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  • What are the Memory Techniques to Follow While Studying for UPSC CSE? || Free Q&A Webinar with IAS Officer Vaibhav Rawat (AIR 25, UPSC 2020)|| Limited Slots Open, Register Now

    What are the Memory Techniques to Follow While Studying for UPSC CSE? || Free Q&A Webinar with IAS Officer Vaibhav Rawat (AIR 25, UPSC 2020)|| Limited Slots Open, Register Now

    REGISTER FOR FREE Q&A WEBINAR WITH IAS OFFICER VAIBHAV RAWAT (AIR 17, UPSC 2020)

    “Prelims, Mains and Interview are 3 stages of pilgrimages and I found all of them equally challenging”, says Vaibhav Rawat IAS after securing All India Rank 25 in UPSC 2020 Exam.

    He started his preparation in 2018 without any idea of what was civil services or the challenging syllabus of UPSC. Fresh out of his job in Samsung R&D, Vaibhav initially faced umpteen difficulties in understanding or remembering what he had read. However, with daily studies there was an improvement and he was slowly able to master the topics. In his first attempt, Vaibhav reached till interview stage but missed out on the final ranking by a whisker. After this, he took the mentorship of Sajal Sir to score high marks in Mains and Interview. Vaibhav proves the saying that, successful people are not gifted but they work hard.

    Upon finding his name in the final pdf, Vaibhav asserts that his parents are more happier than him. For Vaibhav, there is only relief as he doesn’t have to start the exhausting cycle of UPSC preparation all over again.

    Open to All, Free to Attend—Ask me Anything Session with Vaibhav Rawat IAS

    Vaibhav Rawat is geared up for an Ask me Anything Session with all Civilsdaily UPSC aspirants. For anyone wanting tips on certain topics, preparing for UPSC Mains in the last 3 months or suggestions on improving their marks, this session will be useful. Your questions will be Vaibhav’s answers which are drawn from his own experiences. Just register yourself with us as soon as possible to confirm your presence.

    Key Takeaways of Vaibhav Rawat’s Webinar

    1. Importance of having a role model. Who was Vaibhav Rawat’s idol and how did that help him stay calm and focused towards his goals?

    2. Unpredictability of UPSC . What to study when you are not sure of the type of questions which would come in the exam?

    3. The art of answer writing in Mains. What are few of the common practices Vaibhav followed in the Mains exam?

    4. Memory techniques followed by Vaibhav Rawat. What did he do to recall important dates, names, statistics, conventions for the exam?

    5. First Attempt v/s Second Attempt. How did Vaibhav approach prelims, mains and interview preparation?

    6. Tips for beginners. Why is it better to work for a year or two before preparing for UPSC?

    A major part of the session would be interactive and in Q&A format. This will surely benefit any aspirant who are in midway of their preparation.

    Webinar Details

    If you are studying hard but are unsure that you are studying right, then its time to get some assurance from the topper himself! Register for this free webinar by IAS officer Vaibhav Rawat.

    Date: 22 November 2021 (Monday)

    Time: 7 P.M

    REGISTER FOR FREE Q&A WEBINAR WITH IAS OFFICER vaibhav rawat (air 17, upsc 2020)

  • [Burning Issue] Farm Laws and Farmers Protest

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    Recently, Prime Minister Narendra Modi announced that the central government will repeal all three farm laws. Farmers have been protesting against the farm laws and demanding their rollback since 2020.

    The Modi government has been confrontational with farmers’ organizations, giving so far an impression that it would not repeal the laws as the protesting farmers didn’t represent the “real” farmers. These laws will be repealed in the Winter Session of Parliament.

    Let us look at the topic in detail and try to understand the factors behind the policy retreat of the government.

    Background

    • Long pending reforms: Government wanted to convert the COVID-19 crisis into a reform opportunity by undertaking long pending reforms in agriculture marketing.
    • Out of 11 measures, 3 measures seek to liberalize agricultural marketing and hence hailed as 1991 moment for agriculture.
    • The 3 farms acts ware:  
      1. Act to promote Inter-state and Intra-State Trading
      2. Act to promote Contract farming
      3. Amendments to Essential Commodities Act
    • However, these 3 farm Acts have been opposed by various stakeholders- Farmers, Traders and State Governments on account of various reasons:
      1. Discontinuation of MSP via open-ended procurement
      2. Gradual dismantling of the Public Distribution System (PDS),
      3. Loss of price discovery mechanism established by the APMC mandis
      4. Exploitation by the corporates,
      5. Fear of a reduction in the scope and size of PDS

    In what circumstances were the laws passed?

    • Ordinance route: The government initially cleared them as ordinances in June 2020, there were token protests with the country’s attention gripped by the first wave of Covid-19.
    • Without consultation and haste: In Parliament, there was no thorough scrutiny of the Bills by a parliamentary panel. The government dismissed these demands and pushed the legislation through.
    • Opposition disregard: The Opposition benches were suspended for a week for their “disorderly conduct” while protesting against the rushed passage of the laws.

    The Three Contentious Laws: A quick recap

     (1) Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020:

    • It expands the scope of trade areas of farmers produce from select areas to “any place of production, collection, and aggregation”. It allows electronic trading and e-commerce of scheduled farmers’ produce.
    • It prohibits state governments from levying any market fee, cess or levy on farmers, traders, and electronic trading platforms for trade of farmers’ produce conducted in an ‘outside trade area’.

    (2) Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020:

    • It creates a national framework for contract farming through an agreement between a farmer and a buyer before the production or rearing of any farm produce.
    • It provides farmers engaging with Agri-business firms, processors, wholesalers, exporters or large retailers for farm services and sale of future farming produce by a mutually agreed price framework.

    (3) Essential Commodities (Amendment) Act 2020:

    • It allows for the center to regulate food items through essential commodities. 
    • It also requires that imposition of any stock limit on agricultural produce be based on price rise.

    Why are farmers fuming over these laws?

    These bills sought to bring much-needed reforms to the agricultural marketing system. However, farmers are apprehensive that the free market philosophy supported by these bills could undermine the MSP system and make farmers vulnerable to market forces.

    Let us look at all their concerns one by one:

    (1) Fear against the end of Mandi System

    • The APMC regulates the mandi (marketplace) where farmers bring their produce, and therefore, guarantees that they receive the MSP.
    • Since the state governments will not be able to regulate the trade outside the APMC markets, farmers believe the laws will gradually end the mandi system and leave farmers at the mercy of corporates.

    (2) Fear over MSPs and procurement guarantee

    • Farmers believe that dismantling the mandi system will bring an end to the assured procurement of their crops at MSP.
    • Similarly, farmers believe the price assurance legislation may offer protection to farmers against price exploitation, but will not prescribe the mechanism for price fixation.
    • They are demanding the government guarantee MSP in writing, or else the free hand given to private corporate houses will lead to their exploitation.

    (3) Fear of Arhatiyas

    • The arhatiyas (commission agents) and farmers enjoy a friendship and bonding that goes back decades.
    • On an average, at least 50-100 farmers are attached with each arhatiyas, who takes care of farmers’ financial loans and ensures timely procurement and adequate prices for their crop.
    • Farmers believe the new laws will end their relationship with these agents and corporates will not be as sympathetic towards them in times of need.

     (4) Fear over the end of subsidized electricity

    • Farmers concerns are also fuelled by the proposed Electricity (Amendment) Bill 2020 which might end their access to subsidized electricity.
    • The bill seeks to create an Electricity Contract Enforcement Authority (ECEA), a move aimed to further centralization.
    • Another concern is the transfer of subsidies through DBT. Farmers will have to pay first from their own pocket, after which they will get subsidies.

    (5) Fear over Contract Farming

    • The FAPA Act formalizes contract cultivation through a “national framework” and explicitly prohibits any sponsor firm from acquiring the land of farmers through purchase, lease or mortgage.
    • But farmers fear over the big corporate players’ monopoly over food processing industry and its supply chain dynamics.
    • They fear that their ownership rights would be at risk as the Act provides for debt instruments for the companies which have their own recovery mechanisms.

    (6) Fear over dispute resolution

    • The FAPA Act provided for a three-level dispute settlement mechanism by the conciliation board, Sub-Divisional Magistrate and Appellate Authority.
    • Since the highest level of appeal for the farmer against any private entity was the Appellate Authority, the farmer is effectively prevented from moving the Court.
    • Thus, they claim that the Act was highly skewed in favor of private entity as the individual farmers did not have the resources that private companies had.

    (7) Fear over EC Amendment Act

    • The original EC Act de-regulated food items including cereals, pulses, potato, onion, edible oilseeds, and oils, and could only be regulated in the extraordinary circumstances.
    • The new law states that government regulation of stocks will be based on rising prices.
    • This stock-limiting puts farmers at the peril of the government and thus prevent them from making from any profit during any extra-ordinary circumstances as most of the time they only have to bear losses.

    How were protests could sustain for so long?

    • Unity: The leaders of farmers unions were very strategic in their approach to the protest and decided to work together very early in the agitation.
    • Finances: The protest sites at the Delhi border needed a steady injection of resources to keep going. Aware of this need, the unions had begun making monthly collections.
    • People: The unions behind the farm stir are well-organised machineries with committees at the level of villages, blocks and districts.
    • Communication: Social media has been central to the scale of this agitation.
    • Engagement: The unions kept the stakeholders engaged by ensuring that there was never a dull moment in this agitation.

    In practical terms, what was the status of the three laws until the repeal?

    • The farm laws were in force for only 221 days — June 5, 2020, when the ordinances were promulgated to January 12, 2021, when the Supreme Court stayed their implementation.
    • The Supreme Court stayed the implementation of the three laws on January 12 this year.
    • Since the stay, the laws have been suspended.
    • The government has used old provisions of the Essential Commodities Act, 1955 to impose stock limits, having amended the Act through one of the three farm laws.

    Reasons for the repeal

    There are contrasting suggestions about the timing of the decision to announce the repeal.

    • Forthcoming elections: There are crucial Assembly elections early next year in five states, including Uttar Pradesh and Punjab.
    • Public appeasement: The PM sought to announce this on Guru Nanak Jayanti probably in a move to appease a community, to which a significant segment of protesting farmers from Punjab belongs.
    • Rising anxiety among Public: There was a risk that anxiety among the protesters could lead to tensions as there had been many deaths since the protests began.
    • Fury over year-long protests: The protest had created a ruckus on the streets of capital due to continuous blockades even after the intervention of Supreme Court.
    • Rising political differences: Given that it took the government a year to realise the socio-political costs, the repeal also signals a weakened political feedback mechanism within the party.

    Significance of the repeal

    • Reflects popularity of the govt: In the immediate term, the repeal exposes the government to charges of being on the wrong path and against popular sentiments, notwithstanding its claims to the contrary.
    • Dedication over farmers cause: The govt moves were increasingly perceived as being not in tune with the needs of rural farming communities.
    • Political stewardship: The PM was clearly balancing his political posture that has thrived on the image of a strong and decisive leadership.

    Implications of the repeal

    • CAA standpoint: Although the anti-CAA protests were called off,almost two years on, the Home Ministry has not yet framed the rules for implementation of the CAA.
    • Statehood for J&K: There is no such unanimity over Article 370. Most of these parties have largely been united for the restoration of statehood to J&K, and early elections.

    An analysis of the enactment-repeal conundrum

    (1) Reforms are must

    • There may be some deficiencies in the exact design and mechanism of the reforms proposed in the three farm laws.
    • However, most advocates of agricultural reform would agree that they were in the right direction.

    (2) Reforms don’t occur overnight

    • These laws could be a great example for passionate reforms.  However, Legislative tapasya (penance) is all about listening to outer world (i.e the farmers), not inner self.
    • It requires listening to those for whose benefit laws and policies are crafted. It can’t be a meditation in isolation and implementation as a divine ordeal.

    (3) Answerability and consultation matters

    • That the government chose to push these reforms through its own set of consultations left many stakeholders feeling left out, and created a backlash.
    • The repeal underlines that any future attempts to reform the rural agricultural economy would require a much wider consultation.

    (4) Success lies in the acceptance of reforms

    • The better design of reforms ensures wider acceptance.
    • The repeal would leave the government hesitant about pursuing these reforms in stealth mode again.

    Way forward

    • Parliamentary scrutiny is must: Parliament approved the laws even as dialogue around them was missing. While the Union government did speak to farmer leaders, it always maintained it would implement the laws.
      • It is very essential to take various stakeholders under consideration including opposition leaders.
    • Consultation with Farmers: There were no dialogues or inputs from farmers. They were simply bulldozed into implementation, fuelling an impression that some vested private interests were guiding them.
      • That could be the reason why many such laws have been brought in as ordinances and were then approved in Parliament using brute majority. Public scrutiny for laws is always treated as seditious.
      • The government has to do away with such forceful imposition of laws on public without giving due consideration to their demands.
    • A lesson for the upcoming legislations: Many similar legislations will be passed in the next few months. Amendments to the Forest Conservation Act will be one of them.
      • Here also there are many stakeholders at the receiving end government must consider their demands.
    • No stopping here: Though not accepted, reforms are necessary and government should strive to bring them with necessary changes. Agriculture is the backbone of the majority of Indian population and their concerns and wellbeing should be the priority of the government.

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  • The heavy lifting on climate action must begin

    Context

    Glasgow’s success was that it finished building the scaffolding for climate action initiated through the Paris Agreement. But true success depends on whether countries are receptive to these nudges.

    What were the Glasgow climate meeting’s (COP26) successes and failures?

    • Strengthened Paris Agreement mechanism: Glasgow strengthened the Paris Agreement mechanism of eliciting pledges from countries and ratcheting them up over time.
    • It requested countries to update and strengthen 2030 emission targets in their NDCs by the end of 2022, earlier than previously expected.
    • Success at Glasgow was explicitly defined around ‘keeping 1.5 degrees alive’ through such pledges.
    • There are two problems with this interpretation.
    • First, the Paris, and Glasgow, approach focusing on target-setting gives insufficient importance to the challenge of implementing those targets.
    • A focus on shorter term targets and their implementation — which India to its credit has been highlighting — will be important.
    • Second, by calling on countries to strengthen targets to align with the Paris Agreement objectives without explicitly considering that countries have different roles and responsibilities in doing so risks side-stepping, again, the long-standing issue of climate equity.

    Phase-down clause for thermal power and implications for India

    • Phasing down coal power: A specific high profile clause calls for the ‘phase down of unabated coal power and phase out of inefficient fossil fuel subsidies’.
    • It was the Indian Minister who read out an amendment modifying ‘phase-out’ to ‘phase-down’ for coal.
    • India’s concerns: India’s real concerns included not precluding subsidies for social purposes, such as for cooking gas; querying whether from an equity point of view, all countries should be asked to limit coal use at the same time; and noting the lack of mention of oil and gas.
    • A positive for all from environmental point of view: From an environmental point of view, more explicit discussion of coal, but ideally all fossil fuels, is a positive, including for India.
    • Concerns on developmental view: From a developmental view, however, India is concerned that explicit mention of coal constrains us in our choice of fuel.
    • Way out for India: A possible way out is for India to explicitly seek global support for an accelerated transition away from coal, an approach taken by South Africa.

    Challenges and achievements at COP26

    [A] Measures for adaptations

    • Adaptation has long been neglected in global negotiations, reflecting a global power imbalance that places less weight on the concerns of vulnerable nations.
    • In this context, it was a partial win that Glasgow set up an explicit two year work programme for a ‘global goal’ on adaptation.
    • No development on agenda of loss and damage: The important complementary agenda of ‘loss and damage’ – compensating for unavoidable impacts that go beyond adaptation — received at most lip service.
    • Even though there was discussion of a specific mechanism, backed by funding, to the dismay of small, vulnerable nations, only a ‘dialogue’ was established.

    [B] Climate finance commitment issue not addressed

    • Commitment on climate finance not met: Climate finance promised to be the central issue of COP26, with considerable frustration from developing countries that the decade-long commitment of $100 billion had not been met.
    • Glasgow did no more than establish a work programme on post-2025 financing and continue tracking progress on the $100 billion.
    • The exception was a call to double adaptation finance by 2025.
    • Mobilising private finance: Former Bank of England Governor Mark Carney indicated that companies committed to net zero initiatives could marshal a scarcely believable $130 trillion, suggesting growing efforts to mobilise private finance.
    • Developing countries have long insisted that publicly funded climate finance is a right devolving from the ‘polluter pays’ principle rather than aid.

    [C] Paris rulebook

    • Completion of two elements of Paris Rulebook: There were two particularly important elements of what is called the ‘Paris Rulebook’ that were completed in Glasgow.
    • Transparency framework: First, the transparency framework was completed, which includes reporting rules and formats for emissions, progress on pledges and finance contributions.
    • Rules for carbon market: The second key was completion of agreed rules for carbon markets, the complexities of which had stymied agreement for four years.
    • Rules were put in place to limit the scope for ‘double-counting’ of credits by more than one country.

    Way forward for India

    • The real determinant of success or failure rests on national politics and popular support for climate change within countries — how countries use the scaffolding.
    • For India, these politics are complex because they revolve around simultaneously balancing concerns over whether our policy space will be limited by inequities embedded in the global mitigation efforts, and our own interests as a vulnerable country in enhancing and accelerating climate action.
    • A balanced view requires consideration of both objectives.

    Consider the question “Why climate finance continues to be a contentious issue in the negotiations over climate change? Suggest the way to balance the concerns over development with the efforts at climate action.”

    Conclusion

    The meeting hit many, but not all, of its procedural benchmarks by building scaffolding for the future. But the real determinant of success or failure rests on national politics and popular support for climate change within countries.

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  • What are the Memory Techniques to Follow While Studying for UPSC CSE? || Free Q&A Webinar with IAS Officer Vaibhav Rawat (AIR 25, UPSC 2020)|| Limited Slots Open, Register Now

    What are the Memory Techniques to Follow While Studying for UPSC CSE? || Free Q&A Webinar with IAS Officer Vaibhav Rawat (AIR 25, UPSC 2020)|| Limited Slots Open, Register Now

    REGISTER FOR FREE Q&A WEBINAR WITH IAS OFFICER VAIBHAV RAWAT (AIR 17, UPSC 2020)

    “Prelims, Mains and Interview are 3 stages of pilgrimages and I found all of them equally challenging”, says Vaibhav Rawat IAS after securing All India Rank 25 in UPSC 2020 Exam.

    He started his preparation in 2018 without any idea of what was civil services or the challenging syllabus of UPSC. Fresh out of his job in Samsung R&D, Vaibhav initially faced umpteen difficulties in understanding or remembering what he had read. However, with daily studies there was an improvement and he was slowly able to master the topics. In his first attempt, Vaibhav reached till interview stage but missed out on the final ranking by a whisker. After this, he took the mentorship of Sajal Sir to score high marks in Mains and Interview. Vaibhav proves the saying that, successful people are not gifted but they work hard.

    Upon finding his name in the final pdf, Vaibhav asserts that his parents are more happier than him. For Vaibhav, there is only relief as he doesn’t have to start the exhausting cycle of UPSC preparation all over again.

    Open to All, Free to Attend—Ask me Anything Session with Vaibhav Rawat IAS

    Vaibhav Rawat is geared up for an Ask me Anything Session with all Civilsdaily UPSC aspirants. For anyone wanting tips on certain topics, preparing for UPSC Mains in the last 3 months or suggestions on improving their marks, this session will be useful. Your questions will be Vaibhav’s answers which are drawn from his own experiences. Just register yourself with us as soon as possible to confirm your presence.

    Key Takeaways of Vaibhav Rawat’s Webinar

    1. Importance of having a role model. Who was Vaibhav Rawat’s idol and how did that help him stay calm and focused towards his goals?

    2. Unpredictability of UPSC . What to study when you are not sure of the type of questions which would come in the exam?

    3. The art of answer writing in Mains. What are few of the common practices Vaibhav followed in the Mains exam?

    4. Memory techniques followed by Vaibhav Rawat. What did he do to recall important dates, names, statistics, conventions for the exam?

    5. First Attempt v/s Second Attempt. How did Vaibhav approach prelims, mains and interview preparation?

    6. Tips for beginners. Why is it better to work for a year or two before preparing for UPSC?

    A major part of the session would be interactive and in Q&A format. This will surely benefit any aspirant who are in midway of their preparation.

    Webinar Details

    If you are studying hard but are unsure that you are studying right, then its time to get some assurance from the topper himself! Register for this free webinar by IAS officer Vaibhav Rawat.

    Date: 22 November 2021 (Monday)

    Time: 7 P.M

    REGISTER FOR FREE Q&A WEBINAR WITH IAS OFFICER vaibhav rawat (air 17, upsc 2020)

  • More a private sector primer than health-care pathway

    Context

    NITI Aayog recently published a road map document entitled “Health Insurance for India’s Missing Middle”.

    About missing middle and provision in the NITI Aayog report

    • The Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), aims to extend hospitalisation cover of up to ₹5 lakh per family per annum to a poor and vulnerable population of nearly 50 crore people.
    • Left out segment: Covering the left out segment of the population, commonly termed the ‘missing middle’ sandwiched between the poor and the affluent, has been discussed by the Government recently.
    • Towards this, NITI Aayog recently published a road map document entitled “Health Insurance for India’s Missing Middle”.
    • Primary role for private commercial health insurer: The report proposes voluntary, contributory health insurance dispensed mainly by private commercial health insurers as the prime instrument for extending health insurance to the ‘missing middle’.

    Issues with the provision in the NITI Aayog report

    • Narrow coverage: Government subsidies, if any at all, will be reserved for the very poor within the ‘missing middle’ and only at a later stage of development of voluntary contributory insurance.
    • This is a major swerve from the vision espoused by the high-level expert group on UHC a decade ago, which was sceptical about such a health insurance model.
    • No country has ever achieved UHC by relying predominantly on private sources of financing health care.
    • Contributory insurance not best way: Evidence shows that in developing countries such as India, with a gargantuan informal sector, contributory health insurance is not the best way forward and can be replete with problems.
    • Issues with low premium model: For hospitalisation insurance, the report proposes a model similar to the Arogya Sanjeevani scheme, albeit with lower projected premiums of around ₹4,000-₹6,000 per family per annum.
    • This model is a little different from commercial private insurance, except for somewhat lower premiums.
    • Low premiums are achieved by reducing administrative costs of insurers through an array of measures, including private use of government infrastructure.
    • This model is vulnerable to nearly every vice that characterises conventional private insurance.
    • Insufficient measures to deal with adverse selection: The report suggests enrolment in groups as a means to counter adverse selection.
    • The prevailing per capita expenditure on hospital care is used to reflect affordability of hospital insurance, and thereby, a possible willingness to pay for insurance.
    • Both these notions are likely to be far-fetched in practice, and the model is likely to be characterised by widespread adverse selection notwithstanding.
    • OPD insurance on a subscription basis: The report proposes an OPD insurance with an insured sum of ₹5,000 per family per annum, and again uses average per capita OPD spending to justify the ability to pay.
    • However, the OPD insurance is envisaged on a subscription basis, which means that insured families would need to pay nearly the entire insured sum in advance to obtain the benefits.
    • Clearly, this route is unlikely to result in any significant reduction of out-of-pocket expenditure on OPD care.
    • Role of government:The NITI report defies the universally accepted logic that UHC invariably entails a strong and overarching role for the Government in health care, particularly in developing countries.

    Consider the question “What are the challenges in achieving universal health coverage? What are the issues with private sources  financing health care to achieve UHC?”

    Conclusion

    The National Health Policy 2017 envisaged increasing public health spending to 2.5% of GDP by 2025. Let us not contradict ourselves so early and at this crucial juncture of an unprecedented pandemic.

  • Cryptocurrencies

    With cryptocurrencies such as Bitcoin gaining popularity among citizens, the Centre has been compelled to take a stance on the legal status of cryptocurrencies.

    Background

    • The Union Government is said to be considering a proposal to tax cryptocurrency transactions in the country.
    • The move would bring cryptocurrency trading, which has till date happened outside the ambit of the law, into the formal economy.

    Defying RBI ban

    • RBI has been vehemently opposed to the idea of legalizing cryptocurrencies.
    • It had banned financial institutions such as banks from facilitating transactions involving cryptocurrencies back in 2018.
    • The RBI’s order was overturned by the Supreme Court in 2020, and this led to a tremendous surge in cryptocurrency transactions through exchanges.

    Why did RBI propose a ban?

    • Financial stability: The RBI has characterized private cryptocurrencies as a threat to financial stability.
    • Threat to the sovereignty of Rupee: It perceives cryptocurrencies rise as a threat to the sovereignty of the rupee.
    • Beyond regulatory scope: The widespread acceptance of cryptocurrencies could interfere with the ability of the RBI to conduct monetary policy effectively.
    • Digital currency in the pipeline: It should be noted that RBI and other central banks are also looking to come up with digital versions of their own currencies.
    • Competition of currencies: The rupee or central bank digital currencies may not be able to outcompete cryptocurrencies just because they are digital.

    Legislative opinion on Cryptocurrencies

    • Not in favour of ban: This week, a Parliamentary Standing Committee recommended that cryptocurrencies be regulated rather than banned.
    • Making a legal framework: The Government is also expected to table a bill that clarifies its position on cryptocurrencies in Parliament next year.
    • Taxing cryptocurrencies: There is a proposal to classify cryptocurrency exchanges as e-commerce platforms and tax them under the GST framework comes.

    Why has the Government chosen to regulate rather than ban cryptocurrencies?

    • Popularity amongst Public: The growing popularity of cryptocurrencies among citizens may have played a role in the Government opting for regulation over an outright ban.
    • Lack of evident threat: There is no clear evidence of the misuse of cryptocurrencies and their risks.
    • Boosting with policy: The Union govt may also not want to kill the nascent cryptocurrency industry which many believe can be a hub for financial innovation.
    • Revenue generation: Fiscal revenues can be adversely impacted by the increased tax evasion opportunities that crypto-currencies can facilitate.
    • Capitalizing the market: The govt wants to capitalise on the recent surge in the usage of cryptocurrencies to tax them and shore up its revenues.
    • Financial innovation: Blockchain technology has multiple uses beyond just facilitating cryptocurrency transactions.

    Issues with the ban

    • Brain-Drain: Ban of cryptocurrencies is most likely to result in an exodus of both talent and business from India, similar to what happened after the RBI’s 2018 ban.
    • Capital inflows will be restricted: If cryptos begin to get mined onshore, they will induce capital inflows.
    • Killing financial innovation: A ban will deprive India, its entrepreneurs and citizens of a transformative technology that is being rapidly adopted across the world.

    Other generic concerns:

    • Safety (cyber-attacks and fraud)
    • Financial integrity (money laundering and evasion of capital controls)
    • Energy usage (outsized energy needs to mine cryptos)

    Way forward

    • Thus it can be inferred that cryptocurrency is better classified as an asset rather than as a currency, in order to gain acceptance and avoid a ban.

    Conclusion

    • There is no doubt that the acceptance of cryptocurrencies by the Government is likely to be limited.
    • While cryptocurrencies may be accepted as speculative assets, it is highly unlikely that they will be accepted as full-fledged currencies competing against the rupee.

     

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  • RBI panel brings law to regulate Digital Lending

    A Reserve Bank of India (RBI) Working Group (WG) on digital lending has recommended separate legislation to oversee such lending as well as a nodal agency to vet the Digital Lending Apps.

    Digital Lending

    • Digital lending is the process of availing credit online.
    • Its increased popularity amongst new-age lenders can be attributed to expanding smartphone penetration, credit range flexibility, and speedy online transactions.

    Significance of Digital Lending

    India has a huge growth potential when it comes to the Digital Lending landscape:

    • Alternate source of finance: Digital lending is mostly preferred by those who are generally not able to avail any credit through the formal sources of finance, like banks.
    • Lender of the last resort: Digital lending is mostly preferred by those who are generally not able to avail any credit through the formal sources of finance, like banks.
    • Financial inclusion: Digital lending is a powerful tool that can be used for financial inclusion.
    • Cost-efficient lending: With new innovations underway, digital lending offers much better products to the masses at a much faster rate which is even more cost-efficient.
    • Exception for red-tapism: Online lending has played a pivotal role in evading cumbersome red-tapism usually involved while availing loans offline in a traditional setting.
    • Preference by MSMEs: The online lending platforms have gained massive popularity among MSMEs post-Covid as they were unable to secure finance through traditional lending.
    • Easy onboarding: The quick turnaround time and onboarding, easy KYC, as well as disbursement within minutes have attracted the cash-crunched MSMEs towards these digital routes to secure credit.

    Issues with Digital Lending

    • No business model: There are many gaps that are existent in this model of digital lending like any new business operation.
    • High interest: Unauthorised lenders provided credit to customers without any collateral and at exorbitant rates coupled with unachievable deadlines to pay off these humongous debts.
    • Coercing and harassment for recovery: Resultantly, borrowers were coerced by the lenders to recollect when they were unable to pay off these debts. We see many cases of suicides due to such harassment.

    Key recommendations by RBI

    • Self-Regulation: RBI has mooted a Self-Regulatory Organisation for participants in the digital lending ecosystem.
    • Developing a Baseline Technology: Development of certain baseline technology standards and compliance with those standards as a pre-condition for offering digital lending solutions.
    • Direct loan disbursement: Disbursement of loans directly into the bank accounts of borrowers; disbursement and servicing of loans only through bank accounts of the digital lenders.
    • Data collection: With the prior and explicit consent of borrowers with verifiable audit trails.
    • Standardized code of conduct: for recovery to be framed by the proposed SRO in consultation with RBI.

    Way forward

    • There is a growing need for regulation in this space or unauthorized players like pointed out above will keep popping up.
    • Stringent provisions must be formulated which can be enforceable legally.
    • Regulation must be enforced in this industry soon to ensure consumer trust remains unfettered.

     

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  • Speaker’s powers on Anti-Defection Cases

    The All-India Presiding Officers’ Conference (AIPOC) ended with the delegates failing to reach a consensus on whether the Speaker’s powers under the anti-defection law should be limited.

    What is Anti-defection Law?

    • The Anti-Defection Law under the Tenth Schedule of the Constitution punishes MPs/ MLAs for defecting from their party by taking away their membership of the legislature.
    • It gives the Speaker of the legislature the power to decide the outcome of defection proceedings.
    • It was added to the Constitution through the Fifty-Second (Amendment) Act, 1985 when Rajiv Gandhi was PM.
    • The law applies to both Parliament and state assemblies.

    Cases considered under the anti-defection law

    The law covers three scenarios with respect to shifting of political parties by an MP or an MLA.

    (1) Voluntary give-up

    • The first is when a member elected on the ticket of a political party “voluntarily gives up” membership of such a party or votes in the House against the wishes of the party.
    • Such persons lose his seat.

    (2) Independent members

    • When a legislator who has won his or her seat as an independent candidate joins a political party after the election.
    • In both these instances, the legislator loses the seat in the legislature on changing (or joining) a party.

    (3) Nominated MPs

    • In their case, the law gives them six months to join a political party, after being nominated.
    • If they join a party after such time, they stand to lose their seat in the House.

    Powers to disqualification

    • Under the anti-defection law, the power to decide the disqualification of an MP or MLA rests with the presiding officer of the legislature.
    • The law does not specify a time frame in which such a decision has to be made.
    • As a result, Speakers of legislatures have sometimes acted very quickly or have delayed the decision for years — and have been accused of political bias in both situations.

    Significant role of the Speaker/Presiding Officer

    • Pandit Nehru had referred to the Speaker as “the symbol of the nation’s freedom and liberty” and emphasized that Speakers should be men of “outstanding ability and impartiality”.
    • Several judgments on the anti-defection law have been rendered by the Supreme Court.
    • A common factor that shows up in these rulings is the blatant, partisan conduct of speakers in state assemblies.

    Reasons for Speakers’ bias

    • The Speaker continues to belong to a particular political party.
    • The electoral system and conventions in India have ‘not been developed to ensure protection to the office, there are cogent reasons for Speakers to retain party membership.
    • It would be unrealistic to expect a speaker to completely abjure all party considerations while functioning.
    • There are structural issues regarding the manner of appointment of the Speaker and her tenure in office.

    Way forward

    • Parliament may seriously consider a Constitutional amendment to bring in a permanent Tribunal for dealing with defection cases.
    • It is suggested that a scheme should be brought wherein Speakers should renounce all political affiliations, membership, and activity once they have been elected.
    • We can learn from the UK model. In practice, once elected, the Speaker gives up all-partisan affiliation, as in other Parliaments of British tradition.
    • He/she remains in office until retirement, even though the majority may change and does not express any political views during debates.

    Conclusion

    • Impartiality, fairness, and autonomy in decision-making are the hallmarks of a robust institution.
    • It is the freedom from interference and pressures which provide the necessary atmosphere where one can work with an absolute commitment to the cause of neutrality as a constitutional value.

     

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  • Shale and its potential in India

    Cairn Oil & Gas has announced that it is partnering US-based Halliburton to start shale exploration in the Lower Barmer Hill formation, Western Rajasthan.

    What is Shale oil?

    • Shale oil is an unconventional oil produced from oil shale rock fragments by pyrolysis, hydrogenation, or thermal dissolution.
    • These processes convert the organic matter within the rock (kerogen) into synthetic oil and gas.
    • The refined products can be used for the same purposes as those derived from crude oil.

     How does it differ from conventional crude oil?

    • The key difference between shale oil and conventional crude is that the former, also called ‘tight oil’, is found in smaller batches, and deeper than conventional crude deposits.
    • Its extraction requires creation of fractures in oil and gas rich shale to release hydrocarbons through a process called hydraulic fracking.

    What is fracking?

    • Fracking is the process of drilling down into the earth before a high-pressure water mixture is directed at the rock to release the gas inside.
    • Water, sand and chemicals are injected into the rock at high pressure which allows the gas to flow out to the head of the well.
    • The process can be carried out vertically or, more commonly, by drilling horizontally to the rock layer, which can create new pathways to release gas or used to extend existing channels.
    • The term fracking refers to how the rock is fractured apart by the high-pressure mixture.

    Shale production in the world

    • Russia and the US are among the largest shale oil producers in the world.
    • With a surge in shale oil production in the US, it has played a key role in turning the country from an importer of crude to a net exporter in 2019.

    Shale reserves in India

    • As per the US EIA 2015 report, India has got technically recoverable shale gas of 96 trillion cubic feet.
    • The recoverable reserves are identified in Cambay, Krishna – Godavari, Cauvery, Damodar Valley, Upper Assam, Pranahita – Godavari, Rajasthan and Vindhya Basins.
    • The ONGC has drilled the first exploratory shale gas well in Jambusar near Vadodara, Gujarat, in Cambay basin during October 2013.

    What are the prospects of shale oil exploration in India?

    • Currently, there is no large-scale commercial production of shale oil and gas in India.
    • Shale oil and gas exploration faces several challenges other than environmental concerns around massive water requirements for fracking and potential for ground water contamination.
    • State-owned ONGC had, in 2013, started exploration and, by the end of FY21, assessed shale oil and gas potential in 25 nomination blocks.
    • But it has reduced investments over the past few years after only getting limited success in shale exploration efforts.

     

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  • What is Cartelization?

    The Competition Commission of India (CCI) has slapped certain penalties on paper manufacturing companies from agricultural waste and recycled wastepaper against Cartelization.

    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 International Competition Network, which is a global body dedicated to enforcing competition law, has a simpler definition.
    • The three common components of a cartel are:
    1. an agreement
    2. between competitors
    3. 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 a law, that is not cartelization.
    • The Competition Act contains strong provisions against cartels.
    • It also has the leniency provision to incentivise 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.
    • Cartels almost invariably involve secret conspiracies.

    How do they work?

    • According to ICN, four categories of conduct are commonly identified across jurisdictions (countries). These are:
    1. price-fixing
    2. output restrictions
    3. market allocation and
    4. bid-rigging
    • In sum, participants in hard-core cartels agree to insulate themselves from the rigours of a competitive marketplace, substituting cooperation for competition.

    How do cartels hurt?

    • While it may be difficult to accurately quantify the ill-effects of cartels, 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 purchase or sale of goods or services.
    • Thus, excessive pricing by a dominant enterprise could, in certain conditions, be regarded as an abuse and, therefore, subject to investigation by the Competition Commission if it were fully functional.
    • However, it should be understood that where pricing is a result of normal supply and demand, the Competition Commission may have no role.

    How might cartels be worse than monopolies?

    • It is generally well understood that monopolies are bad for both individual consumer interest as well as the society at large.
    • That’s because a monopolist completely dominates the concerned market and, more often than not, abuses 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?

    • Cartels are not easy to detect and identify.
    • As such, experts often suggest providing a 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.
    • However, it must also be pointed out that it is not always easy to ascertain the exact gains from cartelization.
    • In fact, 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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