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  • [Burning issue] 4th Industrial Revolution

    industrial revolution

    Context

    • The World Economic Forum (WEF, as announced earlier, chose Hyderabad as the location for its Center for the Fourth Industrial Revolution (C4IR), which will focus on healthcare and life sciences.
    • In this context, this edition of the burning issue will talk about C4IR, the 4th industrial revolution and India’s readiness to embrace it.

    Objective of setting the ‘Center for the Fourth Industrial Revolution’ (C4IR)

    • The C4IR Hyderabad will be an autonomous, non-profit organization and the only such World Economic Forum in India with a thematic focus on healthcare and life sciences.
    • The C4IR Hyderabad will facilitate, advance and accelerate the development and adoption of newer technologies including genomics, personalized medicine and healthcare manufacturing, with a focus on the interplay between life sciences and technology in the region and globally.
    • It will be the 18th center to join WEF’s Fourth Industrial Revolution (4IR) network that spans four continents.

    What is industrial revolution 4.0?

    • According to the Executive Chairman of WEF, Klaus Schwab, “the fourth industrial revolution is a technological revolution that will fundamentally alter the way we live, work and relate to one another”.
    • It is the information-intensive transformation of manufacturing and related industries into smart factories.
    • It involves the integration of some of the key emerging technologies and trends such as the Internet of Things (IoT), robotics, virtual reality (VR) and artificial intelligence (AI).

    Four integral design principles of Industry 4.0

    • Technical assistance: The ability of the system to assist humans in decision-making, problem-solving, and helping humans with difficult or unsafe tasks.
    • Information transparency: Sharing immense amounts of data and information among the components, to instantly adjust and optimize for higher efficiency.
    • Decentralized decisions: The ability of cyber-physical systems to make decisions on their own and to perform their tasks as autonomously as possible.
    • Interconnection: The ability of devices and people to connect and communicate with each other through the Internet of things.

    The Previous three industrial revolutions

    • 1st industrial revolution: The first Industrial Revolution began in Britain in the last quarter of the 18th century with the mechanization of the textile industry, the harnessing of steam power, and the birth of the modern factory.
    • 2nd industrial revolution: The Second Industrial Revolution, from the last third of the nineteenth century to the outbreak of World War I, was powered by developments in electricity, transportation, chemicals, steel, and mass production and consumption. Industrialization spread even further – to Japan after the Meiji Restoration and deep into Russia, which was booming at the outset of World War I. During this era, factories could produce countless numbers of identical products quickly and cheaply.
    • 3rd industrial revolution: The third industrial revolution, beginning c. 1970, was digital — and applied electronics and information technology to processes of production. Mass customization and additive manufacturing — the so-called ‘3D printing’ — are its key concepts, and its applications, yet to be imagined fully, are quite mind-boggling.

    How different will be the 4th industrial revolution?

    There are three reasons why today’s transformations represent not merely a prolongation of the Third Industrial Revolution but rather the arrival of a Fourth and distinct one: velocity, scope, and systems impact.

    • The speed aspect: The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace.
    • The scope aspect: it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.
    • The system aspect: The 4th revolution will be characterized by the advent of cyber-physical systems which, while being reliant on the technologies and infrastructure of the third industrial revolution, represent entirely new ways in which technology becomes embedded within societies and even our human bodies. Examples include genome editing, new forms of machine intelligence, and breakthrough approaches to governance that rely on cryptographic methods such as blockchain.
    • Hence, it can be said that the 4th industrial revolution is conceptualized as an upgrade on the third revolution and is marked by a fusion of technologies straddling the physical, digital and biological worlds.

    Benefits of Industrial Revolution 4.0

    • Improve the quality of life: Like the revolutions that preceded it, the Fourth Industrial Revolution has the potential to raise global income levels and improve the quality of life for populations around the world.
    • Enhance productivity: Industry 4.0 technologies enable can lead to optimizing resource allocation, reducing downtime and improving production rates, which makes the manufacturing processes more cost-effective and efficient.
    • Cost efficiency: Transportation and communication costs will drop, logistics and global supply chains will become more effective, and the cost of trade will diminish, all of which will open new markets and drive economic growth.
    • Knowledge Sharing and Collaborative Working: Industry 4.0 technologies allow your production lines, business processes, and departments to communicate regardless of location, time zone, platform, or any other factor. Hence, it will facilitate smoother integration of India into the global supply chain. Faster communication and cheaper production technologies can ensure smoother integration of India into the global supply chain. India’s automotive manufacturing sector is a leading user of IR 4.0 technologies.
    • Employment generation: Though the fear of job loss due to Industry 4.0 is widespread, various research points out that is baseless. The Future of Jobs Report 2018 by the World Economic Forum (WEF) predicts the loss of 75 million employments by 2022 worldwide and the production of 133 million occupations over a similar period.

    Challenges to 4IR

    • Cybersecurity issues may increase: In IR 4.0, People, products and equipment will be increasingly connected to the internet. Although this gives us greater access to data via the cloud, it opens up opportunities for hackers to access networks.
    • Reduce the number of low-skill jobs:  Manufacturing, and industry as a whole, continues to rely on humans to enable production. However, the move to digitally connected systems may unintentionally reduce the need for low-skill labor.
    • Industry and Market Disruption: With the new technologies of 4IR, industries that are not able to move with the change will not be unable to survive what Industry 4.0 brings to market.
    • The rise in social inequalities: With this revolution will give rise to a job market increasingly segregated into low-skill/low-pay and high-skill/high-pay segments, which in turn will lead to an increase in social tensions. In India, where digital literacy is dismal, a revolution of this sort can lead to a sharp rise in inequalities.

    Challenges specific to India

    • Deficiency of Infrastructure & internet Connectivity: Besides digital infrastructure, the country lacks some basic infrastructure such as 24×7 power, high-speed internet (especially in rural areas) and a workforce with the necessary skill set.
    • Quality of data: Due to a lack of established data collection standards and a large informal sector, India is unreliable when it comes to the quality of data collected
    • Limited focus on Research and Development: Though India has emerged as the choice location for cutting-edge Research and Development (R&D) projects for global companies, the overall spending on it remains dismal.

    Steps taken by Government

    • SAMARTH Udyog Bharat 4.0: Smart Advanced Manufacturing and Rapid Transformation Hub (SAMARTH) Udyog Bharat 4.0 is an Industry 4.0 initiative of the Department of Heavy Industry, Ministry of Heavy Industry & Public Enterprises. It seeks to facilitate and create an ecosystem for the propagation of Industry 4.0 set of technologies in every Indian manufacturing by 2025, be it MNC, large, medium, or small-scale Indian company.
    • Centre of Excellence (CoE) on IT for Industry 4.0: This CoE would act as a knowledge center for entrepreneurs and startups, propagating the concept of IT and its application in IR 4.0.
    • Centre for Fourth Industrial Revolution: World Economic Forum has opened its 4th center for Fourth Industrial Revolution in Mumbai. It is the fourth in the world after San Francisco, Tokyo and Beijing. It will work in collaboration with NITI Aayog in India to co-design new policies and protocols for emerging technologies. The initial focus of India will be on Artificial Intelligence, Blockchain and drones.
    • National Mission on Interdisciplinary Cyber-Physical Systems (NM-ICPS):  Launched by the Union government in 2018, it was implemented by the Department of Science &Technology.The Mission addresses the ever-increasing technological requirements of society and takes into account the international trends and road maps of leading countries for the next generation of technologies.
    • National Strategy on Artificial Intelligence: Under the strategy, NITI Aayog has adopted a three-pronged approach – undertaking exploratory proof-of-concept AI projects in various areas, crafting a national strategy for building a vibrant AI ecosystem in India and collaborating with various experts and stakeholders.

    What is The Global Lighthouse Network?

    • The World Economic Forum, in collaboration with McKinsey, launched the Global Lighthouse Network (GLN) in 2018 to identify organizations and technologies in the vanguard of the Fourth Industrial Revolution.
    • A lighthouse (in this context) is a manufacturing site that has successfully implemented 4IR technologies at scale, with a significant operational impact.
    • Today, 103 lighthouses—such as Tata Steel’s plant in Kalinganagar, India, and select Henkel Laundry & Home Care production sites—have been identified around the world.

    Way Forward

    • Go for international collaboration: India needs a collaborative effort. It will have to create a long-term ecosystem that trains and educates professionals. India could collaborate with the US, Germany, and the EU. The central government can consider a joint platform between ministries, state governments and industry bodies to create a mission for making the most of the Fourth Industrial Revolution technologies.
    • Promote industry-academia collaboration: There is an urgent need for more industry-academia collaboration and to develop requisite skills in technology. Introduction of a compulsory apprenticeship program to encourage hands-on experience in technology as early as higher secondary level.
    • Increase investments: to fortify quality, prioritize investments in innovation and R&D and invest in life-long learning for employees. He urged the industry to think big and think globally.
    • Focus on improving productivity: To effectively embrace digitalization, the industry has to foster competitive advantage across their value chains, focus on productivity and fill productivity gaps to compete globally.

    Conclusion

    • Fourth Industrial Revolution is about more than just technology-driven change; it is an opportunity to help everyone, including leaders, policy-makers and people from all income groups and nations, to harness converging technologies to create an inclusive, human-centered future.
    • The real opportunity is to look beyond technology and find ways to give the greatest number of people the ability to positively impact their families, organizations and communities

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  • Israel-Palestinian violence on West Bank soars

    west bank

    US has urged Israel and the Palestinians to ease tensions amid a spike in violence that has put the West Bank region on edge.

    Where is West Bank?

    • The West Bank is a landlocked territory near the coast of the Mediterranean in Western Asia that forms the main bulk of the Palestinian territories.
    • It is bordered by Jordan and the Dead Sea to the east and by Israel to the south, west, and north.

    Point of discussion: Anti-Semitism

    • Anti-Semitism (hatred against Jews) is an officially stated policy of many theocratic countries (created by divine orders of religion).
    • This includes entire Arab world, the self-proclaimed caliphate ‘Turkiye’ and even Pakistan.
    • Jews, the micro-minority religion of the world were denied access to their homeland.

    What is the Israel-Palestine Conflict?

    • The land to which Jews and Palestinians lay claim to was under the Ottoman Empire and then the British Empire in early 20th century.
    • Palestinian people —the Arab people from the same area— want to have a state by the name of Palestine in that area.
    • The conflict between Israelis and Palestinians is over who gets what land and how it’s controlled.
    • Jews fleeing the persecution in Europe at the time wanted to establish a Jewish state on the land which they believe to be their ancient homeland.
    • The Arab at the time resisted, saying the land was theirs. The land at the time was called Palestine.
    • In 1917’s Balfour Declaration, the United Kingdom declared its support for the establishment of a “national home for the Jewish people” in Palestine.
    • Arabs resisted it which led to violence.

    Jews into West Bank: Arab hinterland in Israel

    • Some 75,000 Jews migrated to Palestine from 1922-26 and some 60,000 Jews emigrated in 1935, according to a history published by the University of Central Arkansas.
    • It adds that Palestinian Arabs demanded the UK to halt Jewish emigration, but the UK ignored such calls. There were violent incidents, leading to deaths of some 500 people.
    • In 1923, the British Mandate for Palestine came into effect.
    • The document was issued by the League of Nations, the failed predecessor of the United Nations (UN).
    • The mandate gave the UK the responsibility for creating a Jewish national homeland in the region.
    • In 1936, the UK government recommended the partition of Palestine into Jewish and Arab states.

    How did the issue escalate?

    • In 1947, Britain referred the issue of Palestine to the UN, which came up with a partition plan.
    • It put up two proposals. One, two separate states joined economically —the majority proposal— and, two, a single bi-national state made up of autonomous Jewish and Palestinian areas, the minority proposal.
    • The Jewish community approved of the first of these proposals, while the Arabs opposed them both.

    Israel’s independence

    • In May 1948, Israel declared its independence. This was eye-pricking development for Arabs.
    • The Arab countries of Lebanon, Syria, Iraq, and Egypt invaded the newly-declared country immediately.
    • When the war ended, Israel gained some territory formerly granted to Palestinian Arabs under the UN resolution in 1947.
    • It also retained control over the Gaza Strip and the West Bank respectively.

    Resolving the conflict

    Ans. Two-state solution

    • The two-state solution refers to an arrangement where Israeli and Palestinian states co-exist in the region.
    • However, such a solution has not materialised over the decades.
    • As outlined in the beginning and in the briefly explained roots of the conflict, the two-state solution means two separate states for Israelis and Palestinians.

    Why it hasn’t worked out?

    There are four main reasons why the two-state solution has not materialized by now:

    [1] Borders

    • There is no consensus as to how to draw the lines dividing the two proposed states.
    • Many people say borders should have pre-1967 lines.
    • In 1967 Israeli-Arab war, Israel captured Sinai Peninsula, Gaza Strip, West Bank, Old City of Jerusalem, and Golan Heights.
    • Israel is not willing to give up these gains. It returned Sinai to Egypt in 1982.
    • Moreover, there is the question of Israeli settlements in West Bank.

    [2] Question of Jerusalem

    • Both Israel and Palestinians claim Jerusalem as their capital and call it central to their religion and culture.
    • The two-state solution typically calls for dividing it into an Israeli West and a Palestinian East, but it is not easy to draw the line — Jewish, Muslim and Christian holy sites are on top of one another.
    • Israel has declared Jerusalem its ‘undivided capital’, effectively annexing its eastern half, and has built up construction that entrenches Israeli control of the city.

    [3] Refugees

    • A large number of Palestinians had to flee in the 1948 War.
    • They and their descendants —numbering at 5 million— demand a right to return. Israel rejects this.
    • The return of these people would end the demographic majority of Jews, ending the idea of Israel that’s both democratic and Jewish.

    [4] Security

    • Security concerns are also central to Israel as it’s constantly harassed by terrorist group Hamas that controls Gaza Strip.
    • Hamas and other Islamist group in Gaza launch rockets into Israel time-to-time.
    • Moreover, there are also concerns of Palestinians’ attack inside Israel.
    • This year in March-April, at least 18 Israelis were killed in Palestinian attacks inside Israel.
    • A total of 27 Palestinians were also killed in the period, including those who carried out attacks inside Israel. Palestinians too have their concerns.
    • For Palestinians, security means an end to foreign military occupation.

    Why the two-state solution is needed?

    • Besides fulfilling the basic desire of both Jews and Arabs of their own states, supporters of two-state solutions say it must be backed because its alternatives are simply not workable.
    • A single state merging Israel, West Bank, and Gaza would reduce Jews to a minority.
    • At the same time, in such a state, Jews would be a significant minority which would mean that the Arab majority would be miffed.

    Moral reasoning for a two-state solution

    • It says that the aspirations of one person should not be overridden for others’ aspirations.
    • It’s a struggle for collective rights between two distinct groups of people.
    • Jews are the global micro-minority with a very small piece of land to exist.
    • Depriving Israeli Jews of a Jewish state or Palestinians of a Palestinian state would represent a subordination of one group’s aspirations to someone else’s vision.

    Way forward

    • India opines that long-term peace in Israel and Palestine can be achieved only through a negotiated two-State solution leading.
    • This can be done with the establishment of a sovereign, independent and viable State of Palestine living within secure and recognized borders.

     

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  • SC to hear plea against Electoral Bonds Scheme

    bond

    The Supreme Court is scheduled to examine whether petitions challenging the validity of electoral bonds scheme need to be referred to a Constitution Bench.

    What is a Constitution Bench?

    • The constitution bench is the name given to the benches of the Supreme Court of India.
    • The Chief Justice of India has the power to constitute a Constitution Bench and refer cases to it.
    • Constitution benches are set up when the following circumstances exist:
    1. Interpretation of the Constitution: Article 145(3) provides for the constitution of at least five judges of the court which sit to decide any case “involving a substantial question of law as to the interpretation” of the Constitution of India.
    2. President of India seeking SC’s opinion: When the President has sought the Supreme Court’s opinion on a question of fact or law under Article 143 of the Constitution. Article 143 of the Constitution provides for Advisory jurisdiction to the SC. As per the provision, the President has the power to address questions to the apex Court, that he deems important for public welfare.
    3. Conflicting Judgments: When two or more three-judge benches of the Supreme Court have delivered conflicting judgments on the same point of law, necessitating a definite understanding and interpretation of the law by a larger bench.
    • The Constitution benches are set up on ad hoc basis as and when the above-mentioned conditions exist.
    • Constitution benches have decided many of India’s best-known and most important Supreme Court cases, such as:
    1. K. Gopalan v. State of Madras (Preventive detention)
    2. Kesavananda Bharati v. State of Kerala (Basic structure doctrine) and
    3. Ashoka Kumar Thakur v. Union of India (OBC reservations) etc.

     

    What are Electoral Bonds?

    • Electoral bonds are banking instruments that can be purchased by any citizen or company to make donations to political parties, without the donor’s identity being disclosed.
    • It is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India.
    • The citizen or corporate can then donate the same to any eligible political party of his/her choice.
    • An individual or party will be allowed to purchase these bonds digitally or through cheque.

    About the scheme

    • A citizen of India or a body incorporated in India will be eligible to purchase the bond
    • Such bonds can be purchased for any value in multiples of ₹1,000, ₹10,000, ₹10 lakh, and ₹1 crore from any of the specified branches of the State Bank of India
    • The purchaser will be allowed to buy electoral bonds only on due fulfillment of all the extant KYC norms and by making payment from a bank account
    • The bonds will have a life of 15 days (15 days time has been prescribed for the bonds to ensure that they do not become a parallel currency).
    • Donors who contribute less than ₹20,000 to political parties through purchase of electoral bonds need not provide their identity details, such as Permanent Account Number (PAN).

    Objective of the scheme

    • Transparency in political funding: To ensure that the funds being collected by the political parties is accounted money or clean money.

    Who can redeem such bonds?

    • The Electoral Bonds shall be encashed by an eligible Political Party only through a Bank account with the Authorized Bank.
    • Only the Political Parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent of the votes polled in the last General Election to the Lok Sabha or the State Legislative Assembly, shall be eligible to receive the Electoral Bonds.

    Restrictions that are done away

    • Earlier, no foreign company could donate to any political party under the Companies Act
    • A firm could donate a maximum of 7.5 percent of its average three-year net profit as political donations according to Section 182 of the Companies Act.
    • As per the same section of the Act, companies had to disclose details of their political donations in their annual statement of accounts.
    • The government moved an amendment in the Finance Bill to ensure that this proviso would not be applicable to companies in case of electoral bonds.
    • Thus, Indian, foreign and even shell companies can now donate to political parties without having to inform anyone of the contribution.

    Issues with the Scheme

    • Opaque funding: While the identity of the donor is captured, it is not revealed to the party or public. So transparency is not enhanced for the voter.
    • No IT break: Also income tax breaks may not be available for donations through electoral bonds. This pushes the donor to choose between remaining anonymous and saving on taxes.
    • No anonymity for donors: The privacy of the donor is compromised as the bank will know their identity.
    • Differential benefits: These bonds will help any party that is in power because the government can know who donated what money and to whom.
    • Unlimited donations: The electoral bonds scheme and amendments in the Finance Act of 2017 allows for “unlimited donations from individuals and foreign companies to political parties without any record of the sources of funding”.

    Way ahead

    • The worries over the electoral bond scheme, however, go beyond its patent unconstitutionality.
    • The concern about the possibility of misuse of funds is very pertinent.
    • The EC has been demanding that a law be passed to make political parties liable to get their accounts audited by an auditor from a panel suggested by the CAG or EC. This should get prominence.
    • Another feasible option is to establish a National Election Fund to which all donations could be directed.
    • This would take care of the imaginary fear of political reprisal of the donors.

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  • I&B Ministry issues advisory on private TV channels’ ‘Public Service Broadcasting’ Obligation 

    tv

    The Information and Broadcasting Ministry clarified that the topics of national importance and social relevance embedded in the programs broadcast by private TV channels would qualify for “Public Service Broadcasting” Obligation.

    What is the news?

    • The Ministry had earlier issued the guidelines on November 9 last year.
    • Following consultations with the stakeholders, it has now come up with the advisory.

    Content on National Importance: Key Guidelines for TV channels

    • The obligations are under the “Guidelines for Uplinking and Downlinking of Television Channels in India, 2022” to telecast such contents for 30 minutes every day.
    • The time for which the public service broadcasting content is telecast in between commercial breaks shall not be accounted for the 12-minute limit for commercial breaks.
    • The time for the content shall be accounted cumulatively on monthly basis i.e. 15 hours per month.
    • Broadcasters have the liberty to modulate their content.

    Themes of National Interest

    • The relevant content embedded in the programs may be accounted for public service broadcasting.
    • However, it should be done in a manner that the overall objective of the public service broadcasting may be achieved.
    • The content could include the themes of:
    1. Education and spread of literacy
    2. Agriculture and rural development
    3. Health and family welfare
    4. Science and technology
    5. Welfare of women
    6. Weaker sections of society
    7. Protection of environment and cultural heritage and
    8. National integration

    Provisions for voluntary compliance

    • Other subjects: The above list is indicative and could be extended to include similar subjects such as water conservation, disaster management, etc.
    • Self-certification: The advisory seeks to achieve the objective of public service broadcasting by the private TV channels through voluntary compliance and self-certification.
    • Repeat telecast: As advised, the content can be shared between the broadcasters and telecast repeatedly on one or several TV channels.
    • Common e-platform: Such platform can also be developed as a repository of relevant videos or textual content from various sources for access and use.

    Rationale behind

    • Social responsibility: The government has argued that since “airwaves/ frequencies are public property” they “need to be used in the best interest of the society”.
    • Creating awareness: The role of mass media, especially the new channels plays a vital role in reshaping public opinion.

    Ensuring compliance

    • Once the guidelines are implemented, the Ministry will monitor the channels for the broadcast of this content. In case non-compliance is observed in the Ministry’s view, an explanation will be sought.
    • If a channel continues to be non-compliant, more steps can be taken based on specific advisories that will be issued from time to time, and on a case-to-case basis.

    Exemptions

    • Sports channel: The guidelines specify exceptions where it may not be feasible, such as in the case of sports channels, etc.
    • Wildlife channels: The exemption may also apply to wildlife channels and foreign channels, besides live telecasts in the case of sports channels.

     

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  • Process to set up 16th Finance Commission set to kick off soon

    The Centre will soon kick off the process to set up the Sixteenth Finance Commission, with the Finance Ministry likely to notify the terms of reference.

    What is the Finance Commission?

    • The Finance Commission (FC) was established by the President of India in 1951 under Article 280 of the Indian Constitution.
    • It was formed to define the financial relations between the central government of India and the individual state governments.
    • The Finance Commission (Miscellaneous Provisions) Act, 1951 additionally defines the terms of qualification, appointment and disqualification, the term, eligibility and powers of the Finance Commission.
    • As per the Constitution, the FC is appointed every five years and consists of a chairman and four other members.
    • Since the institution of the First FC, stark changes in the macroeconomic situation of the Indian economy have led to major changes in the FC’s recommendations over the years.

    Constitutional Provisions

    Several provisions to bridge the fiscal gap between the Centre and the States were already enshrined in the Constitution of India, including Article 268, which facilitates levy of duties by the Centre but equips the States to collect and retain the same.

    Article 280 of the Indian Constitution defines the scope of the commission:

    1. Who will constitute: The President will constitute a finance commission within two years from the commencement of the Constitution and thereafter at the end of every fifth year or earlier, as the deemed necessary by him/her, which shall include a chairman and four other members.
    2. Qualifications: Parliament may by law determine the requisite qualifications for appointment as members of the commission and the procedure of selection.
    3. Terms of references: The commission is constituted to make recommendations to the president about the distribution of the net proceeds of taxes between the Union and States and also the allocation of the same among the States themselves. It is also under the ambit of the finance commission to define the financial relations between the Union and the States. They also deal with the devolution of unplanned revenue resources.

    Important functions

    • Devolution of taxes: Distribution of net proceeds of taxes between Center and the States, to be divided as per their respective contributions to the taxes.
    • Grants-in-aid: Determine factors governing Grants-in-Aid to the states and the magnitude of the same.
    • Augment states fund: To make recommendations to the president as to the measures needed to augment the Fund of a State to supplement the resources of the panchayats and municipalities in the state on the basis of the recommendations made by the finance committee of the state.
    • Any financial function: Any other matter related to it by the president in the interest of sound finance.

    Members of the Finance Commission

    • The Finance Commission (Miscellaneous Provisions) Act, 1951 was passed to give a structured format to the finance commission and to bring it to par with world standards.
    • It laid down rules for the qualification and disqualification of members of the commission, and for their appointment, term, eligibility and powers.
    • The Chairman of a finance commission is selected from people with experience of public affairs. The other four members are selected from people who:
    1. Are, or have been, or are qualified, as judges of a high court,
    2. Have knowledge of government finances or accounts, or
    3. Have had experience in administration and financial expertise; or
    4. Have special knowledge of economics

    Key challenges for 16th FC

    • Overlap with GST council: A key new challenge for the 16th FC would be the co-existence of another permanent constitutional body, the GST Council.
    • Conflict of interest: The GST Council’s decisions on tax rate changes could alter the revenue calculations made by the Commission for sharing fiscal resources.
    • Feasibility of recommendations: Centre usually takes the Commission’s recommendations on States’ share of tax devolution and the trajectory for fiscal targets into account, and ignores most other suggestions.

    Major outstanding recommendations

    • Creating a Fiscal Council: The 15th FC has suggested creating a Fiscal Council where Centre and States collectively work out India’s macro-fiscal management challenges, but the government has signalled there is no need for it, he pointed out.
    • Creating a non-lapsable fund for internal security: The centre accepted to set up a non-lapsable fund for internal security and defense ‘in principle’, its implementation still has to be worked out.

     

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  • Indus Waters Treaty (IWT) and the disputes

    Indus

    Context

    • India’s January 25 notice to Islamabad seeking modification of the 1960 Indus Waters Treaty is the fallout of a longstanding dispute over two hydroelectric power projects on the western rivers the fully operational Kishenganga on the Jhelum, and Ratle on the Chenab.

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    Indus

    What is Indus Water Treaty (IWT)?

    • The Indus Waters Treaty is a water-distribution treaty between India and Pakistan, brokered by the World Bank signed in Karachi in 1960.
    • According to this agreement, control over the water flowing in three eastern rivers of India the Beas, the Ravi and the Sutlej was given to India.
    • The control over the water flowing in three western rivers of India the Indus, the Chenab and the Jhelum was given to Pakistan.

    Basis of the treaty

    • Equitable water-sharing: Back in time, partitioning the Indus rivers system was inevitable after the Partition of India in 1947.
    • Empathizing the Partition: The sharing formula devised after prolonged negotiations sliced the Indus system into two halves.
    • Water does not recognize borders: Underlying the treaty is the principle that water does not recognise international boundaries and upper riparians have a responsibility to lower riparians.

    Indus

    What is the issue?

    • Pakistan’s objection: The Kishenganga was constructed after the Permanent Court of Arbitration in The Hague ruled in India’s favour. But Pakistan continues to object to this and the Ratle dam.
    • Delhi sought to modify: Delhi, reportedly, has sought to modify the treaty after Pakistan refused intergovernmental negotiations on the matter.
    • Stages for resolving disputes: While that is the first stage provided under the treaty for resolving disputes, the next is the request to the World Bank by the aggrieved party for the appointment of a neutral expert. A court of arbitration is constituted as the last resort.

    Significance of the treaty

    • Testimonial to peaceful coexistence: It is a treaty that is often cited as an example of the possibilities of peaceful coexistence that exist despite the troubled relationship. The IWT is the only agreement between India and Pakistan that has stood the test of time, through wars and terrorism.
    • Survived many hostilities: It has survived 3 crucial wars.
    • Most successful bilateral treaty: It is internationally regarded as an example of successful conflict resolution between two countries otherwise locked in a hostile relationship.

    Indus

    India and Pakistan’s POV

    • While the treaty does provide for modification from time to time, it has to do so by means of a duly ratified treaty concluded for that purpose between the two Governments.
    • More likely, the issue will fester and grow into another active pressure point in India-Pakistan relations.
    • On the Pakistani side, accusations are made with increasing frequency that India has turned off the water, and on this side, the view is growing that India was been too generous in the IWT.
    • Prime Minister Narendra Modi’s remark in the aftermath of the 2016 Uri attack that “blood and water cannot flow together”, even though how this threat might be implemented is not clear as it would be plain dangerous to build big dams to stop the western rivers from flowing across the LoC in a seismologically active region.

    Conclusion

    • Using water as a weapon is never a good idea. It would be so much better for both countries to treat the IWT as an instrument for collaboration on climate action in the fragile Himalayan region.

    Mains question

    Q. What is Indus water treaty? Discuss the significance of IWT and highlight some of the issues.

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  • Layoff and the conditions for retrenchment

    Layoff

    Context

    • Last year, around 1,60,000 workers in the tech industry were laid off globally. In contrast, in just this month alone some 60,000 tech workers have been laid off till now. On the back of a gloomy global economic outlook and prospects of a possible recession, tech firms across the world from US-based giants like Alphabet, Amazon and Meta to early-stage startups have engaged in large-scale retrenchments.

    What is means by Lay-Off?

    • A layoff is the temporary or permanent termination of employment by an employer for reasons unrelated to the employee’s performance.
    • Employees may be laid off when companies aim to cut costs, due to a decline in demand for their products or services, seasonal closure, or during an economic downturn.
    • When laid off, employees lose all wages and company benefits but qualify for unemployment insurance or compensation (typically in USA).

    Inflation after strong recovery of the global economy: Two factors

    • Outpaced demand: Buoyed by extraordinary pandemic relief support to households, aggregate demand in advanced economies outpaced supply.
    • Supply chain disruption as a result of Russia- Ukraine war: the armed conflict between Russia and Ukraine caused supply-chain disruptions, leading to global inflationary pressures for food and fuel. In response, the US Federal Reserve has rapidly hiked rates.

    Layoff

    Layoff drive in India

    • Lay-offs in India: As multinational firms seek to cut their payroll figures worldwide, this lay-off drive has made its way to India as well.
    • Impact on Indian workers: Indian workers, including expatriates and local employees, in both the traditional IT sector and the tech-based startup sector have been affected.
    • Slowdown in funding in 2022: Despite a strong start, funding in India began to slow down in 2022, with third-quarter funding falling to a two-year low.
    • Rising interest rates and cost of capital: Rising interest rates have meant that the cost of capital has increased and venture capitalists have to be more selective about how they deploy funds in this funding winter.
    • Restructuring and cost-cutting for Indian tech startups: Indian tech startups are under pressure to cut costs and restructure their businesses in search for profitability. As a result, startups, including unicorns have engaged in broad-based retrenchments.

    Retrenchment conditions according to Industrial Disputes Act

    • One month notice with reasons is must: Employers must give a one-month notice with reasons for retrenchment to workers who have been in continuous service for at least a year.
    • Must provide compensation: Employers must give retrenchment compensation.
    • Notice shall be served: A notice in the prescribed manner must be served on the appropriate government.
    • Principle of last come first go shall be followed: Employers must follow the principle of last come, first go while retrenching employees.

    Layoff

    Concerns for contract workers

    • Employers often skirt legal requirements by asking for voluntary resignations to remain outside the scope of retrenchment provisions.
    • In any case, these mandates only apply to non-managerial employees; managerial employees are governed by their employment contracts.
    • There are no similar protections available to gig or contract workers.

    Conclusion

    • Even as India seeks to lead a digital and technologically-driven world, it is important to note that the tech sector is not immune to harsh macroeconomic realities. It is crucial for the government and private sector to work together to mitigate the impact of layoffs on workers and to ensure that the industry continues to grow and create opportunities for all.

    Mains question

    Q. Layoffs have been frequently reported in the news recently. In this context, briefly explain the term layoffs and discuss the factors contributing to them? Highlight the impact of layoffs in India.

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  • Census: A prerequisite for economic development

    Census

    Context

    • India aspires to be a $10 trillion economy by 2035. To achieve this, conducting population Census, due in 2021 but postponed indefinitely because of Covid, is necessary. Such data is essential for planning at the village or block level to usher in economic and social development, ensure better governance, and increase the transparency of public schemes and programmes.

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    What is a census?

    • It is nothing but a process of collecting, compiling, analysing, evaluating, publishing and disseminating statistical data regarding the population.
    • It covers demographic, social and economic data and is provided as of a particular date.

    Census

    What is the purpose?

    • To collect the information for planning and formulation policies for Central and the State Governments.
    • The census tells us who we are and where we are going as a nation.
    • It helps the government decide how to distribute funds and assistance to states and localities.
    • The census data is widely used by National and International Agencies, scholars, business people, industrialists, and many more.

    Why conducting a Census has become a prerequisite for economic development?

    • Lack of complete civil registration system: Since many states (and districts) lack a complete civil registration system with a full count of birth and death data, demographers face enormous challenges in providing population counts at the district level. In several instances, estimates tend to be far off the mark, especially for newly formed districts and states.
    • Changing pattern of migration: migration data collected in the Census has great implications for economic activities and social harmony. As India progresses economically, the pattern of migration has been changing in unprecedented ways. The migration pattern in India in the present decade is very different from what the data in Census 2001 and 2011 suggest. Hence, in the absence of updated data, it is difficult to draw conclusions about migration in India.
    • Other surveys does not provide comprehensive data: The Census counts everyone across regions, classes, creeds, religions, languages, castes, marital status, differently-abled populations, occupation patterns etc. Most national-level surveys such as NFHS and NSSO do not have representative data at the population subgroup level, unlike the former. The existence of numerous faiths and languages as well as the expansion or extinction of such communities will be known only via population Census.

    Census

    In the absence of it how demographers collect data?

    • Estimates using past census information: In the absence of updated data, demographers estimate the annual population count at the district level using past Census information for the intercensal or postcensal period. Say, to estimate the population of a district in India in the year 2015, they use the district-level population growth rate between the 2001 and 2011 Census.
    • Such estimates are fair for maximum of 10 years: Such demographic exercises give reasonably fair estimates when the year of population estimation is within the range of a maximum of 10 years. Beyond this period, estimations can be erroneous, particularly at the district level due to dynamic patterns of population components, among them fertility, mortality and migration.
    • Assumptions based model in faster demographic transition: Many districts of India are experiencing a faster demographic transition with varying fertility and mortality rates. So, using the growth rate of 2001-2011 for the period after 2021 becomes more of an assumption-based model than a model that reflects empirical reality. Covid-19 further makes the situation complex as it impacts the fertility and mortality situation in the country.

    Demand for caste census in India

    • India’s population has since increased three-fold to 1.21 billion in 2011.
    • Experts believe the economic status of the dominant OBC castes have improved in the past 80 years and certain castes have not benefited as much.
    • So, the new caste census is required to measure the economic and social well-being of all castes.

    Census

    History and a Way ahead

    • India has a long history of conducting Census without interruption from 1881 with the rare exception of Assam in 1981 and Jammu Kashmir in 1991 due to socio-political unrest and secessionist movements.
    • Conducting it regular at the national and sub-national levels has been a matter of pride for India.
    • It has to be continued until India achieves a fool-proof civil registration system and a dynamic National Population Register.

    Conclusion

    • Conducting the population Census is a mammoth task, of course. Full involvement of the government system is necessary to organise it. But the it is necessary since it forms the basis of all the plans and programmes that the government wants to implement. Postponing the it has immediate and long-term negative consequences for India. The government and other stakeholders should take urgent steps to conduct the Census as early as possible.

    Mains question

    Q. What is census? Why conducting a Census has become a prerequisite for economic development and also discuss the impact of delayed census.

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  • 30th Jan 2023 | Prelims Daily with Previous Year Questions

    30th Jan 2023 | Prelims Daily with Previous Year Questions

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  • National IPR Policy: Discussing the rights of all the stakeholders

    IPR

    Context

    • In May 2016, the then Department of Industrial Policy and Promotion (now known as the Department for Promotion of Industry and Internal Trade) under the Ministry of Commerce released the 32-page National IPR Policy. The overall purpose of this document was to spell out the government’s comprehensive vision for the IPR ecosystem in the country towards shaping a more innovative and creative Bharat.

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    What is a Patent?

    • A patent is an exclusive set of rights granted for an invention, which may be a product or process that provides a new way of doing something or offers a new technical solution to a problem.

    Know the basics: Intellectual Property rights (IPR)

    • IPR refers to the legal rights that protect an individual’s or company’s creations and inventions (such as inventions, literature, music, and symbols) from being used or copied by others without permission.
    • IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create.
    • By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish.

    Three important objectives of National IPR policy document

    • Strong and effective IPR laws: Under the head Legal and Legislative Framework, the goal was to have strong and effective IPR laws, which balance the interests of right owners with larger public interest.
    • Modernise and strengthen IPR administration: Under Administration and Management, the objective was to modernise and strengthen service-oriented IPR administration; and
    • Strengthening adjudicatory mechanism: Under Enforcement and Adjudication, the focus was to strengthen the enforcement and adjudicatory mechanisms for combating IPR infringements.

    IPR

    Changes in IPR ecosystem so far

    • Structural and legislative changes: Over the last six years, the IPR ecosystem in this country has witnessed both structural and legislative changes.
    • Intellectual Property Appellate Board (IPAB): IPAB was dissolved in April 2021 as part of tribunal reforms, and its jurisdiction was re-transferred to high courts.
    • Dedicated IP Division: This was followed by the establishment of dedicated IP benches the IP Division by the Delhi High Court, arguably the country’s leading court on the IPR front, for speedier disposal of IPR disputes.
    • IP friendly environment: Such measures, one presumes, are intended to convey to investors and innovators that Bharat is an IP-savvy and even IP-friendly jurisdiction without compromising on national interest and public health commitments.
    • For instance: This is evident from the very same National IPR Policy which, among other things, expressly recognises the contribution of the Indian pharmaceutical sector in enabling access to affordable medicines globally and its transformation to being the pharmacy of the world.

    IPR

    What are the concerns?

    • Patent-friendliness, rather patentee-friendliness: It appears that the patent establishment of the country has drawn a very different message it has gone on an overdrive to prove its patent-friendliness, rather patentee-friendliness, in the pharmaceutical sector at the expense of public health and national interest respectively.
    • Evergreening of patents on critical drugs: Evergreening patents on drugs which relate to treatment of diabetes, cancers, cardiovascular diseases and other serious conditions continue to be granted to pharmaceutical innovator companies by the Indian Patent Office.
    • Enforcements at the expense of statutory rights: Worse, they are regularly enforced through courts at the expense of the statutory rights of generic manufacturers and to the detriment of patients.
    • Unavailability of affordable drugs: The delayed entry of generic versions of off-patent drugs affects adversely the availability of affordable medicines to patients in a lower middle-income country such as Bharat where most middle-class families and below are only a hospital-visit away from dipping into their hard-earned savings.

    Way ahead

    • It must be understood that IP legislations such as the Patents Act do not exist for the sole benefit of IP right owners.
    • Patent bargain is in which the society is expected to benefit from dynamic innovation-based competition between market players.
    • Clearly, there are four stakeholders under the Patents Act the society, government, patentees and their competitors.
    • Each of these stakeholders has rights under the statute which makes all of them right owners.
    • To interpret, apply and enforce the Act to the exclusive benefit of patentees, and that too evergreening patentees, is to abridge and reduce to a naught the legitimate rights of other stakeholders, leading to sub-optimal and worse, anti-competitive market outcomes.

    Conclusion

    • It is one thing to operate under the understandable belief that Bharat needs to add layers to its IPR ecosystem to attract investment. However, it is entirely another to equate IPR-sensitivity with a pro-patentee position at the expense of public health obligations and long-term national interest. Make in India must be reconciled with Atmanirbhar Bharat, and in the event of conflict between the two, the latter must prevail for Bharat to retain its position as the pharmacy of the world.

    Mains question

    Q. What is Intellectual property rights? Discuss the changes taken place in India’s IPR ecosystem so far and highlight the concerns.

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