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  • 17th August 2020 | Prelims Daily with Previous Year Questions

    [WpProQuiz 502]

    [WpProQuiz_toplist 501]

  • Economic crisis without culprit

    Contradictions in the present crisis

    • India registered negative economic growth in 1972-73, 1965-66 and 1957-58.
    • All these were drought years.
    • 1957-58 also registered a significant balance of payments (BOP) deterioration and 1979-80 witnessing the second global oil shock following the Iranian Revolution.
    • Farmers harvested a bumper rabi crop last year and public cereal stocks at 94.42 million tonnes as on July 1 were also 2.3 times the required level.
    • There’s no shortage today of food, forex or even savings.
    • Foreign exchange reserves were at an all-time high of $538.19 billion.
    • So, the real GDP decline of 5-10 per cent for 2020-21 would be the country’s first-ever not triggered by an agricultural or a BOP crisis.

    “Western style” demand slowdown in India

    • What India has been going through is a full-fledged recession bereft of consumption and investment demand.
    • Households have cut spending.
    • The same goes with businesses. Many have shut or are operating at a fraction of their capacity and pre-lockdown staff strength.
    • This demand-side uncertainty and the resulting economic contraction is something new to India.
    • Banks are also facing a problem of plenty.
    • While their deposits are up 11.1 per cent, the corresponding credit growth has been just 5.5 per cent.
    • At some point when all this reduced spending and investments leads to a further contraction of incomes, it is bound to reduce savings as well.

    Why the government is not spending?

    • Solution in such a situation is the spending by the government.
    • There are three probable reasons why government isn’t doing that.

    1.Optimism

    • Hope that once the worst of the pandemic is behind us, people will start spending and businesses, too, will spring back to life.
    • However, this assumes the economy wasn’t doing all that badly previously and that the lockdown hasn’t caused too much of permanent damage.
    • The truth is that growth had already slid to 3.9 per cent in 2019-20.

    2.State of Government finances

    • In 2007-08 global financial crisis, the Centre’s fiscal deficit was only 2.5 per cent of GDP, whereas it stood at 4.6 per cent in 2019-20.
    •  The space for a fiscal stimulus, in other words, is very limited compared to that time.

    3.Sustainability of debt

    •  Between 2007-08 and 2019-20, the Centre’s outstanding debt-GDP ratio has come down from 56.9 to 49.25 per cent.
    • So has general government debt, which includes the liabilities of states, from 74.6 to 69.8 per cent.
    • Economists such as Olivier Blanchard have shown that public debts are sustainable provided governments can borrow at rates below nominal GDP growth (i.e. GDP unadjusted for inflation).
    • The nominal GDP averaged 11.1 per cent during  2014-15 to 2018-19.
    • As against this, the weighted average interest rate on Central government securities ruled between 6.97 per cent in 2016-17 and 8.51 per cent in 2014-15.
    • Only with nominal GDP growth falling to 7.2 per cent in 2019-20, and most likely zero this fiscal, has the Blanchard debt sustainability formula come under threat.

    Way forward

    • Government can take lessons from the Vajpayee period when the weighted average cost of Central borrowings more than halved from 12.01 per cent in 1997-98 to 5.71 per cent in 2003-04.
    • In the last four months, yields on 10-year Indian government bonds have softened from 6.5 to 5.9 per cent and even more for states — from 7.9 to 6.4 per cent.
    •  Interest rates will fall further as banks have nobody to lend to.

    Consider the question “Examine how covid induced economic recession is different from the past recessions? What are the options with the government to deal with the situation?” 

    Conclusion

    Governments should borrow and spend. They need worry only about GDP growth, real and nominal.

    Sources: https://indianexpress.com/article/opinion/columns/a-crisis-without-villains-6557602/

  • Correcting the agri market

    The article analyses the highlights the importance of post harvest infrastructure for the better price realisation of agri-commodities. It also suggests the two areal which could help the farmers in this regard.

    Purpose of Agriculture Infrastructure Fund

    • Creating post-harvest physical infrastructure is as important as the changes in the legal framework (like the recent ordinances).
    • The recently announced Rs 1 lakh crore Agriculture Infrastructure Fund (AIF) will be used over the next four years.
    • This fund will be used to build post-harvest storage and processing facilities.
    • NABARD will steer this initiative in association with the Ministry of Agriculture and Farmers Welfare, largely anchored at FPOs.
    • The creation of the AIF presumes that there is already large demand for storage facilities and other post harvest infrastructure.

     Reforms in 2 areas which could help farmers get better price realisation

    1) Negotiable warehouse receipt

    • More and better storage facilities can help farmers avoid distress sellingimmediately after the harvest.
    • But small farmers cannot hold stocks for long as they have urgent cash needs to meet family expenditures.
    • Therefore, the value of the storage facilities at the FPO level could be enhanced by a negotiable warehouse receipt system.
    • FPOs can give an advance to farmers, say 75-80 per cent of the value of their produce at the current market price.

    How NABARD can play an important role

    • Since NABARD is also responsible for the creation of 10,000 more FPOs, it can create a package that will help these outfits realise better prices
    • FPOs will need large working capital to give advances to farmers against their produce as collateral.
    • NABARD can ensure that FPOs get their working capital at interest rates of 4 to 7 per cent.
    • Currently, most FPOs get capital from microfinance institutions at rates ranging from 18-22 per cent per annum which is not economically viable unless the off-season prices are substantially higher than the prices at harvest time.

    2)Improving Agri-futures markets

    • A vibrant futures market is a standard way of reducing risks in a market economy.
    • Several countries — be it China or the US — have agri-futures markets that are multiple times the size of those in India.

    Way forward

    • 1) NABARD  should devise a compulsory module that trains FPOs to use the negotiable warehouse receipt system and navigate the realm of agri-futures to hedge their market risks.
    • 2) Government agencies dealing in commodity markets — the FCI, NAFED, State Trading Corporation (STC) — should increase their participation in agri-futures.
    • That is how China deepened its agri-futures markets.
    • 3) The banks that give loans to FPOs and traders should also participate in commodity futures as “re-insurers” for the healthy growth of agri-markets.
    • 4)  Government policy has to be more stable and market friendly.
    • In the past, it has been too restrictive and unpredictable.

    Consider the question “Creating post-harvest physical infrastructure is as important as the changes in the legal framework. In light of this, highlight the importance of recently announced Agriculture Infrastructure Fund and suggest the measures to increase the price realisation of agri-products by farmers.” 

    Conclusion

    India needs to not only spatially integrate its agri-markets (one nation, one market) but also integrate them temporally — spot and futures markets have to converge. Only then will Indian farmers realise the best price for their produce and hedge market risks.

  • 17th August 2020| Daily Answer Writing Enhancement

    Important Announcement:  Topics to be covered on 18th August-

    GS-1 Distribution of key natural resources across the world.

    GS-4 Human Values

    Question 1)

    Explain the mechanism of the monsoon rains in India. Discuss in detail its effect and significance on the economy. 10 marks

    Question 2)

    Analyse the salience of India-Sri Lanka relations as neighbours. Also examine how domestic politics in both the countries influence bilateral relation. 10 marks

     

    Question 3)

    Creating post-harvest physical infrastructure is as important as the changes in the legal framework. In light of this, highlight the importance of recently announced Agriculture Infrastructure Fund and suggest the measures to increase the price realisation of agri-products by farmers. 10 marks

    Question 4)  

    What is environmental ethics? What are the various issues involved in environmental ethics? 10 marks

     

     

    Reviews will be provided in a week. (In the order of submission- First come first serve basis). In case the answer is submitted late the review period may get extended to two weeks.

    *In case your answer is not reviewed in a week, reply to your answer saying *NOT CHECKED*. If Parth Sir’s tag is available then tag him.

    For the philosophy of AWE and payment, check  here: Click2Join

  • Debate: Minimum age of marriage for women

    PM in his I-Day speech has announced that the central government has set up a committee to reconsider the minimum age of marriage for women during his address to the nation on the 74th Independence Day.

    Try this question for mains:

    Q.The different minimum age of marriage for women and men is a discriminatory provision. Analyse.

    Back in debate

    • The minimum age of marriage, especially for women, has been a contentious issue.
    • The law evolved in the face of much resistance from religious and social conservatives.
    • Currently, the law prescribes that the minimum age of marriage is 21 years and 18 years for men and women respectively.

    Issue over majority

    • The minimum age of marriage is distinct from the age of majority which is gender-neutral.
    • An individual attains the age of majority at 18 as per the Indian Majority Act, 1875.
    • The law prescribes a minimum age of marriage to essentially outlaw child marriages and prevents the abuse of minors.

    What is the committee that the PM mentioned?

    • The Union Ministry for WCD had set up a task force to examine matters pertaining to the age of motherhood, imperatives of lowering Maternal Mortality Ratio and the improvement of nutritional levels among women.
    • The task force would examine the correlation of age of marriage and motherhood with health, medical well-being, and nutritional status of the mother and neonate, infant or child, during pregnancy, birth and thereafter.
    • It will also examine the possibility of increasing the age of marriage for women from the present 18 years to 21 years.

    How common are child marriages in India?

    • UNICEF estimates suggest that each year, at least 1.5 million girls under the age of 18 are married in India.
    • It makes our country home to the largest number of child brides in the world — accounting for a third of the global total.
    • Nearly 16 per cent adolescent girls aged 15-19 are currently married.

    Provisions for the minimum age for marriage

    • Personal laws of various religions that deal with marriage have their own standards, often reflecting custom.
    • For Hindus, Section 5(iii) of The Hindu Marriage Act, 1955, sets 18 years as the minimum age for the bride and 21 years as the minimum age for the groom.
    • However, child marriages are not illegal — even though they can be declared void at the request of the minor in the marriage.
    • In Islam, the marriage of a minor who has attained puberty is considered valid.
    • The Special Marriage Act, 1954 and the Prohibition of Child Marriage Act, 2006 also prescribe 18 and 21 years as the minimum age of consent for marriage for women and men respectively.
    • Additionally, sexual intercourse with a minor is rape, and the ‘consent’ of a minor is regarded as invalid since she is deemed incapable of giving consent at that age.

    Evolution of the law

    • The IPC enacted in 1860 criminalised sexual intercourse with a girl below the age of 10.
    • The provision of rape was amended in 1927 through The Age of Consent Bill, 1927, which declared that marriage with a girl under 12 would be invalid.
    • The law faced opposition from conservative leaders of the Indian National Movement, who saw the British intervention as an attack on Hindu customs.
    • A legal framework for the age of consent for marriage in India only began in the 1880s.

    Comes in: The Sarda Act

    • In 1929, The Child Marriage Restraint Act set 16 and 18 years as the minimum age of marriage for girls and boys respectively.
    • The law, popularly known as the Sarda Act after its sponsor Harbilas Sarda, a judge and a member of Arya Samaj, was eventually amended in 1978 to prescribe 18 and 21 years as the age of marriage for a woman and a man respectively.

    Contention over different legal standards

    • There is no reasoning in the law for having different legal standards of age for men and women to marry. The laws are a codification of custom and religious practices.
    • The Law Commission consultation paper has argued that having different legal standards “contributes to the stereotype that wives must be younger than their husbands”.
    • Women’s rights activists have argued that the law also perpetuates the stereotype that women are more mature than men of the same age and, therefore, can be allowed to marry sooner.
    • The international treaty Committee on the Elimination of Discrimination against Women (CEDAW), also calls for the abolition of laws that assume women have a different physical or intellectual rate of growth than men.

    Why is the law being relooked at?

    • Despite laws mandating minimum age and criminalizing sexual intercourse with a minor, child marriages are very prevalent in the country.
    • From bringing in gender-neutrality to reduce the risks of early pregnancy among women, there are many arguments in favour of increasing the minimum age of marriage of women.
    • Early pregnancy is associated with increased child mortality rates and affects the health of the mother.

    Upholding the Constitution

    • Petitioners, in this case, had challenged the law on the grounds of discrimination.
    • It is argued that Articles 14 and 21 of the Constitution, which guarantee the right to equality and the right to live with dignity, were violated by having different legal ages for men and women to marry.
    • Two significant Supreme Court rulings can act as precedents to support the petitioner’s claim.
    • In 2014, in the ‘NALSA v Union of India’ case, the Supreme Court, while recognising transgenders as the third gender, said that justice is delivered with the “assumption that humans have equal value and should, therefore, be treated as equal, as well as by equal laws”.
    • In 2019, in ‘Joseph Shine v Union of India’, the Supreme Court decriminalized adultery, and said that “a law that treats women differently based on gender stereotypes is an affront to women’s dignity”.

  • Why has the Israel-UAE pact unsettled Palestine and Iran?

    Last week Mr Trump has announced that Israel and the United Arab Emirates (UAE) had reached a peace agreement. Many countries, including the European powers and India, have welcomed it, while the Palestinian leadership, as well as Turkey and Iran, have lashed out at the UAE.

    The strategic location of Gaza strip, West Bank, Dead Sea etc. creates a hotspot for a possible map based prelims question. 

    Consider this PYQ:

    Q. The area is known as ‘Golan Heights’ sometimes appears in the news in the context of the events related to: (CSP 2015)

    a) Central Asia
    b) Middle East
    c) South-East Asia
    d) Central Africa

    The Israel-UAE Pact

    • The UAE and Israel would establish formal diplomatic relations and in exchange, Israel would suspend its plans to annex parts of the occupied West Bank.
    • Israeli PM Netanyahu had earlier vowed to annex the Jewish settlements in the West Bank.
    • But now, as part of the agreement, Israel “will suspend declaring sovereignty over areas” of the West Bank and “focus its efforts on expanding ties with other countries in the Arab and Muslim world”.

    A timeline of Israel-Arab Conflict

    Arab-Israeli ties have historically been conflict-ridden.

    • Arab countries, including Egypt, Transjordan, Syria and Iraq, fought their first war with Israel in 1948 after the formation of the state of Israel was announced.
    • The war ended with Israel capturing more territories, including West Jerusalem than what the UN Partition Plan originally proposed for a Jewish state.
    • After that, Israel and Arab states fought three more major wars — the 1956 Suez conflict, the 1967 Six-Day War and the 1973 Yom Kippur War.
    • After the 1967 war in which Israel captured the Sinai Peninsula and Gaza Strip from Egypt, East Jerusalem and the West Bank from Jordan and the Golan Heights from Syria.
    • Arab countries convened in Khartoum and declared their famous three “‘Nos’ — no peace with Israel, no talks with Israel and no recognition of Israel.
    • But it did not last long. After the death of Egypt President Gamal Abdel Nasser, his successor Anwar Sadat started making plans to get Sinai back from Israel.
    • His efforts, coupled with American pressure on Israel, led to the Camp David Accords of 1978 with Israel’s withdrawal.

    Significance of the deal

    • It’s a landmark agreement given that the UAE is only the third Arab country and the first in the Gulf region to establish diplomatic relations with Israel.
    • In 1994, Jordan became the second Arab country to sign a peace treaty with Israel.
    • The UAE-Israel agreement comes after 26 years. If more countries in the Gulf follow the UAE’s lead, it would open a new chapter in Arab-Israel ties.

    Why did the UAE sign the agreement?

    • The old enmity between Arab countries and Israel has dissipated.
    • The Sunni Arab kingdoms in the Gulf region such as Saudi Arabia and the UAE had developed backroom contacts with Israel over the past several years.
    • One of the major factors that brought them closer has been their shared antipathy towards Iran.
    • Arab countries have signalled that they are ready to live with Israel’s occupation of Palestine.

    What do Arab countries want from Israel?

    • Arab countries expect a major change in the status quo on West Bank annexation which would put Israel under political and diplomatic pressure.
    • The UAE-Israel agreement has averted that outcome.
    • If a Democratic Party (Trump’s opposition and Obama’s allegiance) comes to power and restores the Iran deal, both the Israeli and the Arab blocs in West Asia would come under pressure to live with an empowered Iran.
    • A formal agreement and enhanced security and economic ties make the Arab and Israeli sides better prepared to face such a situation.
    • So there is a convergence of interests for the UAE, Israel and the U.S. to come together in the region.

    Where does it leave the Palestinians?

    • Unlike the past two Arab-Israeli peace agreements, Palestinians do not figure prominently in the current one.
    • In the present UAE-Israel deal, Israel has not made any actual concession to the Palestinians.
    • The Palestinians are understandably upset. They called the UAE’s decision “treason”.

    Geopolitical implications of the deal

    • The agreement could fast-track the changes that are already underway in the region.
    • The Saudi bloc, consisting of Egypt, the UAE, Bahrain and others, see their interests being aligned with that of the U.S. and Israel and their support for Palestine, which Arab powers had historically upheld.
    • Turkey and Iran now emerge as the strongest supporters of the Palestinians in the Muslim world.
    • This tripolar contest is already at work in West Asia. The UAE-Israel thaw could sharpen it further.

    Also read:

    West Bank Annexation Plan

  • Expansion of the National Cadet Corps (NCC)

    In his I-Day speech, PM spoke about the expansion of the National Cadet Corps (NCC) in coastal and border districts of India.

    Try this question:

    Q.The Shekatkar Committee recommendations sometimes seen in the news are related to:

    a) Modernization of Railways b) Modernization of Defence c) Road Infrastructure d) Cashless Payments

    About NCC

    • The NCC, which was formed in 1948, has its roots to British era uniformed youth entities like University Corps or University Officer Training Corps.
    • It enrols cadets at the high school and college level and also awards certificates on completion of various phases.
    • Headed by a Director-General of three-star military rank, the NCC falls under the purview of MoD and is led by serving officers from the Armed forces at various hierarchical positions.
    • The NCC currently has 17 regional directorates which govern the NCC in units in various states or groups of states and union territories.
    • Each school and college units have Associate NCC Officers and cadets are also assigned various leadership roles in the form of cadet appointments.
    • NCC has a dual funding model where both the centre and states or union territories provide budgetary support.

    Training the cadets

    • The NCC cadets receive basic military training at various levels and also have academic curriculum basics related to Armed forces and their functioning.
    • Various training camps, adventure activities and military training camps are an important aspect of NCC training.
    • NCC cadets have played an important role over the years in relief efforts during various emergency situations.
    • During the ongoing pandemic, over 60,000 NCC cadets have been deployed for voluntary relief work in coordination with district and state authorities across the country.

    PM’s announcement

    • Expansion of NCC in the border and coastal area has been under consideration of the Ministry of Defence for quite some time.
    • PM took this I-Day to announce that from the 173 coastal and border districts, one lakh cadets, a third of them girls, will be trained.
    • Currently, the NCC has the strength of around 14 lakh cadets from Army, Navy and Air Force wings.
    • Border and coastal areas will get trained manpower to fight with disasters. Youth will acquire the required skills for careers in armed forces.

    Significance of expansion

    • In the coastal regions, where youth are already familiar with the sea, the training will increase interest in careers in Navy, Coast Guard and also Merchant shipping avenues.
    • In the border area, the trained cadets can play an important role in various contingencies and also in supporting roles to the Armed forces in various roles.

  • What is the National Health ID System?

    In his address to the nation on Independence Day, the PM has launched the National Digital Health Mission which rolls out a national health ID for every Indian.

    Try this question for mains:

    Q.What is the National Health ID System? How will it benefit transforming healthcare facilities in India?

    National Health ID System

    • This system finds its roots in a 2018 NITI Aayog proposal to create a centralised mechanism to uniquely identify every participating user in the National Health Stack.
    • It will be a repository of all health-related information of a person.
    • According to the National Health Authority (NHA), every patient who wishes to have their health records available digitally must start by creating a Health ID.
    • Each Health ID will be linked to a health data consent manager — such as National Digital Health Mission (NDHM).
    • The Health ID is created by using a person’s basic details and mobile number or Aadhaar number.
    • This will make it unique to the person, who will have the option to link all of their health records to this ID.

    What was the original proposal for the health ID?

    • The National Health Policy 2017 had envisaged creation of a digital health technology eco-system aiming at developing an integrated health information system.
    • In the context of this, the central government’s think-tank NITI Aayog, in June 2018, floated a consultation of a digital backbone for India’s health system — National Health Stack.
    • As part of its consultation, NITI Aayog proposed a Digital Health ID to greatly reduce the risk of preventable medical errors and significantly increase the quality of care.

    Stakeholders in the national health ID

    • As envisaged, various healthcare providers — such as hospitals, laboratories, insurance companies, online pharmacies, telemedicine firms — will be expected to participate in the health ID system.

    Back2Basics:

    https://www.civilsdaily.com/news/national-digital-health-mission-ndhm/

  • Tweets against CJI amounts to Criminal Contempt

    A three-judge Bench of the Supreme Court has found a famous civil rights lawyer guilty of criminal contempt by ‘scandalizing the court’.

    Try this question for mains:

    Q.What is Contempt of Court? Discuss, how free speech can lead to the contempt of courts?

    Contempt of Court

    • According to the Contempt of Courts Act, 1971, contempt of court can either be civil contempt or criminal contempt.
    • Civil contempt means willful disobedience to any judgment, decree, direction, order, writ or another process of a court or willful breach of an undertaking given to a court.
    • On the other hand, criminal contempt means the publication (whether by words, spoken or written, or by signs, or by visible representations, or otherwise) of any matter or the doing of any other act whatsoever which
    1. Scandalizes or tends to scandalize, or lowers or tends to lower the authority of, any court; or
    2. Prejudices, or interferes or tends to interfere with, the due course of any judicial proceeding; or
    3. Interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner.

    What did the court rule in this case?

    • The tweets had the effect of attempting to destabilize Indian democracy.
    • A defamatory publication concerning “the judge is a serious impediment to justice”.
    • The court could not ignore the disrespect and disaffection created by the “scurrilous” tweets.
    • If such an attack is not dealt with a requisite degree of firmness, it may affect the national honour and prestige in the comity of nations.

    A suo motu action

    • The prior consent of the Attorney General (AG) of India is not required to suo motu initiate the inherent contempt powers of the Supreme Court.
    • The Contempt of Court Act of 1971 cannot limit this power of the court. The statute only provides the procedure in which such contempt is to be initiated.
    • The suo motu contempt powers of the top court are drawn from Article 129 of the Constitution, which says the Supreme Court, as a court of record, has the power to punish for contempt of itself.

    What would be the penalty?

    • The Contempt of Court Act of 1971 punishes with imprisonment that may extend to six months or fine of ₹ 2,000 or both.
    • This is provided in case the accused may be discharged or the punishment awarded may be remitted on apology being made to the satisfaction of the court.

    Also read:

    Explained: What is Contempt of Court?

  • RBI’s Positive Pay system

    The new ‘Positive Pay’ mechanism was recently introduced by the Reserve Bank of India (RBI).

    Try this PYQ:

    With reference to digital payments, consider the following statements:

    1. BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account.
    2. While a chip-pin debit card has four factors authentication, BHIM app has only two factors of authentication.

    Which of the statements given above is/are correct? (CSP 2018)

    a) 1 only
    b) 2 only
    c) Both 1 and 2
    d) Neither 1 nor 2

    What is the move?

    • Issuers will be able to send all details to their bank, thereby ensuring faster clearance of cheques above Rs 50,000.
    • All cheques will be processed as per the information sent by the account holder at the time of issuance of cheques.
    • This will cover approximately 20 per cent of transactions by volume and 80 per cent by value.
    • It will make cheque payments safer and reduces instances of frauds.

    What is Positive Pay Mechanism?

    • Positive Pay is a fraud detection tool adopted by banks to protect customers against forged, altered or counterfeit cheques.
    • It crosses verifies all details of the cheque issued before funds are encashed by the beneficiary.
    • In case of a mismatch, the cheque is sent back to the issuer for examination.
    • By following such a system, a bank knows of a cheque being drawn by the customer even before it is deposited by the beneficiary into his/her account.

    How does the mechanism work?

    • Under Positive Pay feature, the issuer will first share the details of the issued cheque like cheque number, date, name of the payee, account number, amount and the likes through his/her net banking account.
    • Along with this, an image of the front and reverse side of the cheque is also required to be shared, before handing it over to the beneficiary.
    • When the beneficiary submits the cheque for encashment, the details are compared with those provided to the bank through Positive Pay.
    • If the details match, the cheque is honoured. However, in the case of mismatch, the cheque is referred to the issuer.
    • In this way, any cheque where any sort of fraud has happened cannot be cleared at all and hence, a depositor’s money can be protected.

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