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  • 28th August 2020 | Prelims Daily with Previous Year Questions

    [WpProQuiz 509]

    [WpProQuiz_toplist 508]

  • Disintermediation from E-commerce

     E-commerce was expected to provide the level playing field. However, Indian e-commerce has been experiencing the duopoly and new entrant faces several difficulties.

    What is disintermediation

    • The emergence of the internet was seen as a tool for marketers to reach consumers directly.
    • The term disintermediation meant taking intermediaries out of the loop.
    •  The aim was efficiency.
    • It was hoped that without local stockists and distributors in between, retail demand could be fulfilled at lower cost.
    • After all, anyone could put up a website and woo traffic.

    What is the issue?

    • Today, the gains of online market addressal have converged into the hands of a few big winners in a winner-takes-all scenario.
    • Getting an app onto handsets often involves a toll paid to e-gatekeepers.
    • These apps created an entry barrier for the new entrants.
    • So far, single-brand apps have mostly failed, regardless of price baits.
    • After all, it is hard to beat the convenience of a single-touch window that lets shoppers load e-carts with all their needs.

    Conclusion

    E-com was once about snipping out distribution networks. With market access cornered by pioneers, now others want to get past these intermediaries. Only blockbuster apps can do it.

  • Boosting demand with wage hike

    The article discusses the threat posed to the Indian economy by the subdued demand following the return of the labourers to their urban jobs.

    Rural employment issue

    • About 30 million migrant workers rushed home to their villages during the pandemic.
    • About 60 per cent of out-migration from rural India is aspiration-led.
    • Income earned in urban jobs is 2.5 higher than earned in rural area.
    • Though rural economy has been recovering faster than the urban economy, this optimism could prove short-lived, as eventually the more long-lasting determinants of rural wages could prevail.

    What are the determinants of rural wages

    1) NREGA wages

    • The government has raised the rural employment guarantee programme (NREGA) wages and outlays.
    • Demand for the scheme is outpacing supply.
    • This demand-supply mismatch means that it may not be an effective driver of higher rural wages.

    2) Low construction activities

    • Many rural Indians, especially those without land, have become building labourers.
    • 70 per cent of construction is related to real estate and property developers are dependent on funding from struggling non-banking financial companies.
    • Until this type of lending restarts, construction may not normalise.
    • And that means rural wages may not rise quickly either.

    3) Rising debt level

    • The increase in borrowing and fall in inflation over the last few years has increased the “real” indebtedness of rural Indians.
    • This affected particularly the landowners who pay villagers to farm their land.
    • This is likely to hurt their ability to pay high wages.

    3 Reasons why wage outlook could be dimmer

    • As migrant labours start to return to their urban jobs, their wage outlook appears to be bleak for 3 reasons.
    • 1) As during demonetisation, workers could find jobs again, but at lower wages.
    • 2) There could be a second-round of pandemic-led labour market weakness, driven by job losses and falling wages from the first round.
    •  3) We find that both rural and urban wages are driven by economic growth, India’s post-pandemic medium-term growth falling by one percentage point to 5 per cent does not bode well.

    Way forward

    • Weak wages could keep demand subdued. To offset this policymakers have an important role to play.
    • 1) In particular, policymakers may have to ensure that capital is allocated efficiently.
    • After all, investment is the only way to increase the economy’s capacity to create well-paying jobs.
    • 2) Bringing back investment growth would also involve capital re-allocation.
    • This means taking it away from sectors that are not working and redeploying it in sectors that are.
    • Improving the Insolvency and Bankruptcy Code procedure is a key step here.
    • 3) Another important step is to improve the health of banks as they are the ones allocating capital by giving loans.
    •  Implementation of the 5-Rs — recognition, restructuring, resolution, recapitalisation and reforms — for the banking sector may be particularly useful here.

    Consider the question “After supply-side disruption is over, India’s growth may suffer from the subdued wage growth. Suggest the steps to avoid this from happening.”

    Conclusion

    Supply disruption caused by reverse migration won’t last long, but led by lower wages, demand could remain weak, requiring policy intervention.

  • Leveraging its market to force China to settle border issue

    The article charts out the plan to leverage the potential and the present size of the India markets to settle the boundary dispute with China.

    Boycott of Chinese goods: view and counterview

    • After Galwan incident, there have been calls for the boycott of Chinese goods.
    • Counter views have been expressed that the Indian economy is so dependent on China that the costs would be disproportionately higher for India.
    • Our dependence can be reduced substantially if there is a national will and resolve to do so.

    Need for mutually acceptable boundary agreement

    • China may not be willing to go back substantially from the areas they have occupied.
    • Agreeing on maintaining peace and tranquillity or clarification of the LAC has left space for the Chinese to create border incidents which have now led to casualties.
    • So India needs to get China to seriously negotiate a mutually acceptable boundary agreement.

    India could use its market as leverage

    • Size of Indian market: The size of the Indian market and its potential in the coming years provides India considerable leverage.
    • But to use this leverage, Indians, individual consumers as well as firms, have to accept that there would be a period of adjustment in which they would have to pay higher prices.
    • The Chinese have a competitive advantage and are integral to global supply chains.
    • But whatever they sell is, and can be, made elsewhere in the world.
    • Indian can produce everything imported by China: Most of what we import from China was, is and can be made in India itself.
    • With volumes and economies of scale, the cost of production in India would decline as it did in China.

    Steps need to be taken to use market as leverage

    • Focus on those imports from China which have been increasing: The initial focus should be on items which are still being made in India and where imports from China have been increasing.
    • Depriciate Rupees: If the RBI let the currency depreciate in real terms it would be equivalent to an increase in import duties of about 10 per cent.
    • China-specific safeguard duties and use of non-tariff trade barriers should be used in segments like electrical appliances to let Indian producers expand production and increase market share.
    • Government Finances for expansion: The government should also facilitate the flow of finances for expansion and provide technical support for testing, improving quality and lowering costs of production.
    • Look for other players: In critical areas such as Active Pharmaceutical Ingredients, we need a vigorous approach to procure from elsewhere and have early production in India.
    • The government could provide support for environmental compliance to bring down costs of production.This would create demand for domestic goods and services.
    • There are strategic sectors where we should reduce vulnerability: Like scrutiny of -Chinese FDI, Chinese 5G participation etc.
    • Assured government procurement: In critical areas like solar panel and grid storage batteries private investment for manufacturing in India would be triggered by assured government procurement.

    Consider the question “Size and potential of India market could be leverage by India to settle the issues it has with its neighbour. What India needs to achieve this is a strategy and its implementation. Comment.”

    Conclusion

    A sustained and graded economic response to the recent Chinese conduct on the border is needed. We should signal India’s firm resolve and willingness to bear the cost. China could choose to settle the border amicably and have full access to our market. We could then work together to make this the Asian century.

  • States can have sub-groups among SCs/STs: Supreme Court

    A five-judge Bench of the Supreme Court has held that States can sub-classify Scheduled Castes and Scheduled Tribes in the Central List to provide preferential treatment to the “weakest out of the weak”.

    Try this question for mains;

    Q.Reservation is no more seen by the Supreme Court as an exception to the equality rule; rather, it is a facet of equality. Discuss this in light of the quest for sub-categorisation of Scheduled Castes/Tribes.

    What is the sub-categorisation of SCs?

    • States have argued that among the SCs, there are some that remain grossly under-represented despite reservation in comparison to other SCs.
    • This inequality within the SCs is underlined in several reports, and special quotas have been framed to address it.
    • For example, in AP, Punjab, Tamil Nadu and Bihar, special quotas were introduced for the most vulnerable Dalits.
    • In 2007, Bihar set up the Mahadalit Commission to identify the castes within SCs that were left behind.

    About the Judgement

    • The judgment is based on a reference to the Constitution Bench the question of law involving Section 4(5) of the Punjab Scheduled Caste and Backward Classes (Reservation in Services) Act, 2006.
    • The legal provision allows 50% of the reserved Scheduled Castes seats in the State to be allotted to Balmikis and Mazhabi Sikhs.

    There lies struggle within castes: SC

    • There is a “caste struggle” within the reserved class as a benefit of reservation is being usurped by a few, the court pointed out.
    • The million-dollar question is how to trickle down the benefit to the bottom rung.
    • It is clear that caste, occupation, and poverty are interwoven.
    • The State cannot be deprived of the power to take care of the qualitative and quantitative difference between different classes… to take ameliorative measures, said the judgment.

    Overruling the old judgment

    • With this, the Bench took a contrary view to a 2004 judgment delivered by another Coordinate Bench of five judges in the E.V. Chinnaiah case.
    • The judgment had held that allowing States to unilaterally “make a class within a class of members of the Scheduled Castes” would amount to tinkering with the Presidential list.
    • The judgment is significant as it fully endorses the push to extend the creamy layer concept to the Scheduled Castes and Scheduled Tribes.
    • Citizens cannot be treated to be socially and educationally backwards till perpetuity; those who have come up must be excluded like the creamy layer, the judgment said.

    What is the Presidential list?

    • The Constitution, while providing for special treatment of SCs and STs to achieve equality, does not specify the castes and tribes that are to be called SCs and STs.
    • This power is left to the central executive — the President. As per Article 341, those castes notified by the President are called SCs and STs.
    • A caste notified as SC in one state may not be an SC in another state. These vary from state to state to prevent disputes as to whether a particular caste is accorded reservation or not.
    • According to the annual report of the Ministry of Social Justice and Empowerment, there were 1,263 SCs in the country in 2018-19.
    • No community has been specified as SC in Arunachal Pradesh and Nagaland, and Andaman & Nicobar Islands and Lakshadweep.
    • The Constitution treats all Schedule Castes as a single homogeneous group.

    Arguments against sub-categorisation

    • The argument is that the test or requirement of social and educational backwardness cannot be applied to SCs and STs.
    • The special treatment is given to the SCs due to untouchability with which they suffer.
    • In a 1976 case, State of Kerala v N M Thomas, the Supreme Court laid down that “Scheduled Castes are not castes, they are class.”
    • The petitioner’s argument against allowing states to change the proportion of reservation is also based on the perception that such decisions will be made to appease one vote-bank or the other.
    • A watertight President’s list was envisaged to protect from such potential arbitrary change.

    Way ahead with the Judgement

    • The judgement reasoned that sub-classifications within the Presidential/Central List do not amount to “tinkering” with it.
    • No caste is excluded from the list. The States only give preference to weakest of the lot in a pragmatic manner based on statistical data.
    • Preferential treatment to ensure even distribution of reservation benefits to the more backward is a facet of the right to equality, judgement observed.

    Also read:

    [Burning Issue] SC judgement on Reservation not being a Fundamental Right

  • What is the Hangenberg Crisis?

    The explosion of a nearby star — occurred at between Devonian and Carboniferous periods — could have caused a mass extinction event that took place 359 million years ago.

    Try this question from CSP 2018:

    Q.The term “sixth mass extinction/sixth extinction” is often mentioned in the news in the context of the discussion of

    (a) Widespread monoculture Practices agriculture and large-scale commercial farming with indiscriminate use of chemicals in many parts of the world that may result in the loss of good native ecosystems.

    (b) Fears of a possible collision of a meteorite with the Earth in the near future in the manner it happened 65million years ago that caused the mass extinction of many species including those of dinosaurs.

    (c) Large scale cultivation of genetically modified crops in many parts of the world and promoting their cultivationin other Parts of the world which may cause the disappearance of good native crop plants and the loss offood biodiversity.

    (d) Mankind’s over-exploitation/misuse of natural resources, fragmentation/loss, natural habitats, destructionof ecosystems, pollution and global climate change.

    Hangenberg crisis

    • The Earth suffered an intense loss of species diversity that lasted for at least 300,000 years.
    • The event is thought to have been caused by long-lasting ozone depletion, which would have allowed much more of the Sun’s ultraviolet (UV) radiation to reach and harm life on Earth.
    • It was called the Hangenberg crisis.

    What did researchers find?

    • Extensive volcanism and global warming can also rupture the ozone layer but shreds of evidence for these are indefinite as far as the time period is concerned.
    • So, they up that one or more supernovae explosions, at a distance of 65 light-years away from the Earth, may have caused a prolonged loss of ozone.
    • Betelgeuse, a supernova, around 600 light-years away and present outside the kill distance of 25 light-years poses a danger today.
    • Events like gamma-ray bursts, solar eruptions and meteorite collisions end up very soon. As such, they cannot pave the way for gradual ozone depletion that took place at the close of the Devonian aeon.
    • A supernova event can be powerful enough to bathe its galaxy in light for days and months alike. It can be spotted across the universe as well.

    Why Supernovae are considered dangerous?

    • Supernovae (SNe) are quick sources of ionizing photons that include fatal X-rays, UV and gamma rays.
    • Over a longer period of time, the bang clashes with the nearby gas, resulting in a shockwave that causes particle acceleration.
    • As such, cosmic rays are generated by SNe. These charged particles with high energies get magnetically confined on the inside of SN remains.
    • The fossil evidence shows a 300,000-year shrink in biodiversity leading the way to Devonian-Carboniferous Boundary (DCB) mass extinction.
    • This puts forward the possibility of multiple catastrophes or multiple supernovae explosions.

  • Atal Tunnel at Rohtang

    The Atal Tunnel at Rohtang, near Manali, is almost complete in all respects and will be inaugurated very soon in September.

    Tap to read more about Himalayas at:

    https://www.civilsdaily.com/the-northern-and-northeastern-mountains-part-1/

    Atal Tunnel

    • The 9-km-long tunnel is constructed under the Pir Panjal range.
    • It has been named after former PM Atal Bihari Vajpayee and will be the world’s longest highway tunnel above the altitude of 10,000 feet (3000 metres).
    • It was scheduled to be completed by May 2020, in a revised estimate, but the Covid-19 pandemic pushed back the completion by a few months due to lockdown conditions.
    • Vehicles can travel at a maximum speed of 80 km per hour. Up to 1,500 trucks and 3,000 cars are expected to use it per day when the situation gets to normal.

    What is its strategic advantage?

    • Cutting through the Pir Panjal range, the tunnel will reduce the distance between Manali and Leh by 46 km.
    • The tunnel will provide almost all-weather connectivity to the troops stationed in Ladakh.

  • PVTGS in Andaman

    Five members of the Great Andamanese tribe, a Particularly Vulnerable Tribal Group (PVTGs) have tested positive for COVID-19.

    Try this PYQ:

    Q. Consider the following statements about Particularly Vulnerable Tribal Groups (PVTGs) in India:

    1. PVTGs reside in 18 States and one Union Territory.
    2. A stagnant or declining population is one of the criteria for determining PVTG status.
    3. There are 95 PVTGs officially notified in the country so far.
    4. Irular and Konda Reddi tribes are included in the list of PVTGs.

    Which of the statements given above are correct?(CSP 2019)

    (a) 1, 2 and 3

    (b) 2, 3 and 4

    (c) 1, 2 and 4

    (d) 1, 3 and 4

    PVTGs in Andaman

    • Great Andamanese is one of five PVTGs that reside in Andamans archipelago.
    • The Great Andamanese speak Jeru dialect among themselves and their number stands at 51 as per the last study carried out by Andaman Adim Janjati Vikas Samiti in 2012.
    • The five PVTGS residing in Andamans are Great Andamanese, Jarwas, Onges, Shompens and North Sentinelese.

    What are PVTGs?

    • There are certain tribal communities who have declining or stagnant population, low level of literacy, pre-agricultural level of technology and are economically backward.
    • They generally inhabit remote localities having poor infrastructure and administrative support.
    • These groups are among the most vulnerable section of our society as they are few in numbers, have not attained any significant level of social and economic development.
    • 75 such groups have been identified and categorized as Particularly Vulnerable Tribal Groups (PVTGs).

  • Turkey’s Maritime Disputes

    Turkish President Erdogan has asserted that his country will take whatever belongs to it in the Mediterranean, as well as Aegean and the Black Sea.

    Try this PYQ:

    Q.Turkey is located between

    (a) The Black Sea and Caspian Sea

    (b) The Black Sea and Mediterranean Sea

    (c) Gulf of Suez and the Mediterranean Sea

    (d) Gulf of Aqaba and the Dead Sea

    Assertion over the Mediterranean

    • Greece and Turkey have been locked in a dispute over control of eastern Mediterranean waters.
    • They are at odds over the rights to potential hydrocarbon resources, based on conflicting claims over the extent of their continental shelves.
    • The Turkish navy will hold the shooting exercises in the eastern Mediterranean off the coast of Iskenderun, northeast of Cyprus.
    • Cyprus was divided in 1974 following a Turkish invasion triggered by a Greek-inspired coup.
    • Turkey recognizes the Turkish-populated north of Cyprus as a separate state, which is not recognised by other countries.

  • 27th August 2020 | Prelims Daily with Previous Year Questions

    [WpProQuiz 508]

    [WpProQuiz_toplist 507]

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