Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

Comparison between India- Bangladesh per capita GDP

Note4Students

From UPSC perspective, the following things are important :

Prelims level : GDP, GNP, GVA etc.

Mains level : India's GDP related issues

In IMF’s latest Economic Outlook, Bangladesh has overtaken India in GDP per capita. This has caught everyone’s attention.

Do you know?

  • In the 2019 edition of Transparency International’s rankings, Bangladesh ranks a low 146 out of 198 countries (India is at 80th rank; a lower rank is worse off).
  • In the latest gender parity rankings, out of 154 countries mapped for it, Bangladesh is in the top 50 while India languishes at 112.

Bangladesh surpasses India

  • Typically, countries are compared on the basis of GDP growth rate, or on absolute GDP.
  • For the most part since Independence, on both these counts, India’s economy has been better than Bangladesh’s.
  • This can be seen from Charts 1 and 2 that map GDP growth rates and absolute GDP — India’s economy has mostly been over 10 times the size of Bangladesh, and grown faster every year.
  • However, per capita income also involves another variable — the overall population — and is arrived at by dividing the total GDP by the total population.

What made India lag behind?

There are three reasons why India’s per capita income has fallen below Bangladesh this year:

  • The first thing to note is that Bangladesh’s economy has been clocking rapid GDP growth rates since 2004.
  • Secondly, over the same 15-year period, India’s population grew faster (around 21%) than Bangladesh’s population (just under 18%).
  • Lastly, the most immediate factor was the relative impact of Covid-19 on the two economies in 2020. While India’s GDP is set to reduce by 10%, Bangladesh’s is expected to grow by almost 4%.

How has Bangladesh managed to grow so fast and so robustly?

  • Freshly start: In the initial years of its independence with Pakistan, Bangladesh struggled to grow fast. However, moving away from Pakistan also gave the country a chance to start afresh on its economic and political identity.
  • Diverse labour participation: As such, its labour laws were not as stringent and its economy increasingly involved women in its labour force. This can be seen in higher female participation in the labour force.
  • Textile boom: A key driver of growth was the garment industry where women workers gave Bangladesh the edge to corner the global export markets from which China retreated.
  • Less dependence on Agriculture: It also helps that the structure of Bangladesh’s economy is such that its GDP is led by the industrial sector, followed by the services sector. Both of these sectors create a lot of jobs and are more remunerative than agriculture.
  • Better social capital: Bangladesh improved a lot on several social and political metrics such as health, sanitation, financial inclusion, and women’s political representation.

Retaining the lead

  • The IMF’s projections show that India is likely to grow faster next year and in all likelihood again surge ahead.
  • But, given Bangladesh’s lower population growth and faster economic growth, India and Bangladesh are likely to be neck and neck for the foreseeable future in terms of per capita income.

Nobel and other Prizes

Explained: Auction theory

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Auction Theory, Nobel Prizes

Mains level : Auction theory and its utility

This year, the Nobel Prize for Economics was awarded to Paul R Milgrom and Robert B Wilson for “improvements to auction theory and inventions of new auction formats”.

Do you remember the 2G spectrum scam, Coalgate scam etc. that rocked the nation? Can you relate this auction theory for bidding public assets to private entities?

What is Auction?

  • Essentially, it is about how auctions lead to the discovery of the price of a commodity.
  • Auction theory studies how auctions are designed, what rules govern them, how bidders behave and what outcomes are achieved.
  • When one thinks of auctions, one typically imagines the auction of a bankrupt person’s property to pay off his creditors.
  • Indeed, this is the oldest form of auction. This simple design of such an auction — the highest open bidder getting the property (or the commodity in question) — is intuitively appealing as well.

Evolving definitions of auction

  • Over time, and especially over the last three decades, more and more goods and services have been brought under auction.
  • The nature of these commodities differs sharply. For instance, a bankrupt person’s property is starkly different from the spectrum for radio or telecom use.
  • Similarly, carbon dioxide emission credits are quite different from the spot market for buying electricity, which, in turn, is quite different from choosing which company should get the right to collect the local garbage.
  • In other words, no one auction design fits all types of commodities or seller.

The Auction Theory

Three key variables need to be understood before we move to actual propositions.

(1) Rules of the auction

  • Imagine participating in an auction. Your bidding behaviour is likely to differ if the rules stipulate open bids as against closed/sealed bids.
  • The same applies to single bids versus multiple bids, or whether bids are made one after another or everyone bids at the same time.

(2) Commodity or service

  • The second variable is the commodity or service being put up for auction. In essence, the question is how each bidder values an item.
  • This is not always easy to ascertain. In terms of telecom spectrum, it might be easier to peg the right value for each bidder because most bidders are likely to put the spectrum to the same use.
  • This is called the “common” value of an object.

(3) Uncertainty

  • The third variable is uncertainty.
  • For instance, which bidder has what information about the object, or even the value another bidder associates with the object.

The theory

  • Wilson developed the theory for auctions of objects with a common value — a value which is uncertain beforehand but, in the end, is the same for everyone”.
  • Wilson showed what the “winner’s curse” is in an auction and how it affects bidding.
  • As shown in the illustration, it is possible to overbid — $50 when the real value is closer to $25. In doing so, one wins the auction but loses out in reality.
  • Milgrom “formulated a more general theory of auctions that not only allows common values but also private values that vary from bidder to bidder”.
  • He analysed the bidding strategies in a number of well-known auction formats, demonstrating that a format will give the seller higher expected revenue when bidders learn more about each other’s estimated values.

Significance of Auction theory

  • Throughout history, countries have tried to allocate resources in various ways.
  • Some have tried to do it through political markets, but this has often led to biased outcomes. For Ex: The rationing of essential goods worked in State-controlled economies. People who were close to the bureaucracy and the political class came out ahead of others.
  • Lotteries are another way to allocate resources, but they do not ensure that scarce resources are allocated to people who value it the most.
  • Auctions, for a good reason, have been the most common tool for thousands of years used by societies to allocate scarce resources.
  • When potential buyers compete to purchase goods in an auction, it helps sellers discover those buyers who value the goods the most.
  • Further, selling goods to the highest bidder also helps the seller maximise his or her revenues. So, both buyers and sellers benefit from auctions.
  • Whether it is the auction of spectrum waves or the sale of fruits and vegetables, auctions are at the core of allocation of scarce resources in a market economy.

What are the criticisms levelled against auctions and what are the economists contribution?

1.Issue of Winner’s Curse

  • The most common one is that auctions can lead buyers to overpay for resources whose value is uncertain to them.
  • This criticism, popularly known as the ‘winner’s curse’, is based on a study that showed how buyers who overpaid for U.S. oil leases in the 1970s earned low returns. Dr. Wilson was the first to study this matter.
  • The rational bidders may decide to underpay for resources in order to avoid the ‘winner’s curse’, and Dr. Wilson argued that sellers can get better bids for their goods if they share more information about it with potential buyers

2.Auction formats

  • Economists traditionally working on auction theory believed that all auctions are the same when it comes to the revenues that they managed to bring in for sellers. The auction format, in other words, did not matter.
  • This is known as the ‘revenue equivalence theorem’.
  • But Dr. Milgrom showed that the auction format can actually have a huge impact on the revenues earned by sellers.
  • The most famous case of an auction gone wrong for the seller was the spectrum auction in New Zealand in 1990.
  • In what is called a ‘Vickrey auction’, where the winner of the auction is mandated to pay only the second-best bid, a company that bid NZ$1,00,000 eventually paid just NZ$6 and another that bid NZ$70,00,000 only paid NZ$5,000.
  • In particular, Dr. Milgrom showed how Dutch auctions, in which the auctioneer lowers the price of the product until a buyer bids for it, can help sellers earn more revenues than English auctions.
  • In the case of English auctions, the price rises based on higher bids submitted by competing buyers. But as soon as some of the bidders drop out of the auction as the price rises, the remaining bidders become more cautious about bidding higher prices.

Conclusion

  • The contributions of Dr. Milgrom and Dr. Wilson have helped governments and private companies design their auctions better.
  • This has, in turn, helped in the better allocation of scarce resources and offered more incentives for sellers to produce complex goods.

Right To Privacy

Narco Test and the Issue of Consent

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Narcoanalysis, Polygraph Test

Mains level : Not Much

Involuntary administration of narco or lie detector tests is an “intrusion” into a person’s “mental privacy,” a Supreme Court judgment of 2010 has held.

Try this question:

Q.What are the ethical issues associated with the Lie-detection tests?

Various Lie detector tests

(1) Polygraph Test

  • A polygraph test is based on the assumption that physiological responses that are triggered when a person is lying are different from what they would be otherwise.
  • Instruments like cardio-cuffs or sensitive electrodes are attached to the person, and variables such as blood pressure, pulse, respiration, change in sweat gland activity, blood flow, etc., are measured as questions are put to them.
  • A numerical value is assigned to each response to conclude whether the person is telling the truth, is deceiving, or is uncertain.

(2) Narcoanalysis

  • Narcoanalysis, by contrast, involves the injection of a drug, sodium pentothal, which induces a hypnotic or sedated state.
  • In such a state, the subject’s imagination is neutralized, and they are expected to divulge information that is true.
  • The drug, referred to as “truth serum” in this context, was used in larger doses as anaesthesia during surgery and is said to have been used during World War II for intelligence operations.

Why these tests are so (in)famous?

  • Investigating agencies seek to employ these tests in the investigation, and are sometimes seen as being a “softer alternative” to torture or “third degree” to extract the truth from suspects.
  • These tests put into consideration the international norms on human rights, the right to a fair trial, and the right against self-incrimination under Article 20(3) of the Constitution.

Legal status in India

  • In ‘Selvi & Ors vs State of Karnataka & Anr’ (2010), a Supreme Court Bench comprising CJI ruled that no lie detector tests should be administered “except on the basis of the consent of the accused”.
  • Those who volunteer must have access to a lawyer, and have the physical, emotional, and legal implications of the test explained to them by police and the lawyer, the Bench said.
  • It said that the ‘Guidelines for the Administration of Polygraph Test on an Accused’ published by the National Human Rights Commission in 2000, must be strictly followed.
  • The subject’s consent should be recorded before a judicial magistrate, the court said.

What was the latest Judgement?

  • Involuntary administration of narco or lie detector tests is an “intrusion” into a person’s “mental privacy,” a Supreme Court judgment of 2010 has held.
  • The consequences of such tests on “individuals from weaker sections of society who are unaware of their fundamental rights and unable to afford legal advice” can be devastating.
  • It may involve future abuse, harassment and surveillance, even leakage of the video material to the Press for a “trial by media.”
  • Such tests are an affront to human dignity and liberty and have long-lasting effects.
  • “An individual’s decision to make a statement is the product of a private choice and there should be no scope for any other individual to interfere with such autonomy,” the apex court had held.

Legal status of its outcome

  • The results of the tests cannot be considered to be “confessions”, because those in a drugged-induced state cannot exercise a choice in answering questions that are put to them.
  • However, any information or material subsequently discovered with the help of such a voluntarily-taken test can be admitted as evidence, the court said.
  • Thus, if an accused reveals the location of a murder weapon in the course of the test, and police later find the weapon at that location, the statement of the accused will not be evidence, but the weapon will be.

Climate Change Impact on India and World – International Reports, Key Observations, etc.

China’S Climate Commitment

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Net Zero

Mains level : Climate change commitments

Context- Speaking at the UN General Assembly, Chinese President Xi Jinping made two promises that came as a welcome surprise to climate change watchers.

What has China announced ?

  • First, Xi said, China would become carbon net-zero by the year 2060.
    • Net-zero is a state in which a country’s emissions are compensated by absorptions and removal of greenhouse gases from the atmosphere.
    • Absorption can be increased by creating more carbon sinks such as forests, while removal involves application of technologies such as carbon capture and storage.
  • Second, the Chinese President announced a small but important change in China’s already committed target for letting its emissions “peak”, from “by 2030” to “before 2030”.
    • That means China would not allow its greenhouse gas emissions to grow beyond that point.
    • Xi did not specify how soon “before 2030” means, but even this much is being seen as a very positive move from the world’s largest emitter.

How significant is China’s commitment?

  • China is the world’s largest emitter of greenhouse gases. It accounts for almost 30% of global emissions, more than the combined emissions in the United States, the European Union and India, the three next biggest emitters.
  • Getting China to commit itself to a net-zero target is a big breakthrough, especially since countries have been reluctant to pledge themselves to such long term commitments.
  • So far, the European Union was the only big emitter to have committed itself to a net-zero emission status by 2050.

Innovations in Biotechnology and Medical Sciences

CBD Oil

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NA

Mains level : Research and development is medical science

Context- Earlier this week, late actor Irrfan Khan’s wife Sutapa Sikdar made an appeal to legalise CBD oil in India for its potential to treat cancer. Her appeal followed the criticism of actor Rhea Chakrabaorty after it was reported that she had administered CBD oil, used as a pain reliever for some, to Sushant Singh Rajput when he was alive.

About CBD oil ?

  • CBD oil is an extract from the cannabis plant. The two main active substances in it are cannabidiol or CBD and delta-9 tetrahydrocannabinol, or THC.
  • The high that is caused by the consumption of cannabis is due to THC. CBD, however, does not cause a “high” or any form of intoxication.
  • CBD oil is made by extracting CBD from the cannabis plant, then diluting it with a carrier oil like coconut or hemp seed oil.
  • Cannabidiol can reduce pain and anxiety. It also reduces psychotic symptoms associated with conditions such as schizophrenia as well as epilepsy.
  • There is not enough robust scientific evidence to prove that CBD oil can safely and effectively treat cancer.
  • CBD oil manufactured under a license issued by the Drugs and Cosmetics Act, 1940 can be legally used. However, the use of cannabis as a medicine is not much prevalent in India.

History- Important places, persons in news

Who was Kanaklata Barua ?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Kanaklata Barua

Mains level : Role of women in Indian National Movement

A Fast Patrol Vessel (FPV) named ICGS Kanaklata Barua was commissioned in the Indian Coast Guard on Wednesday, in Kolkata. It is named after a teenage freedom fighter who was shot dead in Assam during the Quit India Movement.

Who was Kanaklata Barua ?

  • One of the youngest martyrs of the Quit India Movement, Kanaklata Barua has iconic status in Assam. Barua.
  • Then 17, led the Mukti Bahini, a procession of freedom fighters to unfurl the Tricolour at Gohpur police station on September 20, 1942. When police did not let them move forward, an altercation led to firing, killing Barua at the head of the procession.
  • She had joined the Mrityu Bahini [a kind of a suicide squad] just two days before the incident. The squad strictly admitted members aged 18 and above but Kanaklata was an exception. She wanted to lead the procession and after much persuasion she was allowed to.
  •  Even as Barua fell to bullets, she did not let go of the flag. She did not want it to touch the ground. Another woman volunteer behind her — Mukunda Kakoty — came and held the flag, and she, too, was shot.

    How important is her legacy ?

  •  1940’s was a time where you saw a lot of women coming to the fore, leading processions, patriotic fervour was at its peak — and Kanaklata was a product of this time.
  • There are schools named after her, there are two statues, there is a ship. While we see her as an icon now, people in her village hated her then — she was a rebel, who questioned patriarchy.

Defence Sector – DPP, Missions, Schemes, Security Forces, etc.

What are defence offsets ?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Kelkar committee and defense offset

Mains level : Procurement of defense equipments

What are defence offsets ?

  • In simplest terms, the offset is an obligation by an international player to boost India’s domestic defence industry if India is buying defence equipment from it.
  • Since defence contracts are costly, the government wants part of that money either to benefit the Indian industry, or to allow the country to gain in terms of technology.
  • The Comptroller and Auditor General (CAG) defined offsets as a “mechanism generally established with the triple objectives of: (a) partially compensating for a significant outflow of a buyer country’s resources in a large purchase of foreign goods (b) facilitating induction of technology and (c) adding capacities and capabilities of domestic industry”.

When was the policy introduced?

  • The policy was adopted on the recommendations of the Vijay Kelkar Committee in 2005.
  • The idea was that since India has been buying a lot of defence equipment from foreign countries, so that India can leverage its buying power by making them discharge offset obligations, which is the norm world over.
  • The Sixth Standing Committee on Defence (2005-06) had recommended in December 2005 in its report on Defence Procurement Policy and Procedure that modalities for implementation of offset contracts should be worked out.
  • The first offset contract was signed in 2007.

How can a foreign vendor fulfil its offset obligations?

  • There are multiple routes. Until 2016, the vendor had to declare around the time of signing the contract the details about how it will go about it. In April 2016, the new policy amended it to allow it to provide it “either at the time of seeking offset credits or one year prior to discharge of offset obligations”.
  •  Investment in ‘kind’ in terms of transfer of technology (TOT) to Indian enterprises, through joint ventures or through the non-equity route for eligible products and services.
  •  Investment in ‘kind’ in Indian enterprises in terms of provision of equipment through the non-equity route for manufacture and/or maintenance of products and services.
  •  Provision of equipment and/or TOT to government institutions and establishments engaged in the manufacture and/or maintenance of eligible products, and provision of eligible services, including DRDO (as distinct from Indian enterprises).
  • Technology acquisition by DRDO in areas of high technology.

Will no defence contracts have offset clauses now ?

  • Only government-to-government agreements (G2G), ab initio single vendor contracts or inter-governmental agreements (IGA) will not have offset clauses anymore. For example, the deal to buy 36 Rafale fighter jets, signed between the Indian and French governments in 2016, was an IGA.
  • IGA is an agreement between two countries, and could be an umbrella contract, under which you can go on signing individual contracts. G2G is transaction specific, or an acquisition specific agreement.

 

Why was the clause removed?

  •  Vendors would “load” extra cost in the contract to balance the costs, and doing away with the offsets can bring down the costs in such contracts.

Conclusion-  The CAG is not very hopeful of the obligations being met by 2024. It said the audit “found that the foreign vendors made various offset commitments to qualify for the main supply contract but later, were not earnest about fulfilling these commitments”.

Minimum Support Prices for Agricultural Produce

Explained: Farm Acts and federalism

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Doctrine of colorable legislation

Mains level : Federalism issue raised by the Agricultural Bills

The President has finally given assent to the controversial farm Bills passed by Parliament last week. Amid protests by farmers’ organisations across the country, questions are being raised about the anti-federal nature of these ‘Acts’.

Here we shall only discuss its constitutionality and federal nature. Tap to read more about the theme at:

What is the question over the constitutionality of these laws?

  • These are some of the questions that will be raised in the petitions challenging the constitutionality of the Acts.
  • As per Union of India v H.S.Dhillon (1972), the constitutionality of parliamentary laws can be challenged only on two grounds — that the subject is in the State List, or that it violates fundamental rights.
  • As per Ram Krishna Dalmia v Justice S R Tendolkar (1958) and other judgments, the Supreme Court will begin hearings after presuming the constitutionality of these laws.
  • The bills (now Acts as they have got the President’s assent) do not mention, in the Statement of Objects & Reasons, the constitutional provisions under which Parliament has the power to legislate on the subjects covered.

Where does the question of federalism come in?

What is federalism, first?

  • Federalism is the system of government in which sovereignty is constitutionally divided between a central governing authority and constituent political units.
  • It is based upon democratic rules and institutions in which the power to govern is shared between national and state governments, creating a federation.
  • It essentially means both the Centre and states have the freedom to operate in their allotted spheres of power, in coordination with each other.

Try this PYQ:

Q.Which of the following federal principles are not found in Indian federation?

  1. Bifurcation of the judiciary between the Federal and State Governments
  2. Equality of representation of the states in the upper house of the Federal Legislature
  3. The Union cannot be destroyed by any state seceding from the Union at its will
  4. Federal Government can redraw the map of the Indian Union by forming new States

Select the correct answer using the codes given below:

a) 1, 2 and 3

b) 2, 3 and 4

c) 1 and 2

d) 3 and 4

Federalism in India

  • The Seventh Schedule of the Constitution contains three lists that distribute power between the Centre and states.
  • There are 97 subjects in the Union List, on which Parliament has exclusive power to legislate (Article 246); the State List has 66 items on which states alone can legislate.
  • The Concurrent List has 47 subjects on which both the Centre and states can legislate, but in case of a conflict, the law made by Parliament prevails (Article 254).
  • Parliament can legislate on an item in the State List under certain specific circumstances laid down in the Constitution.

Concretization of the idea

  • Federalism, like constitutionalism and separation of powers, is not mentioned in the Constitution. But it is the very essence of our constitutional scheme.
  • In the State of West Bengal v Union of India (1962), the Supreme Court held that the Indian Constitution is not federal.
  • But in SR Bommai v Union of India (1994), a nine-judge Bench held federalism as part of the basic structure of the Constitution.
  • Neither the relative importance of the legislative entries in Schedule VII, Lists I and II of the Constitution, nor the fiscal control by the Union per se is decisive to conclude the Constitution is unitary.
  • The respective legislative powers are traceable to Articles 245 to 254… The State qua the Constitution is federal in structure and independent in its exercise of legislative and executive power,” it said.

Where is agriculture in the scheme of legislative powers?

Terms relating to agriculture occur at 15 places in the Seventh Schedule.

  1. Entries 82, 86, 87, and 88 in the Union List mention taxes and duties on income and assets, specifically excluding those in respect of agriculture.
  2. In the State List, eight entries contain terms relating to agriculture: Entry 14 (agricultural education and research, pests, plant diseases); 18 (rights in or over land, land tenures, rents, transfer agricultural land, agricultural loans, etc.); 28 (markets and fairs); 30 (agricultural indebtedness); 45 (land revenue, land records, etc.); 46 (taxes on agricultural income); 47 (succession of agricultural land); and 48 (estate duty in respect of agricultural land).
  3. In the Concurrent List, Entry 6 mentions the transfer of property other than agricultural land; 7 is about various contracts not relating to agricultural land; and 41 deals with evacuee property, including agricultural land.
  • It is clear that the Union List and Concurrent List put matters relating to agriculture outside Parliament’s jurisdiction, and give state legislatures exclusive power.
  • No entry in respect of agriculture in the State List is subject to any entry in the Union or Concurrent Lists.

What about Entry 27 of the State List that is subject to Entry 33 of List III (Concurrent)?

  • Entry 33 of the Concurrent List mentions trade and commerce, production, supply and distribution of domestic and imported products of an industry over which Parliament has control in the public interest.
  • This includes foodstuffs, including oilseeds and oils; cattle fodder; raw cotton and jute.
  • The Centre could, therefore, argue that it is within its powers to pass laws on contract farming and intra- and inter-state trade, and prohibit states from imposing fees/cesses outside APMC areas.
  • However, like education, farming is an occupation, not trade or commerce.
  • If foodstuffs are considered synonymous with agriculture, then all the powers of states in respect of agriculture, listed so elaborately in the Constitution, shall become redundant.

So what happens in case of legislation that covers entries in two Lists?

  • In cases such as State of Rajasthan v G Chawla (1959), courts have used the doctrine of “pith and substance” to determine the character of legislation that overlaps between entries.
  • The constitutionality of legislation is upheld if it is largely covered by one list and touches upon the other list only incidentally.
  • But the two new farm Acts go beyond that — they impinge on entries in the State List.
  • In interpreting the lists, the Supreme Court in State of Bihar v Kameshwar Singh (1952) invoked the doctrine of colourable legislation, which means you cannot do indirectly what you cannot do directly.

What is the Doctrine of Colorable Legislation?

  • This doctrine refers to the question of competency of the legislature while enacting a provision of law.
  • If a legislature is prohibited from doing something, it may not be permitted to do this under the guise or pretence of doing something while acting within its lawful jurisdiction and this prohibition is an implied result of the maxim “what cannot be done directly, cannot be done indirectly”
  • This doctrine is a tool used to determine the legislative competence of laws enacted by various legislatures.
  • Therefore, it is a means to implement the separation of powers and impose judicial accountability.

Tax Reforms

Where are the funds collected through cess parked?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Cess, Office of the CAG

Mains level : Cess deposits

The Comptroller and Auditor General (CAG) of India, in its latest audit report of government accounts, has observed that the government withheld in the Consolidated Fund of India (CFI) more than ₹1.1 lakh crore out of the almost ₹2.75 lakh crore collected through various cesses in 2018-19.

Try this PYQ:

Q.Consider the following items:

  1. Cereal grains hulled
  2. Chicken eggs cooked
  3. Fish processed and canned
  4. Newspapers containing advertising material

Which of the above items is/are exempted under GST (Goods and Services Tax)? (CSP 2018)

(a) 1 only

(b) 2 and 3 only

(c) 1, 2 and 4 only

(d) 1, 2, 3 and 4

Issues with the cess deposits

  • The CAG found this objectionable since cess collections are supposed to be transferred to specified Reserve Funds that Parliament has approved for each of these levies.
  • The nation’s highest auditor also found that over ₹1.24 lakh crore collected as Cess on Crude Oil over the last decade had not been transferred to the designated Reserve Fund — the Oil Industry Development Board.
  • Similarly, the Goods and Services Tax (GST) Compensation Cess was also “short-credited” to the relevant reserve fund.

What is Cess?

  • The Union government is empowered to raise revenue through a gamut of levies, including taxes (both direct and indirect), surcharges, fees and cess.
  • While direct taxes, including income tax, and indirect taxes such as GST are taxes where the revenue received can be spent by the government for any public purpose in any manner it deems appropriate for the nation’s good, a cess is an earmarked tax that is collected for a specific purpose and ought to be spent only for that.
  • Every cess is collected after Parliament has authorised its creation through enabling legislation that specifies the purpose for which the funds are being raised.
  • Article 270 of the Constitution allows cess to be excluded from the purview of the divisible pool of taxes that the Union government must share with the States.

How many cesses does government levy?

  • A report submitted to the Fifteenth Finance Commission listed 42 cesses that have been levied at various points in time since 1944.
  • The very first cess was levied on matches, according to this report.
  • Post Independence, the cess taxes were linked initially to the development of a particular industry, including a salt cess and a tea cess in 1953.
  • Subsequently, the introduction of cess was motivated by the aim of ensuring labour welfare.
  • Some cesses that exemplified this thrust were the iron ore mines labour welfare cess in 1961, the limestone and dolomite mines labour welfare cess of 1972 and the cine workers welfare cess introduced in 1981.

Cesses after GST

  • The introduction of the GST in 2017 led to most cesses being done away with and as of August 2018, there were only seven cesses that continued to be levied.
  • These were Cess on Exports, Cess on Crude Oil, Health and Education Cess, Road and Infrastructure Cess, Building and Other Construction Workers Welfare Cess, National Calamity Contingent Duty on Tobacco and Tobacco Products and the GST Compensation Cess.
  • And in February, Finance Minister Nirmala Sitharaman introduced a new cess — a Health Cess of 5% on imported medical devices — in the Finance Bill for 2020-2021.

Why is the issue in the news currently?

  • For one, most crucially, the express purpose of this particular cess is to help recompense States for the loss of revenue on account of their having joined the GST regime by voluntarily giving up almost all the power to levy local indirect taxes on goods and services.
  • Also, the share of revenue to the Centre’s annual tax kitty from cess had risen to 11.88% of the estimated gross tax receipts in 2018-19, from 6.88% in 2012-13.
  • Given that cess does not need to be a part of the divisible pool of resources, this increasing share of cess in the Union government’s tax receipts has a direct impact on fiscal devolution.

Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

Explained: How remunerative is farming in India?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Debate over profitability of farming in India

The government’s push to reform India’s agriculture sector has divided opinions and triggered a debate about the state of Indian agriculture.

Try this PYQ:

Q.In view of the declining average size of land holdings in India which has made agriculture nonviable for a majority of farmers, should contract farming and land leasing be promoted in agriculture? Critically evaluate the pros and cons. (UPSC 2015)

Features of Indian Agriculture

In the context of this debate, two long-standing characteristics of Indian agriculture are noteworthy:

  1. Indian agriculture is highly unremunerative
  2. It has been heavily regulated by the government and protected from the free play of market forces

Why are the new legislation introduced?

  • According to the government, the new Bills passed by Parliament attempt to make it easier for farmers to sell to and produce for the private sector.
  • The hope is that liberalizing the sector and allowing greater play for market forces will make Indian agriculture more efficient and more remunerative for the farmers.
  • In this context, it is important to understand some of the basics of Indian agriculture.

Basics of Indian agriculture

(1) Workforce engaged

  • At the time of Independence, about 70% of India’s workforce (a little less than 100 million) was employed in the agriculture sector.
  • Even at that time, agriculture and allied activities accounted for around 54% of India’s national income.
  • Over the years, agriculture’s contribution to national output declined sharply. As of 2019-20, it was less than 17% (in gross value added terms).
  • And yet, the proportion of Indians engaged in agriculture has fallen from 70% to just 55% (Chart 1).
  • As the Committee on Doubling Farmers’ Income (2017) observes, “the dependence of the rural workforce on agriculture for employment has not declined in proportion to the falling contribution of agriculture to GDP”.

(2) Land holdings

  • While the number of people dependent on agriculture has been burgeoning over the years, the average size of landholdings has become reduced sharply — even to the extent of being unviable for efficient production.
  • Data shows that 86% of all landholdings in India are small (between 1 and 2 hectares) and marginal (less than 1 hectare — roughly half a football field).
  • The average size among marginal holdings is just 0.37 ha which hardly provides enough income to stay above the poverty line.

(3) Debts

  • The combined result of several such inefficiencies is that most Indian farmers are heavily indebted (Chart 2).
  • The data shows that 40% of the 24 lakh households that operate on landholdings smaller than 0.01 ha are indebted. The average amount is Rs 31,000.
  • A good reason why such a high proportion of farmers is so indebted is that Indian agriculture — for the most part — is unremunerative.
  • Chart 3 provides the monthly income estimates for an agriculture household in four very different states as well as the all-India number.
  • Some of the most populous states like Bihar, West Bengal and Uttar Pradesh have very low levels of income and very high proportions of indebtedness.

(4) Buying & selling

  • Another way of understanding the plight of the farmers relative to the rest of the economy is to look at the Terms of Trade between farmers and non-farmers.
  • Terms of Trade is the ratio between the prices paid by the farmers for their inputs and the prices received by the farmers for their output.
  • As such, 100 is the benchmark. If the ToT is less than 100, it means farmers are worse off.
  • As Chart 4 shows, ToT rapidly improved between 2004-05 and 2010-11 to breach the 100-mark but since then it has worsened for farmers.

(5) MSP

  • A key variable in the debate is the role of minimum support prices. Many protesters fear governments will roll back the system of MSPs.
  • MSPs provide “guaranteed prices” and an “assured market” to farmers, and save them from price fluctuations. This is crucial because most farmers are not adequately informed.
  • But although MSPs are announced for around 23 crops, actual procurement happens for very few crops such as wheat and rice.
  • Moreover, the percentage of procurement varies sharply across states (Chart 5). As a result, actual market prices — what the farmers get — are often below MSPs.

Foreign Policy Watch: United Nations

Explained: Birth of United Nations

Note4Students

From UPSC perspective, the following things are important :

Prelims level : United Nations, Atlantic Charter

Mains level : Success and failures of United Nations

The United Nations completed 75 years this year. In order to commemorate the historic moment, world leaders have come together, at a one-day high-level meeting of the UN General Assembly.

Try this:

Q.Discuss the various success and failures of the United Nations. (150W)

Birth of United Nations

  • The United Nations was born out of the horrors of World War II.
  • At the time of its foundation, it was primarily tasked with the goal of maintaining world peace and saving future generations from the evils of war.

A historical backgrounder

  • The UN was born out of the ashes of yet another international organisation created with the intention of keeping war away.
  • The League of Nations was created in June 1919, after World War I, as part of the Treaty of Versailles.
  • However, when the Second World War broke out in 1939, the League closed down and its headquarters in Geneva remained empty throughout the war.
  • Consequently, in August 1941, American President Franklin D. Roosevelt and British PM Winston Churchill held a secret meeting aboard naval ships in Placenta Bay, located in the southeast coast of Newfoundland, Canada.

The Atlantic Charter

  • The heads of the two countries discussed the possibility of creating a body for international peace effort and a range of issues related to the war.
  • Together they issued a statement that came to be called the Atlantic Charter. It was not a treaty, but only an affirmation that paved the way for the creation of the UN.
  • It declared the realization of “certain common principles in the national policies of their respective countries on which they based their hopes for a better future for the world.”

The name ‘UN’

  • The United States joined the war in December 1941, and for the first time the term ‘United Nations’ was coined by president Roosevelt to identify those countries which were allied against the axis powers.
  • On January 1, 1942, representatives of 26 allied nations met in Washington DC to sign the declaration of the United Nations, which basically spelt out the war objectives of the Allied powers.
  • Over the next couple of years, several meetings took place among the Allied big four — The USA, the Soviet Union, the UK and China — to decide on the post-war charter that would describe the precise role of the UN.

Coming to existence

  • The UN finally came into existence on October 24, 1945, after being ratified by 51 nations, which included five permanent members (France, the Republic of China, the Soviet Union, the UK and the US) and 46 other signatories.
  • The first meeting of the General Assembly took place on January 10, 1946.

Its achievements

  • While at the time of its formation, the UN consisted of only 51 member states, independence movements and decolonization in the subsequent years led to an expansion of its membership.
  • At present, 193 countries are members of the UN.
  • It has also expanded its scope to resolve over a large number of global issues such as health, environment, and women empowerment among others.
  • Soon after its formation, it passed a resolution to commit to the elimination of nuclear weapons in 1946. In 1948, it created the World Health Organisation (WHO) to deal with communicable diseases like smallpox, malaria, HIV.
  • In 1950, the UN created the High Commissioner for Refugees to take care of the millions who had been displaced due to World War II.
  • More recently in 2002, the UN established the UN criminal court to try those who have committed war crimes, genocide, and other atrocities.

Various criticisms

  • The UN has also met with its share of criticisms. In 1994, for instance, the organisation failed to stop the Rwandan genocide.
  • In 2005, UN peacekeeping missions were accused of sexual misconduct in the Republic of Congo, and similar allegations have also come from Cambodia and Haiti.
  • In 2011, the UN peacekeeping mission in South Sudan was unsuccessful in eliminating the bloodshed caused in the civil war that broke out in 2013.

Gravitational Wave Observations

Black Holes Merger

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Black Holes

Mains level : Black holes merger

Billions of years ago, a collision between two black holes sent gravitational waves rippling through the universe. In 2019, signals from these waves were detected at the gravitational wave observatory LIGO (United States) and the detector Virgo (Italy).

Try this PYQ:

Q.Recently, scientists observed the merger of giant ‘blackholes’ billions of light-years away from the Earth. What is the significance of this observation?

(a) ‘Higgs boson particles’ were detected.

(b) ‘Gravitational waves’ were detected.

(c) Possibility of inter-galactic space travel through ‘wormhole’ was confirmed.

(d) It enabled the scientists to understand ‘singularity’.

Why in news?

  • The cause of curiosity is the mass of one of the parent black holes, which defies traditional knowledge of how black holes are formed.

What exactly was detected?

  • It was a signal from a gravitational wave, a relatively new field of discovery.
  • Gravitational waves are invisible ripples that form when a star explodes in a supernova; when two big stars orbit each other; and when two black holes merge.
  • Travelling at the speed of light, gravitational waves squeeze and stretch anything in their path.

Detecting gravitational waves

  • Gravitational waves were proposed by Albert Einstein in his General Theory of Relativity over a century ago.
  • It was only in 2015, however, that the first gravitational wave was actually detected — by LIGO. Since then, there have been a number of subsequent detections of gravitational waves.
  • The signal detected at LIGO and Virgo, as described by the LIGO Collaboration, resembled “about four short wiggles” and lasted less than one-tenth of a second.

Where did it come from?

  • Subsequent analysis suggested that GW190521 had most likely been generated by a merger of two black holes. The signal likely represented the instance that the two merged.
  • It was calculated to have come from roughly 17 billion light-years away, and from a time when the universe was about half its age.

Some questions to verify

  • The findings led to further questions.
  • One of the two merging black holes falls in an “intermediate-mass” range — a misfit that cannot be explained by traditional knowledge of how black holes form.

Why is it unusual?

  • All the black holes observed so far belong to either of two categories.
  • One category ranges between a few solar masses (one solar mass is the mass of our Sun) and tens of solar masses. These are thought to form when massive stars die.
  • The other category is of supermassive black holes. This range from hundreds of thousands, to billions of times that of our sun.
  • According to traditional knowledge, stars that could give birth to black holes between 65 and 120 solar masses do not do so — stars in this range blow themselves apart when they die, without collapsing into a black hole.

Observing for the first time

  • In the merger leading to the GW190521 signal, the larger black hole was of 85 solar masses —well within this unexpected range, known as the pair-instability mass gap.
  • It is the first “intermediate-mass” black hole ever observed. (In fact, the smaller black hole to is borderline, at 66 solar masses.)
  • The two merged to create a new black hole of about 142 solar masses. Energy equivalent to eight solar masses was released in the form of gravitational waves, leading to the strongest ever wave detected by scientists so far.

Possible reasons for its formation

  • The researchers suggest that the 85-solar-mass black hole was not the product of a collapsing star, but was itself the result of a previous merger.
  • Formed by a collision between two black holes, it is likely that the new black hole then merged with the 66-solar-mass black hole — leading to gravitational waves and the signal received by LIGO and Virgo.

Parliament – Sessions, Procedures, Motions, Committees etc

What are Question Hour and Zero Hour?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Question hour, Zero Hour

Mains level : Not Much

The Lok Sabha Secretariat officially released the schedule for the monsoon Parliament session with Question Hour being dropped. Zero Hour will also be restricted in both Houses.

This newscard is very narrative in its form and scope.

Q.Discuss the various instruments of Parliamentary Control in India.

What is Question Hour, and what is its significance?

  • Question Hour is the liveliest hour in Parliament. It is during this one hour that MPs ask questions of ministers and hold them accountable for the functioning of their ministries.
  • Prior to Independence, the first question asked of government was in 1893. It was on the burden cast on village shopkeepers who had to provide supplies to touring government officers.
  • The questions that MPs ask are designed to elicit information and trigger suitable action by ministries.
  • Over the last 70 years, MPs have successfully used this parliamentary device to shine a light on government functioning.
  • Their questions have exposed financial irregularities and brought data and information regarding government functioning to the public domain.
  • With the broadcasting since 1991, Question Hour has become one of the most visible aspects of parliamentary functioning.

And what is Zero Hour?

  • While Question Hour is strictly regulated, Zero Hour is an Indian innovation. The phrase does not find mention in the rules of procedure.
  • The concept of Zero Hour started organically in the first decade of Indian Parliament when MPs felt the need for raising important constituency and national issues.
  • During the initial days, Parliament used to break for lunch at 1 pm.
  • Therefore, the opportunity for MPs to raise national issues without an advance notice became available at 12 pm and could last for an hour until the House adjourned for lunch.
  • This led to the hour being popularly referred to as Zero Hour and the issues being raised during this time as Zero Hour submissions.
  • Its importance can be gauged from the support it receives from citizens, media, MPs and presiding officers despite not being part of the rulebook.

How is Question Hour regulated?

  • Parliament has comprehensive rules for dealing with every aspect of Question Hour.
  • And the presiding officers of the two houses are the final authority with respect to the conduct of Question Hour.
  • For example, usually, Question Hour is the first hour of a parliamentary sitting.

What kinds of questions are asked?

  • Parliamentary rules provide guidelines on the kind of questions that can be asked by MPs.
  • Questions have to be limited to 150 words. They have to be precise and not too general.
  • The question should also be related to an area of responsibility of the GoI.
  • Questions should not seek information about matters that are secret or are under adjudication before courts.
  • It is the presiding officers of the two Houses who finally decide whether a question raised by an MP will be admitted for answering by the government.

How frequently is Question Hour held?

  • The process of asking and answering questions starts with identifying the days on which Question Hour will be held.
  • At the beginning of Parliament in 1952, Lok Sabha rules provided for Question Hour to be held every day. Rajya Sabha, on the other hand, had a provision for Question Hour for two days a week.
  • A few months later, this was changed to four days a week. Then from 1964, Question Hour was taking place in Rajya Sabha on every day of the session.
  • Now, Question Hour in both Houses is held on all days of the session.
  • But there are two days when an exception is made. There is no Question Hour on the day the President addresses MPs from both Houses in the Central Hall.
  • Question Hour is not scheduled either on the day the Finance Minister presents the Budget.

How does Parliament manage to get so many questions answered?

  • To streamline the answering of questions raised by MPs, the ministries are put into five groups. Each group answers questions on the day allocated to it.
  • For example, in the last session, on Thursday the Ministries of Civil Aviation, Labour, Housing, and Youth Affairs and Sports were answering questions posed by Lok Sabha MPs.
  • MPs can specify whether they want an oral or written response to their questions.
  • They can put an asterisk against their question signifying that they want the minister to answer that question on the floor. These are referred to as starred questions.
  • After the minister’s response, the MP who asked the question and other MPs can also ask a follow-up question.
  • This is the visible part of Question Hour, where you see MPs trying to corner ministers on the functioning of their ministries on live television.

How do ministers prepare their answers?

  • Ministries receive the questions 15 days in advance so that they can prepare their ministers for Question Hour.
  • They also have to prepare for sharp follow-up questions they can expect to be asked in the House.
  • Governments’ officers are close at hand in a gallery so that they can pass notes or relevant documents to support the minister in answering a question.
  • When MPs are trying to gather data and information about government functioning, they prefer the responses to such queries in writing.
  • These questions are referred to as unstarred questions. The responses to these questions are placed on the table of Parliament.

Are the questions only for ministers?

  • MPs usually ask questions to hold ministers accountable. But the rules also provide them with a mechanism for asking their colleagues a question.
  • Such a question should be limited to the role of an MP relating to a Bill or a resolution being piloted by them or any other matter connected with the functioning of the House for which they are responsible.
  • Should the presiding officer so allow, MPs can also ask a question to a minister at a notice period shorter than 15 days.

Is there a limit to the number of questions that can be asked?

  • Rules on the number of questions that can be asked in a day have changed over the years.
  • In Lok Sabha, until the late 1960s, there was no limit on the number of unstarred questions that could be asked in a day.
  • Now, Parliament rules limit the number of starred and unstarred questions an MP can ask in a day.
  • The total numbers of questions asked by MPs in the starred and unstarred categories are then put in a random ballot.
  • From the ballot in Lok Sabha, 20 starred questions are picked for answering during Question Hour and 230 are picked for written answers.
  • Last year, a record was set when on a single day, after a gap of 47 years, all 20 starred questions were answered in Lok Sabha.

Have there been previous sessions without Question Hour?

  • Parliamentary records show that during the Chinese aggression in 1962, the Winter Session was advanced.
  • The sitting of the House started at 12 pm and there was no Question Hour held. Before the session, changes were made limiting the number of questions.
  • Thereafter, following an agreement between the ruling and the Opposition parties, it was decided to suspend Question Hour.

Foreign Policy Watch: India-Pakistan

Explained: Pakistan-Saudi Rift

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : OIC

The rift between Pakistan and Saudi Arabia over Jammu and Kashmir is out in the open after a delegation led by Pak Army Chief was denied a meeting with Crown Prince Mohammed bin Salman (MBS).

Try this question:

Q. Discuss the new geopolitical realignment in the Arab world and India’s role in it.

Take a look after how the ties emerged and deteriorated:

Saudi-Pakistan ties: A Recap

  • The relationship between Saudi Arabia and Pakistan was most prominent during the 1971 war between India and Pakistan.
  • Saudi Arabia is also reported to have transferred arms and equipment including the loan of some 75 aircraft to Pakistan.
  • After the war, Saudi Arabia consistently supported the call for the return of Pakistan’s prisoners of war and for dropping the Dacca (Dhaka) Trial against 195 of them.
  • After the war, Saudi Arabia gave loans to Pakistan enabling it to buy arms worth about $1 million by 1977, including F-16s and Harpoon missiles from the US.
  • Saudi oil and dollars have kept Pakistan’s economy on its feet after sanctions following the nuclear tests.
  • Over the last two decades, Saudi Arabia has provided oil on deferred payments to Pakistan whenever it ran into economic difficulty.
  • Saudi funding of madrasas has also led to their mushrooming, later giving rise to religious extremism.
  • In 1990, Pakistan sent its ground forces to defend Saudi Arabia against Iraq’s invasion of Kuwait.

Alignment over Kashmir

  • The alignment over Kashmir at the Organisation of Islamic Conference (OIC) crystallized since 1990 when the insurgency in J&K began.
  • While the OIC has issued statements over the last three decades, it became a ritual of little significance to India.
  • Last year, after India revoked Article 370 in Kashmir, Pakistan lobbied with the OIC for its condemnation of India’s move.
  • To Pakistan’s surprise, Saudi Arabia and the UAE issued statements that were nuanced rather than harshly critical of New Delhi.
  • Over the last year, Pakistan has tried to rouse the sentiments among the Islamic countries, but only a handful of them — Turkey and Malaysia — publicly criticised India.

The Saudi perspective

  • Saudi Arabia’s change in position has been a gradual process under Crown Prince MBS.
  • As it seeks to diversify from its heavily oil-dependent economy, it sees India as a valuable partner in the region.
  • New Delhi, for its part, has wooed the Arab world over the last six years.
  • From Saudi Arabia to the UAE, it worked the diplomatic levers through high-level visits and dangled opportunities for investment and business
  • MBS, who is looking to invest in India, has taken a realistic view, along with UAE’s crown prince Mohammed bin Zayed.

Energy connection to India

  • Saudi Arabia is India’s fourth-largest trade partner (after China, US and Japan) and a major source of energy: India imports around 18% of its crude oil requirement from the Kingdom.
  • Saudi Arabia is also a major source of LPG for India.
  • And, with India stopping oil imports from Iran due to the threat of US sanctions, Saudi Arabia is key in this respect as well.

Saudi-Pakistan tension

The tension between Saudi Arabia and Pakistan has been brewing for some time.

  • In 2015, Pakistan’s Parliament decided not to support the Saudi military effort to restore an internationally recognised government in Yemen.
  • Later, Pakistan’s then army chief General Raheel Sharif led the Saudi-led Islamic Military Alliance to Fight Terrorism, comprising 41 Muslim countries.
  • In February 2019, after the Pulwama terror attack, it was Saudi Arabia and the UAE that pulled their weight to get Wing Commander Abhinandan released, apart from the US.
  • The Saudi Crown Prince visited Pakistan and India at that time and made it clear that he valued economic opportunities. He did not wade into the Kashmir issue in India or the terrorism issue in Pakistan.

Frustration over Kashmir

A year after Article 370 was revoked, Qureshi belled the cat.

  • Pak accuses that Saudi Arabia has failed to deliver on the Kashmir and OIC had not played a leadership role in backing Pakistan against India.
  • This angered Saudi Arabia, which in November 2018 had announced a $6.2 billion loan package for Pakistan.
  • The package included $3 billion in loans and an oil credit facility amounting to $3.2 billion.
  • Riyadh demanded the return of the $3 billion loans and refused to sell oil to Islamabad on deferred payment. Pakistan immediately returned $1 billion, displaying the rift.
  • But, in the current economic situation, Pakistan is unable to pay the next tranche.
  • What has also angered Saudi Arabia is that Pakistan has been trying to pander to Turkey and Malaysia.

The China factor

  • Pakistan and China have called themselves “all-weather allies” and “iron brothers” (during FMs meet).
  • Over the last year, Beijing has supported Pakistan on Kashmir, raising the issue at the UN Security Council thrice.
  • China has also emerged as Pakistan’s biggest benefactor through its funding of the CPEC.
  • Saudi Arabia too has invested in CPEC projects, to the tune of $10 billion, but Pakistan now looks towards Beijing for both diplomatic and economic support.

Implications for India

  • Saudi’s silence on J&K as well as CAA-NRC has emboldened the Indian government.
  • At a time when India and China are locked in a border standoff, India has to be wary of Pakistan and China teaming up.
  • But with Saudi Arabia in its corner, for now, it may have leverage over Pakistan — Riyadh would not want a conflict and regional instability.
  • What is key to India’s calculus is that the Pakistan-China and the Pakistan-Saudi axes are not fused together at the moment: It is not a Saudi-Pakistan-China triangle.

Foreign Policy Watch: India-Bangladesh

China twist in Teesta Challenge

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Teesta River

Mains level : Recent trends in India-Bangladesh ties

Bangladesh is discussing an almost $1 billion loan from China for a comprehensive management and restoration project on the Teesta river. These discussions with China come at a time when India is particularly wary about China following the standoff in Ladakh.

Try this question from our AWE initiative:

Teesta River has become an important factor in India – Bangladesh relations. What are the hindrances in successful implementation of river water sharing agreement and what are its possible implications on India-Bangladesh relations? What could be the possible solutions?

Teesta Project

  • The project is aimed at managing the river basin efficiently, controlling floods, and tackling the water crisis in summers.
  • India and Bangladesh have been engaged in a long-standing dispute over water-sharing in the Teesta.

How has the Teesta dispute progressed?

  • The two countries were on the verge of signing a water-sharing pact in September 2011, when PM Manmohan Singh was going to visit Bangladesh.
  • But, West Bengal CM objected to it, and the deal was scuttled.
  • After the regime change in 2014, the government hoped that it could reach a “fair solution” on the Teesta through cooperation between central and state governments.
  • Five years later, the Teesta issue remains unresolved.

Trends in India’s relationship with Bangladesh

  • New Delhi has had a robust relationship with Dhaka, carefully cultivated since 2008, especially with the Sheikh Hasina government at the helm.
  • Security: India has benefited from its security ties with Bangladesh, whose crackdown against anti-India outfits has helped the Indian government maintain peace in the eastern and Northeast states.
  • Trade: Bangladesh has benefited from its economic and development partnership. Bangladesh is India’s biggest trade partner in South Asia.
  • Bilateral trade has grown steadily over the last decade: India’s exports to Bangladesh in 2018-19 stood at $9.21 billion, and imports from Bangladesh at $1.04 billion.
  • Visas:India also grants 15 to 20 lakh visas every year to Bangladesh nationals for medical treatment, tourism, work, and just entertainment.

Recent irritants in ties

  • There have been recent irritants in the relationship.
  • These include the proposed countrywide National Register of Citizens (NRC) and the Citizenship Amendment Act (CAA) passed in December last year.
  • Bangladesh had insisted that while the CAA and the proposed nationwide NRC were “internal matters” of India, the CAA move were “not necessary”.

Chinese affinity with Bangladesh

  • China is the biggest trading partner of Bangladesh and is the foremost source of imports.
  • In 2019, the trade between the two countries was $18 billion and the imports from China commanded the lion’s share. The trade is heavily in favour of China.
  • Recently, China declared zero duty on 97% of imports from Bangladesh. The concession flowed from China’s duty-free, quota-free programme for the Least Developed Countries.
  • This move has been widely welcomed in Bangladesh, with the expectation that Bangladesh exports to China will increase.
  • China has promised around $30 billion worth of financial assistance to Bangladesh.
  • Additionally, Bangladesh’s strong defence ties with China make the situation complicated. China is the biggest arms supplier to Bangladesh and it has been a legacy issue — after its liberation.
  • Recently, Bangladesh purchased two Ming class submarines from China.

India’s engagement post CAA

  • Over the last five months, India and Bangladesh have cooperated on pandemic-related moves.
  • Hasina supported Modi’s call for a regional emergency fund for fighting Covid-19 and declared a contribution of $1.5 million in March 2020. India has also provided medical aid to Bangladesh.
  • The two countries have also cooperated in railways, with India giving 10 locomotives to Bangladesh.
  • The first trial run for trans-shipment of Indian cargo through Bangladesh to Northeast states under a pact on the use of Chittagong and Mongla ports took place in July.
  • Bangladesh gave its readiness to collaborate in the development of a Covid-19 vaccine, including its trial, and looks forward to early, affordable availability of the vaccine when ready.

Among other issues

  • The two sides agreed that Implementation of projects should be done in a timely manner and that greater attention is required to development projects in Bangladesh under the Indian Lines of Credit.
  • Bangladesh sought the return of the Tablighi Jamaat members impacted by the lockdown in India.
  • Bangladesh requested for the urgent reopening of visa issuance from the Indian High Commission in Dhaka, particularly since many Bangladeshi patients need to visit India.
  • India was also requested to reopen travel through Benapole-Petrapole land port which has been halted by the West Bengal government in the wake of the pandemic.

Way forward

  • While the Teesta project is important and urgent from India’s point of view, it will be difficult to address it before the West Bengal elections due next year.
  • What Delhi can do is to address other issues of concern, which too are challenging.
  • Now, the test will be if India can implement all its assurances in a time-bound manner.
  • Or else, the latent anti-India sentiment in Bangladesh, which has been revived after India’s CAA -NRC push can permanently damage the historic ties.

Back2Basics: Teesta Water Dispute

Interstate River Water Dispute

Sutlej-Yamuna Link (SYL) Canal Project

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Sutlej Yamuna Link

Mains level : Inter-state water disputes

Opposing the Sutlej-Yamuna Link (SYL) canal project and staking claim to Yamuna’s waters, Punjab CM warned about the repercussions. Here is a look at the decades-old issue and why it has come up again now.

Try this PYQ:

Q. Which one of the following pairs is not correctly matched? (CSP 2017)

Dam/Lake River

(a) Govind Sagar: Satluj

(b) Kolleru Lake: Krishna

(c) Ukai Reservoir: Tapi

(d) Wular Lake: Jhelum

What is the SYL canal issue?

  • At the time of reorganization of Punjab in 1966, the issue of sharing of river waters between both the states emerged.
  • Punjab refused to share waters of Ravi and Beas with Haryana stating it was against the riparian principle.
  • Before the reorganization, in 1955, out of 15.85 MAF of Ravi and Beas, the Centre had allocated 8 MAF to Rajasthan, 7.20 MAF to undivided Punjab, 0.65MAF to Jammu and Kashmir.
  • Out of 7.20 MAF allocated, Punjab did not want to share any water with Haryana.
  • In March 1976, when the Punjab Reorganization Act was implemented, the Centre notified fresh allocations, providing 3.5 MAF To Haryana.

Inception of the canal project

  • Later, in 1981, the water flowing down Beas and Ravi was revised and pegged at 17.17 MAF, out of which 4.22 MAF was allocated to Punjab, 3.5 MAF to Haryana, and 8.6 MAF to Rajasthan.
  • Finally, to provide this allocated share of water to southern parts of Haryana, a canal linking the Sutlej with the Yamuna, cutting across the state, was planned.
  • Finally, the construction of 214-km SYL was started in April 1982, 122 km of which was to run through Punjab and the rest through Haryana.
  • Haryana has completed its side of the canal, but work in Punjab has been hanging fire for over three decades.

Why has the SYL canal come up again now?

  • The issue is back on centre stage after the Supreme Court directed the CMs of Punjab and Haryana to negotiate and settle the SYL canal issue.
  • The apex court asked for a meeting at the highest political level to be mediated by the Centre so that the states reach a consensus over the completion of the SYL canal.
  • The meeting remained inconclusive with the Centre expressing the view that the construction of the SYL canal should be completed. But Punjab CM refused categorically.

Punjab’s resentment with the project

  • The dispute is based on the bloody history around the SYL canal. The trouble-torn days of terrorism in Punjab started in the early 1980s when work on the SYL started.
  • Punjab feels it utilized its precious groundwater resources to grow the crop for the entire country and should not be forced to share its waters as it faces desertification.
  • It is feared that once the construction of the canal restarts, the youth may start feeling that the state has been discriminated against.
  • The Punjab CM fears Pakistan and secessionist organisations could exploit this and foment trouble in the state.

Water crisis in Punjab

  • Punjab is facing severe water crisis due to over-exploitation of its underground aquifers for the wheat/paddy monocycle.
  • According to the Central Underground Water Authority’s report, its underground water is over-exploited to meet the agriculture requirements in about 79 per cent area of the state.
  • Out of 138 blocks, 109 are “over-exploited”, two are “critical” five are “semi-critical” and only 22 blocks are in “safe” category.

Punjab expects a new tribunal

  • The state wants a tribunal seeking a fresh time-bound assessment of the water availability.
  • The state has been saying that till date there has been no adjudication or scientific assessment of Punjab river waters.

Pharma Sector – Drug Pricing, NPPA, FDC, Generics, etc.

Online Pharmacy Regulation in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Pharma sector regulations

Mains level : E pharmacy and its benefits

In the last week, India’s online pharmacy market saw two significant merger and acquisition deals. This has suddenly caused activity in a sector from which large investors have shied away due to lack of proper regulations.

Try this easy question:

Q. Discuss the prospects and benefits of online pharmacy in India. (150W)

How is the pharmacy market in India currently shaped?

  • Unlike the US, where the top three pharmaceutical distributors have a 90 per cent share in the market, India’s is a fragmented market with over 8 lakh pharmacies.
  • This gives online pharmacies an opportunity to capture their space without opposing large traditional retailers.
  • Currently, companies in the Indian e-pharmacy space mainly operate three business models — marketplace, inventory-led hybrid (offline/online) and franchise-led hybrid (offline/online) — depending on the way the supply chain is structured.

Rules governing the pharma sector

  • Work on regulations specifically for e-pharmacies has been in progress for several years now.
  • In the absence of clear regulations, online pharmacies currently operate as marketplaces and cater to patients as a platform for ordering medicines from sellers that adhere to the Drugs and Cosmetics Act and Rules of India.
  • Other regulations, like the Information Technology Act and the Narcotic Drugs and Psychotropic Substances Act, also apply.

What do the draft e-pharmacy regulations propose?

  • Draft rules for e-pharmacies sought to define the online sale of medicines, what an e-prescription means and what type of licences online firms would need to get from regulators to operate.
  • The draft had proposed to allow e-pharmacies to get a central licence to operate from the country’s apex drug regulator, which could be used to allow it to operate across the country.
  • It also proposed to define e-pharmacies in a way that would allow them to distribute, sell and stock medicines.
  • The proposed regulations prevent them from selling habit-forming drugs like cough syrups specified in Schedule X of the Indian drug regulations.

Current status

  • Regulations for online pharmacy players have been in the works since 2016 but are yet to come out.
  • The last attempt to clear these regulations saw the draft rules being pushed through two expert committees under the Central Drugs Standard Control Organisation–India’s apex drug regulatory body–in June 2019.

Online pharma is growing in scale

  • While Covid-19 and the subsequent behavioural shift towards e-commerce may have catalyzed growth for online pharmacies, the sector was already poised to grow seven-fold by 2023 to $2.7 billion.
  • This was mainly on account of the challenges faced by physical pharmacies that gave their online counterparts a problem to solve.
  • Experts believe that e-pharmacies will be able to solve the problems that traditional pharmacies couldn’t.
  • But for this, they need to have a large-scale presence that calls for either huge investments or consolidation.

Conclusion

  • The e-pharmacy sector holds immense potential to address the persisting issue of affordability and accessibility of medicines in India.
  • Steps should be taken to foster the e-pharmacy sector with sufficient safeguards and under regulatory control to protect the interest of the consumers.

Women empowerment issues – Jobs,Reservation and education

Debate: Minimum age of marriage for women

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Marriage age issues and its discrimination nature

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

Try this question for mains:

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

Back in debate

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

Issue over majority

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

What is the committee that the PM mentioned?

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

How common are child marriages in India?

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

Provisions for the minimum age for marriage

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

Evolution of the law

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

Comes in: The Sarda Act

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

Contention over different legal standards

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

Why is the law being relooked at?

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

Upholding the Constitution

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

The Crisis In The Middle East

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

Note4Students

From UPSC perspective, the following things are important :

Prelims level : West Bank and its location

Mains level : Israeli claims over West Bank and Gaza

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

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

Consider this PYQ:

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

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

The Israel-UAE Pact

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

A timeline of Israel-Arab Conflict

Arab-Israeli ties have historically been conflict-ridden.

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

Significance of the deal

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

Why did the UAE sign the agreement?

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

What do Arab countries want from Israel?

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

Where does it leave the Palestinians?

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

Geopolitical implications of the deal

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

Also read:

West Bank Annexation Plan

Disasters and Disaster Management – Sendai Framework, Floods, Cyclones, etc.

Expansion of the National Cadet Corps (NCC)

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NCC

Mains level : NCC and its mandate

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

Try this question:

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

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

About NCC

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

Training the cadets

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

PM’s announcement

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

Significance of expansion

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