GS-1 Important Geophysical phenomena such as earthquakes, Tsunami, Volcanic activity, cyclone. etc., geographical features and their location-changes in critical geographical features (including water-bodies and ice-caps) and in flora and fauna and the effects of such changes.
GS-2 Health and Education
GS-3 Indian Economy
GS-4 Probity in Governance: Concept of public service; Philosophical basis of governance and probity
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Recently, the UK hosted the fourth summit for Space Sustainability in London in collaboration with the Secure World Foundation.
What does Sustainability in Outer Space mean?
One of the hot issues when it comes to space sustainability is orbital crowding.
With the emergence of large constellations and complex satellites, there is a risk of collisions and interference with radio frequencies.
It poses a direct threat to the operations and safety of a mission and is likely to cause legal and insurance-related conflicts.
Space debris is another prominent issue.
After the completion of a mission, an ‘end-of-life protocol’ requires space objects to be moved to the graveyard orbit or to a low altitude.
Other causes of concern are solar and magnetic storms which potentially damage communication systems.
Such space weather threats need to be addressed along with the efforts to identify the terrestrial carbon footprint of outer space missions.
Why was a conference held in the UK?
Long-term sustainability looks toward space research and development of technology to ensure the reuse and recycling of satellites at every stage.
The UK plan proposes active debris removal and in-orbit servicing.
Policy measures so far
As the outer space is considered a shared natural resource, the United Nations Committee on the Peaceful Uses of Outer Space (COPUOS) in 2019 adopted a set of 21 voluntary, non-binding guidelines.
They aim to ensure the long-term sustainability of outer space activities.
What does the UK plan for space sustainability entail?
The UK calls for an “Astro Carta” for space sustainability, based on the Artemis Accords model for sustainable space exploration.
The UK Space Sustainability plan mentions four primary elements:
To review the regulatory framework of the UK’s orbital activity
To work with organisations such as the G-7 and the UN to emphasise international engagement on space sustainability
To try and develop safety and quality-related metrics that quantify the sustainability of activities; and
To induce additional funding of $6.1 million on active debris removal
The UK also confirmed investments in its National Space Surveillance and Tracking Programme, which works on collision assessment services for UK-licenced satellite operators.
Where does India stand on space sustainability?
India is well on its way to create a subsystem that addresses global sustainability questions.
The headquarters of the Indian National Space Promotion and Authorisation Centre (In-SPACe) was formally inaugurated last month.
One can expect an increased role of the private sector in India’s space activities.
The ISRO has initiated ‘Project NETRA’ to monitor space debris.
To provide in-orbit servicing, ISRO is developing a docking experiment called ‘SPADEX’.
It looks at docking a satellite on an existing satellite, offering support in re-fuelling and other in-orbit services while enhancing the capability of a satellite.
Way forward
Outer space in the 2020s can no longer be considered a ‘space race’ because of the cost, when compared to the beginning of this century.
Today, any entity (government or private) with the necessary access to resources and technology can invest in outer space.
Sustainable practices in outer space would directly help reduce orbital crowding and collision risk while nurturing future technologies.
As the natural course of evolution, the Plan for Space Sustainability, which includes private industries, is a timely move.
This would serve as a model for other space programmes.
The Central Consumer Protection Authority (CCPA) issued guidelines asking hotels and restaurants not to collect service charge from customers.
We often get to hear in news. Once a person had used a loo at a hotel in our national capital. She was charged ₹499 as a service charge in return of purchasing a water bottle!
What is the news?
Under the guidelines, consumers can lodge complaints against hotels and restaurants by calling the number 1915.
The CCPA has issued guidelines under Section 18 (2) (I) of The Consumer Protection Act, 2019.
The CCPA was established in July 2020 to promote, protect, and enforce the rights of consumers as a class, and to investigate, prosecute, and punish violators.
What are the guidelines?
The CCPA has issued five major guidelines regarding the levy of service charge by restaurants and hotels, which has for long been a contentious issue and has periodically triggered complaints from consumers.
The guidelines say:
No hotel or restaurant shall add service charge automatically or by default in the bill;
Service charge shall not be collected from consumers by any other name;
No hotel or restaurant shall force a consumer to pay service charge and shall clearly inform the consumer that service charge is voluntary, optional, and at the consumer’s discretion;
No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers; and
Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.
What can a consumer do in case of a violation of these guidelines?
The consumer has four options at different levels of escalation in case she spots the levy of service charge in her bill.
First, she can make a request to the hotel or restaurant to remove the service charge from her bill.
Second, she can lodge a complaint on the National Consumer Helpline (NCH), which works as an alternative dispute redressal mechanism at the pre-litigation level.
The complaint can be lodged by making a call on the number 1915, or on the NCH mobile app.
Third, the consumer can complain to the Consumer Commission, or through the edaakhil portal, http://www.edaakhil.nic.in.
Fourth, she can submit a complaint to the District Collector of the concerned district for investigation and subsequent proceedings by the CCPA.
A consumer can complain directly to the CCPA by sending an e-mail.
What are the components of a food bill?
A restaurant bill in India comprises food charge (from the menu), with an addition of service charge (anywhere between 5 to 15 per cent) and a 5 per cent GST on this amount (IGST+SGST).
This is for all kinds of standalone restaurants.
In case a restaurant is located inside a hotel wherein room rate is upwards of Rs 7,500 (mostly in case of five-stars), the GST would be 18 per cent.
Nature of Service charge
While the GST is a mandatory component as per law, the service charge is supposed to be optional.
It is the equivalent of what is known as gratuity around the world, or tip, in casual parlance.
Most restaurants decide the service charge on their own, and print it at the bottom of the menu with an asterisk.
What do the restaurants say?
The levy of service charge by a restaurant is a matter of individual policy to decide if it is to be charged or not.
There is no illegality in levying such a charge.
Once the customer is made aware of such a charge in advance and then decides to place the order, it becomes an agreement between the parties, and is not an unfair trade practice.
GST is also paid on the said charge to the Government.
Where does the fund go?
Restaurants claim that a major chunk of the service charge thus collected goes to the staff, while the rest goes towards a welfare fund to help them out during good and bad times.
It’s a default billing option, even as customers can choose not to pay it if they don’t want to.
Of course, they are paid the salaries but the service charge works as an incentive for them.
Restaurateurs also say that patrons can decide not to pay the charge and tip the server directly, but in this case, the backroom staff doesn’t get anything.
A service charge ensures all staff members are rewarded evenly.
What is the issue then?
The issue is that almost all restaurants have put service charge (fixed at their own accord) as a default billing option.
And if a consumer is aware that it is not compulsory and wants it removed or wants to tip the server directly, the onus is on them to convince the management why they don’t want to pay it.
The department says they received several complaints saying it leads to public embarrassment and spoils the dining experience since at the end of it, they either pay the charge quietly and exit the place feeling cheated, or have to try hard to get it removed.
Also, there is no transparency as to where this charge goes.
The officials also say that collecting service charge on their own and paying GST on it to the government doesn’t make it authorised.
Problems faced by customers
It is this component which has come under dispute from time to time, with consumers arguing they are not bound to pay it.
It also said that hotels and restaurants charging tips from customers without their express consent in the name of service charges amounts to unfair trade practice.
A ban on the use of single-use plastics that was notified by the Union Environment Ministry on August 2021 came into effect on July 1 this year.
What is the news?
The national and State-level control rooms would be set up to check illegal manufacture, import, stocking, distribution, sale and use of banned single use plastic items.
The Plastic Waste Management Amendment Rules, 2021, will also prohibit manufacture, import, stocking, distribution, sale and use of plastic carry bags.
This is for plastics having thickness less than 120 microns with effect from December 31, 2022.
What is Single-Use Plastic?
The Centre defines it as an object made of plastic that is intended to be used “only once” before being disposed off or recycled.
Single-use plastic items such as these had “low utility and high littering potential,” it noted.
What is now included in SUPs?
For the purposes of the ban, there is a list of 21 items that come under the definition of single-use plastic including ear buds with plastic sticks, plastic sticks for balloons, plastic flags, candy sticks, ice-cream sticks, thermocol for decoration etc.
It also includes plates, cups, glasses, cutlery such as forks, spoons, knives, straw, trays, wrapping or packing films around sweet boxes, invitation cards, and cigarette packets, plastic or PVC banners less than 100 microns, stirrers.
These objects were listed by the Environment Ministry in August when it notified the Plastic Waste Management Amendment Rules, 2021.
How will the ban be implemented?
So far 32 States/UTs have reportedly constituted a dedicated Task Force to eliminate the use of single-use plastics.
Of these 14 states/UTs and 12 Central Ministries, as of March, had developed action plans describing how they would be enforcing this.
A few States, for example Maharashtra, already have legislation banning the manufacture and storage of such plastic.
But implementing it wasn’t always successful as there was regular supply from States where such bans were not in force.
An all-India ban, it’s hoped, would make enforcement more effective.
Penal provisions
According to the Environment Protection (EP) Act, violating the ban could invite “punitive action”.
Manufacturers and distributors of single-use plastic goods were directed to have zero inventory by June 30.
The EP Act says that violating the ban could invite a five-year imprisonment and a fine of upto ₹1 lakh, or both.
If the violations are repeated, it could mean additional fines up to ₹5000 for each day.
There are different penalties for companies, organisations, and government departments under the EP Act.
What is the history of the single use plastic ban in India?
The Environment Ministry told the Rajya Sabha last July of its plan to phase out some categories of single use plastic by 2022.
A draft outlining the manner in which the ban was to be implemented was issued in March and involved amending the PWM Rules, 2016.
Before the amendments came into force, the Rules only prohibited the manufacture, import, stocking, distribution, sale and use of carry bags and plastic sheets less than 50 microns in thickness in the country.
There is a ban on sachets using plastic material used for storing, packing or selling gutkha, tobacco and pan masala.
Since October 2021, there is a ban on carry bags made of virgin or recycled plastic less than 75 microns as opposed to 50 microns under the earlier version of the rules.
Is there popular support for the ban?
The All India Plastic Manufacturers Association has said that the ban would shutter 88,000 units in the plastic manufacturing business.
These employ close to a million people and contribute to exports worth ₹25,000 crore.
Fast Moving Consumer Goods companies (FMCG) would be severely affected by the the ban due to their dependence on plastic straws, plates.
Their replacements, industry representatives say, are available but cost much more than their plastic alternatives.
There is also limited capacity in India to provide biodegradable replacements.
What is the environmental damage from SUPs?
Unlike thicker and denser plastic material, single-use plastic objects being light and flexible are less amenable to being recycled.
While 99% of plastic is recycled, they constitute heavier plastics that are likely to be collected by ragpickers and plastic waste recyclers.
Single use plastics do not provide an incentive enough for the effort needed to collect them and hence they lie around, leach their toxins into the soil and cause environmental damage in both land and sea.
The world’s most powerful particle collider, the Large Hadron Collider (LHC), will begin smashing protons into each other at unprecedented levels of energy beginning July 5.
What is the LHC?
The Large Hadron Collider is a giant, complex machine built to study particles that are the smallest known building blocks of all things.
Structurally, it is a 27-km-long track-loop buried 100 metres underground on the Swiss-French border.
In its operational state, it fires two beams of protons almost at the speed of light in opposite directions inside a ring of superconducting electromagnets.
The LHC’s second run (Run 2) began in 2015 and lasted till 2018. The second season of data taking produced five times more data than Run 1.
The third run will see 20 times more collisions as compared to Run 1.
How does it work?
The magnetic field created by the superconducting electromagnets keeps the protons in a tight beam and guides them along the way as they travel through beam pipes and finally collide.
Just prior to collision, another type of magnet is used to ‘squeeze’ the particles closer together to increase the chances of collisions.
The particles are so tiny that the task of making them collide is akin to firing two needles 10 km apart with such precision that they meet halfway.
Extreme conditions involved
Since the LHC’s powerful electromagnets carry almost as much current as a bolt of lightning, they must be kept chilled.
The LHC uses a distribution system of liquid helium to keep its critical components ultracold at minus 271.3 degrees Celsius, which is colder than interstellar space.
Given these requirements, it is not easy to warm up or cool down the gigantic machine.
What is the latest upgrade?
Three years after it shut down for maintenance and upgrades, the collider was switched back on this April.
This is the LHC’s third run, and it will operate round-the-clock for four years at unprecedented energy levels of 13 tera electron volts.
Note: A TeV is 100 billion, or 10-to-the-power-of-12, electon volts. An electron volt is the energy given to an electron by accelerating it through 1 volt of electric potential difference.
Targets this year
It now aims to be delivering 1.6 billion proton-proton collisions per second.
The last time, the proton beams will be narrowed to less than 10 microns — a human hair is around 70 microns thick — to increase the collision rate.
ATLAS is the largest general purpose particle detector experiment at the LHC.
The Compact Muon Solenoid (CMS) experiment is one of the largest international scientific collaborations in history, with the same goals as ATLAS, but which uses a different magnet-system design.
Previous runs & ‘God Particle’ discovery
Ten years ago, in 2012, scientists at CERN had announced to the world the discovery of the Higgs boson or the ‘God Particle’during the LHC’s first run.
The discovery concluded the decades-long quest for the ‘force-carrying’ subatomic particle, and proved the existence of the Higgs mechanism, a theory put forth in the mid-sixties.
This led to Peter Higgs and his collaborator François Englert being awarded the Nobel Prize for physics in 2013.
The Higgs boson and its related energy field are believed to have played a vital role in the creation
This newscard is an excerpt from the original article published in The Hindu.
Chenkurinji
Chenkurinji (Gluta travancorica) is a species endemic to the Agasthyamala Biosphere Reserve.
Belonging to the Anacardiaceae family, the tree was once abundant in the hills on the southern parts of the Aryankavu Pass in Kerala’s Kollam district.
The Shendurney Wildlife Sanctuary derives its name Chenkurinji (Gluta travancorica), a species endemic to the Agasthyamala Biosphere Reserve.
Why in news?
It is very susceptible to climate change and the present condition of the species is quite bad with low regeneration performance.
Though there are seemingly enough number of the tree, most are not productive, generating a negative trend in its population.
The majority of the trees is old with poor flowering and fruiting rates.
Though the flowering usually happens in January, of late, the species has reported a tendency to extend the process due to climate change.
Significance of Chenkurinji
It is reported to have medicinal properties and is used to lower blood pressure and treat arthritis.
The Indian economy has been hit by inflationary shocks of late.
Inflation story so far
RBI mandate: The inflation target of the Reserve Bank of India is 4 per cent, with a band of 2 per cent on either side.
Inflation was at or above the upper threshold of 6 per cent since the beginning of this year.
Only after inflation hit 7 per cent did the RBI raise the repo rate.
Increase in interest rate: The RBI has raised the cost of borrowing (by 90 basis points so far), with a promise of more to come.
Fuel taxes reduced: The central government has cut fuel taxes with alacrity, and has banned the export of certain items.
Role of monetary authorities
Monetary authorities raise interest rates if inflation is above the preferred target, and vice versa.
What should be the interest rate? Interest rates should rise more than inflation so the “real” interest rates rise, causing a compression in demand (and a fall in economic activity), which in turn will reduce inflation.
The RBI embraced this idea. In 2016, an independent monetary policy committee was constituted.
Effects of global inflation
Some part of inflation is coming from abroad is an added complication.
Outflow of fund: There has also been a steady outflow of foreign funds from the stock market.
Depreciation of rupee: This could cause the rupee to depreciate, in turn, raising the prices of imported goods thereby adding to the inflationary woes.
Two ways in which the Indian economy is different
1] Role of agriculture in Indian economy
India’s non-food and non-oil components of the consumer price index CPI are about 47 per cent.
In comparison, for the ECB, it is less than one-third of the CPI.
Of course, the RBI has no control over international prices of food and oil, so it must squeeze less than 50 per cent of the domestic economy to lower inflation.
The real interest rise works through demand compression.
But the problem is on the supply side.
Also, as compared to the RBI, the ECB would suffer a lower rise in inflation, and has a larger menu on which to apply demand compression.
2] Exchange rate and its effect on output
Until the 1970s, the accepted wisdom was that an economy had to achieve both internal balance and external balance.
Internal balance consisted of full employment and low inflation using monetary and fiscal policies.
Over time, the internal balance has come to mean, from a policy perspective, low inflation, since “the market” will ensure full employment.
External balance required a balanced current account over some horizon (“don’t get too much into foreign debt”), by using, for example, the exchange rate.
For the OECD countries, the external balance was not a constraint any longer, since they had made their currencies fully convertible, and international capital flows were unrestricted.
But this is not the case with India.
If it were so, no one would be interested in discussing the country’s foreign exchange reserves, because these could be generated instantaneously by exchanging the domestic currency for foreign exchange.
India’s foreign reserves and its impact on competitiveness of Indian products
Until 2020, India had seen massive portfolio capital inflows when OECD interest rates were low, and its current account deficits were financed by foreign reserves.
But portfolio inflows can, and do, reverse themselves.
FII inflows also contribute to India’s lack of competitiveness.
The RBI bought foreign exchange (with rupees).
But fearing this would stoke inflation, it sold government bonds, and removed the excess liquidity.
This “sterilised intervention” saw the RBI’s foreign exchange assets going up, matched by a reduced holding of government bonds.
Thus, India’s foreign exchange reserves were not its “own”— there were liabilities against it.
India’s Dutch Disease: The RBI could have let the rupee appreciate or have accumulated foreign reserves.
It chose an intermediate solution — a mix of an appreciation and accumulation of reserves.
The appreciation caused by inflows reduced international competitiveness for Indian products.
In effect, we had our own episode of the “Dutch Disease”.
Way forward
As the RBI raises interest rates, outflows will possibly slow down with the rupee appreciating.
That is not good for external balance.
It is easy to see that inflation targeting could be at odds with external balance.
Conclusion
If inflation does prove stubborn, and fighting inflation is all that the authorities in India worry about, we could see an external crisis.
Dutch disease is an economic term for the negative consequences that can arise from a spike in the value of a nation’s currency.
It is primarily associated with the new discovery or exploitation of a valuable natural resource and the unexpected repercussions that such a discovery can have on the overall economy of a nation.
Symptoms include a rising currency value leading to a drop in exports and a loss of jobs to other countries.
The introduction of a uniform GST was a watershed moment in India since the country’s earlier regime of taxes and cesses. However, GST is still a complicated tax regime with different slabs.
Unified single tax
Empirical data from across the world on the benefits of a unified single tax is incontrovertible
This needs bold and clear reformist thinking at the political level.
Imposing a high GST in some areas does not make sense.
‘Sin’ taxes are at cross purposes with the government’s policy of generating growth and creating jobs under ‘Make in India’.
High taxes on air-conditioners, air conditioned restaurants, chocolates and luxury cars create an economic ripple effect downstream, in a complex web of businesses that have symbiotic relationships.
The effect finally reaches down to the bottom of the employment pyramid.
Distrust between State and centre: There is distrust between the States and the Centre on revenue sharing.
There is also anger at the Centre for riding roughshod over the States’ autonomy and disregarding the federal structure.
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,
To prevent misclassifications and litigations arising therefrom,
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.
Way forward
Move people up the value chain: The plan must be to figure out how to rev up the economy by making the rich and upper middle class spend and move more people up the value chain instead of designing a tax system that keeps these products out of the new consumer class’s reach.
The same lack of logic applies to taxes on wine, rum and beer, which generate large-scale employment and are the backbone of grape and sugarcane farming and the cocoa industry.
In the automobile sector, the GST on electric cars, tractors, cycles, bikes, low-end and luxury cars ranges anywhere from 5% to 50%.
The sale of automobiles is the barometer of an economy.
Single tax slab: A directive to the bureaucracy is necessary to come up with just two categories: goods eligible for zero tax and goods that will fall under a single rate, say 10% or 12%.
Then there are items that are exempt from GST.
Bring fuels under GST: Petrol, diesel, aviation turbine fuel are not under the purview of GST, but come under Central excise and State taxes.
A single low tax regime will ensure compliance, widen the tax net, improve ease of doing business, boost the economy, create jobs, increase tax collections and reduce corruption
Conclusion
The Finance Minister should take a cue from the Prime Minister, who hinted at major reforms in the aftermath of COVID-19, and do away with all the confusing tax slabs in one fell swoop.
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MPSC changes pattern: Aligned with UPSC, to be implemented from 2023
Maharashtra PSC has recently released a notification citing changes in the pattern. Now the main examination will be subjective/descriptive in nature (essay type answers) instead of objective (MCQ type) questions. Also, an Ethics paper has also been introduced, modern history will also be included.
From earlier 6 papers in MPSC Mains now we will have 9 papers, with total marks now standing at 1750 in Mains, closely resembling UPSC’s pattern.
Papers
Subjects
Marks
Nature of papers
Paper 1
Marathi
300
Descriptive (Qualifying)
Paper 2
English
300
Descriptive (Qualifying)
Paper 3
Essay (Marathi or English)
250
Descriptive
Paper 4
GS 1
250
Descriptive
Paper 5
GS 2
250
Descriptive
Paper 6
GS 3
250
Descriptive
Paper 6
GS 4
250
Descriptive
Paper 8
Optional Paper 1
250
Descriptive
Paper 9
Optional Paper 2
250
Descriptive
1750 Marks
Closely resembling the UPSC pattern
Implications of this change
It has certainly made MPSC mains more comprehensive, requiring a wide-based knowledge just like UPSC.
It will be easier for UPSC aspirants to prepare for MPSC and vice-versa.
It improve the percentage of Marathi candidates appearing and clearing UPSC as the paper pattern is almost the same.
It will give equal opportunity to those from rural as well as urban areas. Now every candidate must play on a level playing field.
For those UPSC aspirants who have exhausted their attempts, they would find it easier to appear and crack MPSC.
Aspirants who will reappear in 2023 will have to consider it as a fresh attempt as they have to study almost from scratch.
All these pose an opportunity as well as a challenge for aspirants but for sure it calls for a change in strategy.
CivilsDaily’s performance in UPSC 2021 and an overwhelming number of our Rankers from Maharashtra
UPSC 2021 results were released a few days back and it was a major validation of CivilsDaily’s student-centric approach, personalized mentorship, and commitment to your goal – cracking the UPSC IAS exam.
..amazing observation was the overwhelming number of rankers from Maharashtra.
This was evident from 200+ rankers, including 30+ in the top 50 in the UPSC 2021 exam. Another amazing observation was the overwhelming number of rankers from Maharashtra.
Moreover, we have thousands of CivilsDaily students from the state.
On the insistence of CivilsDaily’s alumni (ex-rankers) and our students from the state, we will be opening our first center in Maharashtra very soon, in Pune.
How is the Pune center going to help UPSC and Civil Services Aspirants from Maharashtra?
Saves you from the trauma of relocation
Aspirants have to leave their home state to Delhi, Karol Bagh for UPSC prep. It seriously dismantles their mental peace and continuity in preparation.
Now you no longer have to leave your state and come to Delhi for UPSC preparation.
Financially
Financially, by saving huge expenditure incurred in Karol Bagh on renting and tuition fees.
Now prepare for both: UPSC and MPSC
Recently the notification for MPSC was released and since the pattern is similar to UPSC now, we will be helping you prepare for MPSC as well.
Live lectures, Offline 1:1 Mentorship, Testing centre in Pune
We will be providing the best classroom lectures; UPSC-relevant tests and study material; experienced mentors and dedicated faculty.
CivilsDaily will always remain committed to a personalized and student-centric approach and will live for its vision of making UPSC and government service exam preparation simpler, effective, result-oriented, and affordable to every aspiring student.
Mega Seminar on 5th July, at Gokhale Institute, Pune: Sajal sir and UPSC Rankers from Maharashtra
Get a golden chance to meet and discuss 1-1 with Rankers and Sajal sir at Pune center.
Gokhale Institute of Politics and Economics, the alma mater of Sajal sir and a few other UPSC rankers from CivilsDaily, has acknowledged the good work and has requested us to be hosted by the esteemed institute.
You can meet Sajal sir and rankers there and discuss the strategy and approach required to tackle both MPSC and UPSC.
Venue:
Kale Auditorium, Gokhale Institute, Pune
Date: 5th July
Time: 3pm and 6pm
Feel free to call/WhatsApp for any clarification or details: +91 8668582260.
We are all the more motivated now to churn out more and more rankers from Maharashtra.
There are reports suggesting that the government is mulling a ban on rice exports to tame inflation.
Background
This is surely not the first time an attempt is being made to ban wheat and rice exports.
It was also done in 2007-08, in the wake of the global financial crisis.
Perhaps government will also impose stocking limits on traders for a host of commodities, suspend futures trading in food items, and even conduct income tax raids on traders of food.
Issues in India’s rice export strategy
Highest ever volume: India exported the highest-ever volume of 21 million metric tonnes (MMT) of rice in 2021-22 (FY22) in a global market of about 51.3 MMT, which amounts to about 41 per cent of global exports.
Reduces price: Such large volumes of rice exports brought down global prices of rice by about 23 per cent in March (YoY), when all other cereal prices, be it wheat or maize, were going up substantially in global markets.
In fact, in FY22, the unit value of exports of common rice was just $354/tonne, which was lower than the minimum support price (MSP) of rice.
Below MSP buying or leakage from PMGKAY: This meant that rice exporters were either buying rice (paddy) from farmers and millers at below the MSP or that quite a substantial part of rice was given free under the PM Garib Kalyan Ann Yojana (PMGKAY) was being siphoned away for exports at prices below MSP.
Artificial competitive advantage: Free electricity for irrigation in several states, most notably Punjab, and highly subsidised fertilisers, especially urea, create an artificial competitive advantage for Indian rice in global markets.
Suggestion: This is a perfect case for “optimal export tax” — not a ban — on rice exports.
If we can’t raise the domestic price of urea, which is long overdue, we should at least recover a part of the urea subsidy from rice exports by imposing an optimal export tax.
Why export ban on wheat and rice is not a solution
Small contribution of cereals in inflation: In May, the consumer price index (CPI) inflation was 7.04 per cent (YoY). The cereals group as a whole contributed only 6.6 per cent to this inflation.
Within that, wheat, other than through PDS, contributed just 3.11 per cent and non-PDS rice contributed 1.59 per cent.
So, by imposing a ban on wheat and rice exports, India can’t tame its inflation as more than 95 per cent of CPI inflation is due to other items.
Interestingly, inflation in vegetables contributed 14.4 per cent to CPI inflation, which is more than three times the contribution of rice and wheat combined. And within vegetables, tomatoes alone contributed 7.01 per cent.
What all this indicates is that agri-trade policies need to be more stable and predictable, rather than a result of knee-jerk reactions.
Irresponsible behaviour: Export bans on food items also show somewhat irresponsible behaviour at the global level, unless there is some major calamity in the country concerned.
The recently concluded WTO ministerial meeting as well as the G-7 meet expressed concerns about food security in vulnerable nations.
Way forward
Efficient value chain and processing facilities: In commodities like vegetables, most of which are largely perishable, we need to build efficient value chains and link these to processing facilities.
The same would go for onions, which often bring tears to kitchen budgets when prices shoot up.
A switch to dehydrated onion flakes and onion powder would be the answer.
Our food processing industry, especially in perishable products, is way behind the curve compared to several Southeast Asian nations.
Conclusion
If India wants to be a globally responsible player, it should avoid sudden and abrupt bans and, if need be, filter them through transparent export taxes to recover its large subsidies on power and fertilisers.
