday. Through a LIVE answer writing session, he will be teaching and helping you master the skills required to formulate amazing introductions and conclusions.

    Register for the webinar. Submit your query and get Telegram group + access to FREE resources. Sumit sir will also share a special PDF with you post-webinar.

    About Sumit Haritwal sir

    Sumit sir is a senior IAS mentor at CivilsDaily and he has been mentoring UPSC aspirants and now rankers for more than 4 years now. A public policy and international affairs enthusiast Sumit sir has an experience of 3 UPSC interviews and has cleared the PSC and CAPF exam earlier. He will be taking up your questions in the webinar and would also be connecting with you in the Telegram group.

    What The Hindu mentioned about Civilsdaily Mentorship

    The Hindu has acknowledged the success rate of CD’s Smash mains Mentorship

    Quora Digests:

    Register for the webinar. Submit your query and get Telegram group + access to FREE resources. Sumit sir will also share a special PDF with you post-webinar.

  • Bank frauds

    Context

    The biggest banking scam in India has come to the forefront; in this case, DHFL has hoodwinked a consortium of banks driven by the Union Bank of India to the tune of ₹35,000 crore through financial misrepresentation.

    How scams affect economy

    • The banking system of any country is the backbone of its economy.
    • Excessive losses to banks affect every person in the country because the amounts deposited in banks belong to the citizens of the country.
    • The NPAs that banks incur are mainly due to bad loans and scams.
    • The data by the RBI also show that one of the fundamental problems in the way of the development of banking in India is on account of rising bank scams and the costs consequently forced on the framework.
    • Strangely, as in a Global Banking Fraud survey (KPMG), the issue is not just for India alone; it is a worldwide issue.

    Reasons for scams

    •  Frauds in the banking industry can be grouped under four classifications: ‘Management’, ‘Outsider’, ‘Insider’ and ‘Insider and Outsider’ (jointly).
    • Operational failures: All scams, whether interior or outside, are results of operational failures.
    • Limited asset monitoring: Research by Deloitte has shown that limited asset monitoring after disbursement (38%) was the foremost reason behind stressed assets and insufficient due diligence before disbursement (21%) was among the major factors for these NPAs.
    • Poor bank corporate governance: A study by the Indian Institute of Management Bangalore has shown that poor bank corporate governance is the cause behind rising bank scams and NPAs.

    The problems of high NPA

    • In a Financial Stability Report released by the RBI in December 2021, there is a projection of the gross NPAs of banks rising from 6.9% in September 2021 to 8.1% of total assets by September 2022 (under a baseline scenario) and to 9.5% under a severe stress scenario.
    • A high NPA also reduces the net interest margin of banks besides increasing their operating cost; these banks meet this cost by increasing the convenience fee from their small customers on a day-to-day basis.

    Suggestions

    • Banks have to exercise due diligence and caution while offering funds.
    • Regulation and control of CAs: The regulation and the control of chartered accountants is a very important step to reduce non-performing assets of banks.
    • Banks should be cautious while lending to Indian companies that have taken huge loans abroad.
    • Tightening audit system: There is also an urgent need to tighten the internal and external audit systems of banks.
    • Fast rotation of employees: The fast rotation of employees of a bank’s loan department is very important.
    • Public sector banks should set up an internal rating agency for rigorous evaluation of large projects before sanctioning loans.
    • Effective MIS: Further, there is a need to implement an effective Management Information System (MIS) to monitor early warning signals about business projects.
    • CIBIL score of the borrower: The CIBIL score of the borrower (formerly the Credit Information Bureau (India) Limited) should be evaluated by the bank concerned and RBI officials.
    • Use of AI: Financial fraud can be reduced to a great extent by the use of artificial intelligence (AI) to monitor financial transactions.
    • Improve loan recovery process: Rather than having to continuously write off the bad loans of large corporates, India has to improve its loan recovery processes and establish an early warning system in the post-disbursement phase.
    • Risk assessment: Banks need to carry out fraud risk assessments every quarter.
    • Only establishment of National Asset Reconstruction Company Ltd. (NARCL) or the ‘bad bank’ is not a real solution.
    • These measures can help only after a loan is bad but not the process of a loan going bad.

    Conclusion

    While the Government of India and the RBI have taken several measures to try and resolve the issue of scams in the banking industry, the fact is that there is still a long way to go.

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  • India must prepare for 5G technology

    Context

    5G technology is going to make inroads into the country very soon.

    Making Digital India project successful

    • With over 117 crore telecom users and more than 82 crore internet subscribers, India is one of the fastest-growing markets for digital consumers.
    • A 2019 Mckinsey study rated India as the second-fastest digitising economy. 
    • Internet connectivity is critical for making the Digital India project inclusive, and widespread use of optical fibre in the remotest corners of the country is vital to ensure that no one is left behind in this endeavour.

    Digital infrastructure for 5G

    • Digital infrastructure, which seamlessly integrates with physical and traditional infrastructure, is critical to India’s growth story and the country’s thrust towards self-reliance.
    • Networking equipment that relies on optical fibre and other semiconductor-based device ecosystems are at the heart of building the infrastructure that will be needed when the country takes the next step in its digital journey.
    • The government has taken several measures to build the next generation of digital infrastructure.
    • A basic requirement of 5G will be data transmission networks.
    • Optical fibre is the backbone of the digital infrastructure required for this purpose — the data is transmitted by light pulses travelling through long strands of thin fibre.

    Optical fibre industry in India

    • In the last 10 years, domestic manufacturers invested more than Rs 5,000 crore in optical fibre industry, which has generated direct and indirect employment for around 4 lakh individuals.
    • Exports from India: India exported optical fibre worth $138 million to over 132 countries between April 2020 and November 2021.
    • India’s annual optic fibre manufacturing capacity is around 100 million fibre km (fkm) and the domestic consumption is around 46 million fkm. Indian optical fibre cable consumption is predicted to increase to 33 million fkm by 2026 from 17 million fkm in 2021.
    • A little more than 30 per cent of mobile towers have fibre connectivity; this needs to be scaled up to at least 80 per cent.

    Unfair competition from cheap imports

    • India’s optical fibre industry has also seen unfair competition from cheap imports from China, Indonesia and South Korea.
    • These countries have been dumping their products in India at rates lower than the market price.
    • What is dumping? The World Trade Organisation defines dumping as “an international price discrimination situation in which the price of a product offered in the importing country is less than the price of that product in the exporting country’s market”.
    • Way ahead: Imposing anti-dumping duties is one way of protecting the domestic industry.
    • The Directorate General of Trade Remedies has recently begun investigations against optical fibre imports.

    Suggestions

    • India needs to invest in R&D, offer production-linked incentive (PLI) schemes to support indigenous high-tech manufacturing and develop intellectual property in critical aspects of digital connectivity.

    Conclusion

    The need of the hour is to unlock the full potential of India’s optical fibre industry and enable India to emerge as a major manufacturing and technology hub while achieving atmanirbharta in its 5G journey.

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    Back2Basics: About optical fibre

    • Fiber optics, also spelled fibre optics, the science of transmitting data, voice, and images by the passage of light through thin, transparent fibers.
    • In telecommunications, fiber optic technology has virtually replaced copper wire in long-distance telephone lines, and it is used to link computers within local area networks.
    • Fibre optics is also the basis of the fiberscopes used in examining internal parts of the body (endoscopy) or inspecting the interiors of manufactured structural products.
    •  Through a process known as total internal reflection, light rays beamed into the fibre can propagate within the core for great distances with remarkably little attenuation or reduction in intensity.

  • States, freebies and the costs of fiscal profligacy

    Context

    Many states are pursuing the freebie culture, which raises several questions.

    About freebies

    • Why do governments give freebies? The obvious motivation for States in expanding freebies is to use the exchequer to build vote banks.
    • Electoral calculations tempt them to place short-term gains ahead of long-term sustainability.
    • Case in which it is necessary? A certain amount of spending on transfer payments to provide safety nets to the most vulnerable segments of the population is not only desirable but even necessary.
    • What is the problem? The problem arises when such transfer payments become the main plank of discretionary expenditure, the spending is financed by debt, and the debt is concealed to circumvent the FRBM targets.
    • Opportunity cost: The more States spend on transfer payments, the less they have for spending on physical infrastructure such as, for example, power and roads, and on social infrastructure such as education and health, which can potentially improve growth and generate jobs.

    Questioning the logic of freebie culture

    • Sustainability: Is borrowing and spending on freebies sustainable?
    • Best use: Is this the best possible use of public money?
    • Opportunity cost: What is their opportunity cost — what is it that the public are collectively giving up so that the government can fund these payments?
    • Checks and balances: Should not there be some checks on how much can be spent on them?

    Where should government spend the borrowed money?

    • Ideally, governments should use borrowed money to invest in physical and social infrastructure that will generate higher growth, and thereby higher revenues in the future so that the debt pays for itself.
    • On the other hand, if governments spend the loan money on populist giveaways that generate no additional revenue, the growing debt burden will eventually implode.

    But what is the problem with freebies if states are confirming to the FRBM targets?

    • Any analysis of State Budgets by the Reserve Bank of India shows that State finances are in good health and that all of them are conforming to the Fiscal Responsibility and Budget Management (FRBM) targets.
    • This is a misleading picture.
    • Off budget borrowing: Much of the borrowing that funds these freebies happens off budget, beyond the pale of FRBM tracking.
    • The typical modus operandi for States has been to borrow on the books of their public enterprises, in some cases by pledging future revenues of the State as guarantee.
    • Effectively, the burden of debt is on the State exchequer, albeit well concealed.
    • The Comptroller and Auditor General of India (CAG) had in fact pointed out that in respect of some States.
    • Huget cost: The costs of fiscal profligacy at the State level can be huge.
    • The amount States borrow collectively every year is comparable in size to the Centre’s borrowing which implies that their fiscal stance has as much impact on our macroeconomic stability as does that of the Centre.
    • The need, therefore, for instituting more effective checks that can make wayward States fall in line is compelling.

    What are the institutional checks and balances? What are the reasons of their failure?

    • 1] Legislature and opposition: In theory, the first line of defence has to be the legislature, in particular the Opposition, whose responsibility it is to keep the Government in line.
    • But the Opposition does not dare speak up for fear of forfeiting vote banks that are at the end of these freebies.
    • 2] Lag in CAG reports: Another constitutional check is the CAG audit which should enforce transparency and accountability.
    • In practice, it has lost its teeth since audit reports necessarily come with a lag, by when political interest has typically shifted to other hot button issues.
    • 3] The market: The market is another potential check.
    • It can signal the health or otherwise of State finances by pricing the loans floated by different State governments differently, reflecting their debt sustainability.
    • But in practice this too fails since the market perceives all State borrowing as implicitly guaranteed by the Centre, never mind that there is no such guarantee in reality.

    Suggestions

    • 1] Amend FRBM Act for complete disclosure: First, the FRBM Acts of the Centre as well as States need to be amended to enforce a more complete disclosure of the liabilities on their exchequers.
    • Even under the current FRBM provisions, governments are mandated to disclose their contingent liabilities, but that disclosure is restricted to liabilities for which they have extended an explicit guarantee.
    • The provision should be expanded to cover all liabilities whose servicing obligation falls on the Budget, or could potentially fall on the Budget, regardless of any guarantee.
    • 2] Centre should impose conditionalities: Under the Constitution, States are required to take the Centre’s permission when they borrow.
    • The Centre should not hesitate to impose conditionalities on wayward States when it accords such permission.
    • 3] Use of financial emergency provision: There is a provision in the Constitution of India which allows the President to declare a financial emergency in any State if s/he is satisfied that financial stability is threatened.
    • This provision has never been invoked so far for fear that this will turn into a political weapon.
    • But the provision is there in the Constitution for a reason.
    • After all, the root cause of fiscal irresponsibility is the lure of electoral nirvana. It will stop only if the political leadership fears punishment.
    • 4] Course correction by the Centre: The Centre itself has not been a beacon of virtue when it comes to fiscal responsibility and transparency.
    • To its credit, it has embarked on course correction over the last few years.
    • It should complete that task in order to command the moral authority to enforce good fiscal behaviour on the part of States.

    Conclusion

    The state governments, as well as the Central government, need to avoid the freebies that harm financial health and cause long-term harm. For that, there is a need to implement the suggestions mentioned above.

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)


    Back2Basics: FRBM Act

    • The FRBM is an act of the parliament that set targets for the Government of India to establish financial discipline, improve the management of public funds, strengthen fiscal prudence and reduce its fiscal deficits.
    • It was first introduced in the parliament of India in the year 2000 by Vajpayee Government for providing legal backing to the fiscal discipline to be institutionalized in the country.
    • Subsequently, the FRBM Act was passed in the year 2003.
  • AIR-1, Suggested the Best Books for UPSC Preparation from Zero Level

    IAS preparation does never require reading a book page-to-page. Rather, selective study works far better. ‘Experience is the best source’- So, selection of the best books for UPSC preparation should be done after a talk with senior IAS Mentor.


    Table of Content

    To become an IAS officer, you must sit for Civil Service Exam, conducted by Union Public Service Commission every year. The exam consists of 2 successive stages; Prelims and Mains (written & interview). 

    UPSC-CSE exam is considered the toughest and the most unpredictable exam in the country. To clear it successfully, an aspirant will require two most essential things throughout his journey: 1) Proper Materials and 2) Guidance of Mentors. Before proceeding, it’s better to know that the wrong selection of Materials may cost you your dream of IAS.

    Toppers and teachers mention NCERTs are the foundation of UPSC.

    We aren’t to be book collectors. Because so many different books mean so little time. The number of books should be less so that revision and results are excellent. 

    The Complete Advanced Booklist for UPSC Preparation

    Polity:

    1. Indian Polity For Civil Services Examination. Authored by M Laxmikant.

    Economy:

    1. Indian Economy for Civil Services. Authored by Nitin Singhania

    Ancient & Medieval History:

    1. Ancient and Medieval India. Authored by Poonam Dalal Dahiya.

    Modern Indian History:

    1. A Brief History of Modern India. Spectrum Publication
    2. Indian Struggles for Independence. Authored by Bipin Chandra

    Indian Art and Culture:

    1. Indian Art and Culture. Authored by Nitin Singhania

    Environment and Biodiversity: 

    1. Shankar IAS Book

    Geography: 

    1. Indian Geography. Authored by Majid Hussain or Indian Geography authored by D. R Khullar (Read as per your choice)
    2. Certificate Physical and Human Geography:- GC Leong

    General Science:

    1. General Science Books of class-9 and 10 standard

    Current Affairs:

    1. Read a good newspaper. (The Hindu or Indian Express)
    2. Govt. Schemes- CIVILSDAILY Website
    3. Daily Current Affairs- CIVILSDAILY Website
    4. Civilsdaily YouTube Channel

    The Complete Basic Booklist for UPSC Preparation

    Apart from the advanced books, a candidate ought to cover some basic academic books. Because UPSC sometimes asks direct questions from them.

    For Economy: (New Version)

    1. Macroeconomics NCERT, Class-12th standard
    2. Indian Economic Development, Class-11th standard

    For Ancient History: 

    1. Old NCERT by Satish Chandra (Selective Reading)

    Medieval History: 

    1. Old NCERT by Satish Chandra (Selective Reading) 

    Modern Indian History:

    1. Old NCERT by Bipin Chandra (Selective Reading) 

    Art & Culture: 

    1. An Introduction to Indian Art- Class XI NCERT
    2. Heritage Crafts: Living Crafts Tradition of India- NCERT.

    Geography: (New Version)

    1. Fundamental of Physical Geography- XI NCERT
    2. India: Physical Environment-XI NCERT
    3. Fundamentals of  Human Geography- XII  NCERT
    4. India: People and Economy- XII NCERT 

    Now, the question arises, as many new aspirants do: if such well-known sources are widely available, what will successful candidates do in addition to benefiting from their competitors? What additional resources should be used to overcome the large influx of aspirants? Is there hidden or confidential content that only a few people have access to? Such resources, to be honest, do not exist. 

    Remember: despite having all the books, toppers could not be toppers without the guidance of mentors. Their smart preparation, persistence in their studies, self-confidence, thirst for success, initiative to achieve goals, and patience set them apart.

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