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  • Latest spike in Inflation and RBI’s efforts

    RBI

    Central Idea

    • India’s post-pandemic economic recovery has hit a roadblock with the resurgence of inflation, hindering progress despite three consecutive months of softening. Recent significant spike in inflation, leading the Reserve Bank of India to adopt an inflation-targeting stance by raising interest rates. However, the battle to curb inflation is still ongoing, and the latest data raises doubts about whether the RBI’s efforts are sufficient.

    RBI

    What is Inflation?

    • Inflation is an increase in the level of prices of the goods and services that households buy. It is measured as the rate of change of those prices.
    • Typically, prices rise over time, but prices can also fall (a situation called deflation).

    Consumer Price Index (CPI)

    • CPI is used to monitor changes in the cost of living over time.
    • When the CPI rises, the average Indian family has to spend more on goods and services to maintain the same standard of living.
    • The economic term used to define such a rising prices of goods and services is Inflation.

    RBI

    Inflation outlook

    • RBI’s Inflation target: The inflation targeting framework mandates the RBI to achieve a CPI consumer price index inflation target of 4 per cent.
    • Inflation during the pandemic was still within the target band: During the pandemic period of March 2020 to September 2021, CPI inflation averaged 5.9 per cent. This was higher than the point target of 4 per cent but still within the inflation targeting band of 2-6 per cent.
    • Inflation outlook has been worsening: In 2022, CPI inflation was above the upper threshold of the RBI’s targeting band for 10 consecutive months, which meant the target was not achieved for three quarters in a row.
    • Optimism that the Inflation began softening: By December 2022, CPI inflation was down to 5.7 per cent. This led many to believe that the inflation peak had passed, and that inflation was on its way to the official target.
    • This optimism was misplaced: Underlying inflationary pressures still persist. The softening of inflation in November and December 2022 was largely driven by a steep fall in vegetable prices. Excluding vegetables, CPI inflation was in fact more than 7 per cent.
    • The misplaced optimism has now become evident: The January 2023 CPI inflation came out to be 6.5 per cent, once again crossing the upper threshold of the RBI’s inflation targeting band.

    Back to basics: Core Inflation

    • The core inflation rate measures rising prices in everything except food and energy.
    • That’s because gas prices tend to escalate now and then. Higher gas costs increase the price of food and anything else that has large transportation costs.

    inflation

    What contributed to the latest spike in inflation?

    • Rise in food prices: With food accounting for 46 per cent of the overall CPI basket, a rise in food inflation from roughly 4 per cent in December 2022 to almost 6 per cent in January 2023 has played an important role in overall inflation going up.
    • Cereal inflation is soaring high: Within food, one component that has proved rather stubborn is cereal inflation. Between May and December 2022, year-on-year cereal inflation nearly doubled from 5 per cent to 14 per cent. In January 2023, this increased to 16 per cent. Within cereals, inflation in wheat has been steadily going up. Between May and December 2022, wheat inflation increased from 9 per cent to 22 per cent. It increased even further to 25 per cent in January 2023.
    • The steep rise in wheat prices reflects shortages: Data from the Food Corporation of India shows that stocks in government warehouses declined. The government has recently approved a release of three million tonnes in the open market. However, this is insufficient to restore market supplies.
    • Persistently high core inflation: Second, core (non-food, non-fuel) inflation in January came out to be 6.2 percent. This is consistent with the unyielding core inflation of 6 per cent for nearly three years now. A persistently high core inflation implies that price pressures have become entrenched in the system.
    • External factors also play a role: Inflation in developed countries continues to be high (6.4 per cent in the US; 8.5 per cent in the EU; 10.5 per cent in the UK). India is importing some of this elevated inflation through international trade in goods and services. Moreover, with China gradually opening up its economy after nearly three years of zero-Covid restrictions, commodity prices are likely to go up, which could exert renewed pressures on India’s inflation.

    What have the policymakers been doing to address the inflationary concerns?

    • The government has done its bit by announcing a conservative Union budget for 2023-24: It has accorded primacy to much needed fiscal consolidation, and has refrained from announcing populist measures that could have arguably fuelled demand, and hence inflation.
    • The RBI has been doing its job as well: It increased the policy repo rate from a pandemic low of 4 per cent to 6.5 per cent in a span of 10 months. Unlike last year, when despite rising inflation, the monetary policy statements did not contain any forward guidance, the RBI, in its February 2023 statement, emphasised the importance to remain alert on inflation, thereby hinting that the monetary tightening cycle is not over yet.

    Conclusion

    • Inflation has been a challenge for India’s economy post-pandemic, despite the RBI’s attempt to control it by raising interest rates. A credible glide path to bring inflation down is essential today.

    Mains question

    Q. Despite of RBI’s efforts there is significant spike in inflation In India. Discuss the factors that contributed to the latest spike in inflation in India and what are the policymakers doing to address inflationary concerns?

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  • Startup20 Engagement Group On India’s Proposal

    Engagement

    “A small group of determined and like-minded people can change the course of history.”-M.K. Gandhi

    Central Idea

    • By agreeing to India’s proposal to create the Startup20 Engagement Group, the only new group by which G20 has turned itself into an ambidextrous institution, one where both large corporations and startups have an equal voice in taking the economies forward. In the new architecture, while the existing B20 Engagement Group continues its focus on corporations, the Startup20 takes on the policy issues concerning the global startup ecosystem, with the necessary linkages between the two groups.

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    What is meant by ambidexterity?

    • Ambidexterity is the ability to use both hands with equal skill and ease.
    • In the context of organizations, it is the ability to simultaneously pursue both exploratory and exploitative strategies. This means being able to balance the need for innovation and new opportunities with the need for efficiency and optimization of current operations.
    • For example, Indian IT services companies like TCS and Infosys are investing in areas like artificial intelligence, blockchain, and the IoT, even as they continue to deliver traditional IT services to their clients.

    What is B20 Engagement Group?

    • Official G20 dialogue forum representing the global business community: The B20 (Business 20) Engagement Group is a forum for international business leaders from the G20 countries.
    • Established in 2010: It is among the most prominent Engagement Groups in G20, with companies and business organizations as participants.
    • A single voice for the entire G20 business community: The B20 leads the process of galvanizing global business leaders for their views on issues of global economic and trade governance and speaks in a single voice for the entire G20 business community.
    • Aim is to provide recommendations: The group’s aim is to provide recommendations to the G20 on issues such as economic growth, trade, investment, digitalization, sustainability, and job creation.
    • Platform for different stakeholders: The B20 is one of several engagement groups, which also include groups representing civil society, labor, think tanks, and youth, that provide a platform for different stakeholders to share their views and insights with the G20.
    • B20 Secretariat: Confederation of Indian Industry (CII) has been designated as the Business 20 (B20) Secretariat for the India’s G20 Presidency.

    What is Startup20?

    • Initiated under India’s G20 Presidency: The Startup20 Engagement Group has been initiated under India’s G20 Presidency in 2023.
    • Aims to support Startups: The group aims to create a global narrative for supporting startups and enabling synergies between startups, corporates, investors, innovation agencies and other key ecosystem stakeholders.
    • Three taskforces: The engagement group comprises of three taskforces, namely Foundation & Alliance, Finance, and Inclusion & Sustainability, where delegates will come together to discuss efficient policy frameworks to promote scaling up of startups in the G20 nations.

    How these taskforces will work?

    1. Foundation and Alliances Taskforce:
    • Promotes consensus-based ecosystem: The Foundation and Alliances Taskforce will work to harmonize the global Startup ecosystem through consensus-based definitions and promote a global community of knowledge sharing among the Startup ecosystems to explore opportunities.
    • Help to bridge the knowledge gaps: It will also bridge the knowledge gap between the Startup ecosystems of G20 member countries and emerging economies through partnerships to enable more industry players across G20 nations to work with Startups and concrete solutions.
    • To create supportive policies and point of contact: It will aim to create supportive policies for industry players and government organizations to work with Startups and provide points of contact for the participating G20 countries sustained collaboration.
    1. The Finance Taskforce:
    • To provide financing and investment platforms: The finance taskforce will aim to increase access to capital for Startups by providing financing and investment platforms specifically for early-stage Startups to broaden the array of financial instruments available to Startups.
    • Networking opportunities: It will also create pitching and networking opportunities for Startups with the global investor community.
    • Best practices for funding ecosystem: It will work to provide a framework built upon best practices for global investors to fund Startups across G20 member nations, helping build suggestive frameworks that could be implemented in emerging ecosystems for building investment capabilities.
    1. Taskforce for Inclusion and Sustainability
    • Women led startups and community inclusive: For Inclusion and Sustainability, the roadmap involves increasing support for women led Startups and organizations; promotion of Startups working on making communities more inclusive and to promote Startups working on SDGs in areas of global interest.
    • Encouraging investors to invest in startups built upon sustainable practices: This Task Force aims to enable more investors to invest responsibly in Startups built upon sustainable practices and to encourage mentorship support to the Startup ecosystems of the G20 member countries and emerging economies.

    Conclusion

    • Some of the most pressing challenges facing the world today require innovative solutions at scale. The need for solutions to global problems such as climate change, food security, and energy security is urgent. However, by leveraging global ambidexterity and taking advantage of the G20’s new architecture of B20 and Startup20, we can be optimistic about our ability to systematically solve these problems. With deliberate efforts and focused action, we can create a more sustainable and prosperous future for all.

    Mains question

    Q. What is Startup20 engagement group initiated under India’s G20 presidency? How this framework will work to boost startup ecosystem globally?

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  • Understanding India’s Mental Healthcare Act, 2017

    mental

    Central idea: The article discusses the challenges faced in implementing India’s Mental Healthcare Act, 2017 and the need for better mental healthcare services in the country.

    Mental Healthcare Act, 2017

    The Mental Healthcare Act, 2017 is a comprehensive legislation that provides for the protection and promotion of the rights of people with mental illness.  Some of the key features of the Act are:

    • Decriminalization of suicide: The Act decriminalizes suicide and prohibits the use of inhuman and degrading treatment towards those who attempt suicide.
    • Advance directives: The Act allows individuals to make advance directives, specifying the type of treatment they would like to receive in the event of a mental health issue.
    • Informed consent: The Act mandates that patients have the right to give or refuse consent to treatment, and to be informed about the benefits, side effects, and alternatives of the treatment.
    • Mental health review boards: The Act establishes Mental Health Review Boards at the national and state levels to oversee the implementation of the Act and protect the rights of people with mental illness.
    • Prohibition of inhuman treatment: The Act prohibits the use of inhuman treatment methods, including chaining, electroconvulsive therapy (ECT) without anaesthesia, and solitary confinement.
    • Right to access mental healthcare: The Act guarantees the right to access mental healthcare services, and mandates the establishment of mental health services in every district.
    • Protection of rights and dignity: The Act aims to protect the rights and dignity of people with mental illness, and prohibits discrimination and stigmatization on the basis of mental illness.
    • Establishment of a Central Mental Health Authority: The Act establishes a Central Mental Health Authority to regulate mental health services in the country.

    NHRC flags alert

    • Pity over healthcare institution: The National Human Rights Commission (NHRC) in a report flagged the “inhuman and deplorable” condition of all 46 government-run mental healthcare institutions across the country.
    • Prolonged hospitalization: The report notes that the facilities are “illegally” keeping patients long after their recovery, in what is an “infringement of the human rights of mentally ill patients”.
    • Need for Assessment: These observations were made after visits to all operational government facilities, to assess the implementation of the Mental Healthcare Act, 2017 (MHA).

    Major issue: Lack of implementation

    • Despite the act’s provisions, mental health institutions in India have been plagued by a lack of adequate infrastructure, staff, and training.
    • Patients have reported human rights violations, including abuse, neglect, and violence.

    Need for effective implementation

    • The Mental Healthcare Act needs effective implementation and oversight to ensure that patients receive the care and treatment they need with dignity and respect.
    • This requires increased investment in mental health infrastructure, including facilities, staff, and training.

    Way forward

    • Ensuring proper implementation of the Act: There is a need for proper implementation of this act across the country, with a focus on ensuring the rights and dignity of patients in mental healthcare institutions.
    • Increasing awareness: Awareness needs to be raised about the Act, and the rights of mental healthcare patients among the general public, healthcare professionals, and law enforcement agencies.
    • Providing training and capacity building: Healthcare professionals, including doctors, nurses, and caregivers, need to be trained and equipped with the skills and knowledge to provide quality care and support to mental healthcare patients.
    • Strengthening mental healthcare infrastructure: There is a need to strengthen the infrastructure and facilities in mental healthcare institutions, including better staffing, improved physical facilities, and access to quality medication.
    • Encouraging community-based care: Community-based care for mental health patients can help reduce the burden on mental healthcare institutions and provide a more supportive environment for patients.
    • Promoting human rights: There is a need for greater emphasis on the human rights of mental healthcare patients, including the right to dignity, privacy, and freedom from discrimination and abuse.

     

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  • [EPW] Can Canada and India reset their Bilateral Relations?

    [EPW] Can Canada and India reset their Bilateral Relations?

    canada

    Context

    • Canadian Foreign Affairs Minister Melanie Joly was on a two-day visit to New Delhi, and both sides hope to cast a reset in their bilateral relations.
    • These have been rather lukewarm despite many enduring linkages of their past histories, politics and people.

    India-Canada Relations: A quick recap

    • India established diplomatic relations with Canada in 1947.
    • In recent years, both countries have been working to enhance bilateral cooperation in a number of areas of mutual importance.

    History of migration

    The history of Indian migration to Canada has a long, complex history, beginning in the mid-19th century and continuing to the present day.

    • Indentured labour: The first recorded Indian migrants to Canada were indentured labourers brought to British Columbia in the late 1860s to work in the rapidly expanding lumber industry.
    • Population measures: These workers were largely from Punjab, India, and they were part of a larger wave of Indian migration spurred by the British government’s encouragement of emigration in the hope of relieving population pressures in India.
    • Less restrictive immigration: In the mid-20th century, the number of Indians migrating to Canada increased dramatically due to the Canadian government’s introduction of less restrictive immigration laws.

    Today, the community includes people from all regions of India, as well as second and third-generation Canadians of Indian descent.

    Indo-Canadian’s contribution in Freedom Struggle

    [A] Ghadr Party

    • The Ghadr party, also known as the Hindustan Ghadr Revolutionary Party nationalist revolutionary organization founded in May 1913 in San Francisco, California, with the aim of securing India’s freedom from British rule.  
    • The party drew its membership mainly from Punjabi Sikh immigrants in the United States and Canada, but also included Hindu and Muslim immigrants from other parts of India.

    [B] Support to INC

    • Canada was one of the first countries to recognize the Indian National Congress and its aims.
    • Canadian political leaders and public figures publicly expressed their support for the Indian struggle and advocated for India’s independence.
    • In the 1940s, Canadian Prime Minister William Lyon Mackenzie King publicly voiced his support for India’s independence and called for a peaceful transition to self-government.

    [C] Open support for freedom

    • Canada also provided moral support to the Indian struggle. In 1947, the Canadian Parliament unanimously passed a motion expressing support for India’s independence.
    • This motion was a strong statement of solidarity with the Indian people and their struggle for freedom.
    • Canada was an important supplier of resources to India during World War II, providing critical material such as food, clothing, and ammunition.
    • Canada also provided financial aid to India’s independence movement, and Canadian citizens raised funds to support the cause.
    Komagatamaru Incident: The Komagata Maru incident was an incident in 1914 involving the Japanese steamship Komagata Maru, carrying 376 Indian passengers who were denied entry to Canada. They had sailed from Hong Kong, intending to immigrate to Canada, but were refused entry at the port of Vancouver due to the Canadian government’s continuous journey regulation. The passengers, mostly Sikhs from Punjab, were forced to return to India, where they were met with violence and harassment by British colonial authorities. The incident has become a symbol of Canada’s history of racist immigration policies aimed at excluding Asians.

    Significant collaborations

    • Trade: Canada is India’s second largest export destination and is the third largest source of imports for India. It is a major source of FDI for India, with total investments of nearly USD 5.5 billion.
    • Investment: India and Canada have strong bilateral relations which have been further strengthened by the India–Canada Foreign Investment Promotion and Protection Agreement (FIPA), signed in 2009.
    • Collaboration on STEM: India and Canada are also engaged in several joint development projects in the areas of science and technology, health, education, and climate change.
    • Energy: India and Canada have recently signed a Joint Declaration on Cooperation in the Field of Renewable Energy.
    • Security: India and Canada are also cooperating in the field of defence, with joint military exercises and training programs.
    • Global institutional reforms: India and Canada are members of the Commonwealth of Nations and the G20, and cooperate on several international issues.

    Recent souring of ties

    canada

    [A] Racist Policies

    • Canada’s perceived shift away from its traditional stance of neutrality has put at odds with India’s traditional non-alignment policy.
    • Additionally, Canada’s criticism of India’s human rights record has been seen as offensive by many in India, leading to strained diplomatic relations.
    • Additionally, Canada’s failure to exempt India from visa requirements has also been seen as a sign of disrespect.

    [B] Open support of Khalistan movement

    • Over 100,000 Canadians recently took part in voting for the Khalistan Referendum in Brampton, Ontario on 19 September which was organised by pro-Khalistani.
    • Visuals on social media showed a huge number of men, women queueing up to vote in for Khalistan Referendum. 
    • Indian government had warned Canadian govt against the anti-India forces growing in the country.
    • However, the Canadian government refused to stop them from expressing their views by holding the Khalistan Referendum and linking it with a “peaceful and democratic” process.

    [C] Other Impediments

    • Trade decline: India-Canada bilateral trade has been declining since 2013 and currently stands at around $7 billion. There is room to increase this trade and investments in both directions.
    • Illegal immigration: Canada has been increasingly concerned about illegal immigration from India, as well as the backlog in processing applications for legal immigration, both of which have caused tension between the two countries.
    • No security consensus: India and Canada have been working to enhance their defense and security ties, but the two countries have yet to sign a formal security agreement.
    • Under-utilized agriculture: Canada and India have been in negotiations to open up the agricultural sector to more trade, but disagreements over import restrictions and subsidies continue to be a major obstacle.
    • Human rights allegations on India: India and Canada have also clashed over human rights issues, with Canada criticizing India’s policies on religious minorities, freedom of speech, and other human rights issues.

    Why is Canada suddenly recognizing India’s importance?

    [A] Indo-Pacific Strategy

    • First is Canada’s Indo-Pacific Strategy that was issued last November. While it calls China “an increasingly disruptive global power,” it describes India as Canada’s “critical partner” for its regional and global objectives. This is music to Indian ears.
    • Indeed, this 23-page report mentions India 27 times, underlining their “shared tradition of democracy and pluralism, a common commitment to a rules-based international system.”

    [B] Merchandise trade

    • Canada and India have strong economic ties, with two-way merchandise trade between the two countries reaching $9.5 billion in 2019.
    • Canada is also India’s second-largest source of foreign direct investment, and Indian investments in Canada have grown significantly in recent years.

    [C] Cultural ties

    • Canada and India also have strong people-to-people ties, with the Indian diaspora in Canada estimated to be more than one million strong.
    • Sikhs constitute a significant proportion of the Indian diaspora, they make up less than one percent (a little over 500,000) of Canada’s total population.
    • Cultural tourism is boosting between the two countries.

    [D] Newfound enthusiasm

    • This newfound enthusiasm was visible in the press release issued in Canberra on the eve of the Canadian foreign minister’s visit to India.
    • India’s growing strategic, economic and demographic importance makes it a critical partner for Canada in the Indo-Pacific.
    • In turn, Canada can be a reliable supplier of critical minerals, a stronger partner in the green transition, as well as a major investor.

    Why is Canada important for India?

    • Destination for Indian students: Canada is one of the top sources for foreign students for Indian universities. India is the second largest source of immigrants to Canada.
    • 2nd largest trade partner: Canada is India’s second-largest trading partner, and trade between the two countries has been growing steadily.
    • Vibrant diaspora: Canada is home to a large and vibrant Indian diaspora, and the two countries enjoy strong people-to-people ties.
    • Source of FDI: Canada is also an important source of foreign direct investment for India, and provides an important source of capital to Indian businesses.
    • Liberal visas and citizenship: Canada is also an important source of skilled immigrants for India and is a popular destination for students and professionals from India.
    • Trade partnership: Both nations look forward to their proposed Early Progress Trade Agreement (EPTA) before they finalize their CEPA.

    Way forward

    • Strengthening diplomatic ties: India and Canada should work towards strengthening their diplomatic ties, by engaging in more frequent diplomatic exchanges and dialogue. This could include increasing the number of high-level visits between both countries, and exploring opportunities for collaboration in areas such as trade, investment, and education.
    • Enhancing trade relations: India and Canada should focus on enhancing their bilateral trade relations, by exploring the potential for increased exports and investment. This could involve investing in joint initiatives that promote economic growth, as well as taking steps to reduce barriers to trade and investment.
    • Nurturing people-to-people ties: India and Canada should aim to encourage more people-to-people exchanges between the two countries. This could include increasing the number of students and scholars studying and teaching in each other’s countries, as well as promoting cultural exchanges and tourism.
    • Enhancing security cooperation: India and Canada should work together to enhance their security cooperation, by increasing information sharing and collaboration on countering terrorism, cyber-security, and other common security threats.
    • Technology collaboration: India and Canada should explore new areas of collaboration, such as in the fields of renewable energy, space exploration, and artificial intelligence. This could involve engaging in joint research and development initiatives, as well as exploring opportunities for joint ventures.

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  • Industry pushes separate Ministry for Microenterprises

    Central Idea: The Consortium of Indian Associations (CIA) has suggested the formation of an independent ministry for the self-employed and microenterprises to address specific issues concerning the sector.

    Why demand for new Ministry?

    • Micro entrepreneurs continue to be governed by complicated and outdated laws and dispensable compliance burdens.
    • Despite the government’s efforts, MSMEs in India face several challenges such as access to finance, lack of skilled labor, and inadequate infrastructure.
    • New ministry might help in providing different types of support and benefits from the government, such as access to credit, subsidies, and tax exemptions.

    What are Microenterprises?

    • Microenterprises are small businesses that typically have a small number of employees, limited assets, and low levels of annual turnover or revenue.
    • The term “microenterprise” is often used interchangeably with “microbusiness” or “micro firm.”
    • Microenterprises can be found in a wide range of sectors, including retail, manufacturing, and services.
    • Examples of microenterprises include small retail shops, food stalls, street vendors, small manufacturing units, and service providers such as plumbers, electricians, and small-scale service providers.

    Features of Microenterprises

    • In general, microenterprises are considered the smallest type of business.
    • They are typically characterized by their low capital investment and simple production processes.
    • These businesses are often started by entrepreneurs who are seeking self-employment and a means to earn a livelihood.

    Why are they important?

    • Employability: Microenterprises are an important part of many economies, especially in developing countries, where they can provide vital employment opportunities and contribute to economic growth.
    • Scale of business: Such enterprises have huge potential of business penetration at household and domestic level by providing a range of services.

    Microenterprises in India

    • According to the Ministry of Micro, Small and Medium Enterprises (MSMEs), there are approximately 6.3 crore (63 million) MSMEs in India, which employ around 11 crore (110 million) people.
    • In India, MSMEs are classified based on their investment in plant and machinery or equipment, as well as their annual turnover.
    • The classification of MSMEs is as follows:
    1. Micro Enterprises: Micro enterprises are the smallest type of enterprises and have a lower investment limit than the other two categories. For manufacturing enterprises, the investment limit is up to Rs. 1 crore in plant and machinery, while for service enterprises, the investment limit is up to Rs. 50 lakh. The turnover limit for both types of enterprises is up to Rs. 5 crore.
    2. Small Enterprises: Small enterprises are those that have an investment in plant and machinery or equipment between Rs. 1 crore to Rs. 10 crore. For service enterprises, the investment limit is between Rs. 50 lakh to Rs. 2 crore. The turnover limit for both types of enterprises is between Rs. 5 crore to Rs. 50 crore.
    3. Medium Enterprises: Medium enterprises have a higher investment limit than small enterprises. For manufacturing enterprises, the investment limit is between Rs. 10 crore to Rs. 50 crore, while for service enterprises, the investment limit is between Rs. 2 crore to Rs. 5 crore. The turnover limit for both types of enterprises is between Rs. 50 crore to Rs. 250 crore.

    Various initiatives

    The government of India has taken several initiatives to support the growth of MSMEs in the country, such as:

    • Udyam Portal: The government has introduced a new registration process called Udyam Registration to make it easier for MSMEs to register and avail of various government schemes and benefits.
    • Credit Guarantee Fund Scheme: The Credit Guarantee Fund Scheme provides collateral-free loans to MSMEs from banks and other financial institutions.
    • Cluster Development Programme: The government has launched the Cluster Development Programme to enhance the competitiveness of MSMEs by providing support for infrastructure, technology, and marketing.
    • National SC-ST Hub: The National SC-ST Hub aims to promote entrepreneurship among Scheduled Castes and Scheduled Tribes by providing support for capacity building, market linkages, and access to finance.
    • Technology Upgradation: The government provides financial support to MSMEs for technology upgradation through various schemes such as the Technology Upgradation Fund Scheme and the Credit Linked Capital Subsidy Scheme.

    Way forward

    If the govt. is to consider creating a separate ministry for microenterprises, there are several steps that could be taken to ensure its effectiveness:

    • Defining clear objectives: This should be based on a thorough understanding of the challenges faced by microenterprises and the opportunities available to them.
    • Coordination with other ministries: The new ministry should coordinate with other ministries to ensure that the policies and initiatives developed are aligned with the broader economic and social objectives of the government.
    • Developing policies and initiatives: The ministry should develop policies and initiatives that address the specific needs of microenterprises in India such as access to finance, technology, and markets.
    • Strengthening institutional capacity: The ministry should have a strong institutional capacity to implement policies and initiatives effectively. This could involve recruiting experts in the field of microenterprises and strengthening the capacity of existing institutions.
    • Creating awareness: The ministry should create awareness among microenterprises about the support and services available to them. This could involve organizing workshops and training programs, as well as leveraging digital platforms to disseminate information.

     

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  • Ladakh and the Sixth Schedule

    ladakh

    A Ladakhi innovator and engineer completed his five-day “climate fast”, in an effort to draw the attention of leaders to the region’s fragile ecology and to secure its protection under the Sixth Schedule of the Constitution.

    Fast for Ladakh’s Fragile Ecology

    • The fast highlights that Ladakh’s ecology is highly sensitive to climate change, with melting glaciers posing significant risks to the region’s flora, fauna, and people.
    • As a cold desert, Ladakh relies on glaciers to fulfil water needs.
    • However, melting glaciers cause the loss of potable water, threaten agriculture practices, erode sustainable practices, and force locals to migrate.

    About Ladakh

    • Ladakh is a region in the northernmost part of India, bordering China and Pakistan.
    • The region is home to several ethnic groups, including the Ladakhi people, who are predominantly Buddhist.

    Demand for Sixth Schedule in Ladakh

    • There has been a demand from the local tribal communities in Ladakh to extend the provisions of the Sixth Schedule to the region.
    • The demand has been primarily driven by concerns over the protection of tribal rights and the preservation of the unique cultural identity of the local communities.

    Current administration in Ladakh

    • Ladakh was granted Union Territory status in 2019, following the bifurcation of the state of Jammu and Kashmir into two separate Union Territories.
    • The administration of Ladakh is currently governed by the Lieutenant Governor of Ladakh and an elected Ladakh Autonomous Hill Development Council (LAHDC).

    Benefits of Sixth Schedule in Ladakh

    • Meeting tribal aspiration: The Parliamentary standing committee recommended including of Ladakh in the Sixth Schedule because its tribal communities account for 79.61% of its total population.
    • Autonomy and self-governance: The extension of the Sixth Schedule to Ladakh could provide greater autonomy and self-governance to the local tribal communities.
    • Cultural preservation: It could also help to protect the unique cultural identity of the local communities and preserve their traditional practices and customs.

    Challenges to this demand

    • No further fragmentation: The demand to extend the Sixth Schedule to Ladakh has faced some opposition from certain quarters, who argue that it could lead to further fragmentation of the region and create new administrative challenges.
    • Losing political capital: There are also concerns over the potential impact of the demand on the political and administrative structure of the region.

    Conclusion

    • Overall, the demand to extend the provisions of the Sixth Schedule to Ladakh is a complex issue that requires careful consideration of the needs and aspirations of the local tribal communities, as well as the broader political and administrative context of the region.

    Back2Basics: Sixth Schedule of Indian Constitution

    • The Sixth Schedule of the Indian Constitution provides for the administration of tribal areas in the northeastern states of India.
    • These provisions were added to the Constitution in order to protect the rights and interests of the tribal communities in these areas and to promote their social, cultural, and economic development.

    Here’s a summary of the Sixth Schedule of the Indian Constitution:

    Areas covered

    • The Sixth Schedule covers the tribal areas in the states of Assam, Meghalaya, Tripura, and Mizoram.
    • These areas are known as “tribal areas” and are home to a large number of indigenous tribal communities.

    Autonomous district councils

    • The Sixth Schedule provides for the establishment of autonomous district councils in the tribal areas.
    • These councils have the power to make laws and regulations for the governance of their respective areas.
    • They are also responsible for the administration of the local institutions of self-government, such as village councils and traditional councils.

    Composition of district councils

    • The members of the district councils are elected by the people of the respective districts.
    • The councils are headed by a chairman, who is also elected by the members of the council.
    • The district councils have the power to appoint their own staff and to manage their own finances.

    Powers of district councils

    • The district councils have the power to make laws on a range of subjects, including land, forests, water, and fisheries.
    • They also have the power to regulate local markets and to levy taxes and fees on a range of activities.
    • The district councils can also establish and manage schools, hospitals, and other institutions for the benefit of the local communities.

    Protection of tribal rights

    • The Sixth Schedule provides for the protection of the rights of the tribal communities in the areas covered by the schedule.
    • It ensures that the traditional rights and customs of the tribal communities are respected and protected.
    • It also provides for the reservation of seats in the district councils and other local bodies for members of the tribal communities.

     

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  • Thwaites glacier at mercy of sea warmth increase

    thwaites

    The new research suggests that even low amounts of melting can potentially push Thwaites glacier further along the path toward eventual disappearance.

    Thwaites Glacier

    • Called the Thwaites Glacier, it is 120 km wide at its broadest, fast-moving, and melting fast over the years.
    • Because of its size (1.9 lakh square km), it contains enough water to raise the world sea level by more than half a meter.
    • Studies have found the amount of ice flowing out of it has nearly doubled over the past 30 years.
    • Thwaites’s melting already contributes 4% to global sea-level rise each year. It is estimated that it would collapse into the sea in 200-900 years.
    • Thwaites is important for Antarctica as it slows the ice behind it from freely flowing into the ocean. Because of the risk it faces — and poses — Thwaites is often called the Doomsday Glacier.

    How is Thwaites glacier melting?

    thwaites

    • Thwaites Glacier is melting due to a combination of warming ocean currents and a weakening of the ice shelf that acts as a barrier between the glacier and the ocean.
    • The cause of the melting is thought to be the influx of relatively warm bottom water drawn in from the wider ocean.
    • In the 1990s it was losing just over 10 billion tonnes of ice a year. Today, it’s more like 80 billion tonnes.

    Why is this glacier so important?

    • Huge size: Flowing off the west of the Antarctic continent, Thwaites is almost as big as Great Britain.   It is one of the largest and most important glaciers in Antarctica, as it acts as a gateway to a vast area of the continent.
    • Melting faster: It’s a majestic sight, with its buoyant front, or “ice shelf”, pushing far out to sea and kicking off huge icebergs. But satellite monitoring indicates this glacier is melting at an accelerating rate.
    • Seal level rise: Thwaites’ ice loss contributes approximately 4% to the annual rise in global sea-levels, with the potential to add 65cm in total should the whole glacier collapse.  Its melting could also destabilize the entire West Antarctic Ice Sheet, leading to a further rise in sea levels.

     

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  • Ring around a dwarf planet lies in Roche Limit: What it means, why it matters

    roche limit

    Central idea: A new study shows that a dwarf planet, named Quaoar, has a ring system that exists within its Roche limit.

    What is the news?

    • Astronomers have found a ring around a dwarf planet, located in the Kuiper Belt at the solar system’s edge, called Quaoar, according to a new study.
    • The ring, however, is positioned much further away from the planet than is usual and defies theoretical explanations.

    About Quaoar

    • With an estimated radius of 555 km, Quaoar is roughly half the size of Pluto and orbits beyond Neptune.
    • It also has a moon of its own, which is known as Weywot.
    • As the dwarf planet is too small and too distant to be observed directly, the researchers detected the ring with the help of a phenomenon called stellar occultation.

    How was the ring discovered?

    • A stellar occultation occurs when, as seen from Earth, a bright star passes behind a planet.
    • This allows astronomers or anybody on Earth to observe the sharp silhouette of the planet for a brief period of time.
    • The phenomenon, which rarely occurs, is used by researchers to analyze a planet’s atmosphere and determine if it has a ring around it — in 1977, scientists discovered the Uranian ring system with the help of stellar occultation.

    What is the Roche limit?

    • The most intriguing part of the findings is the distance between Quaoar and its ring.
    • Located 2,500 miles away from the dwarf planet, the ring is around 1,400 miles further away from the Roche limit, as per the calculations of the scientists.
    • It suggests that at such a distance, the particles of the ring should have come together to form a moon.
    • For a further understanding of the Roche limit, let’s look at the Earth and the moon. The Earth’s gravity pulls on the moon.
    • However, one side of the moon is closer to the planet and hence, the pull is stronger on the side facing the Earth.
    • The result is the so-called tidal force, which either stretches or compresses the moon from all sides.

    What is the reason behind Quaoar’s far-out ring?

    • As of now, nobody exactly knows how Quaoar’s ring has managed to remain stable at such a distance from the Roche limit.
    • The researchers said that there can be a variety of possible explanations but they aren’t sure about any one of them.
    • It might be possible that Quaoar’s moon, Weywot, or some other unseen moon contributes gravity that somehow holds the ring stable.
    • Another potential explanation can be that the particles of the ring are colliding with each other in such a way that they are avoiding to coalesce into a moon.

     

    Try this MCQ:

    Q.What is the Roche limit?

    A) The distance from a planet where its gravity is balanced by the gravitational force of another celestial body

    B) The minimum distance from a planet that a moon can orbit without being pulled apart by tidal forces

    C) The distance from the sun at which a planet can have a stable orbit

    D) The distance from the earth where meteoroids burn up upon entering the atmosphere

     

    Post your answers here.

     

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  • Folk dance in news: Lavani

    lavani

    Central idea: The article is based on the controversy surrounding the Maharashtra folk dance form, Lavani, which has come under criticism for being ‘vulgar’ and ‘obscene’.

    What is the Lavani folk art form?

    • The word Lavani comes from ‘lavanya’ or beauty.
    • Lavani is a traditional folk art form in which women dancers wearing nine-yard-long sarees in bright colours, make-up, and ghunghroos perform on dholak beats on a stage before a live audience.
    • As an indigenous art form, Lavani has a history going back several centuries, and it attained particular popularity in the Peshwa era in the 18th century.
    • Traditionally, performances were held in front of kings or lords, and for the entertainment of tired soldiers resting during breaks in fighting.

    Genres of Lavani

    • There are several types of Lavani, of which the most popular is the Shringarik (erotic) kind, in which the lyrics are often teasing, with sensuous dance steps and delicate gestures employed to convey erotic meaning.
    • Over the years, Lavani has gained more acceptability among the people, even though certain taboos around it continue.
    • The audience has historically been all-male, but in recent years, some women too have begun to attend performances.

    Why is it under fire these days?

    • Lost its original form: Some also argue that the commercialization of Lavani has led to a loss of authenticity and cultural significance.
    • Objectifying women: The criticism of Lavani dance centres on the traditional dance form’s alleged objectification and commodification of women’s bodies.
    • Public obscenity: It has been accused of promoting obscenity and vulgarity and reinforcing patriarchal attitudes towards women.
    • Communalizing/Stereotyping: Critics have also argued that the dance form perpetuates negative stereotypes of women from marginalized communities, such as the notion that Dalit women are “loose” or sexually promiscuous.

     

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  • (WATCH Live: Zoom link inside) Fill Critical Gaps🚨in UPSC Prelims 2023 Prep | Last 100 days strategy for 120+ score | 1-1 sessions with Santosh sir | Register to get Smash Prelims 3 Mocks, 100 most Imp* topics [PDF] Notes & 1-1 Mentorship

    (WATCH Live: Zoom link inside) Fill Critical Gaps🚨in UPSC Prelims 2023 Prep | Last 100 days strategy for 120+ score | 1-1 sessions with Santosh sir | Register to get Smash Prelims 3 Mocks, 100 most Imp* topics [PDF] Notes & 1-1 Mentorship

    Join Zoom Meeting
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    UPSC Prelims 2023 is 100 days away and this is for you if don’t feel secure w.r.t. your prep.


    Most of the aspirants at this point in time tend to go haywire in their preparation, not knowing how to prioritize and what to study and what to avoid, how to evaluate and measure progress, make improvements, which often leads to confusion, frustration, and in many cases, repeated failures.

    Session by Santosh sir: Last 100 days strategy for UPSC Prelims 2023. Filling critical gaps in your preparation.

    Santosh sir needs no introduction when it comes to UPSC Prelims. He is the Prelims guru for CivilsDaily’s thousands of aspirants who cleared Pre last year with thumping success.

    Santosh sir will be sharing with you a strategy and a blueprint for the remaining 100 days.

    1. What 10 things you must be doing to secure prelims 2023
    2. How to fill critical gaps in your preparation?
    3. Avoiding pitfalls in your preparation, especially 3 months before prelims.
    4. How to solve the current affairs based static questions
    5. Most important themes for UPSC Prelims 2023

    Date: 17th Feb || Time: 7:30 pm || Mode: Online

    Mode: Online (Zoom link will be emailed to you)

    Contact here: +91 7303316700

    2 Day UPSC Prelims 2023 special sessions

    We will have a special 2-Day session by two UPSC toppers, Prabhat sir, AIR 377 & Santosh sir, Asst Commissioner, GST who themselves have faced UPSC Prelims multiple times and cleared it with 120+ scores.

    They will help you define the strategy and approach for the last three months of UPSC Prelims preparation. They will also help you with these things:

    1. Bringing awareness on what your preparation at this stage looks like and how to bridge the critical gaps – in syllabus completion (GS and Current Affairs) and approach.
    2. Making improvements and assessing prep level wrt mocks.
    3. Last 100 days’ strategy
    4. Sticking to the bare minimum for the most optimum UPSC pre-2023 preparation.

    Day 1 with Prabhat sir: Studying what’s important and ignoring the rest. Optimizing preparation like a Topper.

    Prabhat sir will discuss how he approached the last 3 months of his preparation for Prelims. He will discuss basically two things:

    1. Sticking to the bare minimum wrt current affairs and GS subjects.
    2. Following the 80/20 rule, there are 20% of the themes from which you can actually take your success rate up by 80%
    3. The art of attempting mocks for UPSC Prelims
    4. Avoiding 5 mistakes in assessing UPSC Mock tests.

    Date: 15th Feb || Time: 7:30 pm || Mode: Online

    Mode: Online (Video link will be emailed to you)


    CivilsDaily’s FREE Webinar package

    Post-webinar Santosh sir will be sharing:

    1. 100 most important topics for UPSC Prelims 2023
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  • CivilsDaily’s Smash Scholarship Test for UPSC 2024 | Are you an IAS-worthy aspirant?

    Do you have the aptitude and mindset required to be an IAS-IPS-IFS? Get a reality check with 10,000+ aspirants!

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    Toppers attempt this test 1.5 yrs before their actual prelims to know their level 0

    Even before you start preparing for UPSC 2024, you should have a certain aptitude and bent of mind to be a worthy aspirant. Get a check on your current level and situational awareness wrt this exam.

    • Date: 19th Feb 2023
    • Timings: 9:30 am
    • Duration for test: 2 hrs each
    • Language: English
    • Mode: Online
    • Test Fee: FREE for all
    • Syllabus: Very basic concepts which every IAS aspirant must be hands-on with and general current affairs. School-level concepts.

    Admit cards will be released a day before the mock test.

    Post-scholarship test package

    The package will include a detailed test discussion, and a one-to-one mentorship call to highlight your weak areas and issues in preparation. A timetable and strategy will be shared with you and relevant Smash Program selected PDF notes will be shared for FREE.

    CivilsDaily will assign a dedicated mentor for the post-test process. We will also connect you 1-1 with UPSC IAS rankers.

  • Japan-India Combat Exercise and the Chinese Concerns

    Exercise

    Central Idea

    • Japan and India have launched their second Joint Air Defense Exercise called “Veer Guardian 2023” to conduct multi-domain air combat operations in a complex environment and deepen their mutual operational understanding while fostering closer defence cooperation. This increased military collaboration between Japan and India under US guidance in the Indo-Pacific is causing subdued panic among Chinese commentators.

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    Exercise

    All you need to know about Veer Guardian 2023

    • Bilateral exercise: Veer Guardian is a bilateral air exercise between the Indian Air Force (IAF) and the Japan Air Self-Defense Force (JASDF).
    • Fourth edition: The exercise took place at Hyakuri Air Base, near Tokyo in Japan in January 2023 and was the fourth edition of the Veer Guardian series.
    • Participation: The IAF participated with six Sukhoi Su-30MKI multirole fighters and two C-17 Globemaster transport aircraft, while the JASDF deployed six Mitsubishi F-2 fighters.
    • The primary objectives of the exercise: To enhance interoperability between the two air forces, exchange best practices and operational experiences, and improve understanding of each other’s tactics and procedures.
    • Drills: The exercise included various aerial manoeuvres, air combat scenarios, air-to-ground strikes, and close air support operations. The Indian side also participated in a humanitarian assistance and disaster relief (HADR) drill, which involved the C-17 aircraft dropping relief supplies to a simulated disaster-hit area.

    Japan-India collusion against China

    • Japan’s Pursuit of Allies: Japan has been actively seeking allies to counterbalance China’s rise in the Indo-Pacific region. It has formed alliances with several countries, including the US, Germany, the UK, Australia, and India.
    • Japan-India Security Cooperation: Japan and India have a reciprocal access agreement in place since 2020. They have regularly been conducting joint military exercises in naval, ground and air domains.
    • Opportunities for India to gain experience: India, having faced a three-year-long border standoff with China, sees the joint air exercises with Japan as a rare opportunity to gain experience over the East China Sea. Therefore, the joint drill with Japan can become a stepping stone to future quadrilateral air exercises.

    Exercise

    Why China is concerned about the increasing collaboration between Japan and India?

    • Japan’s National Security Strategy: The NSS sees China as Japan’s biggest challenge ever seen and recommends a counter-strike capability by 2027.
    • Japan’s strategy to counter China’s increasing influence in the Indo-Pacific region: The Chinese government believes that Japan is exaggerating the China Threat Theory as evidenced by Japan’s recently published National Security Strategy (NSS).
    • Limiting Strategic manoeuvrability: A stronger India poses a major threat to China’s west while Japan in the east remains a major threat. As both India and Japan are significant players in the Asia-Pacific region, their collaboration could potentially limit China’s strategic maneuverability.
    • Balance of power: Together, India and Japan can bring a paradigmatic shift in the region’s security. The increasing collaboration with India is one of the ways in which Japan is seeking to balance its power with China.
    • Concern for national security: Moreover, China sees Japan’s recent efforts to court allies and introduce NATO forces in the Asia-Pacific region as potentially leading to a resurgence of Japan’s militarist past, which is a concern for China’s national security.

    Conclusion

    • In sum, the Japan-India joint air drill will impart crucial combat experience to both air forces. It will also further Japan’s approach to involve India deeper in the East Asian security architecture. However, for China, the air drill comes as an ominous portent for the future.

    Mains question

    Q. What is the significance of the Veer Guardian 2023 joint air exercise between India and Japan, and why is China concerned about the increasing collaboration between these two countries? Discuss

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  • Divyang friendly digital infrastructure in India

    digital

    Central Idea

    • The estimation in Census 2011, that 2.21% of India’s population is disabled is a gross underestimation. According to the World Health Organization, about 16% of the global population is disabled. While technology has enormous potential to level the playing field for the disabled, it can, at the same time, reinforce the barriers that the disabled otherwise face if it is not designed with their needs in mind.

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    Smartphone users with disabilities in India

    • It is difficult to determine the exact number of smartphone users with disabilities in India, as there is no specific data available on this.
    • However, according to the 2011 Census of India, there are approximately 2.68 crore (26.8 million) people with disabilities in the country.
    • India, it is reported, had 750 million Internet/smartphone users in 2020.
    • Applying the 16% figure here, this works out to be roughly 120 million (12 crore) Internet/smartphone users with disabilities.

    A Report on Accessibility of Apps

    • Evaluation of the most widely used apps: A report that evaluates the accessibility of 10 of the most widely used apps in India, across five sectors. The apps were Zomato, Swiggy, PayTM, PhonePe, Amazon, Flipkart, Uber, Ola, WhatsApp and Telegram.
    • Goal for launching this report is to start discussion on digital accessibility: 1. Objective assessment of the digital accessibility of the apps. 2. To work with these service providers and help them design practices and processes that will not only improve app accessibility but also educate their stakeholders about accessibility and people with disabilities.
    • Findings of the report: Based on the number of violations, categories developed on the level of accessibility of the apps as high, medium and low. Report found that four out of the 10 apps ranked low, while five were in the medium category.

    digital

    key efforts for Divyanga friendly digital infrastructure

    • Guidelines for Indian Government Websites: The Department of Administrative Reforms and Public Grievances (DARPG) has developed guidelines for making government websites accessible to people with disabilities. The guidelines cover various aspects of website design and development, such as colour contrast, keyboard accessibility, and assistive technology compatibility.
    • Accessible India Campaign/ Sugamya Bharat Abhiyan: The Campaign was launched by the government in 2015 to make public spaces, including government buildings, transportation, and information and communication technologies (ICT), more accessible to people with disabilities.
    • Bharat Interconnectivity Limited (BIL): BIL is a subsidiary of Bharat Sanchar Nigam Limited (BSNL) that provides accessible internet and telecom services to people with disabilities. It offers services such as audiobooks, sign language interpretation, and accessible websites and mobile applications.
    • National Institute of Speech and Hearing (NISH): NISH is an autonomous institute under the Department of Empowerment of Persons with Disabilities, Ministry of Social Justice and Empowerment. It provides training and research in the field of speech and hearing disabilities and also offers services like audiobooks and accessible software.
    • Making assistive technology more affordable and accessible: The government has also taken steps to make assistive technology more affordable and accessible to people with disabilities.
    • For example: The Department of Empowerment of Persons with Disabilities provides financial assistance to purchase assistive devices and the Assistive Technology Industry Association (ATIA) has been established to promote research and development of assistive technology.

    digital

    Measures to improve the accessibility of digital services

    • Promoting education and awareness: Steps must be taken to raise awareness about the needs and capabilities of people with disabilities. This could include providing training to developers and designers on how to create accessible digital products and services.
    • Enforcing web accessibility standards: The government should ensure that all websites and mobile applications comply with web accessibility standards such as the Web Content Accessibility Guidelines (WCAG). This will make it easier for people with disabilities to access digital services.
    • Encouraging inclusive design: Designing products and services that are accessible to all users, including those with disabilities, should be an essential part of the design process. Companies and developers should be encouraged to incorporate inclusive design principles into their products from the beginning.
    • Conducting regular accessibility audits: Regular accessibility audits should be conducted to ensure that digital products and services are accessible to people with disabilities. This can help identify barriers and areas of improvement.

    Conclusion

    • Core to the project of securing a more disabled friendly digital ecosystem must be the conviction that, everything digital must be accessible to everyone. This starts with incorporating the principles of accessibility and inclusive design into every digital offering, right from inception. India needs to be truly accessible for all people with disabilities. Organisations, companies, civil society, the government and the courts must make this happen.

    Mains question

    Q. Discuss the efforts of the Indian government towards creating a Divyanga-friendly digital infrastructure and suggest measures to improve the accessibility of digital services.

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  • Green transition during India’s G20 presidency

    transition

    Central Idea

    • Energy transitions are central to the G20 agenda. In 2023, during India’s presidency, the geopolitics and governance of energy have become immensely challenging, as the shift from fossil fuels to renewable energy, concerns about energy security and, in many cases, the pressure on keeping financial commitments made related to tackling climate change have become complicated.

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    transition

    What is mean by Green Transition?

    • Moving away from fossil fuels: The Green transition involves shifting away from traditional sources of energy that contribute to climate change, such as coal and oil.
    • For example: In 2021, the Indian government announced plans to stop the import of coal by 2024 and to reduce the country’s reliance on coal for power generation
    • Embracing renewable energy: The transition involves embracing cleaner and more renewable sources of energy, such as solar, wind, and hydropower.
    • Examples: In 2021, the Gujarat government announced plans to set up a 500 MW solar park, which is expected to be the world’s largest solar park upon completion. In 2021, Google announced plans to power all of its data centers and offices using carbon-free energy sources by 2030.
    • Reducing carbon emissions: The Green transition involves reducing carbon emissions from transportation, industry, and other sectors.
    • For instance, “Switch Delhi campaign”: In 2020, the Delhi government launched the Switch Delhi campaign to promote electric vehicles and reduce air pollution in the city.
    • Promoting sustainable lifestyles: It involves promoting sustainable lifestyles and behaviours, such as reducing waste and conserving resources.
    • India’s LiFE example: The LiFE (Lifestyle for Environment) campaign is an initiative launched by the Indian to promote sustainable lifestyles and reduce the environmental impact by taking actions at individual level.
    • Encouraging sustainable innovation: The Green transition involves encouraging innovation in sustainable technologies and practices.
    • For instance: In 2021, The Government of India announced plans to set up a National Hydrogen Energy Mission to promote the use of hydrogen as a clean energy source in various sectors.

    Energy Poverty at present

    • Increasing energy poverty in Sub-Saharan Africa: The International Energy Agency counts 20 million more people worldwide without electricity now compared to 2021. Predictably, the worst-affected are in sub-Saharan Africa, which is back to its lowest rate of electrification since 2013.
    • Inadequate energy supply in Europe: In Europe, the number of people experiencing inadequate energy supply has risen to 80 million from 34 million in 2021.
    • Middle-income countries face fuel and electricity shortages: Even middle-income countries in Africa, South America and Asia face fuel and electricity shortages and high levels of inflation.
    • Reduced availability of energy impact on economies and public health: Reduced availability of energy is hurting economies as industries close, and is impacting public health as safe fuels such as cooking gas become expensive.
    • Balance of payments crisis and high energy costs: A number of countries also face a balance of payments crisis, partly driven by high energy costs.
    • Global impact on sustainable development goals (SDG): Energy poverty is global and widespread, impacting technology implementation, industry and SDGs all of which are also G20 goals.

    transition

    Suggestions to produce swift results for India’s G20 presidency

    • Financial support as a cornerstone of climate action and energy transition: The G20 should prioritize providing financial support to those in need as a fundamental aspect of climate action and energy transition under the UNFCC Protocol, as emphasized and reinforced in the Paris Agreement and successive Conference of the Parties (COPs).
    • Galvanizing the pursuit of financial support: Although financial support to developing countries has increased over time, it still falls short of what is necessary for a successful transition to a low-carbon economy. The G20 has the potential to mobilize efforts and drive momentum towards securing the funding required for climate action and energy transition.
    • Public Financing alone is insufficient: Public financing alone will not be sufficient to address the current energy challenges faced globally. Private finance is necessary to complement public finance.
    • Innovative approaches to climate financing: Innovative approaches are required to address the financing needs of climate action. These approaches could include blending finance with public and private capital to create a unified effort. Additionally, impediments like exchange rate risks must be addressed to ensure smooth financing of projects.
    • Creation of a Global Climate Finance Agency to better integrate and drive global agenda: The agency could be mandated to lower hedging costs to mitigate a key risk faced by developers of green projects and insure major clean energy projects from potential losses due to government utilities failing to meet supply and payment obligations, which is a common issue in developing countries like India.
    • Harnessing power of public procurement system: The G20 can use the public procurement system to speed up energy transitions and drive significant change. Effective public procurement can ensure funding and adaptation at scale, which has been proven through abundant evidence.

    transition

    Conclusion

    • The G20 should encourage financial centres and business communities, to create new business models and technologies for energy transitions. This will require cooperation and collaboration between financial centres, including through green financing and economy taxonomies. By doing so, the G20 can accelerate climate transition and energy security for all.

    Mains question

    Q. Briefly explain the concept of green transition. How India’s g20 presidency can lead the world towards Green transition? Discuss.

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  • Income Tax Dept. surveys BBC over Transfer Pricing allegations

    tax

    Central idea: The Income Tax Department has conducted surveys at the premises of the British Broadcasting Corporation (BBC) in Delhi and Mumbai. The BBC has been deliberately violative of transfer pricing rules.

    Transfer Pricing: A Tax Evasion Technique

    • Transfer pricing refers to the practice of determining the price at which goods, services or intangible property are sold between related entities within an enterprise across international borders.
    • It is a practice of multinational companies transferring profits to low-tax jurisdictions to reduce their tax liabilities.

    How does Transfer Pricing work?

    • The I-T Department gives the following example: “Suppose a company A purchases goods for 100 rupees and sells it to its associated company B in another country for 200 rupees, who in turn sells in theopen market for 400 rupees.
    • Had A sold it (the good) direct, it would have made a profit of 300 rupees.
    • But by routing it through B, it (A) restricted it (profit) to 100 rupees, permitting B to appropriate the balance.
    • The transaction between A and B is arranged and not governed by market forces.
    • The profit of 200 rupees is, thereby, shifted to the country of B. The goods is transferred on a price (transfer price) which is arbitrary or dictated (200 hundred rupees), but not on the market price (400 rupees).

     

    What is a ‘Survey’ under the I-T Act?

    • Section 133A of the Income Tax Act, 1961 empowers the Income Tax Department to conduct surveys to collect hidden information.
    • I-T authority can enter any place of business or profession within their jurisdiction, verify books of account, and impound documents if needed.

    What is an I-T search?

    • Section 132 of the Income Tax Act, which I-T Department to conduct searches when it has reasons to believe that someone is in possession of undisclosed income or property.

    Differences between a survey and a search

    • A survey is a less serious proceeding than a search and can only be conducted during working hours on business days within the limits of the area assigned to the officer.
    • In contrast, a search can happen on any day after sunrise, and the entire premises can be inspected to unravel undisclosed assets, with the help of police.
    • While the scope of a survey is limited to the inspection of books and verification of cash and inventory, in a search, the entire premises can be inspected to unravel undisclosed assets, with the help of police.

    Powers of the I-T authority during a search

    • The provisions for impounding or seizing the goods were introduced only by the Finance Act, 2002.
    • The Act says that during a search, an authorized officer can:
    1. Enter and search any building or place where he has reason to suspect that such books of account, other documents, money, bullion, jewellery, or other valuable article or thing are kept;
    2. Break/open the lock of any door, box, locker, safe, almirah, or other receptacles for exercising the powers conferred by clause (i) where the keys thereof are not available;
    3. Seize any such books of account, other documents, money, bullion, jewellery, or other valuable article or thing found as a result of such search;
    4. Place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom;
    5. Make a note or an inventory of any such money, bullion, jewellery, or other valuable article or thing.

    What are Transfer pricing rules?

    • By setting transfer pricing rules, countries can ensure that companies pay taxes on profits generated within their jurisdiction.
    • Transfer pricing rules are used to determine the “arm’s length price” at which transactions between related entities should take place.
    • The arm’s length price is the price that would have been charged between unrelated entities in similar circumstances.
    • The rules aim to ensure that related entities do not shift profits to low-tax jurisdictions, and that the tax authorities of different countries get their fair share of taxes.

    What is the role of tax authorities in curbing transfer pricing?

    • Audit: The tax authorities can carry out transfer pricing audits to determine whether the prices used in transactions between related entities are in accordance with the arm’s length principle.
    • Compliance of Arm’s length principle: If the tax authorities find that the prices are not in accordance with the arm’s length principle, they can make adjustments to the prices and levy taxes accordingly.

    What is the “Arm’s Length Arrangement” that the BBC has allegedly violated?

    • Section 92F(ii) of the Income Tax Act, 1961 defines arm’s length price as “a price which is applied or proposed to be applied in a transaction between persons other than associated enterprises, in uncontrolled conditions”.
    • Section 92C(1) says arm’s length shall be determined by the “most appropriate” among the following methods:
    • comparable uncontrolled price method;
    • resale price method;
    • cost plus method;
    • profit split method;
    • transactional net margin method;
    • such other method as may be prescribed by the I-T Board.

    What lies ahead for BBC?

    • BBC will have to comply with transfer pricing rules in each country in which they operate.
    • Failure to comply with transfer pricing rules can lead to tax liabilities and penalties.
    • Compliance with transfer pricing rules can be complex and require the assistance of tax experts.

    Try this MCQ:

    Q. Which government agency regulates transfer pricing rules in India?

    A) Reserve Bank of India

    B) Securities and Exchange Board of India

    C) Income Tax Department

    D) Ministry of Corporate Affairs

     

    Post your answers here.

     

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  • Big Lithium find: Risks and Rewards

    lithium

    Central idea: The discovery of 5.9 million tonnes of lithium in Jammu & Kashmir is a major boost for India’s electrification plans but mining is a high-risk, high-reward game in the ecologically sensitive Himalayas.

    India’s lithium treasure

    • Huge deposits: Authorities have found 5.9 million tonnes of lithium reserves in Reasi district of Jammu & Kashmir.
    • One of the largest mines: This may be the seventh largest deposit of the rare element, accounting for roughly 5.7% of all the reserves in the world.
    • High grade quality: They are also said to be of a higher grade—550 parts per million (ppm) against the average 220 ppm—making it highly lucrative, given how lithium prices have soared in the last few years.

    Game-changing prospects for India

    • White gold: Due to its ability to pack energy, it has utility across a range of sectors and has gained the moniker ‘white gold’.
    • Soaring prices: According to the International Energy Agency, lithium prices went up more than seven-fold between the start of 2021 and May 2022.
    • Battery economy: It is now primarily used to build the batteries that power modern appliances.
    • EV push: They also power electric vehicles, a segment that will corner most of the global lithium production in future.
    • Import cut: Currently, India does not have its own lithium resources and like crude oil, it is dependent on imports. In fiscal 2022, India imported lithium and lithium ion worth almost ₹14,000 crore.

    Will batteries be made of lithium from India now?

    • There is still some way to go before miners can extract lithium for industrial use.
    • The discovery is ‘inferred’ or preliminary, the lowest of the three levels of estimations of a mineral deposit and the second of the four stages of exploration, as per the UN Framework Classification of mineral resources.
    • There is much analysis to be done before its true value is confirmed.

    Pitfalls of lithium mining

    • Pollution in the valley: Open-pit-mining, refining, and waste disposal from these processes substantially degrades the environment, including depletes and contaminates waterways and groundwater, diminishes biodiversity, and releases considerable air pollution.
    • Water intensity: Extracting lithium from its ore is highly water-intensive, taking about 2.2 million litres of water for one tonne of lithium.
    • Seismicity threats: The Himalayas are a highly fragile and eco-sensitive region and as the recent Joshimath subsidence shows, it is vulnerable to long-term adverse consequences of unplanned development works.
    • Displacement issues: Mining in the region could displace local communities and have significant social impacts. The region is home to a number of indigenous communities who could be negatively impacted by mining in the region.
    • Undue activism over Kashmir: Mining in the region can attract opposition from environmentalists and so-called separatists disguised as national leaders.

    Geostrategic considerations

    • Sensitive location: The new lithium discovery in J&K has significant geostrategic implications due to the geopolitical sensitivity of its location.
    • Neighborhood hostility: The Union territory of J&K has a history of cross-border tensions, domestic insurgency, and terrorism.
    • Resentment of local population: Lack of meaningful engagement with the local populace in the Li extraction project could introduce new frontiers of socio-environmental conflict.

    China factor

    • China currently dominates the global lithium-ion battery manufacturing industry.
    • Dependence on China for Li and other crucial metals and their derivatives is a source of energy security risks.
    • Major economies such as the E.U., the U.S., Canada, and India are seeking alternative supplies to challenge China’s geopolitical dominance.

    Indian initiatives in this regard

    • Undeterred trade with China: India’s security considerations are more immediate due to the growing geopolitical rivalry with China and longstanding territorial disputes.
    • Rare Earths Mission: The Indian government and industry are pushing for a ‘Rare Earths Mission’ to reduce dependence on China and exploit the country’s critical mineral reserves.

    Conclusion

    • In effect, the proliferation of EVs could mean India becoming dependent on China, just like it is reliant on the Middle East for crude oil today.
    • J&K’s reserves, however, provide a major opening for India to be self-reliant.

     

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  • Vacancy of Deputy Speaker Chair in States

    The Supreme Court issued notices to the Centre and five states — Rajasthan, Uttarakhand, Madhya Pradesh, Uttar Pradesh, and Jharkhand — over the failure to elect a Deputy Speaker.

    The Post of Deputy Speaker

    • The Deputy Speaker is the second-highest-ranking official of the Lok Sabha, after the Speaker.
    • She/he presides over the House in the absence of the Speaker, maintains order and decorum, and decides points of order raised by the members.
    • She/he is elected by the members of the House and holds office until the next Lok Sabha is constituted.

    Constitutional provisions for Dy. Speaker

    • The Constitution of India provides for the post of Deputy Speaker in the Lok Sabha under Article 93.
    • The Deputy Speaker is elected by the members of the House and holds the office until the next Lok Sabha is constituted.
    • The Constitution does not provide for a temporary or acting Deputy Speaker in case of the incumbent’s absence or inability to perform the duties.
    • Article 178 contains the corresponding position for Speaker and Deputy Speaker of the Legislative Assembly of a state.

    Is it mandatory to have a Deputy Speaker?

    • Constitutional experts point out that both Articles 93 and 178 use the word “shall”, indicating that the election of Speaker and Deputy Speaker is mandatory under the Constitution.

    What if she/he remains absent?

    • In the absence of Dy. Speaker, the house functions with the Speaker or the panel of chairpersons presiding over the House.
    • The House may elect a new Deputy Speaker to fill the post until the next assembly is constituted.
    • The House might need to elect a new Deputy Speaker in case of the incumbent’s absence or inability to perform the duties.

    Why discuss this?

    • The post of Deputy Speaker is an important position in the Lok Sabha/Legislative Assembly and plays a crucial role in conducting the House proceedings.
    • It is important to ensure the post’s functioning to maintain the House’s order and decorum and conduct the House proceedings smoothly.

     

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  • InfoCrop v2.1: Indigenous Crop Simulator

    infocrop

    Central idea: Scientists at the Indian Agricultural Research Institute conducted an experiment using InfoCrop version 2.1 to quantify the impact of hot weather on crop yield in Punjab and Haryana.

    What is InfoCrop v2.1?

    • InfoCrop version 2.1 is India’s only dynamic crop simulation model developed and released by the IARI in 2015 to study the long-term impact of climate change and crop management practices on yield.
    • InfoCrop is more suited for India as it has the life cycle data for almost all the local varieties of 11 crops: paddy, wheat, maize, sorghum, pearl millet, pigeon pea, chickpea, soybean, groundnut, potato and cotton.

    How does it work?

    • In InfoCrop, the parameters are already calibrated to Indian crop varieties and they are updated at regular intervals by the institute.
    • The parameters deal with aspects of-
    1. Weather (precipitation, temperature, radiation and others)
    2. Crop growth (phenology, grain characteristics, leaf growth, temperature and flooding sensitivity and others)
    3. Soil (texture and organic carbon, water holding characteristics and pH levels) and
    4. Pests and crop management (organic matter, fertiliser and irrigation).

    Efficiency of InfoCrop model

    • The model has an 85 per cent accuracy rate.
    • This is on par with widely used dynamic models such as the Decision Support System for Agrotechnology Transfer model, developed by the US, and Agriculture Production Systems sIMulator, developed by Australia.

    Utility of this tool

    • Prevent on-field corruption: India currently relies on field trials, which are expensive and resource-intensive as well as highly corrupt practise.
    • Crop insurance prediction: Government and insurance companies can use this for climate impact projections and for pre- or in-season crop yield forecasts to improve accuracy.
    • Assess crop loss: Besides forecasting, simulation models can be used to assess crop loss in the aftermath of an extreme weather event, which can then be used to provide relief packages.

     

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