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Subject: Governance

Important aspects of Society

  • [26th June 2024] The Hindu Op-ed: Agony still in Manipur, a year later

    PYQ Relevance: 

    Q What are the two major legal initiatives by the state since Independence, addressing discrimination against Scheduled Tribes (ST)? (UPSC IAS/2017)
    Q Why are the tribals in India referred to as ‘the Scheduled Tribes’? Indicate the major provisions enshrined in the Constitution of India for their upliftment. (UPSC IAS/2016)

    Mentors’ comment: The Meiteis and Kuki-Zos are the two major ethnic communities in Manipur engaged in a violent conflict since May 2022. The Meiteis, the dominant group in the Imphal valley, have demanded Scheduled Tribe status, which the Kuki-Zos in the hills oppose fearing loss of land and jobs. The conflict has led to over 220 deaths, thousands injured, and tens of thousands displaced, creating a humanitarian crisis.

    Let’s learn!

    Why in the news?

    The absence of Manipur Chief Minister N. Biren Singh was notable at the high-level security meeting on Manipur convened by Union Home Minister Amit Shah in New Delhi on June 17, 2024.

    Background issue:

    • Communities Involved: The primary conflict is between two major ethnic communities in Manipur: the Meitei and the Kuki-Zo tribes.
    • Violence and Casualties: The clashes have resulted in significant violence, including attacks on civilians and property. The conflict has led to a considerable loss of life, with casualties reported on both sides.
    • Displacement: The violence has caused widespread displacement within Manipur. Both Meiteis and Kuki-Zos have been forced to flee their homes, contributing to a humanitarian crisis in the region.
    • Reason: The roots of the conflict are deep-seated and include historical grievances and disputes over land, resources, and political representation.

    Issues related to High-Level Security Meeting:

    • Exclusion from High-Level Meetings: Manipur Chief Minister N. Biren Singh was conspicuously excluded from a high-level security meeting convened by Union Home Minister Amit Shah in New Delhi on June 17, 2024.
    • Centralized Control: Speculations arose about an undeclared President’s Rule in Manipur, indicating that the State government’s authority in handling the ethnic clashes between Meitei and Kuki-Zo tribes has been significantly diminished.
    • Appointment of Officials: The Director General of Police and Security Adviser for Manipur were appointed from outside the State following the outbreak of violence, highlighting a shift in administrative control away from local authorities.

    Recent challenges:

    • Misguided Separation Strategy: An attempt to create a buffer zone between the warring communities by dividing responsibilities between central forces and state police backfired.
    • Lack of Resolution Efforts: While violence temporarily subsided, underlying causes of discord between Meiteis and Kuki-Zos were not addressed, allowing tensions to persist and escalate unpredictably.
    • Presence of Security Forces: Despite a large deployment of around 70,000 personnel, the strategy has focused on managing rather than resolving the conflict, leading to sustained distrust and communal tensions.

    Impact on Meiteis and Kuki-Zos communities:

    • Casualties and Displacement: Official figures report 225 deaths, with significant displacement and mutual ethnic cleansing affecting both Meiteis and Kuki-Zos communities.
    • Blurred Victim-Perpetrator Lines: Over time, the distinction between victims and perpetrators has become less clear, complicating reconciliation efforts and deepening communal divisions.
    • Humanitarian Impact: The conflict has exacted a heavy toll on lives and properties, necessitating empathy and shared acknowledgement of suffering as a basis for reconciliation and eventual peace-building.

    Way forward: 

    • Inclusion of Local Leadership: Ensure the meaningful participation of Manipur Chief Minister N. Biren Singh and local community leaders in high-level security meetings and decision-making processes. This can help in fostering trust and ownership of initiatives aimed at resolving the conflict.
    • Address Root Causes: Conduct a comprehensive assessment to identify and address the underlying causes of ethnic tensions, such as historical grievances, competition over resources, and political representation. Develop policies and initiatives that aim at long-term reconciliation rather than short-term management of conflict.

    Source: 

    https://www.thehindu.com/opinion/lead/agony-still-in-manipur-a-year-later/article68332570.ece#:~:text=There%20seem%20to%20be%20no,placed%20in%20virtual%20animated%20suspension.

  • Finance Commission and Indian Cities

    Why in the news? 

    With the new Lok Sabha and Union government in place, this final piece focuses on how the 16th Finance Commission can drive substantive public finance reforms for India’s cities.

    Note: The Sixteenth Finance Commission has been requested to make its recommendations available by October 31, 2025, covering an award period of 5 years commencing 1st April, 2026.

    16th Finance Commission can catalyse municipal-level financial reforms     

    • Strengthening State Finance Commissions: The Commission should emphasize the need for state governments to constitute state finance commissions on time, provide them with adequate resources, and ensure their recommendations are taken seriously.
    • Fiscal Decentralization: The 16th FC should recommend a formula-based approach for predictable fiscal transfers from state governments to municipalities, moving away from the current practice of ad hoc, discretionary grants. This will enhance the financial autonomy of urban local bodies.
    • Revenue Optimization: The Commission should incentivize municipalities to enhance their own revenues through measures like property tax reforms, user charges, and leveraging land assets. This will reduce their dependence on state grants and promote fiscal responsibility.
    • Fiscal Responsibility and Budget Management: The 16th FC can provide incentives for municipalities to adopt fiscal responsibility and budget management frameworks to accelerate municipal borrowings for infrastructure development. This will enable cities to access capital markets for financing their growth.
    • Transparency and Citizen Participation: The 16th FC can encourage municipalities to enhance transparency and citizen participation in urban governance for improved accountability at the neighbourhood level. This will make urban local bodies more responsive to the needs of citizens.

    Need for the Reforms

    • Inadequate Funding and Resource Utilization: Indian cities face significant financial shortfalls and struggle to effectively utilize the funds they have, leading to underdeveloped infrastructure and services.
    • Lack of Accountability: There is minimal accountability regarding how municipal spending improves citizens’ lives, resulting in inefficient use of resources and unmet public needs.
    • Fiscal Decentralization: Cities need predictable fiscal transfers for effective planning, but state governments often delay constituting State Finance Commissions (SFCs) and implementing their recommendations.
    • Revenue Optimization: Cities underutilize their revenue-generating powers due to outdated valuation processes controlled by state governments. Comprehensive reforms are needed at all stages of revenue collection.
    • Transparency and Fiscal Responsibility: The legal framework for financial accounting, reporting, and budgeting is inconsistent across states. Standardized formats, mandatory accounting standards, and management accounting systems are necessary to improve transparency and fiscal responsibility.

    Activities by State Governments

    • Timely Constitution and Implementation of State Finance Commissions: State governments must ensure the timely establishment and effective implementation of SFC recommendations to support fiscal decentralization and provide predictable funding to cities.
    • Updating Valuation Processes: States should regularly update guidance values or circle rates to reflect current market values, enabling cities to optimize revenue collection and ensure financial sustainability.
    • Enhancing Legal and Institutional Frameworks: States should establish and enforce standardized formats for financial accounting, reporting, and budgeting to ensure consistency, transparency, and comparability across municipalities.
    • Empowering Local Governments: States should delegate reasonable expenditure authority to city councils, reducing dependency on state-level approvals and enabling more efficient and responsive local governance.
    • Mandating Transparency and Citizen Participation: States should mandate public disclosure of municipal financial data and project details in machine-readable formats and support the implementation of participatory budgeting to enhance transparency and citizen involvement in governance.

    Conclusion: The 16th Finance Commission can drive critical municipal-level financial reforms by strengthening state finance commissions, promoting fiscal decentralization, optimizing revenues, enhancing fiscal responsibility, and encouraging transparency and citizen participation in governance.

    Mains PYQ:

    Q How is the Finance Commission of India constituted? What do you know about the terms of reference of the recently constituted Finance Commission? Discuss. (15) (UPSC IAS/2018)

  • Indian Railways and safety challenges

    Why in the news?

    The turmoil has not subsided since the tragic accident involving the GFCJ container train, which, while travelling at high speed, collided with the 13174 Agartala-Sealdah Kanchanjunga Express, resulting in 11 deaths and approximately 40 injuries.

    Indian Railways: Recent Issues

    • Tragic Accident: The GFCJ container train collided with the 13174 Agartala-Sealdah Kanchanjunga Express, causing 11 deaths and around 40 injuries.
    • Premature Conclusions: The Chairperson of the Railway Board prematurely blamed the container train crew and provided incorrect information about casualties.
    • Slow Rollout of Kavach System: Kavach, an indigenous signalling system to prevent collisions, has been slowly implemented due to limited industrial capacity.
    • Staffing Issues: Indian Railways is overstaffed but has critical vacancies in safety-sensitive positions, leading to stress and overwork for existing staff.
    • Ambiguous Protocols: Ambiguous rules for handling Automatic signal failures create confusion and increase the risk of accidents.

    What are the major challenges that Indian Railways faces?  

    • Safety Concerns: Inadequate measures to prevent collisions and improve overall safety, despite technological advancements.
    • Staffing Shortages: Critical vacancies in essential roles such as loco pilots, train managers, and signal maintainers, lead to overworked staff.
    • Slow Technological Implementation: Delayed implementation of safety technologies like the Kavach system due to limited industrial capacity and lack of focus.
    • Ambiguous Safety Protocols: Poorly drafted rules and unclear protocols for handling signal failures and emergencies.
    • Managerial and Communication Issues: Premature conclusions and miscommunication by top management, undermine trust and effective crisis management.

    What can be the solution?

    • Enhanced Safety Protocols: Strengthen and clarify protocols for Automatic signal failures and other emergency situations.
    • Accelerated Technology Adoption: Fast-track the implementation of safety technologies like the Kavach system, with targets of 4,000 to 5,000 km/year.
    • Increase Recruitment in Critical Areas: Fill vacancies in essential safety roles promptly to reduce stress and workload on existing staff.
    • Encourage Industrial Capacity Building: Support and incentivize allied industries to increase capacity for producing and implementing safety technologies.
    • AI-Enabled Safety Monitoring: Implement AI-enabled applications to analyze digital data from station loggers and train microprocessors for actionable safety insights.
    • Focus on Managerial Accountability: Ensure that managerial issues are thoroughly investigated and addressed to improve overall safety management.

    Steps taken by the government:

    • The government has established the Rashtriya Rail Sanraksha Kosh (RRSK), a dedicated fund with a corpus of Rs. 1 lakh crore over 5 years, to finance critical safety asset replacement, renewal, and upgradation.
    • The government has implemented Electrical/Electronic Interlocking Systems at 6,427 stations as of May 2023, which centrally operate points and signals to eliminate human error-related accidents.

    Conclusion: Strengthen and clarify safety protocols for handling signal failures and emergencies, ensuring clear guidelines and training for staff. Fast-track the implementation of safety technologies like the Kavach system, setting annual targets of 4,000 to 5,000 km to improve overall safety and prevent collisions.

    Mains PYQ:

    Q Why is Public Private Partnership (PPP) required in infrastructural projects? Examine the role of PPP model in the redevelopment of Railway Stations in India. (UPSC IAS/2022)

  • India among a select few countries that have not conducted the Census    

    Why in the news?

    India’s last census was conducted in 2011, and the scheduled Census 2021 has been indefinitely postponed, citing the COVID-19 pandemic. This delay has significant implications for welfare schemes and policy planning reliant on accurate population data.

    Significance of Census Calculation  

    • Foundation for Policy Planning and Governance: Census data forms the foundational basis for policy planning and governance across various sectors such as education, healthcare, infrastructure development, and social welfare.
    • Allocation of Resources and Welfare Benefits: Census figures are crucial for determining the allocation of resources and distribution of welfare benefits like food subsidies, housing schemes, healthcare facilities, and educational resources.
    • Monitoring Socio-Economic Development: Census data enables monitoring of socio-economic development indicators over time, such as literacy rates, employment patterns, poverty levels, and household incomes.

    Present Observations:

    • Global Comparison: India is among a minority of countries (44 out of 233) that have not conducted the latest census, despite most nations managing to proceed with their census rounds after March 2020, amidst the pandemic. This delay places India alongside conflict-affected countries and those facing economic crises.
    • Regional Context: Among BRICS nations, India is the only country yet to conduct its latest census, contrasting with others such as Brazil, China, South Africa, and Russia, which have completed their census rounds during or after the pandemic.
    • Dependency on Census Data: Census data serves as the primary source for accurate demographic information at grassroots levels, crucial for planning and implementing welfare schemes across various sectors, including education, healthcare, and social security.

    Implications for Society:

    • Welfare Scheme Implementation: The absence of updated census figures hampers the effective implementation of welfare schemes such as the Public Distribution System (PDS), National Family Health Survey, and National Family Security Act. Outdated population data from 2011 leads to inaccuracies in identifying beneficiaries, potentially excluding millions from essential services and entitlements.
    • Education and Social Development: Schemes like the Eklavya Model Residential School (EMRS), aimed at providing quality education to Scheduled Tribe (ST) children, are adversely affected. Allocation decisions based on 2011 census data may not accurately reflect current demographic realities, leading to misplaced resource distribution and missed opportunities for targeted interventions.
    • Economic and Social Planning: Census data plays a pivotal role in economic planning, resource allocation, and policy formulation. Without updated population figures, India faces challenges in devising evidence-based policies that address regional disparities, socio-economic needs, and demographic shifts effectively.

    Conclusion: The indefinite postponement of Census 2021 in India has profound implications for governance, socio-economic planning, and equitable development. Addressing these challenges requires expedited efforts to conduct the census and ensure accurate demographic data to inform inclusive policy frameworks.

    Mains question for practice: 

    Q Discuss the present observations regarding India’s census delay and analyze its implications. 15M

  • [22nd June 2024] The Hindu Op-ed: A mandate for a new economic approach

    PYQ Relevance: 

    Q The nature of economic growth in India in recent times is often described as jobless growth. Do you agree with this view? Give arguments in favour of your answer. (UPSC IAS/2015)

    Q ‘Economic growth in the recent past has been led by the increase in labour productivity.” Explain this statement. Suggest the growth pattern that will lead to the creation of more jobs without compromising labour productivity. (UPSC IAS/2022)

    Mentors comment: Following the results of the Lok Sabha elections, Prime Minister Narendra Modi has begun his third term leading a coalition government. The continuity in government policy is anticipated, with top ministers like Nirmala Sitharaman and Piyush Goyal retaining their portfolios unchanged in key economic ministries such as finance commerce and industry. According to Jeremy Zook, director at Fitch Ratings, there is an expectation that India’s robust medium-term growth outlook will persist, supported by government capital expenditure initiatives and improvements in corporate and bank balance sheets. However, the potential for significant enhancements to medium-term growth prospects may be limited if reforms encounter greater challenges in implementation.

    Let’s learn_ _

    Why in the News?

    The recent general election results reflect a dissatisfaction with economic conditions.

    Sources of Discontent

    • Governance Issues: Dissatisfaction is high due to unemployment and persistent inflation.
    • Food-Price Inflation: Food-price inflation has been elevated for five years, particularly for cereals and pulses, which are staples. Households at the bottom of the income distribution spend nearly half their expenditure on food.
    • High Expectations: Historical precedents, like the high food price inflation before the end of the A.B. Vajpayee-led government in 2004, show the impact of food prices on voting behaviour.
    • Unemployment: The unemployment rate has been mostly higher since 2014, with the Periodic Labour Force Survey showing a decline in the real earnings of regular employees and the self-employed.
    • Economic Shift: These factors have contributed to the economic discontent leading to the shift away from the BJP.

    Promise for reforms

    • Electoral Mandate: Prime Minister Narendra Modi must honour the electoral mandate by addressing the sources of discontent.
    • Need for Change: A change from the economic approach of the past decade is required, but no indications of such a shift have been observed.
    • Promised Reforms: The Finance Minister has promised ‘reforms,’ but these must translate into tangible economic improvements.

    Aspersions over Reform and Growth

    • Growth Rates: Despite Mr Modi’s reforming zeal, the average growth rate has not increased post-2014.
    • Impact of Reforms: Effective reforms should impact demand or supply forces, which has not happened strongly enough.
    • Unmet Aspirations: Growth since 2014 has not met the aspirations of Indians, particularly in terms of affordable food, healthcare, and education.

    Economic Policy of the Past Decade

    • Policy Focus: The past decade’s focus has been on attracting foreign investment, digital payment, manufacturing through subsidies, and highway construction.
    • Cash Transfers: Cash transfers to farmers and housewives, and free rations for the poorest, have not been enough to secure a majority for the BJP.
    • Policy Re-evaluation: Continued emphasis on these policies would ignore the people’s verdict. More significant interventions at current pressure points are necessary.

    Key Pressure Points

    • Food Prices: Rising food prices indicate an underdeveloped economy. There is a need for mission-mode initiatives to make India self-sufficient in pulses. Improvement in cold storage facilities and transportation for fruits and vegetables is crucial.
    • Indian Railways: Long-distance migration for work has overwhelmed the railway system. Prioritizing high-end trains like ‘Vande Bharat’ and bullet trains over essential services is a misjudgment.
    • Water Supply in Mega Cities: Cities like Bengaluru and Delhi face severe water shortages. A reliable water supply is critical for these agglomerations’ economic potential and social harmony.

    Public Sector’s Role

    • Infrastructure Needs: Infrastructure supporting everyday life and economic activity is essential.
    • Private Sector Limitations: The private sector has not delivered necessary services like efficient transportation, steady electricity, sewerage, and waste disposal.
    • Public Sector Capability: Only the public sector can supply these at scale. The government should pivot from relying on the private sector to address obvious pressure points.
    • Vision for 2047: For India to become a developed economy by 2047, it must have the infrastructure to support life, which requires substantial public sector involvement.

    Conclusion:

    To honour the electoral mandate, a change in economic strategy is imperative. The focus must shift from merely attracting foreign investment and building infrastructure to addressing the immediate needs of the populace. Specific interventions in areas such as food prices, railway services, and water supply in megacities are crucial. Moreover, the public sector must play a central role in developing essential infrastructure to support both everyday life and economic activity.

    https://www.thehindu.com/opinion/lead/a-mandate-for-a-new-economic-approach/article68317846.ece

  • The NEP debate: Why criticism of the policy is premature and off the mark?

    Why in the News?

    Opposition mainly comes from traditionalists who dislike markets, industrial experience, and internships. The NEP supports Ambedkar’s vision of education focused on employability for most Indians.

    About the National Education Policy (NEP)

    • The NEP was implemented in 2020, replacing the outdated NEP of 1986 after a delay of 34 years.
    • It aims to address the low employability of graduates by aligning education with the rapidly changing technological and industrial landscape.
    • It emphasizes a well-rounded education that includes in-depth knowledge, soft skills, technical skills, research capabilities, analytical and problem-solving abilities, and critical thinking.
    • The NEP shifts all programs towards outcome-based learning, with specified learning outcomes and corresponding assessments for each course.

    Why Criticism of the Policy is Premature and Off the Mark?

    • Early Stage of Implementation: Critics argue that it dilutes core content and burdens students and educators with bureaucratic requirements, but these criticisms are considered premature.
    • Continuous Task: Overhauling the vast education sector is a continuous task, and many concerns are over-emphasized.
    • University-Specific Issues: Much criticism centers around syllabus design and content, which is a university-specific issue and not a failure of the NEP.

    Provisions under NEP and Government Efforts

    • Credit-Based Courses: The NEP introduces credit-based courses, allowing for a flexible and multidisciplinary academic path.
    • Ability and Skill Enhancement Courses: These courses are designed to equip students with employability or entrepreneurial skills.
    • Recognition of Prior Learning (RPL): Students gaining industrial exposure related to their studies can earn credits through RPL, facilitating lifelong learning.
    • Revamped Curriculum and Syllabi: Emphasis on hands-on learning and continuous assessment through credited tutorials.
    • Internships and Practical Experiences: Integration of internships, apprenticeships, projects, and community outreach within degree programs.
    • Flexible Exit and Re-Entry: The NEP allows students to exit and re-enter programs, accommodating varied backgrounds and circumstances.

    Way Forward

    • Responsive Academia: Academia should be responsive to the requirements of the masses and markets, ensuring education is aligned with employability and industrial needs.
    • Continuous Feedback and Updates: Institutions should continuously update their programs based on feedback from stakeholders, following the example of successful adopters like Delhi University.
    • Long-Term Infrastructure Development: Realizing the full potential of the NEP requires long-term infrastructure development, which should be a sustained effort.

    Mains PYQ: 

    Q National Education Policy 2020 is in conformity with the Sustainable Development Goal-4 (2030). It intends to restructure and reorient the education system in India. Critically examine the statement. (UPSC IAS/2020) 

  • What is ‘Blood Money’ in Islamic Law?

    Why in the News?

    • The Indian Government has approved the transfer of the sum of $40,000 for preliminary discussions regarding the release of Nimisha Priya from a Yemeni prison.
      • Currently, Priya’s mother is in Yemen, trying to waive her death penalty by paying “blood money” to the murdered man’s family.

    Nimisha Priya’s Case Details

    • Priya, a nurse, moved to Yemen in 2008 and married Tomy Thomas in 2011 before returning to Yemen.
    • She faced abuse and exploitation by Talal Abdo Mahdi, leading to the tragic events resulting in Mahdi’s death and Priya’s arrest.
    • The $40,000 payment aims to initiate negotiations for Priya’s release.
    • To waive the death penalty, Priya’s family may need to raise $300,000-$400,000.
    • The ‘Save Nimisha Priya International Action Council’ is fundraising to meet this requirement.

    What is Blood Money?

    • According to Islamic law, victims of crimes have a say in how criminals are to be punished.
    • In the case of murder, this principle applies to the families of victims.
    • Although murder is punished via the death penalty, the victim’s family (specifically, heirs) may choose to “forgive” the murderer in exchange for monetary compensation.
    • This is the principle of Diyya, or, as it is commonly referred to “blood money”.
    • It can be traced to the Holy Quran.
    • Applicability:
      • Blood money is applicable in cases of unintentional homicide (Qatl Khata) or accidental death, as well as in cases of bodily injury or harm caused by negligence or unintentional actions.

    Practical Implications of Blood Money

    • Scholars believe that the idea behind this is to encourage the virtue of forgiveness, while also providing reparative justice to the victims’ family.
    • The scriptures do not set any specific amount as compensation.
    • The sum is generally arrived at via negotiation between the murderer’s family/representatives and the victim’s family.
    • Some Islamic countries, however, have set minimum compensation amounts.

    Significance of Blood Money

    • Forgiveness from the victim’s family is highly encouraged and considered virtuous in Islam.
    • Blood money aims to prevent cycles of vengeance or retaliation (Qisas) that could lead to further social harm or conflict.
    • It promotes reconciliation and mutual understanding.

  • Why caste should inform debates on inequality in the country?

    Why in the News?

    A recent working paper from the World Inequality Lab has sparked renewed debate about the growing divide between the rich and the poor.

    Disparities in Consumption Patterns:

    • Population vs. Consumption Share: Scheduled Tribes (ST): Despite making up 9% of the population, their consumption share is only 7%. Scheduled Castes (SC): Represent 20% of the population but have a consumption share of 16%. Other Backward Classes (OBC): Align more closely with their population percentage, constituting 43% of the population and a 41% consumption share.General Category: Comprises 28% of the population but commands a significantly higher consumption share of 36%.
    • Reduction in Consumption Inequality: The overall Gini coefficient decreased from 0.359 in 2017-18 to 0.309 in 2022-23. Gini coefficients for ST, SC, OBC, and General categories also saw reductions, indicating a slight improvement in the equitable distribution of consumption within these communities.

    • Economic Disparities Among Social Groups: The bottom 20% decile experienced a decrease in consumption levels for ST, SC, and OBC groups, although marginally. The General category saw a more pronounced decrease in consumption levels among the poorest segment, highlighting a relative decline in consumption among this group.
    • Concentration of Wealth in Higher Deciles: Consumption has increased for all social groups in the top 20% decile. The General category experienced a significant 10% points surge in consumption between 2017-18 and 2022-23, implying a potential concentration of wealth among high-caste elites and persistent economic disparities.

    Efforts to Augment Income Generation Abilities:

    • Targeted Policies:
      • Reservation: Affirmative action programs to improve opportunities for SCs, STs, and OBCs.
      • Rural Development Initiatives: Policies aimed at enhancing infrastructure, education, and healthcare in rural areas.
      • Direct Benefit Transfers (DBT): Financial aid is directly transferred to beneficiaries to ensure they receive the intended benefits without middlemen.
    • Focus on Lower Deciles: Emphasis on increasing income generation and consumption abilities, particularly within the lower deciles of SC, ST, and OBC communities—the importance of fostering social harmony and economic stability through equitable income distribution.
    • Monitoring and Intervention: Continuous monitoring of consumption trends and economic disparities. They are implementing targeted interventions addressing the specific socio-economic challenges faced by different groups to ensure sustained progress towards economic equity.

    Way forward:

    • Strengthen and Expand Affirmative Action Programs: Enhance and rigorously implement affirmative action policies such as reservations in education and employment for SCs, STs, and OBCs. This should include increasing access to quality education, vocational training, and skill development programs to empower these communities economically and socially. 
    • Promote Inclusive Economic Development Initiatives: Implement comprehensive rural development initiatives that focus on improving infrastructure, healthcare, and education in marginalized areas.

    Mains PYQ: 

    Q What are the main factors responsible for gender inequality in India? Discuss the contribution of Savitribai Phule in this regard.(UPSC IAS/2020)

  • What is SWM Cess and Why is It Levied on Waste Generators?

    Why in the News?

    The Bruhat Bengaluru Mahangara Palike (BBMP) has proposed a Solid Waste Management (SWM) Cess of ₹100 per month for each household.

    What is Cess?

    • A cess is a form of tax or levy imposed by governments to fund specific services or purposes, such as waste management or infrastructure development.

    How has the SWM cess fared so far?

    • Purpose of SWM Cess: SWM Cess is intended to cover a portion of the costs incurred by Urban Local Bodies (ULBs) in providing SWM services, which are resource-intensive and crucial for maintaining cleanliness and health standards in urban areas.
    • Legal Provisions: According to the Solid Waste Management Rules, 2016, ULBs are mandated to collect user fees/cess for SWM services. The proposed increase reflects the rising costs and challenges faced by ULBs in managing solid waste effectively.

    Why has it hit the headlines suddenly?

    • Significant Increase in User Fee: The proposed SWM Cess represents a substantial increase from the previous user fees typically charged by ULBs (Urban Local Bodies) across India, which are generally in the range of ₹30-50 per month. Such a significant rise in fees has garnered attention and sparked debate among residents and stakeholders in Bengaluru.
    • Impact on Residents: The SWM Cess directly affects every household in Bengaluru, potentially adding financial burden on residents. This has led to widespread discussions and concerns among citizens about the affordability and justification of the proposed increase.

    Present Status in Bengaluru:

    • Bengaluru faces significant challenges in solid waste management (SWM) due to its large population and high daily waste generation of approximately 5,000 tonnes. Managing such volumes requires extensive resources and infrastructure.
    • The Bruhat Bengaluru Mahangara Palike (BBMP) primarily focuses its SWM efforts on the collection and transportation of waste. These activities are labor-intensive and consume a major portion of BBMP’s budget allocated for SWM services.
    • SWM services constitute a substantial portion of BBMP’s budget, with limited revenue generated from these services. This financial strain necessitates the proposal of initiatives like the SWM Cess to bridge the funding gap and ensure sustainable service delivery.

    What is about to change?

    • Proposed Changes: Going forward, Bengaluru plans to implement several changes in its SWM strategy.
      • These include revising user fees and potentially increasing charges on bulk waste generators to better cover operational costs and enhance service efficiency.
    • Strategies for Improvement: BBMP aims to enhance waste management practices through initiatives such as waste segregation at source, promoting decentralized composting centres, and launching public awareness campaigns. These efforts are aimed at optimizing resource utilization and improving overall SWM effectiveness in the city.

    Mains PYQ: 

    Q What are the impediments in disposing of the huge quantities of discarded solid wastes which are continuously being generated? How do we remove safely the toxic wastes that have been accumulating in our habitable environment? (UPSC IAS/2018)

     

  • India’s growth story has a ‘beneficial ownership’ hurdle

    Why in the News?

    To achieve a $5 trillion economy by 2025-26, India must eliminate obstacles hindering Foreign Investments and facilitate smoother processes for companies and investors.

    About the Indian Foreign Exchange Management (Non-debt Instruments) Rules

    • FEMA outlines the formalities and procedures for the dealings of all foreign exchange transactions in India. These foreign exchange transactions have been classified into two categories — Capital Account Transactions and Current Account Transactions.
    • The Indian Foreign Exchange Management (Non-debt Instruments) Rules, 2019, commonly referred to as FEMA NDI, regulates foreign investments in Indian companies. These rules are critical for overseeing the flow of foreign capital into the country, ensuring that investments align with national interests and do not pose security risks.
    • The amendment to the Indian Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (“FEMA NDI”) was again made through press note number 3 in the year 2020.
    • In exercise of the powers conferred by section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) and consequent to the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019, the Reserve Bank of India makes the following regulations relating to mode of payment and reporting requirements for investment in India by a person resident outside India.
      • ‘Act’ means the Foreign Exchange Management Act, 1999 (42 of 1999);
      • ‘Rules’ means Foreign Exchange Management (Non-Debt Instrument) Rules, 2019;
    • On April 16, 2024, the Ministry of Finance, through the Department of Economic Affairs, notified the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2024 (the “Amendment“), prescribing new entry routes for foreign investment in activities under the space sector.

    Introduction of Press Note 3 (PN3) Requirement:

    • What does it mean?: This amendment requires prior government approval for any investments from entities or individuals in countries that share a land border with India. This rule applies if the investment comes directly from these countries or if the beneficial owner (the real person who ultimately owns or controls the investment) is a citizen or resident of these countries.
    • The purpose: Implemented during the COVID-19 pandemic, the rule aims to prevent opportunistic takeovers of struggling Indian companies by neighboring countries

    Challenges with the Recent Amendment

    • Undefined ‘Beneficial Owner’: The term ‘beneficial owner’ isn’t clearly defined in the PN3 Requirement, leading to confusion. Different laws define the term differently, making it hard for companies to know which standards to follow.
    • Regulatory Uncertainty: Since the latter half of 2023, the Reserve Bank of India (RBI) has adopted a stricter interpretation of these rules. This shift has caused anxiety among investors and companies, as practices previously deemed acceptable are now being scrutinized.
    • Regulatory Burden: Companies now face significant delays and a high rate of rejection when seeking approval for investments. According to some officials, proposals worth ₹50,000 crore have been stalled or rejected in the past three years, with 201 applications being turned down.
    • Severe Fines: Non-compliance with the PN3 Requirement can result in fines up to three times the amount of the investment. For many startups, this could mean financial ruin, as the fines could exceed their revenue or assets.
    • Legal Battles: Violations could lead to lengthy and costly legal disputes, further burdening the already slow judicial system in India.

    What can be the better solution? (Way forward) 

    • Ownership Thresholds: Define beneficial ownership with clear thresholds, such as 10% to 25% ownership stakes. This would help companies understand whether they need to seek approval.
    • Control-Conferring Rights: Specify which rights indicate control, such as the ability to influence board decisions or veto significant operational changes. Exclude rights that merely protect investor interests, such as veto powers over mergers.
    • Investor Representations: Allow Indian companies to require foreign investors to provide assurances about their compliance with the PN3 Requirement, backed by indemnities.It would provide a safety net for Indian companies.
    • Time-Bound Reviews: Introduce a system where companies can seek timely advice from regulatory authorities on whether specific clauses in their investment agreements confer control. This would be similar to mechanisms in competition law, offering clarity and reducing the risk of penalties for inadvertent non-compliance.

    Mains PYQ:

    Q Foreign Direct Investment (FDI) in the defence sector is now set to be liberalized: What influence this is expected to have on Indian defence and economy in the short and long run? (UPSC IAS/2014)