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5th February 2022 | Prelims Daily with Previous Year Questions
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4th February 2022 | Prelims Daily with Previous Year Questions
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3rd February 2022 | Prelims Daily with Previous Year Questions
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India-Britain free trade agreement
Context
In May last year, Prime Ministers Narendra Modi and Boris Johnson announced their shared vision for a transformative decade for the India-United Kingdom partnership. These words have now been made real.
Transforming India-UK partnership
- Doubling bilateral trade: The two leaders had declared their ambition to more than double bilateral trade by 2030, which totalled over £23 billion in 2019.
- Reduce barriers to trade: They directed their governments to take rapid steps to reduce barriers to trade.
- FTA: The groundwork necessary to begin work on a Free Trade Agreement (FTA) had to be prepared by the end of 2021.
- Both governments have already taken action; for example, unlocking the export of British apples to India and enabling a greater number of Indian fisheries to export shrimp to the U.K.
- The big next step was the launch of FTA negotiations last month.
Trade relations at present
- Bilateral trade: The bilateral trade between the two countries stood at 15.5 billion USD in 2019-20. India has engaged with the UK in sectors like pharma, textiles, leather, industrial machinery, furniture, and toys.
- Britain is among the top investors in India and India is the second-biggest investor and a major job creator in Britain. Recently, the Serum Institute of India has announced setting up its research facilities in the UK.
- Indian Diaspora: Around 1.5 million people of Indian origin live in Britain. This includes 15 Members of Parliament, three members in Cabinet, and two in high office as Finance and Home Ministers.
- India is already a big investor in the U.K. — especially in dynamic sectors such as fintech, electric vehicles, and batteries.
- India has an extraordinary opportunity to transform its economy and society in the next 30 years, as it hits its demographic sweet spot, at the heart of the Indo-Pacific region where half the world’s people live and 50% of global economic growth is produced.
Benefits of FTA
- A U.K.-India trade agreement will stimulate growth and employment in both countries.
- Lower barriers coupled with greater regulatory certainty would incentivize new small and medium-sized enterprises to export their goods and services.
- An agreement also means Indian and British consumers see improvements in the variety and affordability of products.
- Strategic reasons: The British Government’s Integrated Review of our overseas policy, describes the world we are in; messier, with the more geostrategic competition.
- It is one in which two dynamic democracies such as India and the U.K. need to work closely together to promote open economies.
Consider the question “Colonial prism has long distorted the perception of India-UK relation. However, both the countries stand to gain by finding a fresh basis for sustaining bilateral relations. Comment.”
Conclusion
An FTA would mark a new way of working between the U.K. and India. It gives a new framework within which the two countries can grow and flourish together, putting the colonial economic relationship where it belongs — in the history books.
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What is Cartelization?
The Competition Commission of India (CCI) issued its final order in an alleged case of cartelization involving four Japanese shipping firms, asking them to desist from avoiding competition with each other.
What is a Cartel?
- According to CCI, a “Cartel includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services”.
- The three common components of a cartel are:
- an agreement
- between competitors
- to restrict competition
What is Cartelization?
- Cartelization is when enterprises collude to fix prices, indulge in bid-rigging, or share customers, etc. But when prices are controlled by the government under law, that is not cartelization.
- The Competition Act contains strong provisions against cartels.
- It also has the leniency provision to incentivize a party to a cartel to break away and report to the Commission, and thereby expect total or partial leniency.
- This has proved a highly effective tool against cartels worldwide.
How do they work?
- Four categories of conduct are commonly identified across jurisdictions (countries). These are: price-fixing, output restrictions, market allocation and, bid-rigging
- In sum, participants in hard-core cartels agree to insulate themselves from the rigors of a competitive marketplace, substituting cooperation for competition.
How do cartels hurt?
- They not only directly hurt the consumers but also, indirectly, undermine overall economic efficiency and innovations.
- A successful cartel raises the price above the competitive level and reduces output.
- Consumers choose either not to pay the higher price for some or all of the cartelized product that they desire, thus forgoing the product, or they pay the cartel price and thereby unknowingly transfer wealth to the cartel operators.
Are there provisions in the Competition Act against monopolistic prices?
- There are provisions in the Competition Act against abuse of dominance.
- One of the abuses is when a dominant enterprise “directly or indirectly imposes unfair or discriminatory prices” in the purchase or sale of goods or services.
- Thus, excessive pricing by a dominant enterprise could, in certain conditions, be regarded as abuse and, therefore, subject to investigation by the Competition Commission if it were fully functional.
- However, where pricing is a result of normal supply and demand, the Competition Commission may have no role.
What is the penalty for cartelization?
- The Competition Act calls for a penalty on each member of the cartel, which is up to three times its profit for each year of anti-competitive behavior, or 10% of turnover for each year of its continuance, whichever is higher.
- However, in case of a leniency petition, CCI can waive the penalty depending on the timing and usefulness of the disclosure and full cooperation in the probe.
How might cartels be worse than monopolies?
- Monopolies are bad for both individual consumer interests as well as society at large.
- Monopolist completely dominates the concerned market and, more often than not, abuse this dominance either in the form of charging higher than warranted prices or by providing lower than the warranted quality of the good or service in question.
How to stop the spread of cartelization?
- Strong deterrence to those cartels that are found guilty of being one.
- Typically this takes the form of a monetary penalty that exceeds the gains amassed by the cartel and it is not always easy to ascertain the exact gains from cartelization.
- The threat of stringent penalties can be used in conjunction with providing leniency — as was done in the beer case.
Back2Basics: Competition Commission of India (CCI)
- The CCI is the chief national competition regulator in India.
- It is a statutory body within the Ministry of Corporate Affairs.
- It is responsible for enforcing The Competition Act, 2002 in order to promote competition and prevent activities that have an appreciable adverse effect on competition in India.
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Pradhan Mantri Matru Vandana Yojana (PMMVY)
The government’s recent announcement that the maternity benefits program which provides ₹5,000 for the first child will be extended to cover the second child only if it is a girl has met with sharp criticism from activists who have demanded that it be universalized.
What is PMMVY?
- Launched in 2017, this scheme provides ₹5,000 for the birth of the first child to partially compensate a woman for the loss of wages.
- It also aims to improve the nutritional well-being of the mother and the child.
- The amount is given in three installments upon meeting certain conditions.
- It is combined with another scheme, Janani Suraksha Yojana, under which nearly ₹1,000 is given for an institutional birth so that a woman gets a total of ₹6,000.
Eligibility Conditions
The first transfer (at pregnancy trimester) of ₹1,000 requires the mother to:
- Register pregnancy at the Anganwadi Centre (AWC) whenever she comes to know about her conception
- Attend at least one prenatal care session and take Iron-folic acid tablets and TT1 (tetanus toxoid injection)
- Attend at least one counseling session at the AWC or healthcare centre.
The second transfer (six months of conception) of ₹2,000 requires the mother to:
- Attend at least one prenatal care session and TT2
The third transfer (three and a half months after delivery) of ₹2,000 requires the mother to:
- Register the birth
- Immunize the child with OPV and BCG at birth, at six weeks, and at 10 weeks
- Attend at least two growth monitoring sessions within three months of delivery
Additionally, the scheme requires the mother to:
- Exclusively breastfeed for six months and introduce complementary feeding as certified by the mother
- Immunize the child with OPV and DPT
- Attend at least two counselling sessions on growth monitoring and infant and child nutrition and feeding between the third and sixth months after delivery
Why in news?
- Under the revamped PMMVY under Mission Shakti, the maternity benefit amounting to ₹6000 is also to be provided for the second child.
- However, this is only in case the second is a girl child, to discourage pre-birth sex selection and promote the girl child.
Issues with this provision
- To provide maternity benefit only to the mother of the firstborn is illegal as the National Food Security Act, 2013 lays down that every pregnant woman and lactating mother are entitled to it.
- For second child as a girl, it is to promote the birth of a girl child is nothing but posturing since it penalizes the mother for not giving birth to a girl child.
- Subsequent adding of more conditions to the scheme will prove to be a bureaucratic nightmare, which can be overcome if the scheme is universalized.
- Women will be able to access the scheme only after the delivery, which will not have any impact on their nutritional uptake during the course of their pregnancy.
Before judging this factual information, take this PYQ form 2019:
Q.Which of the following statements is/are correct regarding the Maternity Benefit (Amendment) Act, 2017?
- Pregnant women are entitled to three months pre-delivery and three months post-delivery paid leave.
- Enterprises with creches must allow the mother a minimum of six crèche visits daily.
- Women with two children get reduced entitlements.
Select the correct answer using the code given below.
(a) 1 and 2 only
(b) 2 only
(c) 3 only
(d) 1, 2 and 3
Post your answers here.
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Paray Shikshalaya Initiative
The West Bengal government has launched ‘Paray Shikshalaya’ Initiative.
Paray Shikshalaya
- It is an open-air classroom in the neighborhood programme – for students from class 1 to 7.
- The aim of this initiative is to encourage students who dropped out of schools during the Covid-19 pandemic to continue their education.
Why was this initiative launched?
- In view of the rising demand for physical classes, the state government reopened schools.
- Classroom teaching could not be called on due to fear of spikes in covid cases.
- Hence, students are being called in batches.
Where were these classes held?
- Schools which do not have open-air spaces conducted the classes in neighbourhood parks and grounds.
- Local councilors and MLAs helped set up infrastructure in such parks like putting up makeshift shades and chairs, besides making mid-day meal arrangements for the students.
- Schools which have open-air spaces held the classes there.
- Benches were set up for students and blackboards were placed to provide a real classroom experience.
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What is Operation AAHT?
The Railway Protection Force (RPF) has launched a nationwide ‘Operation AAHT’ to curb human trafficking.
We can site such examples in essays as well as mains as initiatives for curbing human trafficking in India
Operation AAHT
- As part of this operation, special teams will be deployed on all long-distance trains/routes with focus on rescuing victims, particularly women and children, from the clutches of traffickers.
- The RPF will act as a bridge cutting across States to assist the local police in the mission to curb the menace.
- The infrastructure and intelligence network of the force could be utilized to collect, collate and analyse clues on victims, source, route, destination, popular trains used by suspects, identity of carriers/agents, kingpins etc and shared with other law-enforcing agencies.
Why need this mission?
- The Railways, which operate about 21,000 trains across the country daily, is the most reliable mode of transportation for the traffickers who often move their victims on long-distance trains.
- Thousands of Indians and persons from neighboring countries are trafficked every day to some destinations where they were forced to live like slaves.
- They are also being trafficked for illegal adoptions, organ transplants, working in circus, begging and entertainment industry.
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