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List of Contents
IMD’s new Dynamical Forecast Model
Source- The Hindu
Syllabus- GS 3 – Achievements of Indians in science & technology; indigenization of technology and developing new technology.
Synopsis – IMD recently updated the status of the monsoon and predicted a normal monsoon this year. IMD has adopted a new forecast dynamical model. It will allow farmers, government officials, disaster managers, and other stakeholders to better prepare for their activities.
- The India Meteorological Department (IMD) has forecast a normal monsoon for this year.
- The southwest monsoon in 2021, which will begin in June, is forecast to be regular, with 98 percent of the Long Period Average rainfall (LPA).
- During the monsoon season, weak El Nino conditions are likely to prevail, with severity decreasing as the season progresses.
- Rainfall between 96 and 104 percent of the Long Period Average [LPA] is considered normal.
What is the importance of the new Dynamical monsoon Model?
New Dynamical Monsoon Model uses the evolving weather patterns to predict monsoon. It is unlike the traditional method, in which the forecast was based on a fixed set of meteorological variables.
- Also, dynamic models are useful for predicting rainfall over smaller spatial and temporal scales. It is not possible with IMD’s previous statistical forecasting method.
- IMD will forecast rainfall for June and September, using this model. It was previously difficult to predict due to the monsoon’s arrival and departure.
- There will also be forecasts for the monsoon core zone [MCZ]. It represents most of the rain-fed agriculture regions in the country.
Why is it important to correctly forecast rainfall?
- For disaster preparedness – Accurate forecasts will aid in the implementation of preventative measures, the reduction of vulnerabilities. It can also prevent extreme events from turning into disasters.
- For example- Preparation of a heat plan/forest fires plan in case of hot summer.
- For agriculture purposes – Farmers can decide on sowing time based on local conditions. Also, they can decide the type of crop that is best suited to the conditions, using accurate forecasting.
- For Government planning- the Centre and states can prepare better joint plans with respect to agriculture; such as drought action plan, MSP and buffer creation. It can better use and optimize government schemes
- For several business and service sector industries which need weather products.
IMD’s move from a statistical to Dynamical model will improve the accuracy of its forecast. So that farmers, policymakers, local administration, scientists & aid organizations can make most of it.
Issues Associated with Election Commission of India
Source: The Hindu
Gs2: Powers, Functions and Responsibilities of ECI
Synopsis: Recently, the Election Commission of India was in discussion. Many questions and doubts are being raised regarding the model Code of Conduct and powers of ECI under Article 324.
- Model code of conduct (MCC) is a set of guidelines that ECI issues. The political parties, candidates, and governments need to follow MCC during an election.
- T.N Seshan (former chief election commissioner) enforced the model code of conduct (MCC) for the first time using the powers under Article 324.
- It brought the issue of ballot rigging and the use of Muscle power during elections under control.
- Apart from MCC, the ECI also gives directions, instructions, and clarifications on other issues that emerge during the election.
- However, some issues linked to the model code, and the exercise of the ECI under Article 324, requires clarity.
What is Article 324?
- Article 324 empowers the Election Commission to direct, control, and conduct elections to Parliament and Legislature of every state. It also conducts elections to the offices of the President and Vice President
- In Mohinder Singh Gill case, the SC stated that Article 324 gives plenary powers to ECI to ensure free and fair elections.
What are the issues?
- First, with respect to the Model code, the question about the enforceability of the code remains unresolved.
- The Model Code was framed on the basis of a consensus among political parties. It has no legal backing.
- But the commission has the power to suspend or withdraw recognition of a political party. If, it refuses to follow the MCC according to the Election Symbols (Reservation and Allotment) Order, 1968.
- Now, the question is, since the MCC is legally not enforceable, how can the ECI take punitive action; such as withdrawal of recognition against a political party.
- Second, ECI’s intervention in the administrative decisions of a Union or State government during elections is questionable. For example, ECI recently stopped the Kerala Government from continuing to supply kits. It was containing rice, pulses, cooking oil, etc.
- According to the MCC, if the ECI believes that such actions will affect free and fair elections, It can stop a government from taking any administrative action.
- The issue here is, whether the distribution of food will affect free and fair elections.
- Further, The SC in Subramaniam Balaji case held that distribution of colour TVs, computers, cycles, goats, cows, etc., that is in accordance with the directive principles of state policy, is permissible during an election.
- Also, according to Section 123 (2)(b) of the Representation of the People Act, 1951, the declaration of a public policy will not amount to interfering with the free exercise of the electoral right.
- Third, under Article 324, ECI has the power to abruptly transfer any senior officials working under State governments. If it believes that the presence of those officials will adversely affect the free and fair election.
- However, in Mohinder Singh Gill’s case, the Court had made it clear that the ECI can draw power from Article 324 only when no law exists which governs a particular matter.
- Transfer of an official is within the exclusive jurisdiction of the government. It needs the concurrence of the State governments.
- Further, Article 324 does not confer absolute powers on the ECI to do anything in connection with the elections.
No constitutional body has absolute power. Because in the words of justice S.M. Fazalali, if ECI is armed with unlimited and arbitrary powers and if it becomes partisans, it might lead to a constitutional crisis. Integrity and independence of the electoral process are important and indispensable to the democratic system.
What led to the abolition of Intellectual Property Appellate Board?
Source: The Hindu
Gs2: Statutory, Regulatory, and various Quasi-judicial Bodies.
Synopsis: A lack of effective government support provided to the Intellectual Property Appellate Board has led to its demise.
- The Intellectual Property Appellate Board (IPAB) established in 2003. It aimed to specifically deal with matters of intellectual property including copyright, trademarks, patents, and geographical indications.
- Further, since 2007 Novartis’ patent case, the IPAB has been authorized to hear and decide upon the appeals made by the Patent Controller under the Patents Act. Therefore, all pending appeals of Indian High Courts under the Patents Act transferred to IPAB.
- However, the IPAB stands abolished after the passage of Tribunal reforms (Rationalisation and condition service) ordinance 2021.
- India has been a good example for the world with regard to legislating TRIPS compliant Patent laws. For example, anti-evergreening provisions, compulsory licensing regime.
- However, by the abolition of IPAB, India has the missed opportunity to develop an effective indigenous appellate mechanism on patent law.
What are the reasons for the failure of IPAB?
- First, IPAB was not able to perform its adjudicatory functions due to administrative reasons. Many issues were pending in the court for resolution. For example,
- Petition on the constitutionality of the IPAB.
- Petitions to fill up the vacancies before the High Court in Delhi and Chennai.
- Also, Petitions in the Supreme Court for extension of the term of the chairperson.
- Second, the issue of understaffing. For example, it was functioning without a chairperson for almost two years. Also, there were subsequent delays in the appointment of the technical member for patents.
- Third, lack of judicial and institutional independence of the IPAB. Previous chairpersons raised this issue publicly.
- Fourth, lack of Power. For example, the highest authority on protecting technology and innovation working had to function during power cuts without any viable backup.
- Fifth, lack of efficiency. For example, the disposal rate was about 20 patent cases a year. Further, nearly 70% of the patent cases filed were either pending at some stage.
- Sixth, finally, the apathy of the government towards IPAB led to its demise. For example, most of the significant amendments to the Patents Act since 1970 came through, not by way of an Act passed by Parliament, but through an ordinance.
An appellate mechanism allows for the correction of unjustified patent grants at the Patent Office, by error or oversight. An effective appellate mechanism on patent law is critical for the innovation ecosystem.
Introducing Green Targets for Corporates
Source: The Hindu
Syllabus: GS-3: Conservation, environmental pollution, and degradation
Synopsis: The government can introduce green targets and obligations on corporates. Adoption of such targets will help the global fight in Climate change.
The massive levels of production, consumption, and disposal of goods and services benefited economic growth. But it slowed the replenishment cycle of limited resources. This is evident from the impacts of Climate Change.
Both the consumers and corporations have to equally bear the growth of large-scale manufacturing and services and their impact on Climate Change. So the loss of resources and increase in greenhouse gas emissions is the responsibility of both the consumers and corporations.
Consumers can reduce their usage through awareness campaigns. But so far, everyone is focussing on sustainable efforts by the government and their policies. But the impact of corporations is neglected. Indian corporations can become a major help in India’s story of sustainable growth by achieving ‘green targets’.
What are Green targets?
These are commercial contracts. Under this, the contracting parties set a mandate to cut down greenhouse gas emissions at different stages of delivery of goods/services. This includes all the phases of industry such as design, manufacturing, transportation, operations, and waste disposal.
How India can enforce Green Targets?
- The government can introduce the green targets when the companies participate in the tender process. During these ‘green tenders,‘ the government can introduce ‘Green qualifications’. This includes a range of qualifications from pre-defined usage of ‘green energy’ to adequate on-site waste management, reducing carbon emissions, etc.
- Once the bidding process is complete, then the government can sign a contracting agreement(green contract). Under this, the government can prescribe the ‘green obligations’.
- These green contracts are necessary as this makes the obligations binding and legally enforceable for the corporates. Further, these green contracts will vary from one industry to another.
- Thus, the green targets can help in cutting down emissions. The targets can provide good quality and energy-efficient infrastructure, reducing noise, air, and water pollution and ensuring eco-friendly means of transportation within corporates like bicycles, etc.
How to enforce these ‘green obligations’ and achieve ‘green targets’?
- The government can formulate measurement criteria and conduct performance audits against these ‘green obligations’.
- During these, the government has to identify the non-performer. Further, the government has to prescribe penalties for non-compliance with such green obligations.
- The government can also make the green obligations trickle down to all levels of the supply chain.
The economic cost of executing green contracts may be greater than normal contracts. But the corporates have to undertake such green targets to attain greater benefit to the environment.
India needs to be cautious before joining Global Minimum Tax rate
Source: The Indian Express
Syllabus: GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
Synopsis: A Global minimum tax rathttps://blog.forumias.com/india-needs-to-be-cautious-before-joining-global-minimum-tax-rate/e is beneficial for the US. But India need to rethink before joining such international tax proposals
The US Treasury’s call for a global minimum tax rate is gaining a global endorsement. But the goal of a global minimum tax is not only to end the race to the corporate tax but also to end the right to the tax of developing countries.
Base Erosion and Profit Shifting (BEPS) Programme:
- Big tech companies are able to conduct economic activities in countries without their physical presence. Further, they also move profits to low-tax jurisdictions.
- The Base Erosion and Profit Shifting (BEPS) programme were initiated in 2013. It aims to curb practices that allowed companies to reduce their tax liabilities by exploiting loopholes in the tax law. But to tax Big tech companies the countries have to sign a BEPS agreement among themselves.
- So the OECD also asked the countries in the BEPS framework to adopt a consensus-based outcome instead of the country’s individual moves.
Challenges to BEPS Programme:
But there are few countries that are not ready to sign BEPS agreements.
- Over the past decades, there are many countries that enacted tax policies specifically aimed at attracting multinational business. These countries attract investment by lowering corporate tax rates. This, in turn, has pushed other countries to lower their rates as well to remain competitive.
- Also, there are few Developing countries as well that are not sure if they will receive the right to tax the mobile incomes of Big tech companies
The OECD policy to solve BEPS issues:
Addressing this concern, the OECD published a policy note. In that, it bifurcated the challenge of BEPS into two pillars.
- Pillar 1: It addresses the issue of reallocation of taxing rights to all the countries
- Pillar 2: This pillar aims to address all the remaining issues in the BEPS program.
Concerns with the OECD policy proposal:
The blueprints of this policy proposal were released in October 2020. But, the experts mention few concerns with the OECD policy note. Such as,
- Complexity in taxing Big techs: The experts found the policy of OECD as a more complex one to implement.
- Profit allocation: This is the most contentious provision of the policy. As the policy allocated only a fraction of the profits of Big Techs to the markets(Operating country of Big techs). The policy also allocated more profits to the source country.
Intermediate Taxation of Big Tech:
- With the blueprints are under consideration, the Big techs gained profits. On the other hand, the tax base of countries, including India, remains exposed to the risk of under or non-taxation.
- To fix this situation, countries implemented digital services tax on revenues of Big tech companies.
- But the US on the other hand launched inquiries on these countries under their Trade Act 1974.
The path to global minimum tax rate:
After the Biden administration came into force in the US, it agreed to work on a consensus-based solution.
- Further, the US Treasury suggested that it will apply the pillar 1 proposal to the top 100 companies. This includes showing a non-discriminatory policy to the US companies in the top 100. Further, the US also working on simplification of the proposal.
- With regard to pillar 2 proposals, the US decided to raise the corporate tax rate to 28 percent. This is decided along with the harmonisation of rates across countries. This includes,
- Defining minimum tax rate for the world, after the global consensus on the effective tax rate for companies. (So, the minimum tax rate is not yet decided)
- After fixing the minimum tax rate, the countries will compare the multinational enterprise’s effective tax rate in each jurisdiction. Especially in places where the low tax rate is paid.
- A top-up tax will apply for the remaining profits. But there is an ambiguity on who will tax these remaining profits?
- In general, the country, where the ultimate parent entity resides, is where the tax is first applicable. Applying that concept, then 30 percent of the Forbes 2000 companies are located in the US. So, the implementation of this proposal best serves the needs of the US.
Can India join the minimum tax rate proposal?
- India needs to assess the situation carefully. Because the proposal will apply to companies with global revenues above Euro 750 million. So, committing wrongly will lose India’s taxing rights.
- Moreover, India also witnessed a consistent rise in the effective tax rate, which is now close to 26 percent.
- Further, committing such a minimum tax rate also need India to reform its tax systems accordingly. Especially allowing foreign countries to tax the incomes that are perceived to be under-taxed in India.
For the past few years, India adopted legal measures to tax incomes of companies that avoid physical presence in India. But if global consensus is there for a minimum tax rate, then it is necessary for India to reflect the two pillars of international tax reform.