Note4Students
From UPSC perspective, the following things are important :
Prelims level: MEITY
Mains level: Paper 2- Need for data protection law
Context
The Minister for the Ministry of Electronics and IT withdrew the Personal Data Protection Bill, 2019. The reasons for the withdrawal were circulated in a note to MPs, which stated that,âconsidering the report of the JPC (Joint Parliamentary Committee), a comprehensive legal framework is being worked uponâŚâ.
Background of Personal Data Protection Bill
- Â An expert committee headed by Justice (retd) A P Shah recommended in October, 2012,âa detailed framework that serves as the conceptual foundation for the Privacy Actâ.
- This did not come to fruition, with proposals buried by 2014 due to objections from the intelligence establishment on surveillance reforms.
- While petitions on the constitutionality of Aadhaar and the right to privacy were pending before the Supreme Court, the Union government constituted an expert group headed by Justice (retd) B N Srikrishna in July, 2017.
-  In August, a nine-judge bench unanimously pronounced the Puttaswamy judgment that reaffirmed the fundamental right to privacy for the autonomy, dignity and liberty for every Indian.
- Justice D Y Chandrachud, who authored the majority opinion, noted the formation of the Srikrishna Committee as a positive obligation on the government to enact a law for informational privacy.
- In December 2019, government introduced the Personal Data Protection Bill, 2019 in Parliament.
- The draft law was referred to a JPC of 30 MPs that submitted a report after two years.
- With the withdrawal in Parliament on August 3, it almost seems institutional processes, in which all three branches of government worked for years, are being jettisoned in favour of âa comprehensive legal frameworkâ.
Issues with reasons given for withdrawal of the Bill
- The JPC has nowhere suggested a withdrawal in favour of a âcomprehensive legal frameworkâ.
- The proper course was to consider the JPCâs recommendations including the dissent notes and expert analysis, redraft and introduce a new Data Protection Bill.
- Compliance burden concern of government: With the government setting the goal of a one trillion dollar digital economy, fears of a compliance burden can impede innovation and growth.
- Date protection is needed for innovation: Here, detailed reasoning is available in the Srikrishna Committeeâs report as well as a growing international consensus suggesting that next-generation innovation in technology needs data protection.
- Regulatory intervention will improve business practices requiring engineering decisions that focus on user trust.
- Imperfections in law argument: With the imperfections within the Personal Data Protection Bill, 2019 and even the JPC report, there exists a reasonable argument that if passed into law, it may institutionalise bad privacy practices.
- Â Such a line of reasoning fails to recognise that institutional memory develops through reasonable due diligence and experience.
- Legislative foresight is limited and no law is perfect, which is why there exist parliamentary amendments and judicial review.
Conclusion
Today, there is a relentless pace of digitisation that relies on gathering personal data in all spheres of our lives. All of this is done in a legal vacuum without any oversight or remedy. This underscores the urgent need for data protection law.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Population dividend
Context
The UN report, World Population Prospects 2022, forecasts that the worldâs population will touch eight billion this year and rise to 9.8 billion in 2050. What is of immediate interest to India is that its population will surpass Chinaâs by 2023 and continue to surge.
India’s potential workforce and growth as projected by consulting firms
-  Deloitteâs Deloitte Insights (September 2017) expects âIndiaâs potential workforce to rise from 885 million to â1.08 billion people over the next two decades from todayâ, and âremain above a billion people for half a century,â betting that âthese new workers will be much better trained and educated,â than their existing counterparts.
- McKinsey & Companyâs report, âIndia at Turning Pointâ (August 2020), believes the âtrends such as digitisation and automation, shifting supply chains, urbanisation, rising incomes and demographic shifts, and a greater focus on sustainability, health, and safety are acceleratingâ to âcreate $2.5 trillion of economic value in 2030 and support 112 million jobs, or about 30% of the non-farm workforce in 2030.â
- Four pillarsIn its May 14, 2022 issue, The Economist had this to say about India, âAs the pandemic recedes, four pillars are clearly visible that will support growth in the next decade. The four pillars are:
- 1) The forging of a single national market.
- 2) An expansion of industry owing to the renewable-energy shift and a move in supply chains away from China,
- 3) Continued pre-eminence in IT.
- Â 4) High-tech welfare safety-net for the hundreds of millions left behind by all this.
- The Financial Times in an article, âDemographics: Indian workers are not ready to seize the batonâ, believes that Indiaâs bad infrastructure and poorly skilled workforce will impede its growth.
Comparing India’s preparedness with China’s in 1970s
- China is enduring an ongoing population implosion, which by 2050, will leave it with only 1.3 billion people, of whom 500 million will be past the age of 60.
- Indiaâs population, by contrast, would have peaked at 1.7 billion, of whom only 330 million will be 60 years or older.
- Simply put, India is getting a demographic dividend that will last nearly 30 years.
- There is so much going on for India today compared to China, the only country it can be reasonably compared to.
- It is still a young country and in a much better position to transform itself compared to China of the 1970s.
- It is still an open society where mass protest matters and produces results.
- Indians have not been traumatised as Chinese were at the time of Mao Zedongâs death.
- IT backbone: The IT technologies now available in India, and most importantly the Internet they run on have matured exponentially.
- Many things right from video conferencing to instantaneous payments and satellite imaging are getting better and cheaper by the day.
- Better administrative system: Creaky and inadequate as they are, Indiaâs administrative systems manage to deliver and its infrastructure is in far better shape today than it was for China at the start of its reforms.
- No rural urban divide: India does not have a Hukou system which in China tethers rural folk to rural parts creating a deep divide between a small and prosperous urban China and a much larger, very deprived rural China.
Way forward for India
- To wring the best out of its demographic dividend, India needs to invest massively in quality school and higher education as well as healthcare across India on an unprecedented scale, literally in trillions of rupees between now and 2050 when it would have reached the apogee of its population growth.
Conclusion
India must seize the moment and not be incremental in its approach. Given the will it can initiate and see through a transformation that will stun the world, even more than Chinaâs has so far.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Taiwan issue
Context
The US House of Representatives Speaker Nancy Pelosi visited Taiwan evoking strong protest from China.
Brief history of China-Taiwan Tensions
- Taiwan is an island about 160 km off the coast of southeastern China, opposite the Chinese cities of Fuzhou, Quanzhou, and Xiamen.
- It was administered by the imperial Qing dynasty, but its control passed to the Japanese in 1895.
- After the defeat of Japan in World War II, the island passed back into Chinese hands.
- After the communists led by Mao Zedong won the civil war in mainland China, Chiang Kai-shek, the leader of the nationalist Kuomintang party, fled to Taiwan in 1949.
- Chiang Kai-shek set up the government of the Republic of China on the island, and remained President until 1975.
- Beijing has never recognised the existence of Taiwan as an independent political entity, arguing that it was always a Chinese province.
The US and One-China Principle
- With the shifting geopolitics of the Cold War, the PRC and the U.S. were forced to come together in the 1970s to counter the growing influence of the USSR.
- This led to the US-China rapprochement demonstrated by the historic visit of then US President Richard Nixon to PRC in 1972.
- The same year, the PRC displaced ROC as the official representative of the Chinese nation at the UN.
- Diplomatic relations with the PRC became possible only if countries abided by its âOne China Principleâ â recognizing PRC and not the ROC as China.
Why does China have a problem with Pelosi visiting Taiwan?
- For China, the presence of a senior American figure in Taiwan would indicate some kind of US support for Taiwanâs independence.
- This move severely undermined Chinaâs perception of sovereignty and territorial integrity.
China’s reaction
- Increased military exercises around Taiwa : Military exercises around Taiwan have been expanded, with Chinese aircraft intruding more frequently across the informal median line which defines the zone of operations on each side.
- Increased naval presence: Chinese naval ships are cruising within the Taiwan Straits and around the island itself.
- Economic sanctions have been announced, prohibiting imports of a whole range of foodstuffs from Taiwan.
- One item which will be left out is semi-conductors, a critical import for a range of Chinese high-tech industries.
- Taiwanese firms like the Taiwan Semi-Conductor Manufacturing Company (TSMC) are world leaders in the most sophisticated brands of chips imported by a large number of countries.
- Â The main target of Chinaâs escalating response will be Taiwan.
- Taiwan is indeed caught in the crossfire between China and the US and being a proxy in a fight between giants.
Implications for East Asia and South East Asia
- Forced into making a choice: Just as Taiwan is caught in a crossfire between the US and China, so are the East Asian and South East Asian countries.
- Prefer US military presence: They feel reassured by the considerable US military presence deployed in the region and tacitly support its Indo-Pacific strategy.
- Strong economic ties with China: However, their economic and commercial interests are bound ever tighter with the large and growing Chinese economy.
- This having it both ways strategy is beginning to fray at the edges with the escalating tensions between the US and China.
- Most do not wish to be forced into making a choice.
What should be India’s approach?
- Advantageous for India: In one sense, Chinaâs preoccupation with its eastern ocean flank of the Yellow Sea, the Taiwan Strait and the South China Sea is good for India.
- It diminishes Chinese attention toward the Indian Ocean, Indiaâs primary security theatre.
- Adhere to One China Policy: Prudence demands that India hew closely to its consistent one China policy even while maintaining and even expanding non-official relations with Taiwan.
- For the US, Japan and Australia, members of the Quad, Taiwan is a key component of the Indo-Pacific strategy.
- It is not for India.
Conclusion
One should use the opportunity to expand Indiaâs naval capabilities and maritime profile in this theatre before the Chinese begin to look to our extended neighbourhood with renewed interest and energy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Finance Commission
Mains level: Paper 2- Freebies issue
Context
Concern over âfreebiesâ in Indian politics has recently been expressed by those in the highest offices in the country.
Issue of irrational freebies
- Challenge in defining freebies: There is often confusion on what constitutes âfreebiesâ, with a number of services that the Government provides to meet its constitutional obligations towards citizens also being clubbed in this category.
- Distortion of electoral process: A Bench headed by the Chief Justice of India recently heard a public interest litigation in which the petitioner argued against the promise of âirrational freebiesâ by claiming that these distort the electoral process.
- The bench asked the Central government to take a stand on the need to control the announcement of âfreebiesâ by political parties during election campaigns.
- The Court also suggested that the Finance Commission could be involved to look into the matter and propose solutions.
- The basic argument is that these are a waste of resources and place a burden on already stressed fiscal resources.
- Discussions on âfreebiesâ not only include the free distribution of what may be considered âclub goodsâ such as televisions but also welfare schemes such as free or subsidised rations under the Public Distribution System (PDS) and work provided through the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
Can we term foodgrain distribution under PDS as freebies?
- It ensures food security: Subsidised foodgrains distributed under the PDS not only contribute to ensuring basic food security but also act as an implicit income transfer allowing the poor to afford commodities that they otherwise could not.
- Price support for farmers: Further, the PDS also plays an important role in our country where public procurement at minimum support prices (MSPs) is one of the main instruments of support to farmers.
- The PDS allows foodgrains to be available for cheap for consumers while assuring remunerative prices to farmers.
- Food security during emergency: The PMGKAY is probably what kept many away from the brink of starvation during the novel coronavirus pandemic.
- From around the mid-2000s, the PDS increasingly became a political issue, with State governments expanding coverage and reducing prices.
- Â This ultimately led to the National Food Security Act being passed by Parliament unanimously in 2013.
- Despite its shortcomings, it cannot be denied that the PMGKAY and the support that it provided during the pandemic would have been impossible had it not been for the NFSA which expanded the coverage of the PDS to about two thirds of the population.
- In its absence, a much smaller number of people would have had ration cards with high errors in identification.
Other welfare schemes
- Â At a time when there are few employment opportunities, working under MGNREGA can guarantee some assured wages; if implemented in the true spirit of the legislation this is also demand-based and, therefore, responds to as much need as there is.
- Similarly, mid-day meals in schools have been proven to contribute to increased enrolment and retention in schools and addressing classroom hunger.
- A number of other schemes such as old age, single women and disabled pensions, community kitchens in urban areas, free uniforms and textbooks for children in government schools, and free health-care services play a critical role in providing social security and access to basic entitlements in our country.
Way forward
- Building public pressure towards making welfare delivery an electoral issue is the need of the hour.
- It is important to recognise that most welfare schemes contribute to improving human development outcomes, which also results in higher economic growth in future.
- As suggested by the Supreme Court, the Finance Commission could be tasked with formulating the criterion to come up with the criterion for freebies.
- Sometimes, this process throws up initiatives that seem âwastefulâ â while these must be discussed, one cannot deny them completely.
Conclusion
There are a number of lacunae in these programmes which call for expansion in coverage, allocation of greater resources, along with putting in place mechanisms for greater accountability and grievance redress.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CIC
Mains level: Paper 2- Challenges facing RTI
Context
Amidst renewed concern over its functioning across states, the Right to Information Act (RTI) is set to complete 17 years this October.
Issues facing RTI
- Backlog of appeals: Issues include a huge backlog of second appeals, lengthy wait time for hearings, hesitancy in posting penalties and increasing opacity in the working of the commissions.
- Â As on June 30, 2021, 2.56 lakh appeals were pending with 26 information commissions in the country.
- CICs downgraded rank: Any serious RTI query or one which concerns more than one government department requires intervention by higher officials, but it is the PIOs from junior ranks who attend hearings and are often clueless.
- Often, it requires a notice to higher authorities, in some cases, the secretary of the department, to elicit the right answer.
- Â With CICs downgraded in rank, there will be fewer and fewer notices served to the heads of departments and senior officers to appear and answer queries.
- Vacancies: The commissions have been plagued with vacancies, poor choice of commissioners, untrained staff and a non-cooperative set of public information officers (PIOs).
- Threat to some RTI activists: Apart from the PIOsâ general inexperience and unprofessionalism, comes the threat to some RTI activists who seek information to expose corruption.
- According to the Commonwealth Human Rights Initiative (CHRI), across India, 99 RTI activists have lost their lives, 180 assaulted and 187 were threatened since 2006.
- Political proclivity: The attitude of a few commissioners going public with their political proclivities is another cause for concern.
Way forward
- Training of officials: The Indian information law, rated as one of the strongest in the world, needs to be bolstered by raising awareness amongst the people and organising rigorous training of government officials.
- Code of conduct: A code of conduct must be evolved for the central and state information commissioners.
- It is imperative for the commissioners to keep a strict distance from government heads and officialdom.
- Â A strong political system is a must for the RTI regime to flourish.
- It is imperative to ensure freedom of the press and democratic institutions, punish errant officials and maintain complete autonomy of the information commissions, in the interest of the people and the nation at large.
Conclusion
As India emerges as a global power, the implementation of legislation like the RTI Act will be under the constant scrutiny of the comity of nations.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Schedule H drugs
Mains level: Paper 3- E-commerce for medical drug
Context
A draft law to replace the 1940 Drugs and Cosmetics Act with a Drugs, Medical Devices and Cosmetics Bill 2022 was uploaded by the Union health ministry in early July, seeking public comments and objections.
Major provisions of the Bill
 1] E-commerce for medical drugs
- Presently, online sales of medicines account for a fraction of the total pharma sales in India but are forecast to grow exponentially.
- The first major feature in the new Bill that affects consumers relates to e-commerce.
- Like all online shopping, the consumer gets the advantage of discounts and the comfort of shopping from home.
- In normal times, e-commerce can surmount three uniquely Indian disadvantages.
- Storage condition: The first relates to climatic conditions, which require medicines to be stored at below 30 degrees Celsius and 70 per cent relative humidity â unattainable in most of India.
- Â It can mandate establishing a back-end brick and mortar store for drug supply having good storage conditions.
- Compliance with regal provision: The second advantage of e-commerce could be fulfilling a legal requirement â providing a bill to the consumer and retaining one copy bearing the batch numbers and expiry dates of the drugs.
- In addition, the practice of accessing prescription drugs over-the-counter would reduce.
- In the case of e-commerce, registration of a pharmacy can require enrollment with the central and state drug control organisations and the practice of uploading a prescription from a registered medical practitioner can be enforced.
- Concern: Shopping for medical drugs on the internet could encourage overuse or incomplete use of drugs, increase dependency on habit-forming medicine â for example, sleep-inducing drugs or self-medication with products for weight loss, male enhancement, even treating mental illness â which is fraught with dangerous consequences.
- Â A greater focus on medical devices: The draft law also proposes according a greater focus on medical devices, which include thousands of engineered apparatuses like stents, joint implants, pacemakers, catheters, etc, which require quality regulation.
- Provision for advisory board: Rules for medical devices were notified in 2017 but now it is proposed to establish a statutory Medical Device Technical Advisory Board, with experts from the fields of atomic energy, science and technology, electronics, and related fields like biomedical technology to guide the process.
- This is a welcome move that will bring in the required expertise.
Issues not addressed in the Bill
- Mismanagement of trade: What the Bill does not address is the need to stop the continued mismanagement of the wholesale and retail drugs trade in India.
- Requirements for drug license not changed: Rule 64 (2) of the Drugs and Cosmetics Rules 1945 lays down that a wholesale drug licence can be given to a qualified pharmacist or one who has passed the matriculation examination or its equivalent or a graduate with one yearâs experience in dealing with drug sale.
- This is a relic from 80 years ago.
- When the country is reported to have over 7,00,000 pharmacists, this anachronism must be discarded.
- Â It is essential to introduce a binding and enabling provision to only licence qualified pharmacists and put the safety of millions of citizens before the self-preservation of a few thousand wholesalers and stockists.
Way forward
- There is need for ensuring digitisation of procurement, inventory control and accountability for dispensing drugs into a digital trail.
Conclusion
The debate should not be between e-commerce and retail sale. It should be between being compliant and non-compliant.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: TRIPS waiver
Mains level: Paper 3- WTO and India
Context
The 12th Ministerial Conference (MC12) of the World Trade Organization (WTO) was concluded recently. A cursory examination of the outcomes of the meeting leaves us in no doubt that the European Union (EU) and some other developed countries are the overwhelming winners, while India finds itself on the losing side.
Background of TRIPS waiver for Covid related treatment
- On October 2020, India and South Africa put forth a proposal seeking to temporarily suspend the protection of intellectual property rights such as patents, copyrights, industrial designs and trade secrets, so that the production of vaccines, therapeutics and diagnostics could be ramped up to help overcome the crisis and fight the COVID-19 pandemic.
- The opponents of the proposal, i.e,. Germany, the United Kingdom, Japan, Switzerland and the United States, found themselves on the wrong side of the global opinion on this issue.
- In June-July 2021, the U.S. gave its support to the proposal, but limited it to vaccines.
- Pushed into a corner, the European Union (EU) made a counter-proposal to undermine the proposal made by India and South Africa.
- This counter proposal provided a cosmetic simplification in certain procedural aspects of compulsory licensing in patent rules.
- By March 2022, India and South Africa were corralled into accepting the EUâs proposal.
- This formed the basis of the final outcome at the MC12.
Gain for EU at MC12
- The ministerial outcome on the so-called TRIPS waiver represents the biggest gain for the EU.
- The ministerial outcome adds very little to what already exists in the WTO rulebook.
- The final outcome is almost unworkable; a big public relations victory for the EU.
- Change in institutional architecture: In the name of WTO reform, the EU sought to make fundamental changes to the institutional architecture of the WTO.
- It also sought to give a formal role to the private sector in WTO.
- Environmental issues: The EU has also managed to create a window to pursue negotiations on issues related to trade and environment at the WTO, an issue of concern for many developing countries.
Disappointments for India
- No solution to public stockholding issue: India, the issue of a permanent solution to public stockholding was identified by the Indian Minister of Commerce and Industry as being its top most priority.
- Despite having the support of more than 80 developing countries, this issue has not found mention anywhere in the ministerial outcome.
- Â Instead, the WTO members have succeeded in diverting attention from Indiaâs interest by agreeing that food security is multi-dimensional, requiring a comprehensive solution.
- No taxing electronic transmission: India has also failed in many of its other objectives, such as securing the right to raise revenues by taxing electronic transmissions.
- In the area of fisheries subsidies, it gets two years to have suitable regulatory mechanisms in place to monitor fish catch and reporting.
- Â Although it has secured a temporary reprieve to provide subsidies for enhancing its fishing fleets, it will have to fight an uphill battle on this issue in future negotiations.
Conclusion
Overall, the path ahead for India at the WTO is difficult. Indiaâs negotiators need to undertake soul searching to learn lessons from the dynamics at the MC12, and make course corrections.
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Back2Basics: Public stockholding issue
- Under the WTOâs Agreement on Agriculture, government procurement for public stockholding programs is exempt from discipline if stocks are procured at current market prices.
- If procured at pre-announced administered prices, however, those outlays would potentially be counted toward a countryâs overall limits on trade-distorting support.
- Some developing countries are concerned that their procurement of food at fixed prices under these programs may push outlays to exceed allowed limits, thus depriving them of the necessary policy space to meet domestic food security requirements.
- In this context, India and other members of the G33 developing country coalition have called for WTO members to agree to a âpermanent solution,â following the 2013 Bali decision to exempt these programs from legal challenge under certain conditions.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Foreign exchange reserves
Mains level: Paper 3- Depreciation of rupee
Context
The Indian rupee has been in free fall. Some commentators have pointed out that it has fallen less against the US dollar than a lot of other currencies.
Significance of foreign exchange reserves
- Decline by 10 per cent: A large part of the current relative strength of the rupee vis-Ă -vis other currencies is due to the sale of dollars by the RBI â it has lost more than 10 per cent of its foreign reserves in the space of about nine months.
- Why country needs foreign exchange: A developing economy needs foreign exchange to finance its international transactions for both the current account (goods and services) and capital account (assets) transactions.
- Cost involved: The benefits of this stock are obvious, but there are also costs associated with the holding of these.
- Â The larger the stock, the more its reassuring value.
- Typically, because of their âliquidâ nature, the returns on these are low.
How RBI manages the foreign exchange reserves?
- How country accumulates foreign exchange reserves? A country can accumulate reserves by running current account surpluses that is, keeping its total expenditure below its gross national product, and/or by interventions in the foreign exchange markets.
- India (usually) runs a current account deficit.
- Its reserves are then accumulated solely through âsterilisedâ interventions.
- When foreign entities want to invest in Indian assets (stocks and debt), the RBI gives them rupees in exchange for foreign exchange.
- Mindful of the fact that this may cause a surge in inflation, the RBI then sells government bonds, sucking out the additional rupees.
- The foreign exchange reserves rise, and are matched by an increase in government bonds outstanding.
How outflow of foreign financial capital affects foreign exchange reserves?
- When capital inflows were taking place, the RBI accumulated foreign exchange and allowed some currency appreciation.
- As long as capital flows were strong, foreign reserves kept piling up and the currency (in real terms) was strong.
- Depreciation of rupee: In recent months, we have witnessed an outflow of foreign financial capital, with reserves falling and the rupee depreciating.
- International capital flows tend to be pro-cyclical, that is, they move with the world economic activity.
- Unlikely to increase export: A depreciation of our currency is unlikely to see our exports rise very much because the world income levels are down.
- Inflation: What this depreciation will cause is imported inflation and bankruptcies.
Analysing the RBI’s role
- Allowed outward remittances: The RBI threw caution to the winds and allowed outward remittances in foreign currency by Indian residents, with almost no questions asked (up to $2,50,000 annually).Â
- The RBI could have had a much larger supply of foreign exchange had they not generously handed out foreign currency to be frittered away.
- While they have not restricted outward remittances, they are trying to shore up reserves by making FCNR (B) and FRE deposits more attractive.
- It is not in any individualâs interest to bail out the RBI.
- The RBI has also committed to using reserves to ensure an orderly depreciation.
- Futility of RBI’s intervention: If the world financial markets want a depreciated rupee, the RBI’s intervention would not be able to prevent it.
- But in spite of this, the RBI, with its commitment to inflation targeting, would try to prevent a depreciation (because it causes the price of imported goods to rise).
- Possible impact on the poor: Having too open a capital account policy was always fraught with risks.
- When countries are confronted with a crisis, the IMF is asked to provide assistance.
- But assistance from IMF would involve a âstructural adjustmentâ, including cutting back on subsidies for the poor and vulnerable.
Conclusion
We are standing at the edge of a precipice, but, hopefully, the world will pull back in the nick of time. If not, it would be the chronicle of a death foretold.
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Back2Basics: FCNR(B) Account
- An FCNR ( Foreign Currency Non-resident) account is a type of term deposit that NRIs can hold in India in a foreign currency.
- FCNR (A) was introduced in 1975 to encourage NRI deposits.
- The Reserve Bank of India (RBI) guaranteed the exchange rate prevalent at the time of a deposit to eliminate risk to depositors.
- In 1993, the apex bank introduced FCNR (B), without exchange rate guarantee, to replace FCNR (A).
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: INSTC
Mains level: Paper 2- Significance of INSTC for India
Context
Last week, two 40-ft containers of wood laminate sheets crossed the Caspian Sea from Russiaâs Astrakhan port, entered Iranâs Anzali port, continued their southward journey towards the Arabian Sea, entered the waters at Bandar Abbas and eventually reach Nhava Shiva port in Mumbai.
Launch of INSTC
- The journey of containers signalled the launch of the International North South Transport Corridor (INSTC), a 7,200-km multi-modal transport corridor that combines road, rail and maritime routes connecting Russia and India via central Asia and Iran.
- The legal framework for the INSTC is provided by a trilateral agreement signed by India, Iran and Russia at the Euro-Asian Conference on Transport in 2000.
- Since then Kazakhstan, Belarus, Oman, Tajikistan, Azerbaijan, Armenia and Syria have signed instruments of accession to become members of the INSTC.
- Once fully operational, the INSTC is expected to reduce freight costs by 30% and journey time by 40% in comparison with the conventional deep sea route via the Suez Canal.
- The corridor is expected to consolidate the emerging Eurasian Free Trade Area.
Significance for India
- Geopolitical link: The INSTCâs launch provides missing pieces of the puzzle about Indiaâs refusal to condemn Russiaâs invasion of Ukraine.
- Indiaâs investment in the INSTC is exemplified by its involvement in Iranâs Chabahar port and the construction of a 500-km Chabahar-Zahedan railway line.
- Â The India Ports Global Limited, a joint venture between the Jawaharlal Nehru Port Trust and Kandla Port Trust, will develop the port along with Iranâs Aria Banader.
- IRCON International will contribute to constructing the railway line.
- A special economic zone around Chabahar will offer Indian companies the opportunity to set up a range of industries.
- The INSTC, thus, provides an opportunity for the internationalisation of Indiaâs infrastructural state, with state-run businesses taking the lead and paving the way for private companies.
Geopolitical significance for India
- Access to Afghanistan and Central Asia: Once completed, this infrastructure will allow India access to Afghanistan and central Asia, a prospect strengthened by the Taliban governmentâs support for the project.
- India can now bypass Pakistan to access Afghanistan, central Asia and beyond.
- North-South transport corridor: The INSTC can shape a north-south transport corridor that can complement the east-west axis of the China-led Belt and Road Initiative (BRI).
- Non-alignment to multi-alignment: Indiaâs founding role in both the INSTC and the Quad exemplify its departure from non-alignment to multi-alignment.
- The INSTC offers a platform for India to closely collaborate with Russia, Iran and Central Asian republics.Â
- That two of its partners are subject to Western sanctions hasnât prevented India from collaborating with the U.S., Japan and Australia as part of the Quad to create and safeguard a free and open Indo-Pacific.
Conclusion
As a transcontinental multi-modal corridor that aims to bring Eurasia closer together, the INSTC is a laudable initiative in its own right. That it helps India consolidate its multi-alignment strategy sweetens the deal.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: India's coal import
Mains level: Paper 3- Issues with India's power sector
Context
Across several states, the fiscal situation is becoming increasingly challenging. Yet, the common thread that runs through these deficits â state ownership and control â remains unaddressed.
State ownership: structural cause of India’s deficit
- Coal Indiaâs inability to raise production to meet growing demand contributed to the recent power crisis.
- The state-owned power distribution companies have failed to bring down losses despite many schemes and packages.
- The state control of these critical aspects of Indiaâs power chain is central to a higher current account deficit and growing fiscal risks at the state level.
Coal output fails to meet the demand
- From 2013-14, the Indian economy has grown by around 50 per cent (in real terms).
- But Coal India, which accounts for around 80 per cent of Indiaâs total coal production, was able to raise its output by just 34 per cent over the same period.
- Increased reliance on imported coal: Indiaâs coal imports (thermal and cooking) rose to a staggering 230.3 million tonnes in 2020-21, up 37 per cent from 168.5 million tonnes in 2013-14.
- Coal imports for thermal power alone have more than doubled in the first quarter, compared to the same period last year.
- To put this in perspective â the value of coal imports in just the first three months of this year is likely to be around half of what was imported in all of last year.
- Increase in current account deficit: This growing reliance on coal imports (along with crude and gold) is at the root of the countryâs widening current account deficit.
- An inability to ramp up production, to forecast demand accurately, as every episode of coal shortage over the years has exposed, is the hallmark of the coal sector that is still largely the preserve of a public sector monopoly.
Problem of DISCOMS
- No improvement in financial and operational issues: Despite repeated attempts to turn around their financial and operational positions, on key metrics, the divide between the public and private sector discoms is deepening.
- In 2019-20, public sector discoms lost Rs 0.72 per unit of power sold, while private discoms made Rs 0.20 per unit.
- High AT&C losses: Similarly, in 2019-20, the AT&C losses (due to operational inefficiencies) for state discoms were pegged at 21.7 per cent, while for the private sector, losses were at 8 per cent.
- With deteriorating finances, the net worth of all public sector discoms put together stands at a negative Rs 61,757 crore, while for the private sector, it is a positive Rs 24,965 crore.
- There have been several attempts to rescue state discoms.
- In the early 2000s, the scheme for repayment of SEB dues amounted to Rs 41,473 crore.
- In 2012, the financial restructuring plan added up to Rs 1.19 lakh crore.
- In 2015, UDAY involved a transfer of Rs 2.01 lakh crore to state government balance sheets.
- Notwithstanding various schemes to turn around their finances, the total debt of all discoms put together stood at Rs 5.14 lakh crore at the end of 2019-20.
- Of this, Rs 4.87 lakh crore is owed by state discoms.
- Impact on entire power chain: A deterioration in the financial position of discoms means that their dues to power generating companies start mounting, which in turn delay payments to coal miners, affecting the financial stability of the entire power chain.
Declining cross-subsidisation
- As tariffs charged by discoms are much higher than the cost of alternatives, a sizeable part of non-agricultural sales of discoms (industrial and commercial consumers) have already shifted towards captive and solar.
- Â And with the ministry of power recently reducing the threshold for green energy open access, more and more consumers will increasingly opt out.
- This would mean that discom losses will rise as cross subsidisation from commercial and industrial consumers will decline, increasing their dependence on state subsidies.
- In 2019-20, the total state subsidy claimed and released was around Rs 1.1 lakh crore or 17 per cent of total discom revenue.
- This will only increase down the line, making future bailouts even more fiscally challenging.
Conclusion
Tackling these deficits requires addressing the issue of government control over critical aspects of Indiaâs energy sector. Without shifting to market-determined prices â reforms are ultimately about price â little headway is likely to be made.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Issues with PMLA
Context
The Supreme Court has upheld the constitutional validity of the provisions of the Prevention of Money Laundering Act (PMLA), calling it a âunique and special legislationâ and underlining the powers of the Directorate of Enforcement (ED) to hold inquiries, arrest people and attach property.
Prevention of Money Laundering Act (PMLA)
- PMLA, 2002 is an Act of the Parliament of India enacted by the NDA government to prevent money laundering and to provide for confiscation of property derived from money laundering.
- It was enacted in response to Indiaâs global commitment (including the Vienna Convention) to combat the menace of money laundering.
- PMLA and the Rules notified there under came into force with effect from July 1, 2005.
- The act was amended in the year 2005, 2009 and 2012.
Objectives of PMLA
The PMLA seeks to combat money laundering in India and has three main objectives:
- To prevent and control money laundering.
- To confiscate and seize the property obtained from the laundered money; and
- To deal with any other issue connected with money laundering in India.
Issues with the PMLA
- Opacity: The Enforcement Case Report (the analogue of an FIR) is not shared with the accused.
- Nor are the full grounds of arrest shared with you.
- Bail cannot be granted without hearing the prosecution and you are required to prove your innocence to get bail.
- Lack of clarity in definition: The definition of crime under this Act is elastic.
- The sovereign has immense latitude to define what counts as the relevant crime.
- It can also in a classic instance of rule by law change the presumption of innocence.
- Lack of safeguard: The list of crimes included overrides similar crimes in other parts of the law.
- The code has an exceptional procedure of its own that can trump the safeguards of the Criminal Code of Procedure.
- In theory, the law provides safeguards against attaching properties, but those safeguards are weak and do not allow for even reasonable exceptions that might be necessary for your dignity or continuing with your business or livelihood.
- Mere possession of the proceeds of a crime, without any surrounding consideration of how one came to be in possession of the proceeds, makes it an offence.
- That the state officials are not classed as police. But they, in some respects, have even more power than the police.
- Use of Money Bill route: The law itself has been enacted by using the controversial Money Bill route.
- Low conviction rate: The conviction rate under this law is very low, less than 0.5 per cent.
- Misuse of law: The stringent provisions and vagueness in definitions in the law make it susceptible to misuse against a political opponenet.
- International context: Post 9/11, there was concern with terrorist financing and arguably many international treaties actually weakened, rather than strengthened, individual rights protections.
- The goal of international treaties is laudable.
- But the rhetoric of international treaties is often used to override domestic rights safeguards.
Conclusion
There is a need for a review of the various provision and definitions in the law and their utility.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: International Tiger Day
Mains level: Paper 3- Tiger conservation in India
Context
India is now reporting increased tiger numbers, and a recent International Union for Conservation of Nature assessment suggests that tiger numbers have increased by 40% since 2005. This is cause for celebration. But is the rise in tiger numbers enough to prevent their extinction?
Relations between distribution and genetic variation
- Decades of research in ecology and evolution suggest that numbers are critical to avoid extinction.Â
- Populations that are smaller than 100 breeding individuals have a high probability of extinction.
- At the same time, for populations to persist, they should be part of larger landscapes with other such populations that are connected.
- This is because small populations are subject to chance/random events.
- These chance events may cause them to lose advantageous genetic variants, while other, detrimental genetic variants might increase in frequency.
- This process is called genetic drift.
- Individuals in small populations are more likely to be related, leading to inbreeding.
- This exposes the many slightly disadvantageous genetic variants that are present in all genomes.
- When expressed together, these detrimental genetic variants cause inbreeding depression, and reduced survival and reproduction of inbred individuals.
- A closer look at the distribution of tigers across their range shows that most tiger âpopulationsâ are smaller than 100.
- This raises a question why are we not seeing extinctions happening more often? Is this because tiger populations are connected to each other?
Research findings about movement of tigers
- One way to answer the question about not so frequent extinction is to use movement data sourced from radio-collared tigers, often difficult to come by for a rare and endangered species.
- Alternatively, tigers can be genetically sampled using their excreta/scat, hair and other biological samples from different tiger reserves and analysed in a laboratory.
- Genetic variants in tiger DNA can be identified and analysed and compared across tiger reserves.
- Genetic variation in landscape with connectivity: Sets of tiger reserves that show shared genetic variation are well connected â the inference is that the intervening landscapes facilitate connectivity or movement.
- On the flip side, sets of tiger reserves that share less genetic variation must have barriers or landscapes that impede movement and connectivity.
- Most land-use types were not too bad for tiger connectivity, including agricultural fields.
- However, the presence of built-up areas and high traffic roads greatly impeded tiger movement.
- Results showed that extinction could be avoided if corridors were safeguarded.
- In summary, as long as we manage landscapes outside tiger reserves to allow tiger movement, and protect prey and tigers inside tiger reserves, tigers are sure to survive in landscapes such as central India.
Genetic changes in isolated tiger population
- Black tigers were found only in the Similipal tiger reserve in Odisha.
- Genome sequences of a litter of zoo tigers that included pseudo-melanistic cubs revealed that a single spelling mistake (or mutation) in a specific gene causes these tigers to look this way.
- Pseudo-melanistic or black tigers found in Odisha has demonstrated the genetic effects of isolation.
- Results of the research pointed to genetic drift, or random events that have lead to this genetic variant that causes pseudomelanistic coat colour becoming common only in Similipal.
- On the other side of India, in Rajasthan, genome sequences from wild tigers reveal that individuals in the Ranthambore tiger reserve show inbreeding.
- In short, we are seeing the genetic effects of isolation and small population size in wild tigers at some locations.
Way forward
- Focus on connectivity: While we celebrate the recovery of tiger populations only by looking at numbers, we must not lose sight of other factors that are critical to their continued survival, such as connectivity.
- Special attention is needed for populations that are becoming isolated and facing the genetic consequences of such isolation.
- The future of such populations may depend on genetic rescue or even the introduction of novel genetic variants.
Conclusion
We are fortunate that novel genome sequencing technology provides an opportunity to understand tigers much better in the context of their conservation. The future of tigers will require a âdialogueâ between such data and management strategies in order to ensure their survival. India is lucky to have so many wild tigers and we must work together to save them.
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Back2Basics: Pseudo-melanism
- Tigers have a distinctive dark stripe pattern on a light background of white or golden.
- A rare pattern variant, distinguished by stripes that are broadened and fused together, is also observed in both wild and captive populations.
- This is known as pseudo-melanism, which is different from true melanism, a condition characterised by unusually high deposition of melanin, a dark pigment.
- While truly melanistic tigers are yet to be recorded, pseudo-melanistic ones have been camera-trapped repeatedly, and only, in Simlipal, a 2,750-km tiger reserve in Odisha, since 2007
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: FRBM Act
Mains level: Paper 2- Freebies and related issues
Context
In a recent address, the prime minister shared his anguish on what he called the ârevdiâ or the freebies culture.
Populist policies and its impact over the states’ finances
- What are freebies? N K Singh defined freebies as âsomething that is given to you without having to pay for them, especially as a way of attracting your support for or interest in something.â
- A recent report of the RBI on statesâ finances highlighted the perilous condition of statesâ finances and enhanced debt stress on account of flawed policies.
- Â Nothing undercuts more irresponsibly Indiaâs abiding international and national commitments than the perils of this reckless populism.
Factors that need to be considered in devising welfare policies
1] Quest for sustainable development
- The initiatives undertaken at COP21 in Paris, the International Solar Alliance and subsequently at the COP26 in Glasgow represent Indiaâs national consensus to forge a path of growth geared towards intergenerational equity and to exponentially increase development.
- Our ability to adhere to this commitment depends on two other commitments.
- 1] An increase in the percentage of renewable energy in our energy consumption.
- While subsidies are being promised in one form or the other by way of free electricity, the deteriorating health of state distribution companies seriously undercuts their financial viability.
- Lowering the price for some consumers, offset through overcharging industrial and commercial contracts, reduces competitiveness, ushers slower growth both in incomes and employment.
- 2] The inability of discoms to actively encourage solar power is stymied by their financial condition and the inability to evolve tariff structures.
- Â Regulatory capture, a fixation on unrealistic tariffs and cross-subsidy in energy utilisation prevent a credible coal plan, which is central to our energy planning.
2] Challenges in providing basic facilities
- The government seeks to address the challenge of inequity by ensuring access to a wide range of basic facilities.
- These include banking, electricity, housing, insurance, water and clean cooking fuel, to mention a few.
- Removing this inequity to access helps boost the productivity of our population.
3] Issue of access
- Benefits under various welfare schemes such as PM Awas Yojana, Swachh Bharat Mission and Jal Jeevan Mission have eliminated the biggest barrier for citizens â the exorbitant upfront cost of access.
- Moreover, they are leading to irreversible empowerment and self-reliance.
- For instance, a house built under the PM Awas Yojana is a lifelong asset for the beneficiary household that cannot be taken back by any government.
4] Use of technology in direct benefit transfer
- Identification of beneficiaries through the SECC and prioritisation based on deprivation criteria has enabled the government to assist those who need it the most.
- Governments that end up taking the shortcut of universal subsidies or freebies often end up ignoring the poor and transferring public resources to the affluent.
5] Expenditure prioritisation
- The next issue that needs to be considered is of expenditure prioritisation being distorted away from growth-enhancing items, leading to intergenerational inequity.
- Investors, both domestic and foreign, and credit rating agencies look to macro stability in terms of sustainable levels of debt and fiscal deficit.
- After years of fiscal profligacy, we returned to the path of fiscal rectitude in 2014.
- The last time such an effort was made was by enacting the first FRBM Act on August 26, 2003.
6] Impact on future of manufacturing and employment
- The next factor that need to be considered is the debilitating effect of freebies on the future of manufacturing and employment.
- Freebies lower the quality and competitiveness of the manufacturing sector by detracting from efficient and competitive infrastructure.
- They stymie growth and, therefore, gainful employment because there is no substitute for growth if we wish to increase employment.
Conclusion
The poor state finance position should serve as a timely reminder to those promising fiscally imprudent and unsustainable subsidies.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GDP
Mains level: Paper 3- Need for overhaul of India's economic performance measurement framework
Context
It is then apparent that GDP growth matters to the average Indian only if it can generate good quality jobs and incomes for them.
Background
- Nobel laureate Simon Kuznets, who conceived of GDP as a measure of economic performance, never intended it to be the single-minded economic pursuit for a nation that it has now become, and warned repeatedly that it is not a measure of societal well-being.
- Irrefutably, GDP is an elegant and simple metric that is a good indicator of economic progress which can be compared across nations.
- But a compulsive chase for GDP growth at all costs can be counter-productive, since it is not a holistic but a misleading measure.
- The excessive obsession over GDP growth by policymakers and politicians can be unhealthy and dangerous in a democracy.
- If growth in GDP does not translate into equivalent economic prosperity for the average person, then in a one person-one vote democracy, exuberance over high GDP growth can backfire and trigger a backlash among the general public.
- Global phenomenon: Sri Lankaâs mass uprising and peopleâs revolution can partly be explained through this prism of the structural break between headline GDP growth and economic prosperity for the people.
- The U.S. today produces fewer new jobs for every percentage point of GDP growth than it did in the 1990s.
- China produces one-third the number of new jobs today than it did in the 1990s for every percentage of its GDP growth.
Employment intensity of economic growth
- Data of âemployment in public and organised private sectorsâ published by the Reserve Bank of India (RBI) shows that in the decade between 1980 and 1990, every one percentage point of GDP growth (nominal) generated roughly two lakh new jobs in the formal sector.
- In the subsequent decade from 1990 to 2000, every one percentage point of GDP growth yielded roughly one lakh new formal sector jobs, half of the previous decade.
- In the next decade between 2000 and 2010, one percentage point of GDP growth generated only 52,000 new jobs.
- The RBI stopped publishing this data from 2011-12.
- In essence, one percentage of GDP growth today yields less than one-fourth the number of good quality jobs that it did in the 1980s.
- It is amply clear that the correlation between formal sector jobs and GDP growth has weakened considerably.
Implications of decline in GDP growth’s contribution to job creation
- Irrelevant as a political measure: GDP growth may be an important economic measure, but it is becoming increasingly irrelevant as a political measure, since it impacts only a select few and not the vast majority.
- Indicates changed nature of economic development: This divorce of GDP growth and jobs is both a reflection of the changed nature of contemporary economic development with emphasis on capital-driven efficiency at the cost of labour and GDP being an inadequate measure.
- Political backlash: The perils of the obsession over GDP growth will be felt by politicians who have to answer voters on lack of jobs and incomes despite robust headline growth.
- Voter disenchantment over the economy not working for them is already rife in many democracies across the world that have catalysed agitations and social disharmony.
- Electoral outcomes in favour of extreme positions in mature democracies such as the U.S., the U.K., France and Germany in the last decade may partly be a reflection of votersâ sense of deception over economic gains.
Way forward
- It is time for Indiaâs political leaders to not be drawn into argument over GDP growth every quarter and instead clamour for an overhaul of Indiaâs economic performance measurement framework to reflect what truly matters to the common person.
Conclusion
GDP growth has turned into a misleading and dangerous indicator that portrays false economic promises, betrays peopleâs aspirations and hides deeper social problems.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: IBC
Mains level: Paper 3- Point of trigger for insolvency
Context
In the recent judgement the Supreme Court held that the National Company Law Tribunal (NCLT) cannot admit an insolvency application filed by a financial creditor merely because a financial debt exists and the corporate debtor has defaulted in its repayment.
Why the point of trigger is important in insolvency law
- A critical element for any corporate insolvency law is the point of trigger.
- The law must clearly provide the grounds on which an insolvency application against a corporate debtor should be admitted.
- If there is any confusion at this stage, precious time could be wasted in litigation.
- That would cause value destruction of the distressed business.
- On the other hand, if the law is clear and litigation can be minimised, the distressed business could be resolved faster.
- Its value could be preserved.
- And all stakeholders collectively would benefit.
- Evidently, objective legal criteria for admission are critical for an effective corporate insolvency law.
Determining insolvency and implications of the SC ruling
- The balance-sheet test is one method for determining insolvency at the point of trigger.
- This test, however, is vulnerable to the quality of accounting standards.
- Thatâs why the Bankruptcy Law Reforms Committee did not favour this test in the Indian context.
- Instead, it recommended that a filing creditor must only provide a record of the liability (debt), and evidence of default on payments by the corporate debtor.
- This twin-test was expected to provide a clear and objective trigger for insolvency resolution.Â
- The Supreme Courtâs latest ruling is likely to radically alter these expectations.
Implications of the Supreme Court ruling
- Resisting the admission by debtor: Now due to the Supreme Court ruling, even if the NCLT is satisfied that a financial debt exists and that the corporate debtor has defaulted, it may not admit the case for resolution if the corporate debtor resists admission on any other grounds.
- Corporate debtors are likely to use this precedent to the fullest to resist admission into IBC.
- Risk of value destruction due to delay: The likely outcome would be more litigation and delay at the admission stage, enhancing the risks of value destruction in the underlying distressed business.
Conclusion
In all fairness, the Supreme Court has been extremely pragmatic in its interpretation and application of the IBC. Even in the recent ruling, the court has rightly cautioned that the NCLT should not exercise its discretionary power in an arbitrary or capricious manner. Yet, this decision may have opened a Pandoraâs box. Policymakers would be well-advised to take note before history starts repeating itself.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: LEO
Mains level: Paper 3- 5G network with LEO satellites
Context
As terrestrial 5G mobile networks are being rolled out across countries, there is a renewed interest in integrating Non-Terrestrial Networks.
SatNets for 5G
- Satellites and terrestrial networks have always been considered two independent ecosystems, and their standardisation efforts have proceeded independent of each other.
- The primary non-terrestrial network that is being considered is the low latency Low Earth Orbit (LEO) satellite networks (SatNets), as a complement to terrestrial networks.
- Towards this, Starlink, operated by the Elon Musk-owned SpaceX, and OneWeb, promoted by Bharti Global, have launched about 2,500 and 648 LEO satellites respectively at an altitude of about 1,200 km with the objective of promoting global broadband connectivity.
- There are other players such as Reliance Jio in a joint venture with Luxembourg-based SES and Amazonâs Project Kuiper.
Benefits of using SatNets
- 1] Service continuity in emergency: service continuity to provide seamless transition between terrestrial networks and SatNets in case of public safety, disaster management and emergency situations;
- 2] Providing service in remote area: Service ubiquity to provide 5G services in unserved and underserved areas of the world, thereby bridging the digital divide;
- 3] Scalability: Service scalability that utilises the unique capabilities of SatNets in multicasting and broadcasting similar content over a large geographical area.
- 4] Service to in-motion user: The LEO SatNets can provide service not only to stationary but also to in-motion users.
- 5] Low latency over long distance: Wireless communications through LEO satellites over long distances is proven to be 1.47 times faster than communication over the same distance through terrestrial optic fibre. It is this advantage along with global coverage that provide a strong use case for LEO SatNets to complement terrestrial optic fibre networks.
- SatNet in standardisation: In view of the above advantages, standard-setting organisations such as the Third Generation Partnership project (3GPP), comprising telcos and equipment manufacturers around the world, started integrating SatNets in the standardisation process.
Measures by the government
- Realising the advantages, the Government, in its National Digital Communications Policy 2018, has indicated the development of an ecosystem for local manufacturing of satellite communication systems and promoting participation of private players for the strengthening of satellite communication infrastructure in the country.
- Accordingly, the New Space India Limited (NSIL), a public sector enterprise, was established in 2019 to re-orient space activities from a âsupply drivenâ model to a âdemand drivenâ model, thereby ensuring optimum utilisation of the space assets.
- The Department of Space also established in 2020 a new regulatory body named the Indian National Space Promotion and Authorisation Centre (IN-SPACe).
- IN-SPACe is intended to provide a level playing field for private companies to use Indian space infrastructure.
Issues and challenges
- Allocation of frequency: Issues will involve addressing issues around frequencies to be allocated for satellite broadband, the methodology of allocation, the relatively higher cost of consumer equipment and the placement and interconnections of SatNets with terrestrial public landline/ mobile networks at the ground stations
- Cost: The other major challenge in LEO SatNets is the cost of user terminal and access charges to the end users.
- A recent research analysing both Starlink and OneWeb concludes that the standalone LEO SatNets have a distinct cost advantage only if the density is less than 0.1 person per square km compared to terrestrial broadband networks.
- Hence it is to the advantage of LEO SatNet providers to integrate their networks with terrestrial 5G networks to improve the cost economies.
Conclusion
All these, along with the proposed revisions to the Satellite Communications Policy of the Government, will provide the required fillip to LEO SatNets to become an integral part of the communication infrastructure of the country.
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Back2Basics: LEO satellites
- LEO satellites orbit between 2,000 and 200 kilometers above the earth. LEO satellites are commonly used for communications, military reconnaissance, spying and other imaging applications.
- A low earth orbit (LEO) satellite is an object, generally a piece of electronic equipment, that circles around the earth at lower altitudes than geosynchronous satellites.
- Satellites made for communications benefit from the lower signal propagation delay to LEO.
- This lower propagation delay results in less latency.
- Being closer to the earth has an obvious benefit for many types of earth observational satellites by resolving smaller subjects with greater detail.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Monkeypox
Mains level: Paper 2-Challenges of zoonotic diseases
Context
Monkeypox was previously limited to the local spread in central and west Africa, close to tropical rainforests, but has recently been seen in various urban areas and now in more than 50 countries.
About monkeypox
- A virus belonging to the poxviruses family causes a rare contagious rash illness known as monkeypox.
- This zoonotic viral disease (a disease transmitted from animals to humans) has hosts that include rodents and primates.
- It is a self-limiting disease with symptoms lasting two to four weeks and a case fatality rate of 3-6 per cent.
- Symptoms: A skin rash on any part of the body could be the only presenting symptom.
- Swollen lymph nodes are another distinguishing feature. Aside from these, other symptoms of a viral illness include fever, chills, headache, muscle or back aches, and weakness.
- Mode of transmission: Touching skin lesions, bodily fluids, or clothing or linens that have been in contact with an infected person can result in transmission.
- Itâs also worth noting that monkeypox does not spread from person to person through everyday activities like walking next to or having a casual conversation with an infected person.
- Treatment: Monkeypox is mostly treated by managing symptoms and preventing complications if it is diagnosed.
- Â In the minor proportion who are immunocompromised, complications can occur; pulmonary failure was the most common complication with a high mortality rate.
Containment Measures
- Because symptoms usually appear 5-21 days after exposure, people with rashes, sores in the mouth, rash, eye irritation or redness, or swollen lymph nodes should be monitored.
- When symptoms appear, it is critical to isolate the infected from other people and pets, cover their lesions, and contact the nearest healthcare provider.
- It is also critical to avoid close physical contact with others until instructed to do so by our healthcare provider.
- It is preferable to use home isolation whenever possible.
- Â Priority should be given to educating grassroots workers about symptoms, specimen collection, disease detection, acquiring sample collection equipment, and maintaining cold storage of specimens.
- Â Increased surveillance and detection of monkeypox cases are critical for controlling the diseaseâs spread and understanding the changing epidemiology of this resurging disease.
- Preventive health measures, such as avoiding infected animal or human contact and practising good hand hygiene, are the best option.
Vaccines and drugs
- In the US, pre exposure vaccination with JYNNEOSÂŽ is available to healthcare workers and lab workers exposed to this group of poxviruses.
- The smallpox vaccine is 85 percent effective against the disease.
- Another vaccine, ACAM2000, is a live vaccinia virus vaccine that is otherwise recommended for smallpox immunisation and can also be used for high-risk individuals during monkeypox outbreaks.
- In addition, Tecovirimat, an antiviral drug used to treat smallpox, is recommended for monkeypox.
- Challenges: Smallpox vaccination programmes have been discontinued for the past 50 years, resulting in a scarcity of effective vaccines.
- There are approved drugs and vaccines, but they are not widely available to scale up controlling monkeypox.
Why WHO declared it as international concern?
-  The increase in monkeypox cases in a short span of time in many countries necessitated the declaration of public health emergency of international concern (PHEIC) and additional research studies.
- It is unclear whether the recent sudden outbreaks in multiple countries result from genotypic mutations that alter virus transmissibility. SARS-CoV-2 and monkeypox virus co-infection can alter infectivity patterns, severity, management, and response to vaccination against either or both diseases.
- As a result, there is a need to improve diagnostic test efficiency.
Way forward
- Plan for pandemic preparedness: This is not the last such difficulty we will face, as the world is still witnessing more such public health crises.
- Zoonotic diseases are caused by various factors, including unchecked deforestation, climate coupled with a failure to prioritise public health, poverty, and climate change.
- Instead, a robust plan for pandemic preparedness should be accelerated, guided by a single health agenda.
- Â The world is yet to recognise emerging and re-emerging infectious diseases as a genuine threat.
- The immediate priority is to strengthen the surveillance infrastructure, including hiring public health professionals and field workers who can participate in outbreak detection and response during many future PHEICs.
Conclusion
Without prioritising public health strengthening, the threat of new and re-emerging infectious diseases, as well as the enormous social and economic challenges that accompany them, is real and grave.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Input tax credit
Mains level: Paper 3- Next stage of reforms in GST
Context
India has completed five years under the GST regime.
How GST has performed so far
- Before the GST, there were multiplicity of the Centre and state levies that masked the actual incidence of tax on products, the debilitating effects of the entry tax and the uncertainty of tax rates.
- Today, in contrast, we have a single tax across the country combined with a stability in rates and a common technology platform in the form of a GSTN.
- Record number of registrants: The ease of payments has improved over time with the technical glitches having been slowly sorted out, leading to a record number of GST registrants â increasing from 1.08 crore in April 2018 to 1.36 crore in 2022.
- Â The revenue gains have been significant.
- If we factor in the three-percentage point decline in the incidence of GST duty from 14.8 to 11.8 per cent as suggested by the RBI, the actual proportion in 2021-2022 would have been 7.4 per cent of the GDP (according to a recent article by Arvind Subramanian and Josh Felman).
What were the changes made to ensure the stricter compliance
- The above improvement can be traced to stricter compliance flowing from three factors.
- 1] Input credit only after supplier uploads invoice: Denial of input credit to the buyer without the supplier uploading the invoice.
- 2] The introduction of e-invoicing.
- 3] Third the introduction of e-waybills for transporters for value exceeding Rs 50,000 per consignment.
- Greater coordination between CBIC and CBDT: Another factor is greater coordination between the Central Board of Excise and Customs (CBIC) and Central Board of Direct Taxes (CBDT) in compliance verification.
Changes needed
- 1] Provisions for unregistered GST suppliers: The micro, small and medium enterprises (MSME) sector has been affected by the GST reforms because the large units have been reluctant to buy from them in the absence of input duty credit.
- An important measure here would be to amend the law to provide that all units buying from unregistered GST suppliers would have to pay duty on a reverse charge basis.
- 2] Rate rationalisation: While the revenue gains have come through better compliance, the next surge in GST revenues will have to come from an increase in the average incidence of GST duties.
- This will require a combination of measures â phasing out of exemptions, raising of the merit rate from the present level of 5 per cent and merging the 12 per cent rate with the standard rate, whether to 16 per cent or 18 per cent.
- 3] Inclusion of fuels and real estate: Including natural gas/ATF under GST should be considered.
- Further reforms in the factor markets â land, real estate and energy â would require their inclusion in the GST.
- This is essential because while the economic reforms of the 1990s restructured the product market, the factor market reforms were incomplete.
- 4] Creation of federal institution: We need to create another institution in the form of a GST state secretariat that can bring together senior officers from the Centre and states in an institutional forum registered under the Society Act.
- This forum could also provide a common point of contact for trade and industry to redress the grievances on non-policy matters.
Conclusion
As GST enters its sixth year journey, the changes suggested above will fine tune it to propel India towards $5 trillion economy.
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Back2Basics: GST Input Tax Credit
- Input Tax Credit means claiming the credit of the GST paid on purchase of Goods and Services which are used for the furtherance of business.
- The Mechanism of Input Tax Credit is the backbone of GST and is one of the most important reasons for the introduction of GST.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: I2U2
Mains level: Paper 2- Changes in global order
Context
Adrift at the end of the 20th century, the world of the 21st century is proving to be highly chaotic.
Lack of strong European leadership
- Europe has been undergoing several major changes in recent months
- Germany, which has steered European politics for almost two wdecades under Angela Merkel, now has a Chancellor (Olaf Scholz) who has hardly any foreign policy experience.
- Without Germanyâs steadying hand, Europe would be virtually adrift in troubled waters.
- Emmanuel Macron may have been re-elected the President of France, but his wings have been clipped with the Opposition now gaining a majority in the French National Assembly.
- Â The United Kingdom is in deep trouble, if not disarray.
- Consequently, at a time when actual and moral issues require both deft and firm handling, Europe appears rudderless.
- Economic impact: Compounding this situation is the negative economic impact of the war in Ukraine.
- What is evident already is that apart from the spiralling cost of energy, food and fertilizers, quite a few countries confront the spectre of food scarcity given that Ukraine and Russia were generally viewed as the granaries of the world.
- Apart from this, nations do face several other problems as well, including, in some cases, a foreign exchange crisis.
- The instruments employed by the West against Russia, such as sanctions, have not had the desired impact as far as the latter is concerned.
Growing Russia-China closeness and its implications for Indo-Pacific
- The situation in Europe is still to be decided, but what is also becoming obvious is that outside Europe, the conflict is beginning to take on a different dimension, leading to the emergence of new patchworks of relationships.
- Chinaâs growing influence in the Pacific region, including in the Indo-Pacific, and further strengthened by the entente with Russia, may hardly be a by-product of the Ukraine-Russia conflict, but it has induced fresh energy into a possible conflict between two rival power blocs.
- Asia unwilling to take sides: Understanding the changing nature of relationships in Asia, and considering that most Asian nations appear unwilling to take sides in the event of a conflict, is important.
- No unity of purpose: Unlike the unity and the strength displayed by European nations â there is no evidence of any such unity of purpose in the event that China was to launch a conflict with Taiwan.
Challenges for India
- India cannot ignore the situation created by the stronger bonds between Russia and China.
- Uncertainty about Russia: India will need to determine whether Russia can be expected to play a role as a âtrusted friendâ of Indiaâs.
- Again, it would be too much to hope that in dealing with China, India can expect the same kind of support it may need from the Quad.
- China sidelining India: China, however, seems intent on establishing its dominance and also sidelining India in Asia, which New Delhi would have discerned in the course of the virtual BRICS Summit hosted by China in June.
- Afghanistan challenge: Apart from China, India also urgently needs to come to terms with a Taliban Afghanistan.
- Sri Lanka Challenge: At this time, the democratic upsurge in Sri Lanka presents India with a fresh set of problems.
- In a situation where ârageâ and âangerâ are the dominant sentiments, there is every reason for concern that even governments that have maintained a âhands-offâ relationship could become targets of the new forces emerging in Sri Lanka.
Major developments in West Asia
- The Abraham Accords in 2020, which brought about the entente between the United Arab Emirates and Israel, has been the harbinger of certain new trends in the tangled web of relationships among countries of West Asia.
- But even as the U.S.âs relations with Arab nations in West Asia appear to weaken, Russia and China are beginning to play key roles, with Iran as the fulcrum for establishing new relationships.
- China continues to steadily build on its connections with the region, and with Iran in particular.
- How India is dealing with the situation: India has been making steady progress in enlarging its contacts and influence in West Asia.
- Â While the India-Israel relationship dates back to the 1990s, the India-UAE relationship has blossomed in the past couple of years.
- India-Iran relations, however, seem to have reached a stalemate of late.
- Issues with I2U2: India has joined a U.S.-based group, the I2U2, comprising India, Israel the UAE and the U.S.
- Details of the new arrangements are unclear, but it is evident that the target is Iran, as China is for the Quad, injecting yet another element of uncertainty into an already troubled region.
Implications for nuclear deterrence
- The argument being adduced is that a wide gap exists today in regard to China and Indiaâs nuclear deterrent capabilities, and implicitly blames India for its voluntary ban on testing and its âno-first-useâ doctrine from making progress in this arena.
- What is also implied is that India could overcome the lacuna by seeking the assistance of western nations which have such capabilities and knowledge.
- Way forward for India: It is important for India to guard against such pernicious attempts at this time to undo its carefully negotiated and structured nuclear policy and doctrine, and be inveigled into any anti-China western move on this front.
Conclusion
Geopolitical experts in the West confine their findings at present solely to the impact of the Russia-Ukraine conflict, believing that this alone would determine not only war and peace but also other critical aspects as well. Significant developments are also taking place in many other regions of the globe, which will have equal if not more relevance to the future of the international governance system.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Digital economy and policy formulation challenges
Context
Hyperactivity in the digital regulatory space in India in the form of policies, rules and guidelines signals the accelerated growth of the digital ecosystem which needs regulatory nurturing.
Recent policy measures related to digital ecosystem
- The Ministry of Electronics and Information Technology (MeitY) has announced the draft amendment to the IT Rules 2021 (June 2022).
- The draft India Data Accessibility and Use Policy (February 2022),
- National Data Governance Framework Policy (May 2022) and the new cyber security directions (April 2022).
- Besides these, the most awaited and critical e-commerce policy and the Data Protection Bill, both of which have been in the making for at least a few years now, are likely to be announced soon.
- This hyperactivity signals the accelerated growth of the digital ecosystem which needs regulatory nurturing.
- The government has recently invited stakeholders to an open house discussion on the proposed changes to the IT Rules.
Participation of Big Tech platforms and other stakeholders in policy discussions
- Various aspects of digital economy: Governments have been pushed to respond to myriad aspects of the digital economy â from financial sector regulation to anti-trust to data privacy.
- With so much at stake, Big Tech platforms have upped their advocacy by hiring qualified professionals and funding empirical research, not only in India but also across the world.
- Google, Amazon, Facebook, Twitter and the likes are all actively engaged in policy discussions, either directly or through third parties to put forth a point of view.
- Similarly, start-ups, think tanks, civil society organisations and academics invested in the issues of the digital economy either as users or as observers contribute to the policy discourse.
Who is missing?
- Indian origin multinational corporations â the Tatas, Reliance, Aditya Birla Group, Godrej, ITC, Bajaj, and Hero â have collectively contributed to the countryâs development.
- While these may not be quintessential digital companies, except for Reliance Jio, many are working towards adopting digital technologies for manufacturing, distribution, and client service.
- Many companies now have online distribution channels that retail through intermediary platforms or their own websites.
- The Tatas have taken the plunge into e-commerce, first with Tata Cliq and recently with Neu.
- Â Despite this, these Indian MNCs are distant from conversations on these landmark policies that will determine the future of Indian commerce.
Government relations and outreach functions of MNCs
- Government relations and outreach functions have always been important to big businesses.
- At what point and in what manner MNCs interact with the government will of course vary.
- Using a sector-specific example, all telecom companies in India committedly participate in TRAIâs open houses, industry deliberations and written submissions so that they can nudge policymakers toward industry-friendly decision-making that sits well with overall growth objectives.
- On general concerns such as infrastructure and the ease of doing business, intervention from the industry is much more indirect and often an ex-post phenomenon, that is, after the policy has been announced.
- The practice of multi-stakeholderism in policy formulation is present in letter, if not always in spirit.
Policy formulation in digital economy
- The case of the digital economy is different.
- There are multiple opportunities and avenues for participating in dialogue.
- Striking balance between business viability and government objectives: The policy teams of Big Tech make the most use of these channels to present their point of view and hope for reconciliation on issues, with the final policy document attempting to strike a balance between business viability and government objectives.
- Over the last few years of active debate on critical digital policies including those on data governance, privacy, anti-trust, and intermediary liability, there has been an overwhelming presence of the Big Tech Indian start-ups competing in this space, as well as their affiliated associations.
- Indian MNCs, for reasons unclear, has been mostly absent.
Conclusion
Absence of Indian MNCs resulted in is a disproportionate policy focus on keeping Big Tech in check as against creating an enabling, secure and trusted digital ecosystem in India. As many issues highlighted by Big Tech are likely to be pain points for Indian businesses as well, participation of Indian MNCs could break the âus versus themâ problem plaguing policy making in India today.
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