Goods and Services Tax (GST)

Need to deal with distortions built into GST

Note4Students

From UPSC perspective, the following things are important :

Prelims level: GST council decision making

Mains level: Paper 3- Issues with one state one vote system in GST council

The article highlights the issues with the one state one vote system adopted in the GST Council decision making.

Context

The Goods and Services Tax (GST) Council in India is still engaged in a discussion on whether life-saving and hard-to-come-by products should be taxed. Such delay in decision-making can largely be explained by the distorted design and incentive structure of the GST itself.

Imbalance in collection and distribution of taxes

  • The taxes collected under GST are accumulated by the Union government and a portion is transferred back to each state under a formula.
  • As is the case with most federal countries, there is a large imbalance in the collection and distribution of taxes between states.
  • this holds true also for income accrued to, and distributed, from the GST pool.
  • Four states — Maharashtra, Tamil Nadu, Karnataka, and Gujarat contribute nearly as much as the remaining 27 states combined.
  • Most federal countries exhibit this characteristic where a few large, rich, provinces or states contribute disproportionately.

Variation in dependence of States on transfers from the Union government

  • Only about 30 per cent of the overall revenue of the states mentioned above — Maharashtra, Tamil Nadu, Gujarat, and Karnataka — comes from the Union government.
  • But for the remaining 27 states, roughly 60 per cent of their revenues are obtained through transfers from the Union government.
  • For the smaller Northeastern states, these transfers from the Union government constitute 80-90 per cent of their total revenues.
  •  In effect, the states that contribute the most to the GST pool are the least dependent on transfers from the Union government while the ones that contribute the least are the most dependent.

Two problems in net-transfers in India

1) One-sided transfers

  •  In almost every federal union, net-transfers work to reduce differences in development between states over time.
  • However, Over the last 25 years or so, net transfers have become increasingly one-sided in India.
  • That is, the quantum of net-transfers diminishes, as states become more equal through such transfers.
  • But in India, the opposite has occurred.

2) Indirect taxes and cess

  • The Union government of the last seven years has greatly exacerbated this problem through two actions.
  • First, it has reconstructed the composition of taxation away from the fair and progressive channel of direct taxation towards the inherently regressive and unfair channel of indirect taxes.
  • Second, the Union has shifted a large proportion of taxation roughly 18 per cent of its overall revenues into cesses, a special form of taxes that remain outside the GST pool and hence do not have to be shared with the states.
  • Since 2014, cess revenues grew 21 per cent every year leading to a doubling in terms of its share of GDP.

Implications of these two problems for fiscal federalism

  • The combined effect of these problems is that all states (collectively) get a lower share of overall revenues.
  • Individual states face an ever-increasing disparity in the ratio of funds received from the Union as a proportion of taxes collected by the Union from that state.
  • This is an affront to fiscal federalism and an assault on “cooperative federalism”.

Issue of ‘one state one vote’ system

  • States that are more dependent on transfers from the Union want to maximise GST collections while states that are less dependent can afford to be more sensitive to citizens’ concerns.
  • The case of taxes on Covid products is perhaps the starkest instance of such differences.
  • Most large states are ready to forego this tax revenue for humanitarian considerations.
  • But 19 states representing the remaining 30 per cent of the population seem keen to continue to levy GST on Covid products.
  •  These are mostly smaller states.
  • Given the smaller population of such states, the adverse impact of Covid taxes will be minimal for them.
  • But they will reap the benefits of additional revenues from GST on Covid products levied on the much larger populations of the bigger states.

Conclusion

When direct tax policy decisions are legislated by Parliament, which has proportional representation from states according to their size of the population, indirect tax policy decisions should not be subject to one state one vote system.

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Important Judgements In News

Verdict on Maratha reservation ignores inequality within intermediate castes

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Reservation debate

The article highlights the issues with Maratha reservation judgement delivered by the Supreme Court which rejected the positive discrimination of lower classes of dominant caste.

About the verdict

  • The Supreme Court rendered a unanimous verdict on the validity of the SEBC Act, 2018 that was to grant reservation to Marathas.
  • The court held that the classification of Marathas as a socially and educationally backward class was unreasonable.
  • Court held that Maratha belonged to a politically dominant caste with significant economic resources.

Justification for 50% limit

  • The court also concluded that the majority opinion in the Indra Sawhney case was correct and that the limit of 50 per cent for caste-based reservation did not need consideration by a larger bench.
  • The court justified the fixed quantitative limit on caste-based reservation by postulating that it was intrinsic to the fundamental principle of equality.
  • The court highlighted the need to safeguard the interests of unreserved sections and said that all sections have progressed after 70 years of independence.
  • Based on this, the court rejected the state’s argument that the breach of the limit was necessitated by the fact that the population of backward classes was over 80 per cent.

Missed opportunity to acknowledge growing socio-economic differentiation within the dominant castes

Growing income difference

  • If in 2011-12, the average per capita income of the Marathas was second only to the Brahmins at Rs 36,548, against Rs 47,427.
  • Their highest quintile -20 per cent of the caste group- got 48 per cent of the total income of the Marathas with a mean per capita income of Rs 86,750.
  • The lowest quintile earned 10 times less (Rs 7,198) and the 40 per cent poorest got less than 13 per cent of the total income of the caste — and were lagging behind the Scheduled Castes elite.
  • In fact, the mean incomes of the highest Dalit quintile, Rs 63,030, and that of the second-highest, Rs 28,897, were above those of the three lowest quintiles of the Marathas.

What explains growing income difference

  • This is partly due to changes on the education front. 
  • The percentage of graduates among Dalits in 2004-05 was 1.9 per cent and has more than doubled to 5.1 per cent in 2011-12.
  • The corresponding figure for the OBCs was 3.5 per cent and has doubled to 7.6 per cent, while for the Marathas it was 4.6 per cent in 2004-05 and has come up to 8 per cent in 2011-12.
  • Correlatively, the percentage of salaried people among the Dalits was about 28 per cent in Maharashtra in 2011-12, as against 30 per cent among the Marathas.

Issues with the Maratha quota judgment

  •  The Court refused to recognise the need for positive discrimination of the lower classes of the dominant castes which continue to be seen as a dominant bloc.
  • It fails to admit the complexity that the role of class has introduced in post-liberalisation India.
  • This is unequivocal confirmation of a dated approach to social realities and a purely arithmetic limit that finds no expression in the Constitution.
  • The judgement also raises the issue of judicial supremacy in the broad area of social policy as it could lead to undesirable exclusion of beneficiaries.
  • The court seems to have forgotten its own observation in NM Thomas case that functional democracy postulates participation of all sections of the people and fair representation in administration is an index of such participation.

Conclusion

The Supreme Court has rejected the determination of Marathas as backward by holding that their relative deprivation and under-representation with regard to other sections of the general category did not entitle them to affirmative action.

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Close the vaccination gap, in global lockstep

Note4Students

From UPSC perspective, the following things are important :

Prelims level: COVAX

Mains level: Paper 2- Dealing with the vaccine inequality

Why vaccination gap is cause of worry

  • By the end of May 2021, only 2.1% of Africans had received at least one dose of a COVID-19 vaccine.
  • A widely vaccinated world population is the only way to end the pandemic; otherwise, the multiplication of variants is likely to undermine the effectiveness of existing vaccines.
  • Vaccination is also a prerequisite for lifting the restrictions that are holding back our economies and freedoms.
  • If the vaccination gap persists, it risks reversing the trend in recent decades of declining poverty and global inequalities.
  • Such a negative dynamic would hold back economic activity and increase geopolitical tensions.
  • The cost of inaction would for sure be much higher for advanced economies than what we collectively would have to spend to help vaccinate the whole world.
  • The International Monetary Fund has proposed $50 billion plan in order to be able to vaccinate 40% of the world population in 2021 and 60% by mid-2022.

Need to resist the vaccine nationalism

  • To achieve the goal set by IMF, we need closely coordinated multilateral action.
  • We must resist the threat posed by linking the provision of vaccines to political goals and vaccine nationalism.
  • The EU has been vaccinating its own population, while exporting large volumes of vaccines and contributing substantially to the vaccines roll-out in low-income countries.
  • The EU has also exported 240 million doses to 90 countries, which is about as much as used within the EU.
  • One-third of all COVAX doses delivered so far have been financed by the EU.
  • India’s Vaccine Maitri is another example of global solidarity.
  • However, this effort is still far from sufficient to prevent the vaccination gap from widening.

Way forward

  • To fill widening vaccination gap, countries with the required knowledge and means should increase their production capacities, so that they can both vaccinate their own populations and export more vaccines.
  • All countries must avoid restrictive measures that affect vaccine supply chains.
  • We also need to facilitate the transfer of knowledge and technology, so that more countries can produce vaccines.
  • Voluntary licensing is the privileged way to ensure such transfer of technology and know-how.

Conclusion

The COVID-19 pandemic has reminded us that health is a global public good. Our common global COVID-19 vaccine action to close the vaccination gap must be the first step toward genuine global health cooperation, as foreseen by the Rome Declaration recently adopted at the Global Health Summit.

 

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Foreign Policy Watch: India-Bangladesh

India-Bangladesh Relations

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- India-Bangladesh relations

The article highlights the need for Indian leaders to respect the sentiments of Bangladesh by avoiding adverse comments during elections and recognition of Bangladesh’s importance for India.

 Diplomacy with Bangladesh

  • Long-standing bilateral problems: As a neighbour nearly surrounded on all territorial sides by India, there are the inevitable bilateral problems of long duration.
  • Such problems include a perennially favourable balance of trade for India, drought and flood in the 54 transboundary rivers flowing from India to Bangladesh, and the smuggling of goods and vulnerable human beings across the approximately 4,100 kilometre land border.
  • Cultural ties with India: There are several sections who regard their Bengali roots and traditions as being of equal validity as their religious affiliation, and treasure the linguistic and cultural ties with adjacent India.
  • India’s expectations: For India’s attentions and support, India’s expectations are that a neighbour will keep India’s concerns in mind when devising and pursuing its policies.

Steps taken to consolidate the bilateral ties

  • Bangladesh has successfully dealt with Muslim fundamentalist terrorists.
  • Bangladesh has also controlled the Northeast militant movements sheltering in Bangladesh.
  • This has facilitated the pacification of India’s Northeast.
  • Bangladesh facilitated a considerable degree of connectivity between India and its Northeast by land, river and the use of Bangladeshi ports.
  • Indian investments in Bangladesh have been encouraged.
  • There are at least 100,000 Indian nationals now living and working in that country.
  • For economic integration along with free movement of commerce and capital, the movement of persons on the lines of Nepal and Bhutan will have to be considered.

Consider the question “To a certain degree both India and Bangladesh depend on each other for security and stability. In light of this, take an overview of the consolidation of the bilateral ties between the two countries and discuss the issues that need to be addressed between the two countries.”

Conclusion

Responsible individuals on both sides of the border, whether in government or the Opposition, must be actively discouraged from words and actions detrimental to the consolidation of the existing cordiality.

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Challenges federalism faces in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Growing tendency towards centralisation

The article highlights the challenges faced by the federalism in India in various domains and forms and suggests the ways to deal with these challenges.

Growing tendency towards Centralisation

  • Moves to erode the powers of State governments are not new.
  • The Centre, on several occasions, has used its powers to dismiss or use the Governor to intimidate democratically elected governments.
  • During the Emergency, education was moved to the Concurrent list which was until then a State subject under the constitutional division of responsibilities.
  • However, the changes to federal relations at present are more systemic.
  • There has been increasing centralisation in resource allocations and welfare interventions.
  • After GST, the gap between the revenue that State governments are allowed to generate and the expenditure that they are expected to incur has been widening.
  • The Centre has been encroaching into domains under State government control through centrally sponsored schemes in sectors such as education and health.

Three domains in which federalism faces challenges

1) State-capital relation

  • At present there is growing trend towards centralising economic power in conjunction with political centralisation.
  • The consolidation and expansion of a few big business groups is taking place, probably at the expense of smaller players.
  •  On the one hand, the Centre has sought to insulate Indian big business from global competition by choosing not to enter into the Regional Comprehensive Economic Partnership (RCEP).
  • But the power of small businesses is eroded through support for GST and the call for a single national market.
  • So, big businesses are more likely to benefit from a removal of State-level barriers to trade at the expense of smaller regional players.

2) Institutional transgression

  • Central institutions are increasingly weakening the policy levers of State institutions.
  • There are growing allegations of the misuse of institutions such as the Income Tax Department, the Enforcement Directorate and the National Investigation Agency are being used to intimidate opponents..
  •  Direct transfers to beneficiaries of welfare schemes bypassing States are also contributing to this dynamic.
  • The Centre is increasingly ignoring elected representatives of State governments, holding meetings with State secretaries and district collectors on issues that are primarily under State control.
  • Governors perform active administrative roles instead of their signatory roles.
  • To ensure national uniformity in educational institutions NEET was introduced in medical education.
  • But it subverts the affirmative action policies developed at the regional level in response to local.
  • In the domain of health, the Centre has now put State governments at a disadvantage in vaccine usage by fixing differential pricing for procuring vaccines.

3) Socio-cultural foundations

  • Beside the legal-constitutional aspects of federalism, it is diversity in cultural foundation of regions that sustains Indian federalism.
  •  Markers of regional identities and regional socio-cultural practices are now interpreted as belonging to a pan-Indian Hindu tradition.

Conclusion

To stem this trend towards centralisation we need to provide more legal and constitutional safeguard to the States, strong regional political assertion and a strong federal coalition.

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Tax Reforms

Global minimum tax may help India but can cause international disagreements

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Global Minimum corporate tax and issues associated with it

The article deals with the issue of global minimum tax proposal floated by the US, challenges it faces and its implications for India.

The US proposal for global minimum tax

  • In its recent proposal, the U.S. sought to impose a global minimum tax on foreign income earned by U.S. corporations.
  • The proposal is intended to disincentivise American companies from inverting their structures due to the increase in the U.S. corporate tax rate.
  • The U.S. is now discussing a floor of 15% for the minimum tax rate.
  • The proposal is similar to Pillar Two, except for the rate of the effective minimum tax.

Similarity with Pillar Two Proposal

  • The Pillar Two proposal was the Organisation for Economic Co-operation and Development’s (OECD) plan to plug the remaining Base Erosion and Profit Shifting (BEPS) issues
  • It provide jurisdictions the right to “tax back” where other jurisdictions have either not exercised their primary taxing right or have exercised it at low levels of effective taxation.
  • For instance, if an Indian-headquartered multinational corporation (MNC) has an entity in Singapore or the Netherlands through which global operations are run, and its income from global operations is not taxed at an effective rate of 10% or 15%, then it can be taxed in India.
  • India has been part of the Pillar Two discussions and has not objected in principle to the proposal.

How Global Minimum Tax would benefit India?

  • The proposal, along with the increased tax bill for U.S. companies, may benefit the Indian revenue department.
  • The State of Tax Justice report of 2020 notes that India loses over $10 billion in tax revenue due to the use of offshore structures, particularly through investments made by Indian residents through Mauritius, Singapore and the Netherlands.
  • This is supported by the overseas direct investment (ODI) data from 2000 to 2021 published by the Reserve Bank of India.
  • Start-ups and large Indian conglomerates commonly use offshore structures for conducting global operations.
  • Revenue from such operations is often retained offshore and not repatriated to India.
  • Tax advantages incentivise such structures, due to which taxes on such income are not paid in India.
  • Once these proposals are implemented, Indian companies would have to pay additional taxes on their offshore structures to the extent that the effective rate of tax is lower than the global minimum tax rate.

Challenges

  • Lack of consensus: Several countries have taken a different approach to the rate of global minimum tax.
  • While France and Germany have expressed support, the EU has raised concerns regarding the high rate proposed by the United States.
  • Tax sovereignty issue: Countries have stated that the proposal infringes upon their tax sovereignty and that the fight against unfair tax competition should not become a fight against competitive tax systems.

Consider the question “What are the factors that led to the demand of global minimum corporate tax? What will be its implications for India?” 

Conclusion

As economies struggle amid the COVID-19 pandemic, the necessity of encouraging trade and economic activity should be prioritised over disagreements on tax allocations. A tax-related trade war or entrenchment of unilateral levies may further harm both global and national economies.

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Child Rights – POSCO, Child Labour Laws, NAPC, etc.

Child labour in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Challenges in dealing with child labour

The article highlights the risk posed by pandemic to the gains made by India on reducing the child labour in India.

Child labour in India

  • A Government of India survey (NSS Report No. 585, 2017-18) suggests that only 79.6%. of the children in the age group of 14-17 years are attending educational institutions (formal and informal).
  • The Census of India 2011 reports 10.1 million working children in the age group of 5-14 years.
  • Out of whom 8.1 million are in rural areas mainly engaged as cultivators (26%) and agricultural labourers (32.9%).
  • UNESCO estimates based on the 2011 Census record 38.1 million children as “out of school” i.e.18.3% of total children in the age group of 6-13 years.
  • A Rapid Survey on Children (2013-14), jointly undertaken by the Ministry of Women and Child Development and UNICEF, found that less than half of children in the age group of 10-14 years have completed primary education.

How policies and initiatives helped reduce child labour in India (2001-11)

  • Child labour in India decreased in the decade 2001 to 2011.
  • Policy interventions such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005, the Right to Education Act 2009 and the Mid Day Meal Scheme have paved the way for children to be in schools along with guaranteed wage employment (unskilled) for rural families.
  • Efforts towards convergence of government schemes is also the focus of the implementation of the National Child Labour Project.
  • Ratifying International Labour Organization Conventions Nos. 138 and 182 in 2017, the Indian government further demonstrated its commitment to the elimination of child labour.
  • The Ministry of Labour and Employment-operated online portal allows to share information and coordinate on child labour cases at the national, State and local levels for effective enforcement of child labour laws.

Challenges ahead

  • The economic contraction and lockdowns have worsened the situation, posing a real risk of backtracking the gains made in eliminating child labour.
  • With increased economic insecurity, lack of social protection and reduced household income, children from poor households are being pushed to contribute to the family income.
  • With closure of schools and challenges of distance learning, children may drop out leaving little scope for return unless affirmative and immediate actions are taken.
  • As many schools and educational institutions are moving to online platforms for continuation of learning, the ‘digital divide’ is a challenge that India has to reconcile within the next several years.
  • The NSS Report titled ‘Household Social Consumption on Education in India’ suggests that in 2017-18, only 24% of Indian households had access to an Internet facility.
  • The Annual Status of Education Report (ASER) 2020 survey highlights that a third of the total enrolled children received some kind of learning materials from their teachers during the reference period (October 2020) as digital mode of education was opted for.

Way forward

  •  It is through strategic partnerships and collaborations involving government, employers, trade unions, community-based organisations and child labour families that we could make a difference building back better and sooner.
  • We need a strong alliance paving our way towards ending child labour in all its forms by 2025 to achieve Sustainable Development Goal 8.7.

Consider the question “What are the policy measures and programmatic intervention implemented to reduce the child labour in India. How Covid-19 threatens the gains made on reducing the child labour?”

Conclusion

To deal with the child labour challenge, we need the right level of commitment among all the relevant stakeholders and the right mix of policy and programmatic interventions are present.

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Coronavirus – Health and Governance Issues

COVID diplomacy 2.0, a different order of tasks

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Diplomatic fallout of the second covid wave

The article highlights the contrast in India’s diplomacy during the first wave of the pandemic and the second wave. It also discusses the challenges ahead for India.

India’s diplomatic structure in two Covid waves

  •  In the past month, the focus for the Ministry of External Affairs (MEA) and Missions abroad has shifted.
  • During the first wave of the pandemic, focus was on coordinating exports of COVID-19 medicines, flights to repatriate Indians abroad through the ‘Vande Bharat Mission’ after the lockdown, and then exporting vaccines worldwide- ‘Vaccine Maitri’.
  • After the second wave, Covid Diplomacy 2.0 has a different order of tasks, both in the immediate and the long term.
  • The immediate imperative was to deal with oxygen and medicine shortages that claimed the lives of thousands.
  • The Ministry of External Affairs has had to deal with internal health concerns while galvanising help from abroad for others.
  • Despite difficulties, the Ministry of External Affairs has completed the task of bringing in supplies in a timely manner, and with success.

Dealing with vaccine shortage

  • Companies manufacturing AstraZeneca and Sputnik-V are stretched as far as future production is concerned.
  • The Chinese vaccines are out of consideration given bilateral tensions.
  • So, it is clear that India is looking to the U.S. to make up the shortfall.
  • This could be done in the following ways:
  • 1) Requesting the U.S. to share a substantial portion of its stockpile of AstraZeneca.
  • The U.S. government is holding up its AstraZeneca exports until its own United States Food and Drug Administration approves them.
  • 2) Asking the US to release more vaccine ingredients which are restricted for exports.
  • 3) To buy more stock outright from the three U.S. manufacturers, Pfizer, Moderna and Johnson & Johnson, and to encourage production in India of these vaccines.
  • Production of Johnson & Johnson single-dose vaccines in India, as had been announced during the Quad summit, will take some time.
  • The U.S. companies seem set on getting both an indemnity waiver from India as well as Emergency Use Authorisation prior to supplying them.
  • The Government may also need to make a change to its publicly announced policy that States in India will need to negotiate purchases directly, as the U.S. manufacturers want centralised orders, with payments up-front.

2) Patent waiver

  • The promise of patent waivers, from India’s joint proposal at the World Trade Organization (WTO) will not reap early benefits.
  • Even though it has received support from world leaders such as the U.S., Russia and China.
  • Many countries including Japan, Australia, Brazil and EU are still holding out on the idea of freeing up intellectual property rights on vaccines for three years.
  • That could ultimately hold up proceedings at the WTO, as it works by consensus.

3) Diplomatic fallout of vaccine collapse

  • The Government has defended its decision to export more than 66 million vaccines doses to 95 countries between January and April this year.
  • All exports were stopped as soon as cases in India began to soar.
  • Both India’s neighbours and partners in Africa as well as global agencies depending on India for vaccines have been left in the lurch by the Government’s failure to balance its vaccine budget.
  • For example, once India completed delivery of the first batch, of 550,000 Covishield doses, Bhutan completed the administration of the first dose to 93% of its population in a record 16 days.
  • Two months later, Bhutan does not have any vaccines to complete the second dose and has been left requesting other countries for vaccines.
  • It is no surprise that each of India’s neighbours has now sought help from China and the U.S. to complete their vaccination drives.

4) Tracing virus pathways

  • India, as one of the worst pandemic-hit countries, must be at the forefront of demanding accountability on the origin of the virus.
  • The World Health Organisation (WHO) which studied “pathways of emergence” of SARS-CoV2 in Wuhan, listed four possibilities:
  • 1) Direct zoonotic transmission.
  • 2) An intermediate host.
  • 3) Cold chain or transmission through food.
  • 4) A laboratory incident.
  • China appears adamant on blocking these studies.
  • Even the U.S. appears to have dragged its feet on a conclusive finding, possibly because the U.S. National Institutes of Health had funded some of the Wuhan Institute’s research.

Way forward on virus pathways

  • India must call for a more definitive answer and also raise its voice for a stronger convention to regulate any research that could lead, by accident or design, to something as the current pandemic.
  •  It is necessary to revamp the 1972 Biological Weapons Convention to institute an implementation body to assess treaty compliance, and build safer standards for the future.

Consider the question “How different was the impact of two Covid-19 waves on India’s diplomacy? What are the challenges India faces in the near future in dealing with the fallout of the pandemic?”

Conclusion

With its seat at the UN Security Council as non-permanent member and its position on WHO’s Executive Board, India could seek to regain the footing it has lost over the past few months of COVID-19 mismanagement, by taking a lead role in ensuring the world is protected from the next such pandemic.

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Israel and Palestine could take a leaf out of India’s book

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Israel-Palestine conflict

The article suggest the Indian model for peaceful coexistence as a possible solution to Israel-Palestine conflict.

Brief history of the conflict

  • Britain renounced its Mandate over Palestine in 1948.
  • This paved the way for the United Nations to divide Palestine between the Jews and Arabs, giving them about 55% and 45% of the land, respectively.
  • The Jews, meanwhile, had declared the establishment of the state of Israel for which they had been working for long.
  • The Palestinians, who lacked the resources to conceive of a state, failed to form a state of their own in the land allotted to them.
  • Instead, a coalition of Arab countries invaded the nascent state of Israel to nip it in the bud.
  • Israel defeated the Arab armies.
  • Israel also destroyed about 600 Palestinian villages and expelled about 80% of Arabs from its territory.
  • In 1967, in the Six-Day War, Israel captured not just more Palestinian land but also Egypt’s Sinai Peninsula and Syria’s Golan Heights.
  • During the Yom Kippur War of 1973, the Arabs came to realise that Israel is here to stay.

Need for realisation on both the sides

  • The Arab states failed to impress the realisation of permanency of Israel upon their Palestinian brethren, a sizeable number of whom remain committed to seeking a solution through counter-violence. 
  • Vicious cycle of violence is not going to end unless there is realism on both sides.
  • The Hamas should know that Israel will not give up on holding on to land it has held for years.
  • Israel should understand that total subjugation, expulsion or even decimation of Palestinians will not make it any safer.
  • A solution based on the common humanity of all stakeholders, one that is not riven by racial and religious schisms, needs to be explored.

Viability of Indian model

  • The Indian model of democracy and secularism, which accommodates religious, ethnic, linguistic and other diversities, could be a viable model for the peaceful coexistence of formerly antagonistic groups.
  •  India evolved a unique model of accommodating the victors and the vanquished, without ever resorting to the latter’s decimation.
  • A modus vivendi has to evolve on the basis of hard realities, the first of which is that neither the Jews nor the Palestinians are going to vanish.
  • If the two-state solution is nowhere in the offing, a single state after the Indian model, i.e., a secular, democratic and pluralistic state, may be the only feasible option.
  • The Palestinian refugees have a right to return.
  • That the altered demographics would impinge on the religio-racial character of Israel is not an argument which behoves a modern democratic state.
  • It is true that a nation state belongs to the group which constituted itself into a nation.
  • A nation is an imagined community.
  • As imagination expands, the foundations of the nation become deeper.

Consider the question “In the absence of two-state solution to the Israel-Palestine conflict, what lessons India could offer to the two parties for peaceful coexistence?”

Conclusion

Israel might not offer the right model of conflict resolution for India, but India presents a model of peaceful coexistence for Israel.

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Foreign Policy Watch: India-Pakistan

How Pakistan Plays the world

Note4Students

From UPSC perspective, the following things are important :

Prelims level: SEATO and SENTO

Mains level: Paper 2- India-Pak relations

The article explains evolution of Pakistan’s approach towards forming alliances and maintaining strategic autonomy against the backdrop of U.S. withdrawal from Afghanistan.

New dynamic Pakistan has to face

  • As the US withdraws its troops from Afghanistan, Pakistan is eager to build a relationship with Washington that is not tied to US stakes in Afghanistan.
  • Pakistan does not want to be totally alienated from U.S. in the new geopolitical jousting between the US and China.
  • How Pakistan copes with the new dynamic between the US and China as well as manages the deepening crisis in Afghanistan would be of great interest to India.

Striking the balance between autonomy and alliance

  • Autonomy is about the basic impulse for enhancing the degree of one’s freedom.
  • Alliances are about coping with real or perceived threats to one’s security.
  • Both are natural trends in international politics.
  • Joining an alliance does not mean ceding one’s sovereignty.
  • Within every alliance, there is a perennial tension between seeking more commitments from the partner in return for limiting one’s own.

Explaining Pakistan’s approach to alliances

  • Pakistan’s insecurities in relation to India meant it was eager for alliances.
  •  And as the Anglo-Americans scouted for partners in the crusade against global communism, Pakistan signed a bilateral security treaty with the US and joined the South East Asia Treaty Organisation and Central Treaty Organisation in the mid-1950s.
  • Rather than target Pakistan’s alliance with a West that was intensely hostile to Beijing in the 1950s, Chinese premier Zhou Enlai saw room to exploit Pakistan’s insecurities on India.
  • While Pakistan’s ties with the US went up and down, its relationship with China has seen steady expansion.
  • Pakistan’s relations with the US flourished  after the Soviet Union sent its troops into Afghanistan at the end of 1979.
  • The US and Pakistan reconnected in 2001 as Washington sought physical access and intelligence support to sustain its intervention in Afghanistan following the attacks on September 11.
  • Now the US wants Pakistan to persuade the Taliban to accept a peaceful transition to a new political order in Afghanistan.

Pakistan’s ability to adapt to shifting geopolitical trends

  • Pakistan worries that its leverage in U.S. will diminish once the US turns its back on Afghanistan and towards the Indo-Pacific.
  • Pakistan does not want to get in the Indo-Pacific crossfire between the US and China.
  • It would also like to dent India’s growing importance in America’s Indo-Pacific strategy.
  • India should not underestimate Pakistan’s agency in adapting to the shifting global currents.
  • Pakistan has been good at using its great power alliances to its own benefit.

Three problems that complicates Pakistan’s strategic autonomy

  • 1) Relative economic decline: Pakistan’s expected aggregate GDP at around $300 billion in 2021 is 10 times smaller than India’s.
  • 2) Obsession with Kashmir: Pakistan’s enduring obsessions with separating Kashmir from India, and extending its political sway over Afghanistan; both look elusive despite massive political investments by the Pakistan army.
  • Unsurprisingly, there is a recognition that Pakistan needs reorientation — from geopolitics to geoeconomics and permanent war with neighbours to peace of some sorts.
  • 3) Using religion as political instrument: Turning Islam into a political instrument and empowering religious extremism seemed clever a few decades ago.
  • However, today those forces have acquired a life of their own and severely constrain the capacity of the Pakistani state to build internal coherence and widen international options.

Conclusion

It will be unwise to rule out Pakistan’s positive reinvention; no country has a bigger stake in it than India. For now, though, Pakistan offers a cautionary tale on the dangers of squandering a nation’s strategic advantages — including a critical geopolitical location that it had inherited and the powerful partnerships that came its way.

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Social Media: Prospect and Challenges

New IT Rules is not the way forward

Note4Students

From UPSC perspective, the following things are important :

Prelims level: IT Act 2000

Mains level: Paper 3- Issues involved in traceability of originator of information on social media

The article deals with the issues involved in the traceability requirement of the originator of information on social media platform as per new IT Rules.

Traceability clause and issues involved

  • Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 imposes certain obligation on significant social media intermediaries.
  • Rule 4(2) puts an obligations to ensure traceability of the originator of information on their platforms.
  • Consequently, WhatsApp has filed a petition in the Delhi High Court.
  • WhatsApp contends that the mandate for traceability violates the privacy rights of Indian citizens, by rendering WhatsApp unable to provide encrypted services.

Government’s response

  • The Government primarily relies on the argument that: privacy is not an absolute right, and that the traceability obligation is proportionate, and sufficiently restricted.
  • Notably, the new Rules mandate traceability only in the case of significant social media intermediaries i.e. those that meet a user threshold of 50 lakh users, which WhatsApp does.
  • Traceability is also subject to an order being passed by a court or government agency and only in the absence of any alternatives.
  • While it is indeed true that privacy is not an absolute right, the Supreme Court of India in the two K.S. Puttaswamy decisions of 2017 and 2018 has laid conditions for restricting this right.
  • In Puttaswamy cases, the Supreme Court clarified that any restriction on this right must be necessary, proportionate and include safeguards against abuse.

Issues with traceability

  • Not proportionate: A general obligation to enable traceability as a systemic feature across certain types of digital services is neither suitable nor proportionate.
  • No safeguard against abuse: The Rules lack effective safeguards in that they fail to provide any system of independent oversight over tracing requests made by the executive.
  • This allows government agencies the ability to seek any messaging user’s identity, virtually at will.
  • Presumption of criminality:  Weakening encryption — which a traceability mandate would do — would compromise the privacy and security of all individuals at all times, despite no illegal activity on their part, and would create a presumption of criminality.

Way forward

  • Explore the alternatives: The Government already has numerous alternative means of securing relevant information to investigate online offences including by accessing unencrypted data such as metadata, and other digital trails from intermediaries.
  • Already has ability to access encrypted data: The surveillance powers of the Government are in any case vast and overreaching, recognised even by the Justice B.N. Srikrishna Committee report of 2018.
  • Importantly, the Government already has the ability to access encrypted data under the IT Act.
  • Notably, Section 69(3) of the Information Technology Act and Rules 17 and 13 of the Information Technology Rules, 2009 require intermediaries to assist with decryption where they have the technical ability to do so, and where law enforcement has no alternatives.
  • Judicial scrutiny of Section 79 of IT Act: The ability of the government to issue obligations under the guise of “due diligence” requirements under Section 79 of the IT Act must be subject to judicial scrutiny.
  • Legislative changes needed: The long-term solution would be for legislative change along multiple avenues, including in the form of revising and reforming the now antiquated IT Act, 2000.

Consider the question “What are the issues involved in the traceability of the originator of the information on social media platforms as mandated by the new IT Rules 2021? Suggest the way forward.”

Conclusion

While, undoubtedly, there are numerous problems in the digital ecosystem that are often exacerbated or indeed created by the way intermediaries function, ill-considered regulation of the sort represented by the new intermediary rules is not the way forward.

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Government Budgets

Resource crunch in states after Covid second wave

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Impact of second Covid wave on States' fiscal health

The article gives the overview of the impact of second Covid wave on the fiscal health of the States.

Impact of first Covid wave on fiscal health of states

  • The analysis of the fiscal data for all states with the exception of Goa, Manipur, Meghalaya and Sikkim reveal a grim picture.
  • The aggregate revenue deficit for 24 state governments soared to Rs 4 trillion as per the revised estimates (RE) for 2020-21, up from a modest budgeted amount of Rs 353 billion.
  • And, despite a 16 per cent cut in capital spending, the fiscal deficit of these states deteriorated to Rs 8.7 trillion in 2020-21 (RE), up from the budgeted estimate of Rs 6.0 trillion.

How states had projected ambitious decline in revenue deficit

  • The budgets for the ongoing fiscal year,  had projected an ambitious, decline in the aggregate revenue deficit to Rs 1.2 trillion, lower than the pre-Covid-19 level of Rs 1.3 trillion in 2019-20.
  • This has benefitted from the considerable expansion in their revenue receipts this year, forecasted at 24.7 per cent, compared to a moderate 12.4 per cent increase in their aggregate revenue expenditure.
  • This anticipated shrinking of the revenue deficit has allowed states to plan for a substantial expansion in their capital expenditure and net lending pegged at 34.1 per cent.
  • This anticipated shrinking also allowed the States to attempt a modest correction in their budgeted fiscal deficit, bringing it down to Rs 7.6 trillion in 2021-22 from Rs 8.7 trillion in 2020-21 (RE).

Fiscal concerns over second Covid wave

  • The second wave of Covid-19 infections and its spread to rural areas has fanned fiscal concerns.
  •  The curtailed consumption of discretionary items and contact-intensive services will dampen the growth of states’ own tax revenues this year.
  • Moreover, lower mobility during the regional lockdowns will constrain tax revenues that states earn on fuels.
  • The data for the generation of GST e-way bills confirms that the staggered imposition of the localised lockdowns has had an adverse impact on economic activity since April.
  • This will result in a sequential slowdown in GST collections that will be reported in the subsequent two months.
  • Nevertheless, the GST collections is likely to nearly double to Rs 1.7 trillion in the first quarter of this year, up from Rs 0.9 trillion over the same period last year, boosted by the record-high collections in April,
  • That reflected healthy economic activity in March.

The shortfall and way forward

  •  States’ own tax collections is estimated to trail their budget estimates as they were drawn up before the second wave.
  • For this year,  state GST collections would be at Rs 6.1 trillion, falling below their projected revenues of Rs 8.7 trillion.
  • This indicates a GST compensation requirement of Rs 2.65 trillion — only 38 per cent of which may be met through the expected GST compensation cess collections.
  • Following the meeting of the GST Council, the Finance Minister has indicated that a back-to-back loan of Rs 1.58 trillion will be provided to the states.
  • If the tranches of this loan start flowing to the states soon, it will alleviate their anticipated revenue crunch over the next two months.
  • Already, there has been a sharp rise in the size of the upcoming State Development Loan auction to Rs. 19,550 crore, relative to the modest average size of around Rs. 7,400 crore seen so far in the first eight auctions held in FY2022.

Conclusion

In any case, the capital spending budgeted by certain state governments this year appears to be optimistic. Moreover, localised restrictions imposed during the last two months are expected to have constrained activity.

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RBI Notifications

Cryptocurrency & India

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Blockchain technology

Mains level: Paper 3- Adopting and regulating cryptocurrencies

The article highlights the need for coherent cryptocurrency policy and avoid missing the benefits offered by the technology.

Growing dominance of cryptocurrencies

  • Created by Satoshi Nakamoto in 2008, Bitcoin is the most popular cryptocurrency.
  • It is a fully decentralised, peer-to-peer electronic cash system that didn’t need the purview of any third-party financial institution.
  • The Bitcoin, which traded at just $ 0.0008 in 2010, commanded a market price of just under $65,000 this April.
  • Many newer coins were introduced since Bitcoin’s launch, and their cumulative market value touched $ 2.5 trillion this May.
  • Within a span of just over a decade, their value has surpassed the size of economies of most modern nations.
  •  The “cryptomarket” grew by over 500 per cent, even while the pandemic unleashed global economic carnage not seen since the Great Depression.
  • China’s recent crackdown on cryptocurrency had far-reaching consequences.
  • An astounding trillion US dollars were wiped out from the global cryptomarket within a span of 24 hours.
  • This kind of  volatility mentioned above has always been a concern for regulators and investors alike.

India’s approach

  • Law enforcement and taxation agencies have called for a ban, expressing concerns over cryptocurrencies being used as instruments for illicit activities, including money laundering and terror funding.
  • In 2018, the Reserve Bank barred our financial institutions from supporting crypto transactions — but the Supreme Court overturned it in 2020.
  • Yet, Indian banks still block these transactions, and the government has circulated a draft bill outlawing all cryptocurrency activities, which has been under discussion since 2019.
  • The Reserve Bank has announced the launch of a private blockchain-supported official digital currency, similar to the digital Yuan.
  • India is increasingly mimicking China’s paradoxical attempt to centralise a decentralised ecosystem.
  • India is trying to decouple cryptocurrencies from their underlying blockchain technology, and still derive benefit.
  • Unfortunately, this is impractical, and shows a lack of understanding of this disruptive innovation.
  • The funds that have gone into the Indian blockchain start-ups are less than 0.2 per cent of the amount the sector raised globally.
  • The current central government approach makes it near-impossible for entrepreneurs and investors to acquire much economic benefit.

Need for regulation

  • Regulation is definitely needed to prevent serious problems, to ensure that cryptocurrencies are not misused, and to protect unsuspecting investors from excessive market volatility and possible scams.
  •  However, regulation needs to be clear, transparent, coherent and animated by a vision of what it seeks to achieve.
  • India has not been able to tick these boxes, and we’re in danger of missing out in the global race altogether.

Way forward

  • Any new regulations made in this sector should prevent the misuse of these digital assets without hindering innovation and investments.
  • Provisions have to be made to route the value extracted from these networks transparently into our financial system.
  • Regulatory uncertainties over India’s position on cryptocurrency highlights the need for clear-headed policy-making.

Consider the question “India was a late adopter in all the previous phases of the digital revolution be it the semiconductors, the internet or smartphones. Do you think the same is happening again in India’s adoption of cryptocurrencies and blockchain technology?”

Conclusion

We are currently on the cusp of the next phase, which would be led by technologies like blockchain. We have the potential to channel our human capital, expertise and resources into this revolution, and emerge as one of the winners of this wave. All we need to do is to get our policymaking right.

 

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Data is an essential weapon against Covid

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: `Paper 3- Role of data analytics during pandemic

The article highlights how data played an important role in decision-making in dealing with the Covid-19 pandemic. 

Importance of data in decision making

  • The COVID-19 pandemic has highlighted globally how important data is to governments in decision-making.
  • Epidemiological data is of paramount significance for targeting and implementing control measures for public health in a timely manner
  • Such data was used effectively in the evidence-based response and decision-making in countries like South Korea.
  • Modern response to pandemics has focused on exploiting all the available data to inform policy action in real time.

How data analysis helped during pandemic

  • Data analysis has revealed the need for continuous and repeated tracking of case numbers, fatalities and recoveries.
  • The epidemiological concept of flattening the curve and its predictions are results of data analysis and modelling.
  • Understanding testing adequacy or lack thereof allows us to measure our preparedness, prognostic versus diagnostic ability, and shape our responses to identify, manage, and care for new cases.
  • Epidemic outbreak data like case data, medical and treatment data can be used to understand disease pathogenesis and severity.
  • Genome sequencing surveillance helps identify and track viral genome sequence variants in real time and the evolution of the virus.
  •  The concept of open access to various data enables models to improve forecast and study the spread of the disease.’

Integration and analysis of multiple datatypes

  • The integration and analysis of multiple heterogeneous datatypes eventually would yield a holistic picture.
  • This helps guide policy decisions for control and management of public health.
  • When genome surveillance data is correlated with the magnitude of cases and their outcomes, then we can understand the transmissibility or infectivity of the virus.
  • Geographical mapping of prevalence of mutants allows us to understand viral spread and explain recoveries or deaths in a specific area.
  • The roll out of vaccinations can shape viral evolution and drug-treatment strategies.
  • Surveillance through studying genome sequencing of the virus, coupled to other epidemiological data allows us to identify these connections.

Challenges

  • Part of the challenge lies in the standardisation of data collection, curation, annotation and the integration of data analytics pipelines for outbreak analytics.

Way forward

  • Ensuring data availability and quality under operational constraints is critical.
  • The use of data standards instils consistency, reduces errors and enables transparency.
  • Embedded in the idea of data sharing lies the concept of data security and confidentiality.
  • Concerns of privacy and security calls for a systemic infrastructure with built-in safeguards to ensure data encryption while preserving anonymity and ensuring privacy.
  • As our dependence on data-based decisions becomes more and more critical, an urgent charter for standardised digital health data in India is required.

Consider the question “The COVID-19 pandemic has highlighted globally how important data is to governments in decision-making. Explain how data helps in decision making and challenges in evidence-based decision making based on data.”

Conclusion

Rational and scientific methods necessitate data without which neither can we have information, nor knowledge or wisdom. Data sharing, and transparency and timely dissemination of data are critical to overcome the pandemic.

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Foreign Policy Watch: India-Nepal

India must engage with Nepal-without intervening

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Engage with Nepal without intervening

The article suggests recalibration of India’s approach towards political turmoil in Nepal.

Nepal in political crisis

  • For the second time in weeks, Prime Minister K P Oli has persuaded President Bidya Devi Bhandari to dissolve parliament and call for fresh elections.
  • That is, unless the Supreme Court decides to declare the dissolution of parliament as unconstitutional, as it had done in the recent past.
  • The current dissolution has been challenged in the court by five political parties.

Medhesi demand fulfilled

  • Prime Minister Oli has also delivered on the longstanding Madhesi demand to reverse a constitutional provision which denied citizenship to children born of Nepali mothers who had foreign husbands.
  • The widespread unrest in the Terai adjoining India in 2015 was triggered by this attempt to deny equal rights to the Madhesi population.
  • This provision had directly targeted the Madhesi population, which has close kinship and marital ties across the border with India.
  • While this provision has now been removed through a presidential ordinance, it could well be reversed in future by Nepali political parties dominated by the higher caste.

Steps India needs to take

  • Political uncertainty in a neighbouring country is never good news for India, particularly in Nepal with whom we share a long and open border.
  • The Indian government has maintained a studied silence on the current political developments in Nepal and this may be the right thing to do.
  • But this silence should not imply the lack of a proper assessment of the political situation in Nepal and what would serve the interests of India best.
  • Following are the steps India need to take:

1) India should declare it does not support the revival of monarchy

  •  The abolition of the monarchy is a net gain for India and the government must firmly and unambiguously declare that it does not support the revival of the monarchy, which has already been rejected by its people.
  • India should declare its unconditional support to Nepal’s republican democracy.

2) Remain engaged with Nepal

  • India should remain fully engaged with Nepal at all levels and across the political spectrum.
  • The safeguarding of India’s vital interests demands such sustained engagement.
  • A hands-off policy will only create space for other external influences, some of which, like China, may prove to be hostile.
  • However, engagement must dispense with the recurrent tendency to label Nepali political leaders as friends or enemies.
  • India should advocate policies rather than persons.

3) Recognise the role of Madhesi population

  • In India’s engagement with Nepal, the Terai belt and its large Madhesi population plays a critical and indispensable role.
  • In an effort to win over the Kathmandu political and social elite, one should be careful not to neglect citizens living in the plains.
  • Our engagement with Nepal must find an important place for Nepali citizens who are our immediate neighbours and act as a kinship, cultural and religious bridge between our two countries.

4) Appreciate people-to-people link

  • India needs to appreciate that the people-to-people links between our two countries have an unmatched density and no other country, including China, enjoys this asset.
  • The challenge to our Nepal policy lies in leveraging this precious asset to ensure a stable and mutually-productive state-to-state relationship.
  • India has every reason to approach its relations with Nepal with confidence and assurance.

Consider the question “What are the factors that make India-Nepal relationship special? What are the recent challenges impacting this special relationship? ” 

Conclusion

The safeguarding of India’s vital interests demands India’s engagement with Nepal without intervening in its politics. A hands-off policy will only create space for other external influences.

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Social Media: Prospect and Challenges

New IT Rules 2021

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Provisions of IT Rules 2021

Mains level: Paper 3- Issues with IT Rules 2021

The article highlights the issues with the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.

Important provision made in the IT Rules 2021

  • The Rules mandate duties such as removal of non-consensual intimate pictures within 24 hours.
  • The rules also mandates publication of compliance reports to increase transparency.
  • Rules provides for setting up of a dispute resolution mechanism for content removal.
  • It provides for adding a label to information for users to know whether content is advertised, owned, sponsored or exclusively controlled.

Issues with the rules

1) Affects right to free speech and expression

  • The Supreme Court, in the case of Life Insurance Corpn. Of India vs Prof. Manubhai D. Shah (1992) had elevated ‘the freedom to circulate one’s views as the lifeline of any democratic institution’.
  • So, the rules need to be critically scrutinised for the recent barriers being imposed by it.

2) Violation of legal principles

  • The rules were framed by the Ministry of Electronics and Information Technology (MeiTY).
  • However, the Second Schedule of the Business Rules, 1961 does not empower MeiTY to frame regulations for digital media.
  • This power belongs to the Ministry of Information and Broadcasting.
  • This action violates the legal principle of ‘colourable legislation’ where the legislature cannot do something indirectly if it is not possible to do so directly.
  • Moreover, the Information Technology Act, 2000, does not regulate digital media.
  • Therefore, the new IT Rules which claim to be a piece of subordinate legislation of the IT Act, goes beyond the rule-making power conferred upon them by the IT Act.
  • This makes the Rules ultra vires to the Act.

3) Deprives the fair recourse to intermediary

  • An intermediary is now supposed to take down content within 36 hours upon receiving orders from the Government.
  • This deprives the intermediary of a fair recourse in the event that it disagrees with the Government’s order due to a strict timeline.

4) Privacy violation

  • These Rules undermine the right to privacy by imposing a traceability requirement.
  • The immunity that users received from end-to-end encryption was that intermediaries did not have access to the contents of their messages.
  • Imposing this mandatory requirement of traceability will break this immunity, thereby weakening the security of the privacy of these conversations.
  • This will also render all the data from these conversations vulnerable to attack from ill-intentioned third parties.
  • The threat here is not only one of privacy but to the extent of invasion and deprivation from a safe space.
  • Recent data breach affecting a popular pizza delivery chain and also several airlines highlights the risks involved in such move in the absence of data protection law.
  • Instead of eliminate the fake news, the Rules proceed to hurriedly to take down whatever authority may deem as “fake news”.

5) Operational cost

  • The Rules create additional operational costs for intermediaries by requiring them to have Indian resident nodal officers, compliance officers and grievance officers.
  • Intermediaries are also required to have offices located in India.
  • This makes profit making a far-fetched goal for multinational corporations and start-up intermediary enterprises.
  • Therefore, not only do these Rules place a barrier on the “marketplace of ideas” but also on the economic market of intermediaries in general by adding redundant financial burdens.

Consider the question “What are the challenges associated with the social media? How the  Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 will help is dealing with these challenges? What are the issues with these rules?”

Conclusion

Democracy stands undermined in direct proportion to every attack made on the citizen’s right. The IT Rules 2021 have tilt towards violation of rights. Therefore, these rules need reconsideration.

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Coronavirus – Health and Governance Issues

Addressing vaccine hesitancy

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Dealing with vaccine hesitancy

The article deals with the issue of vaccine hesitancy and its consequences.

Why vaccinate?

  • The primary purpose of vaccination is to protect individuals against severe infection.
  • Vaccination also protects populations by providing ‘herd immunity’, if done on a large scale.
  • Globally, vaccinations against polio, small pox, meningitis and so on have seen huge success.

Need to address the vaccine hesitancy

  • The results of a 2020 Gallup poll, conducted before the vaccine roll-out reveals that 18% of the Indian said that they won’t take the vaccine.
  • But vaccine hesitancy has gone up in India since then, due in part to largely overblown reports of complications or even deaths.
  • The consequences of vaccine hesitancy are disastrous.
  • If herd immunity does not develop, disease outbreaks and pandemics will prevail.
  • The slower the vaccination rate, the wider the spread of infection and the greater the chances of mutations and the emergence of new variants.

Factors driving vaccine hesitancy

  • The influencing factors include a lack of awareness of the extent of benefits.
  • Fears based on inaccurate information.
  • Lack of access to vaccine.
  • Disinformation, especially on social media.
  • Other factors include civil liberty concepts, cost, cultural issues, and various layers of confidence deficit.

Way forward

  • To allay vaccine fears, our messaging needs to focus on simple facts.
  • Before attempting to persuade people, we need to understand the basis of their fear, hesitancy and the anti-vax attitude.
  •  By challenging untruths, we inadvertently feed the perception that we are actively suppressing the “real” truth.
  • The objective now should be to reach more people faster with a message that doesn’t just provide more science but includes guidance.
  • Providing practical information through social media, alternatives to apps for those lacking easy access to vaccines, and taking the help of well-informed frontline workers will all help.

Conclusion

The possibility of a significant number of people not getting vaccinated thwarts our collective ability to reach the herd immunity threshold against Covid-19. Therefore the issue of vaccine hesitancy needs to be urgently addressed.

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Goods and Services Tax (GST)

Fundamental problems facing GST regime

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Fundamental challenges GST regime faces

The article highlights the fundamental challenges the GST faces in the form of trust erosion and politicisation of decision making in GST Council.

Initial issues with GST

  • The multiple rates structure, high tax slabs and the complexity of tax filings as the problems underpinning India’s GST.
  • These were indeed the initial problems in the way GST was implemented, leading to some of its current woes.
  • However, technical fixes such as simplification of GST rates and tax filing systems will not succeed in addressing the fundamental problems with GST.

Fundamental problems

1) Politics influence the decision of GST Council

  • The 43rd meeting of the Goods and Services Tax (GST) Council which consists of 31 States and Union Territorie is to be held on May 28.
  • Ideally, political affiliations should not matter in a Council set up to decide indirect taxes.
  • The GST Council was mandated to meet at least once every quarter, but it had not met for two quarters, due to the pandemic.
  • Several of the 14 members of the groups who belong to parties different from the party ruling in the Centre, requested the Finance Minister to convene the GST meeting to help them manage their finances.
  • None of the 17 members of the ruling group deemed it necessary.
  • Even the need for a meeting to determine tax revenues for States is evidently a political decision.

2) Lack of trust

  • The GST Council is a compact of trust between the States and the Centre, set in the larger context of India’s polity.
  • The tragedy of the GST Council is that it is afflicted with spite and forced to function under the prevailing cloud of politics.
  • If the functioning of the GST Council is subject to the vagaries of elections and consequent vendetta politics, GST will continue to be just a caricature of its initial promise.

3) Uncertainty after the guarantee of 14% growth ends

  • The States paid a huge price for GST in terms of loss of fiscal autonomy.
  • GST has endured so far primarily because the States were guaranteed a 14% growth in their tax revenues every year.
  • This minimised the risks of this new experiment for the States and compensated for their loss of fiscal sovereignty.
  • This revenue guarantee ends in July 2022.
  • This can lead to a crumbling of the precarious edifice on which GST stands today.

Consider the question “What are the challenges faced by the States in the GST regime? What would be the impact on States as a guarantee of 14% growth in tax revenue comes to an end in July 2022?” 

Conclusion

The end of India’s grand GST experiment seems inevitable unless there is a radical shift in the tone and tenor of India’s federal politics, backed by an extension of revenue guarantee for the States for another five years.

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Coronavirus – Economic Issues

Tackling rural economic distress

Note4Students

From UPSC perspective, the following things are important :

Prelims level: MGNREGS

Mains level: Paper 2- Need to strengthen the PDS and MGNREGS

The disruption caused by the second Covid wave has added to the hardship faced by the migrant workers and the rural poor. Dealing with it requires strengthening of  PDS and MGNREGS.

Distress due to second Covid wave

  • Several States have imposed lockdown amid second Covid wave which will have severe implications for the livelihoods of those in the informal sector.
  • Migrant workers and the rural poor have been facing great distress over the past one year and the crisis for food and work is only going to intensify further.
  • The migrants have again become vulnerable due to the lockdown in different cities.
  • In this context, there is an urgent need to strengthen the public distribution system (PDS) and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

Steps need to be taken

  • The government announced 5 kg free foodgrains for individuals enlisted under the National Food Security Act (NFSA), for May and June 2021.

1) Changes in PDS

  • Expand coverage: The government should expand PDS coverage immediately and include all eligible households under the schemes.
  • According to an independent study, about 100 million people are excluded from the ration distribution system owing to a dated database based on the 2011 Census.
  • Extend period: The Centre should also extend the free foodgrains programme to a year instead of limiting it to two months.

2) Expand MGNREGS

  • The Centre had allocated ₹73,000 crore for 2021-22 for MGNREGS and notified an annual increment of about 4% in wages. 
  • Both these provisions are inadequate to match the requirements on the ground.
  • The central allocation for MGNREGS is about ₹38,500 crore less than last year’s revised estimate.
  • The budget for 75-80 days of employment in the year for 6.5 crore families given the current scale of economic distress.
  • By this rationale, at the current rate of ₹268/day/person, at least ₹1.3 lakh crore will have to be budgeted.
  • The government should also re-consider its decision of a mere 4% increase in MGNREGS wages and hike it by at least 10%.

Conclusion

A large population is facing hunger and a cash crunch. The situation is only becoming more dire as the pandemic continues to rage on. Therefore, the Union government should prioritise food and work for all and start making policy reforms right away.

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

Data central to effective climate action

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Data driven approach to deal with the future disruptions

Article highlights the importance of data driven approach in dealing with the future disruptions and suggests the reforms in the system.

Managing the disruption through data-driven tools

  • The data-driven tools were used for managing pandemic induced disruption.
  • This offers an opportunity to restructure the data ecosystem for managing the disruptions of the future that are more likely to be driven by climate change.

Policies for data sharing in India

  • The National Data Sharing and Accessibility Policy (NDSAP), 2012 recognises the importance of data.
  • NDSAP recognised the importance of data in improving decision making, meeting the needs of civil society and generating revenue by permitting access to datasets.
  • In 2012, a government portal, data.gov.in was also established as a unified platform to enable sharing of data available with ministries, departments and other public agencies for wider public use.
  • The sharing of data in this platform, apart from others, is further streamlined through the nodality of Chief Data Officer-CDO in respective ministries.

Challenges

  • Challenge remains about whether the collected data is usable, accessible and if it captures the details that end users are interested in.
  • Even after years of the portal’s operationalisation, there are multiple data-sets that aren’t updated regularly.
  • Though NITI Aayog has brought indices to track climate actions such as under SDG-13 of SDG India Index, but it remains vague in tracking improvements in climate resilience, by solely using number of lives lost due to extreme weather events.

Reforms needed in data-ecosystem

  • 1) Complete dataset: There is a need to collect complete datasets required to assess climate risks and vulnerabilities.
  • This involves collection of datasets that are sex-disaggregated and geo-spatial and collect more nuanced dimensions like disaster response capacities.
  • Targeted research: There is a requirement of targeted research for designing better questionnaires and identifying new nodes for data collection.
  • 2) Reliability of data: The data collected has to be made reliable and usable through an accountability framework.
  • Legislation: A separate legislation in this regard would bring in the much-needed consistency in periodic collection of identified datasets and their proactive sharing in designated platforms.
  • 3) Centralisation of data: There is a need for centralising public data that currently exists with different departments and public institutions.
  • The National Data Governance Centre was planned to be set up in 2019 for precisely this objective.
  • But it is yet to be operationalised.

Consider the question “How data driven approach could help India deal with the future disruptions that are more likely to be from climate change? Suggest the reforms needed in India’s data ecosystem.”

Conclusion

It is time that India places itself on track to address the issues around the known unknowns of climate change through data driven apporach.


Source:

https://www.financialexpress.com/opinion/data-central-to-effective-climate-action/2258964/

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