9 PM Daily Current Affairs Brief – August 9th, 2021

Dear Friends,

We have initiated some changes in the 9 PM Brief and other postings related to current affairs. What we sought to do:

  1. Ensure that all relevant facts, data, and arguments from today’s newspaper are readily available to you.
  2. We have widened the sources to provide you with content that is more than enough and adds value not just for GS but also for essay writing. Hence, the 9 PM brief now covers the following newspapers:
    1. The Hindu  
    2. Indian Express  
    3. Livemint  
    4. Business Standard  
    5. Times of India 
  3. We have also introduced the relevance part to every article. This ensures that you know why a particular article is important.
  4. Since these changes are new, so initially the number of articles might increase, but they’ll go down over time.
  5. It is our endeavor to provide you with the best content and your feedback is essential for the same. We will be anticipating your feedback and ensure the blog serves as an optimal medium of learning for all the aspirants.
  • For previous editions of 9 PM BriefClick Here
  • For individual articles of 9 PM BriefClick Here

Mains Oriented Articles 

GS Paper 2

GS Paper 3

Prelims Oriented Articles (Factly)


Mains Oriented Articles


GS Paper 2

Standing with Kabul – India’s Afghan policy

Source: Indian Express

Syllabus: GS2 – International Relations (IR)

Relevance: India’s Afghan policy post-US-exit from Afghanistan

Synopsis: A lack of consensus on Afghanistan amongst the permanent members of UNSC means India will have to build international opinion around this topic gradually. Also, it should put pressure on Pakistan and the Taliban to make peace with Kabul.

Context

Recently, a special meeting of the United Nations Security Council on Afghanistan convened under India’s presidency. It failed to bring a new international consensus on controlling the Taliban’s military offensive with the full support of the Pakistan army.

No consensus on Afghanistan

In Afghanistan, there is no unanimity amongst the five permanent members, which is critical for any consequential decisions by the UN Security Council (UNSC).

  • China: An ambitious China is seeking to extend its regional footprint
  • Russia: An opportunistic Russia is tagging behind Beijing. Both China and Russia seem to support Pakistan’s game plan to reinstall the Taliban in Kabul.
  • UK: Given its special ties with the Pakistan army, London tends to be unstable on the Taliban.
  • US: The US has ceded much ground by deciding to withdraw all its troops in Afghanistan by the end of this month.
  • France: In Europe too (represented by France which has a permanent seat in the UNSC),  there is a decline in political support for continued Western military intervention in Afghanistan.
Way forward for India

India must continue to stand with the people of Afghanistan, whose dreams for a peaceful future are being shattered. Delhi must continue to mobilize international opinion in all global forums, as well as work with its close partners so that Pakistan and the Taliban can be pressurized to stop fighting and start peace talks with Kabul.

Must Read: India’s future Afghan policy – Explained, pointwise

Terms to know


The many hurdles for students

Source: The Hindu

Syllabus: GS Paper 2: Issues relating to development and management of Social Sector/Services relating to Education

Relevance: This article explains the challenges faced by Indian students abroad and provides suggestions.

Synopsis:

Indian students studying overseas and those looking to go abroad face many COVID-related challenges

Indian students in abroad:
  • Students from China and India accounted for 47% of all active foreign students in the U.S. in 2020
  • Indian students comprised the second-largest student community in the U.K. and Australia in 2019-2020.
  • Similarly, Indian students are now the largest group within the international student community in Canada.

But despite that, during the Covid-19 pandemic, Indian students face several problems which need to be addressed.

Read more: India’s schoolchildren need their childhood back
Issues faced by Indian students during Covid-19:
  1. Indian students were forced to delay their plans in 2020 due to the imposition of lockdowns, disruption of flights, and embassies not issuing student visas.
  2. Furthermore, many countries have closed their borders and/or restricted flights from India.
  3. Many foreign universities require students to get vaccinated before they go. Covaxin and Sputnik V are yet to be recognised by the World Health Organization. Countries like the U.S. do not accept students who have been inoculated with these vaccines and have told them to get re-vaccinated.
  4. Due to the disruption caused by COVID-19, students overseas are finding it difficult to get jobs.
Read more: One year of National Education Policy – Explained, pointwise

All this led to a drop in the number of Indian students going abroad to study in 2020. According to the Ministry of External Affairs, while in 2019 nearly 5.9 lakh students went overseas for higher education, in 2020 only 2.6 lakh were able to go.

Suggestions:

Policies pertaining to air travel and recognition of Covaxin need to be addressed at the earliest to facilitate smooth travel for tourists seeking to go overseas.


Addressing the quality deficit in India’s technical education

Source: The Indian Express

Syllabus: GS Paper 2: Issues relating to development and management of Social Sector/Services relating to Education

Relevance: This article explains the issues surrounding Engineering education and suggestions to improve them.

Synopsis:

The problems surrounding Engineering education needs immediate attention.

Introduction:

Engineering is an applied science. But private entrepreneurs without the subject knowledge took the lead to meet the country’s growing demand for technical education in the mid-Eighties. This resulted in the following challenges.

Challenges facing Engineering colleges:
  1. The engineering curriculum took a hit as the management’s agenda entered academic bodies of various universities.
  2. Subjects like materials, applied physics, and thermodynamics became dispensable. Several universities merrily revised their curriculum at the expense of these courses.
  3. The regulatory gaps, poor infrastructure, lack of qualified faculty, and the non-existent industry linkage contributed to the abysmal employability of graduates.
  4. The private colleges also failed to make a considerable investment to adapt to the dynamic environment of the job market.
Read more: India’s schoolchildren need their childhood back
Other challenges:
  • Not a single industry body, be it CII, FICCI or ASSOCHAM has managed to effectively inform the education planners on the growth in different employment sectors.
  • The government also failed to take any tangible steps to set up an independent body to advise AICTE on this vital aspect.

All these resulted in real dilution of Engineering education’s overall standards in the country.

Present status of Engineering colleges:

At its peak in 2014-15, AICTE-approved institutes had almost 35 lakh seats. Since 2015-16, at least 50 colleges have closed each year, and this year, AICTE approved the closure of 63 institutes.

Suggestions:
  • Rather than being reactive, institutions must proactively define the practising elements of education.
  • The corrective measures for these shortfalls are technology-intensive, are experiential, and need investments in teaching.
  • The need of the hour is to create a truly autonomous quality assurance body at an arms-length from the government, manned by eminent persons both from the industry and academia.
Read more: One year of National Education Policy – Explained, pointwise

Technical education has to reach the unreached sections with assured quality. Then only India can see improvements in Technical education and Engineering.


Mending fences: On Goodwill among northeastern states

Source: Indian express

Syllabus: GS2 – Inter-state relations

Relevance: Assam-Mizoram dispute, its negative impact from regional, national and international perspective, steps that can be taken to resolve such disputes.

Synopsis: Border tensions between Assam and Mizoram have calmed down. We need to build upon the momentum and ensure that peace and order is maintained in the North East because the success of Act East policy rests on it.

Background
Steps taken 

Following steps have been taken till now to remedy the situation.

  1. Assam chief minister has sent two ministerial emissaries from Assam to Aizawl (Mizoram). Atul Bora, one of the ministers sent to Aizawl is from the Asom Gana Parishad (AGP). Mizo National Front (MNF) has had good relations with the AGP.
  2. Deployment of neutral Central forces at the disputed stretches of the interstate border
  3. Withdrawal of the Assam government’s travel advisory which asked people not to travel to Mizoram.
Impact of confrontation
  1. Regional – rise in prices and shortage of commodities, impact on the entire supply chain, from producer to transporter and receiving customers/markets, impact on the investment in the region
  2. National – affect the public image of the North East in rest of India. Such instances erode the gains made in the past to achieve peace and security.
  3. International – impacts effective implementation of International policies like Act East.
What needs to be done?
  • Public engagement: Communities at the border, stakeholders such as business leaders and transporters as well as civil society need to be involved in conversations and dialogue for sustainable settlements.
  • Political leaders must take the lead and show the way. There will have to be give and take, to arrive at a common conclusion. That is the practical side, which politicians are best equipped to deliver.
  • A Development Corridor at the border through consensus from both states would be a welcome step. It will build on the natural advantages of the bordering states — vegetable, meat and fruit processing, handicrafts and designer handlooms & and create jobs, livelihoods and better incomes for people on the border and beyond, building an equitable supply chain

Conclusion

The visionary Act East Policy and its predecessor Look East Policy rest on the pillars of peace and trust, not just better roads and physical infrastructure. Peace and trust depend on good relationships between neighbors which is essential for economic cooperation, transport and trade not just cultural and social collaboration.

Terms to know


Putting an end to police brutality

Source: Indian Express

Syllabus: GS-2 Polity and Governance: Important aspects of institutional and other measures

Relevance: The article highlights the police brutality & steps to stop the custodial deaths

Synopsis: NCRB data have repeatedly shown police brutality, violation of human rights, and even extreme instances of custodial killings.

 Some recent examples include:

  • Death of fruit stall owner in Tamil Nadu
  • Death of vegetable vendor in UP for violating Covid norms

National Crime Record Bureau (NCRB): According to NCRB data

In 2017—100 cases of custodial deaths were reported, of which 42 were in police custody.  Maharashtra ranked first in custodial deaths, followed by Gujarat and Rajasthan

In 2019—85 cases of custodial deaths were reported, of which no policeman was convicted, although some were arrested and charge-sheeted. Tamil Nadu registered the highest number of cases, followed by Gujarat, Punjab, and Rajasthan

Problem: Although several policemen do get convicted, there are that many who go scot-free — by manipulating records, intimidating complainants or political patronage.

Read more: Threat to human rights is highest in police stations: CJI 

Way Forward:

  1. There is a need to give strict and prompt punishment to policemen who are found guilty by the senior officers.
  2. Even those police personal should be punished who remain as spectators when the person in custody is being tortured
  3. Making accountable, the sub-divisional police officers and superintendents of police for any misconduct that happens under their supervision
Read more: State of Prisons in India – Explained, pointwise

Securing the Indian ocean

Source: Indian express

Syllabus: GS2 – Important International Institutions, agencies and fora – their Structure, Mandate

Relevance: Strengthening maritime security

Synopsis: Maintaining and strengthening maritime security is a key concern for India. With an open debate on the issue in UNSC, India has a chance to showcase that maritime security requires a multi-dimensional and multi-stakeholder approach.

Context

India has convened an open debate of the UN Security Council (UNSC) on enhancing maritime security, which will be chaired by Indian PM on August 9. It reflects India’s international evolution as a maritime nation. The objective of the debate is to highlight the effectiveness of international maritime cooperation to respond holistically to natural and man-made threats to maritime security.

Why marine security is important for India?
  1. Protecting its vast coastline – India has a coastline of over 7,500 km, thus it has a natural interest in enhancing maritime security
  2. Maritime trade route – 75% of the world’s maritime trade and 50% of daily global oil consumption is transported through Indian Ocean region.
SAGAR policy

India launched SAGAR (Security and Growth for All) initiative  which proposes an integrated regional framework to enhance maritime security in the Indian Ocean & focuses on following 5 pillars –

  1. Role of India – as a net security provider in the region
  2. Active engagement with friendly countries – to enhance the maritime security capacities and economic resilience of these countries
  3. Advancing peace and security – by developing a network to take effective collective action
  4. Ensuring sustainable development in the region – through  integrated and cooperative focus on the future of the IOR
  5. Collective approach – ensuring that the primary responsibility for peace, stability and prosperity in the IOR would be on those “who live in this region”
Measures to sustain international coop

Sustaining international cooperation to enhance maritime security requires two supportive frameworks in the policy and operational areas.

  • Rule of Law approach –  A rule-of-law based approach backed by an effective legal policy framework is essential to secure the maritime domain.
  • UN Convention on the Law of the Sea (UNCLOS) – Application of UNCLOS to address new challenges to peace and security including from non-state actors such as terrorists, pirates and criminal gangs engaged in drug trafficking.
Relevant issues 

Certain important issues need to be discussed at the open debate:

  1. Improving the operational effectiveness of the UNCLOS, especially regarding the enforcement of its provisions on freedom of navigation, the sustainable exploitation of maritime resources, and the peaceful resolution of disputes.
  2. Securing the sea lanes of communication (SLOCs) – The debate must focus on ensuring equal and unrestricted access to SLOCs by states while resolving differences through peaceful means. 3 important SLOCs in Indian Ocean Region are – the SLOC connecting
    1. Red Sea to the Indian Ocean through the Bab al-Mandab
    2. Persian Gulf to the Indian Ocean through the Strait of Hormuz
    3. Indian and Pacific Oceans through the Straits of Malacca
  3. Data-sharing: Sharing data on threats to commercial shipping is important to enhance maritime security. India’s initiative to establish an International Fusion Centre (IFC) for the Indian Ocean region in Gurugram in 2018 effectively aims to achieve the same
  4. Increasing role of the private sector in the maritime domain – to promote blue economy through sustainable development as well as digital economy by providing the critical submarine fibre-optic cables.

Conclusion

The ability of the UNSC to respond to the debate by endorsing a multiple stakeholder approach to enhancing maritime security would be a significant outcome. It would set a paradigm for upholding “multi-dimensional” security in the 21st century.


GS Paper 3

The sovereign right to tax is not absolute

Source: The Hindu and Livemint

Syllabus: GS Paper 3: Indian Economy and issues relating to planning, mobilization, of resources

Relevance: This article explains India’s sovereign right to tax and its limitations

Synopsis:

India has a sovereign right to tax, but that right is subject to certain limitations.

Introduction:

The government has recently introduced the Taxation Laws (Amendment) Bill, 2021, in Parliament. The bill seeks to nullify the contentious retrospective tax law by amending the Income Tax (IT) Act of 1961 and the Finance Act of 2012. 

About the backdrop of the bill:

Earlier, the Supreme Court had ruled against the retrospective reading of the law by tax officials in the case of Vodafone. Despite that, In 2012, the Indian government then retrospectively amended the tax code, giving itself the power to go after mergers and acquisitions(M&A) deals all the way back to 1962 if the underlying asset was in India.

The retroactive amendment resulted in Vodafone and Cairn Energy suing India before Investor-State Dispute Settlement (ISDS) tribunals of India-Netherlands and India-U.K. bilateral investment treaties (BITs) respectively.

Both the tribunals held that India’s retroactive amendment of tax laws breached the fair and equitable treatment provision of the two BITs.

The proposed amendment, long overdue, is a welcome development. But this amendment hasn’t been proposed to comply with the two adverse ISDS decisions. This is because of the government’s belief that taxation matters are part of sovereign measures, they cannot be challenged before ISDS tribunals.

Read moreCairn Energy dispute and Government disputes with private entities – Explained, pointwise
Does the state have a sovereign right to tax?

Several ISDS tribunals have recognised the fundamental principle that taxation is an intrinsic element of the state’s sovereign power.

For instance, in a case known as Eiser v. Spain case, the tribunal held that the power to tax is a core sovereign power of the state that should not be questioned lightly. A similar opinion is held in other cases as well.

Read more: Retrospective taxation and the Taxation Laws (Amendment) Bill – Explained, pointwise
Then how a state’s taxation can be questioned?

The two most used BIT provisions to challenge a state’s taxation measures are expropriation and the fair and equitable treatment provision.

  1. Expropriation: The State’s taxation measures can be questioned on the following conditions.
    1. The tax should not be discriminatory
    2. It should not be confiscatory
    3. The tax law should not be extraordinary, punitive in amount, or arbitrary in incidence
  2. Fair and equitable treatment provision: In this type, a state’s taxation can be questioned if,
    1. It breaches legal certainty
    2. Amending tax laws in an unreasonable and disproportionate manner.

Thus, India’s right to tax in the public interest should be balanced with the investor’s interest of legal certainty. So, the retrospective laws with public purpose have to justify the retroactive application of the law.


Cyclone-ravaged Sunderbans is now drowning in plastic

Source: The Hindu

Syllabus: GS Paper 3: environmental pollution and degradation

Synopsis

The unregulated inflow of relief materials in the Sunderbans region has resulted in a new crisis in the cyclone battered region: Plastic Waste.

Background:
  • Sunderbans has been battered by many cyclones over the years, with Cyclone Yaas being the latest.
  • To support the affected people, packaged relief material has been flowing into the Sunderbans.
  • The unregulated inflow of relief materials has resulted in the accumulation of plastic waste in the Sunderbans.
What are the concerns raised by the NGOs?

Plastics in the Sunderbans would have both short term and long term ecological impacts.

  • The presence of plastic in saline water increases the toxicity of water and could also contribute to the eutrophication of water.
  • The breakdown of plastics in the water will lead to an increase in microplastics, which would subsequently enter the food system.
  • Given that Sunderbans is connected to the sea, the increase of plastic in the region could lead to plastic waste entering the ocean.
  •  Sunderbans is largely dependent on fisheries and aquaculture and any change in the delicate ecosystem can spell doom not only for the ecology but also for livelihoods. 
  • Moreover, the Indian Sunderbans, a UNESCO World Heritage Site, is home to about 2,626 faunas, including Royal Bengal Tigers, Gangetic Dolphins, saltwater crocodiles, and threatened species of freshwater turtles. Hence, an increase in plastic waste may pose a threat to the unique biodiversity of the region.
Steps to be taken:
  • Tight vigil on the entrances to the Sundarbans Biosphere Reserve and the Sundarbans Tiger Reserve. 
  • NGOs and locals should be encouraged to collect plastic waste, which should also be recycled.
  • Organize cleanliness drives to remove plastic from the Sunderbans.

The SC’s Amazon ruling upholds the doctrine of party autonomy

Source: Livemint

Syllabus: GS-3 – Indian Economy and issues relating to planning, mobilization, of resources

Relevance: To understand the recent SC ruling and extension of the Indian Arbitration Act 1996.

Synopsis: The SC order in Amazon’s case has answered two important judicial questions.

What is the background of the event?

Read here: Emergency arbitration award is applicable: Amazon wins in Supreme Court

What is the story so far?

  1. When Future Retail struck a deal with Reliance Retail, Amazon initiated the proceedings as per SIAC rules. The future group then approached Delhi HC, but HC refused to grant any relief.
  2. Amazon also requested Delhi HC for enforcement of the Singapore arbitration award, which was accepted by Delhi HC. This single judge ruling was later stayed by the division bench of Delhi HC, after which Amazon approached SC.

What are the two important points questions answered by SC?

In the recent ruling of the Amazon and Reliance case, the court answered two important questions.

  1. Whether an award by the emergency arbitrator under the SIAC Rules could be valid for consideration under the Indian Arbitration Act.
  2. Whether a court order enforcing such an award is appealable.

SC’s response:

On the first question:

  • Doctrine of Party autonomy” – In arbitration, both parties agreed upon the principles and platform for conflict resolution. Upon receiving an adverse award, the party cannot wriggle out of responsibility.
  • Though the institution of emergency arbitration is not explicitly covered in Arbitration Act 1996, its provisions are broad upon to cover it. In fact, they help in decongesting the Judiciary.

On 2nd question:

  • On the second issue, the court observed that while the interim award was subject to review, the order of HC on its enforcement was not.

Way forward:

  • The Judiciary is becoming sensitive to party autonomy and is more open to welcoming awards of international arbitrations.
  • Such enforcement of contracts would help in promoting EODB (Ease of Doing Business)

Making trade work for climate

Source: Business standard

Syllabus: GS3 – Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment

Relevance: On Carbon border tax and its impact

Synopsis: An analysis of the complexities involved in dealing with climate change via measures like carbon border tax.

Context

The European Union’s (EU’s) plan for a carbon border tax (CBT) —that is, duty on imported goods like aluminium, steel, cement, and electricity from countries with less stringent greenhouse gas is gaining both support and criticism. The global trade is critically linked to GHG (greenhouse gas) emissions, thus EU’s move is expected to pressure other countries to impose similar taxation and thereby reduce emissions.

Trends

Past : In the early 1990s, when world leaders came together to discuss and sign the Framework Convention on Climate Change, they recognized that the emissions would increase the warming of the planet and produce catastrophic weather changes that knew no borders.

  • Signing of free trade agreements: Despite the well known fact of eventual warming of the planet, the developed world was busy signing free-trade agreements. The reason for this furious activity was that the already rich world was finding the cost of production too high there. They wanted to reduce their cost of production to enable consumption and economic growth.

Present day: However, today, China is the biggest exporter; it has overtaken all other countries, including the US. China is also the world’s biggest GHG emitter, followed by USA

Real problem

The real problem is that rich countries did not reduce their emissions. So even as manufacturing moved to “other” countries, their emissions, driven by the consumption of goods and electricity, continued to rise.

At the same time, the emerging world — China, India, Brazil, Indonesia, Vietnam, and all the “other” world exporters — saw their emissions rise. This is why we are in a extremely difficult situation wrt climate change.

Problems with CBAM

Carbon border tax has many issues associated with it.

  • A protectionist measure promoting domestic industries
  • Increase distrust: It will only add to the distrust between the developed and the developing countries.
  • Will further inequity –  The border tax will add to the revenue of the EU while it will impact the revenue’s of exporting country. For instance,the UN Conference on Trade and Development (UNCTAD) estimates that at $44 per tonne, the carbon border adjustment mechanism (CBAM) income will rise by $2.5 billion in the EU and fall by $5.9 billion for the exporting countries

Conclusion

The world cannot ignore the question of global trade and consumption anymore.  It needs a carbon tax to disincentivize consumption and to make production systems climate-friendly. But the monies collected from this tax, including the EU carbon border tax, should be spent in countries worst impacted by climate change.

Terms to know


What good are BITs?

Source: Business Standard

Syllabus: GS3 – Effects of Liberalization on the Economy, Changes in Industrial Policy and their Effects on Industrial Growth

Relevance: Harnessing the potential of Bilateral Investment Treaties to promote economic growth

Synopsis: Many of us in India are irritated when the country’s state agencies lose cases (example Cairn energy case), and large penalties have to be paid on account of Bilateral Investment Treaties (BITs). But from India’s viewpoint, it is efficient to enter into BITs.

Why it is efficient to enter into BITs? 
  • They provide insurance to foreign investors from risk of expropriation.
  • To improve our policy framework – state can harness lost BIT cases as a feedback loop for improving policy framework.
What is expropriation?

When the state grabs private property, this constitutes expropriation.  In an early-stage democracy like India, the checks and balances that control the behavior of the state are limited. From the viewpoint of a foreign investor, making business plans in India involves expropriation risk.

Importance of BIT to a foreign investor

Other than expropriation risk, a foreign investor is marred by following issues:

  • Low voice in the political system: Locals have a greater voice in the political system and have a better sense of how policies will evolve in the future. While  Foreign investors know less about India, have a low voice in the political system.
  • Lack of confidence: Local companies are more confident in their activities, and take greater risks in the interpretation of law. Foreign companies are more unsure, and opt for extremely conservative interpretations. Hence, the rate of tax payment by foreign companies operating in India is systematically higher than local companies.
  • Expropriation is difficult to quantify and insure: Expropriation risk and policy risk is difficult to quantify and impacts upon different situations in a non-uniform fashion. It is not easy to label a precise outcome as having involved expropriation. Hence, it is not an insurable risk. It is not a risk against which the global insurance market will supply protection to foreign investors.

Hence,  if we do nothing about this, the required rate of return for investment into India is enhanced and many investments do not take place.

How to address the issue?

BITs are an effective mechanism through which this issue could be solved. It consists of following benefits –

  1. They act as an insurance for foreign investors against expropriation risk and policy risk
  2. Provides for effective dispute redressal mechanism such as hearing, at a neutral forum, where both sides argue their case
  3. Creates additional layer of checks and balance against arbitrary behaviour of government
  4. Encourages greater investment into India, which is in the country’s interests
  5. Strengthen investment policy framework where lost cases act as feedback
Way forward

Each lost case is an opportunity that can lead to improvements in the policy framework so that similar situations would not recur in the future.

Terms to know


Our broken growth model is in acute need of some repair work

Source: Live Mint

Syllabus: GS3 – Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

Relevance: Battling the slowdown in Indian economy

Synopsis: Solving India’s chicken-and-egg problem of income and investment will take government action.

Background
  • India was expected to grow in double digits in 2021-22.
  • However, most double-digit economic growth forecasts for the current financial year have been cut to single digits.
  • For instance, the International Monetary Fund recently cut its growth forecast for India from 12.5% to 9.5%.
  • India’s economic growth model of recent years is one of the main reasons hampering India’s rapid Economic growth.
Factors behind economic growth

The two things that drove economic growth during 2001-2011 are

  1. Investment: High investment to gross domestic product (GDP) ratio
  2. Increase in Exports 
Trends & Problems 

Despite high investment and increase in exports, Indian economy came under the following problems

  • Inflation hit double digits. Projects did not take off on time, leading to huge bank loan defaults.
  • Also, some business promoters simply siphoned off money borrowed from banks. This led to huge bad loans for banks that peaked at ₹10.36 trillion, as of 31 March 2018.
  • More importantly, this pushed banks away from funding industrial projects.
  • Also, many corporates were not in a position to borrow, having already gone on a borrowing binge.
  • In the process, India’s investment to GDP ratio fell. In 2020-21, it was at an almost two-decade low of 27.1%.
  • Meanwhile, Indian exports fell to 18.7% of GDP in 2020-21. This fall has primarily been driven by a massive fall in outward shipments of goods.
  • Nevertheless, private consumption, came to the rescue. India continued to grow in double digits post 2011-12 and up until 2016-17.
  • The trend led to consumption’s share in our economy increasing from around 56% in 2011-12 to 60% in 2019-20.
  • After 2016-17, consumption growth declined.
Why private consumption declined?
  • Private consumption was funded through savings as well as increased borrowings. However, due to increasing NPA’s and low per capita gross national disposable income, private consumption started declining.

In this scenario, if income growth has to pick up, investment needs to go up in order to create jobs and spur economic activity.

Why growth still not picking up?

As stated above, investment needs to go up, but businesses are not in a position to borrow.

  • Even if they are, the capacity utilization in many sectors continues to be low, which means that producers have no need to expand unless consumer demand rises to justify it.

Way forward

  • If India needs to come out of this situation, both central and state governments need to spend more.
  • This could involve putting more money directly in the hands of citizens in the form of tax cuts to spending more money on capital-intensive infrastructure projects.
  • Cutting excise duty on petrol and diesel are other options.

However, the concern towards increasing public spending is that this will involve governments having to borrow more. And, the liabilities of the central and state governments have already touched around 91.7% of GDP, as of March 2021.


Everything you want to know about CBDC

Source: Business Standard

Syllabus: GS3 – Indian Economy and issues relating to planning, Mobilization of Resources, Growth, Development and Employment.

Relevance: CBDC, its potential impact, relevant suggestions

Synopsis: The central bank digital currency will neither substitute nor compete with cryptocurrency; it’s just a wallet. An analysis of its inherent problems and a way forward.

Background
  • The RBI has been working towards a phased implementation of a central bank digital currency (CBDC) with “little or no disruption”.
About CBDC
CBDC in India
  • CBDC is just a wallet or an electronic purse, issued by a central bank.
  • Like credit card, internet banking and wallets, the CBDCs will be part of the payment system, supplementing use of cash, it’s not an alternative to cash. There are many such wallets operating in the Indian financial system. The CBDC will be one of them, but with a difference that it will be issued by the nation’s central bank.
Must Read: What is a CBDC? – Explained
Impact of CBDC
  • Since it will supplement cash, the cost of printing money, distribution and removing of soiled notes will come down drastically as the use of CBDC grows. And, to that extent, the RBI’s surplus funds, will rise.
  • For the masses, the transactions will be easy as they won’t have to carry cash
  • It will give a push to financial inclusion. CBDC can be used by many Indians who are still not in the banking fold.
  • There is no scope for speculation which drives the value of cryptocurrency.
  • Regarding safety, since such a wallet (CBDC) will be issued by the RBI (even though it can be done through designated banks), this will be the most secured transaction in the payments space.
Concerns/Issues 
  • Interest payments: Should interest be paid on CBDCs or not? And should the RBI issue the CBDCs directly or through banks? When one keeps money with the banks, they earn interest. If the CBDCs don’t offer interest, however small it is, why will people shift from cash to CBDCs? The more important issue is that if interest is paid and the RBI issues CBDCs, won’t there be a flight of deposits from the banks?
  • Threat to financial stability: If the regulator ends up competing with the regulated entities, the banking system may see erosion in deposits, threatening the financial sector’s stability.
  • Operational issues: There will be many operational issues for the implementation of CBDC, including the KYC (know your customer) norms and privacy of data.
  • Risk of fraud: Another challenge will be the risks of fraud, like any other payment system
Suggestions

The CBDCs can be issued via a distributed ledger, synchronised between the banks and the RBI and not a centralised ledger, held solely by the RBI. This is a decentralised model but if the RBI adopts this, it will not end up competing with banks, and financial sector stability will be preserved.

Terms to know:


Prelims Oriented Articles (Factly)


Union Minister launches ‘PM-DAKSH’ Portal and ‘PM-DAKSH’ Mobile App

Source: PIB

What is the News?

The Union Minister for Social Justice and Empowerment has launched ‘PM-DAKSH’ Portal and ‘PM-DAKSH’ Mobile App.

About PM-DAKSH Portal:
  • PM-DAKSH stands for Pradhan Mantri Dakshta Aur Kushalta Sampann Hitgrahi Yojana.
  • Nodal Ministry: It was launched by the Ministry of Social Justice & Empowerment (MoSJ&E) in 2020-21. 
  • Purpose: It is a National Action Plan for skilling marginalized persons covering SCs, OBCs, EBCs, DNTs, Sanitation workers including waste pickers.
  • Developed by: The Portal has been developed by the Ministry of Social Justice and Empowerment, in collaboration with National e-Governance Division(NeGD).
  • Features: Under this Programme, eligible target groups are being provided with skill development training programmes on
    1. Up-skilling/Reskilling
    2. Short Term Training programme
    3. Long Term Training Programme
    4. Entrepreneurship Development Program (EDP).
  • Implementation: The training programs are being implemented through Government Training Institutes, Sector Skill Councils constituted by the Ministry of Skill Development and Entrepreneurship and other credible institutions.
Note:
  • Under the Ministry of Social Justice and Empowerment, three Apex Corporations are functioning. They are,
    1. National Scheduled Castes Finance and Development Corporation,
    2. National Backward Classes Finance and Development Corporation and
    3. National Safai Karamcharis Finance and Development Corporation. 
  • These Corporations are providing loans at concessional interest rates to the target groups of backward classes, scheduled castes and Safai Karamcharis for self-employment. 
  • Besides, they are also providing free training for skill development of the target groups.  

U.N creates permanent body to address challenges of racism

Source: The Hindu

What is the News?

The United Nations General Assembly has approved a resolution establishing a Permanent Forum of People of African Descent.

About Permanent Forum of People of African Descent:
  • The Permanent Forum of People of African Descent will serve as a platform for improving the safety and quality of life and livelihoods of people of African descent and their full inclusion in the societies where they live.
The mandate of the Forum:
  • To advance the full political, economic and social inclusion of people of African descent in the societies in which they live.
  • To provide expert advice and recommendations to the Human Rights Council, the Assembly’s main committees, and the various UN entities working on issues related to racial discrimination.
Composition of the Forum:
  • The forum will consist of 10 members: five elected by the General Assembly from all regions and five appointed by the Human Rights Council following consultations with regional groups and organizations of people of African descent.
  • The Forum’s first session will take place in 2022.
Significance of the Establishment of this Forum:
  • The forum’s establishment comes during the International Decade for People of African Descent established by the General Assembly which began on January 1, 2015, and will end on December 31, 2024. It is focusing on the themes of recognition, justice and development.
  • Moreover, the new body’s creation comes ahead of the 20th anniversary of the 2001 UN World Conference Against Racism in Durban, South Africa. This conference was dominated by clashes over the Middle East and the legacy of slavery. 

Exhibition to mark the 79th anniversary of ‘Quit India Movement’ inaugurated as part of Azadi ka Amrit Mahotsav celebration

Source: PIB

What is the News?

The Union Minister of Culture has inaugurated an exhibition to mark the 79th anniversary of the ‘Quit India Movement’ at the National Archives of India.

About Quit India Movement:
  • The Quit India Movement is also known as the August Movement was a movement launched at the Bombay session of the All India Congress Committee by Mahatma Gandhi on 8 August 1942, demanding an end to British rule in India.
Causes of Quit India Movement:
  • Involvement of India in World War II without prior consultation with the leaders
  • Failure of Cripps Mission
  • Shortage of essential commodities
  • Prevalence of anti-British sentiment
  • Centralisation of many small movements
Phases of Quit India Movement

The Quit India Movement can be viewed in three phases from its inception to end. The phases are as follows:

  • First phase: The first phase or the inception of the movement had no violence. It began with civil disobedience, boycotts, strikes that the British Government quickly suppressed. Almost all members of the Congress Committee, including Gandhiji, were arrested and kept in Jail till 1945 without any trial.
  • Second phase: The second phase of the movement took a violent and aggressive turn. Any building or offices which were the symbol of colonial authority was attacked and distracted.
  • Third and last phase: In the last phase of the movement, there was the formation of many independent national or parallel governments in the isolated pockets of the country, such as Ballia, Satara, Tamluk, etc.
Successes of the Quit India Movement
  • Women empowerment: This movement had the active participation of women of the country. Aruna Asif Ali hoisted the national flag on the Gowalia tank maidan; Usha Mehta, on the other hand, helped set up the underground radio station to spread awareness about the movement.
  • Rise of future leaders: This movement also gave some future prominent leaders such as Biku Patnaik, Aruna Asif Ali, Ram Manohar Lohia, Sucheta Kriplani, J.P. Narayan, etc. These leaders were helping the movement through underground activities.

Failure of the Quit India Movement: The movement did not have the support of many organisations of the country itself.

  • The Britishers were supported by the Princely States, British Indian Army, Indian Civil Services, Viceroy’s Council (which had Indians in the majority), All India Muslim League, Indian Imperial Police.
  • The Hindu Mahasabha, Muslim League also opposed the Quit India

China impacted by temperature rise higher than the global average: Govt. Blue Book

Source: AIR

What is the News?

China’s China Meteorological Administration (CMA) has published a Blue Book on Climate Change in China 2021.

About the Blue Book:
  • The Blue book provides the latest monitoring information on climate change in China and globally. It also provides data on the atmosphere, hydrosphere, cryosphere, terrestrial biosphere and driving factors of climate change.
Key Findings:
  • China is facing a growing risk of experiencing extreme weather and climate events and a temperature rise higher than the global average as a result of continuing climate warming.
  • Sea Level: In 2020, the sea level in China’s coastal areas was 73 mm higher than the average from 1993 to 2011, the third-highest since 1980. The continued rise of sea temperature in summer has caused severe coral bleaching in several islands in the disputed South China Sea
  • Typhoons: The average intensity of typhoons landing in China has increased since the late 1990s. China is hit by nine typhoons this year, causing widespread devastation.
Other Reports:
  • Greenpeace East Asia has released a report analyzing temperature data for 57 cities across mainland China, Korea and Japan.
  • The report has found that scorching temperatures and increasingly severe heatwaves are becoming much more frequent in cities across East Asia.
  • Moreover, the report has shown that hot weather was arriving earlier in the year in more than 80% of the cities studied

Threat to human rights is highest in police stations: CJI

Source: Indian Express, The Hindu and Times of India

What is the News?

The Chief Justice of India while addressing an event organised by National Legal Services Authority (NALSA) has said, “the threat to human rights and bodily integrity are the highest in police stations”. He also observed that Custodial violence and other police atrocities are problems that still prevail in our society.

What is Custodial Violence?
  • Custodial violence primarily refers to violence in police and judicial custody. It includes death, rape and torture.
  • Between 2001 and 2018, 1,727 persons died in police custody. This includes both persons on police/ judicial remand and those just arrested and not produced before the court. Only 26 policemen were convicted in this period for such deaths.
  • Except in Uttar Pradesh, Madhya Pradesh, Chhattisgarh and Odisha, no policeman was convicted for such deaths across the country.
Reasons for Custodial Violence:
  • Lack of Legal representation: Lack of effective legal representation at police stations is a huge detriment to arrested or detained persons. 
  • Lengthy Judicial Process: Lengthy and expensive judicial processes dissuade the poor and the vulnerable from accessing the justice system.
  • Digital Divide: The digital divide has not helped the cause of easy access to justice. Rural and remote areas suffer from a lack of connectivity.
Other Facts Mentioned in the Article:

About Access to Justice for Marginalized People or the A2J Project:

  • Access to Justice Project is a collaborative effort between the UNDP and Department of Justice, Ministry of Law and Justice, Government of India.
  • Aim: The project focuses on strengthening access to justice for the poor by developing strategies that address barriers to accessing justice in legal, social, economic and political domains.

Centre mulls changes in draft e-commerce rules

Source: Business Standard

What is the news?

The Centre is considering changes to the consumer protection rules on e-commerce that may include redrafting related party sales and clarity on flash sales, after consultation with industry and e-commerce players.

Why govt is considering changes?

Industry associations and companies voiced their concerns regarding various provisions of the draft rules. Hence, the final rules are expected to give clarity on issues such as what constitutes flash sales, finer details, and issues regarding the appointment of resident grievance officers, among others.

Background

In a bid to tighten regulatory norms further, the government had released draft e-commerce rules on 21st June 2021 for public consultation. Various industry associations and companies have sent their response to this draft policy. The final draft is expected after the Parliament session gets over later this week.

Concerns 

Industry players have expressed the following concerns:

  1. Related-parties clause: They have urged the government to change the clause that says related parties cannot do any transaction in the marketplace.
  2. Definition of e-commerce: They have also raised their concerns regarding the definition of e-commerce where the proposed rules state that anyone who helps in logistics or fulfillment, should also be considered an e-commerce player.
  3. Inc in compliance burden: Implementation of the amendments in their current form will significantly increase the compliance burden on small businesses as well as for start-ups who are not even in the e-commerce business, but provide services to e-commerce
Suggestions

Industry associations and companies have suggested various changes:

  • The definition of “inventory e-commerce entity” and “marketplace e-commerce entity” must be amended. It will clearly stipulate what is allowed and what is not for both modes of e-commerce.
  • Proposed amendments exclude digital businesses that are already being governed by robust consumer protection norms and grievance redressal procedures, under parallel regulations.

National Innovations in Climate Resilient Agriculture(NICRA)

Source: PIB

What is the News?

Union Minister of Agriculture and Farmers Welfare has informed Rajya Sabha about National Innovations in Climate Resilient Agriculture(NICRA)

About NICRA:
  • National Innovations in Climate Resilient Agriculture (NICRA) is a network project of the Indian Council of Agricultural Research (ICAR) launched in February 2011. 
  • Aim: The project aims to enhance the resilience of Indian agriculture to climate change and climate vulnerability through strategic research and technology demonstration. 
  • The research on adaptation and mitigation covers crops, livestock, fisheries and natural resource management.
Objectives of NICRA:
  • To enhance the resilience of Indian agriculture covering crops, livestock and fisheries to climatic variability and climate change through the development and application of improved production and risk management technologies.
  • To demonstrate site specific technology packages on farmers’ fields for adapting to current climate risks
  • To enhance the capacity building of scientists and other stakeholders in climate resilient agricultural research and its application.

Components: The Project is composed of Four Components:

  • Strategic research on adaptation and mitigation
  • Technology demonstration on farmers fields to cope with current climate variability
  • Sponsored and competitive research grants to fill critical research gaps
  • Capacity building of different stakeholders

India to call bids for battery storage system in Ladakh

Source: Livemint

What is the News?

India will be calling for bids for the largest global tender for a 13 gigawatt-hours (GWh) grid-scale battery storage system in Ladakh Region.

What are Battery Storage Systems?
  • Battery storage systems are devices that enable energy from renewables like solar and wind to be stored and then released when customers need power most.
  • Lithium-ion batteries which are used in mobile phones and electric cars are currently the dominant storage technology.
What is the need for a large scale Battery Storage Project in Ladakh?
  • The Government of India has planned to build 10GW of large green energy capacity projects in the Ladakh region, comprising both solar and wind projects.
  • These large battery storage projects will be used to store the electricity generated to supply to the rest of the country through a transmission link.

Importance of Battery Energy Storage Systems for India:

  • According to the Central Electricity Authority (CEA), India’s power requirement would be 817GW by 2030. More than half of this would be clean energy. 
  • This huge injection of electricity in the grid from sources such as solar and wind requires a storage mechanism that can help balance the national electricity grid. 
  • Hence, it is estimated that there will be a need for a 27GW grid-scale battery energy storage system by 2030 with four hours of storage.
    • One GWh (1,000-MWh) of battery capacity is sufficient to power 1 million homes for an hour and around 30,000 electric cars

ITBP inducts first women officers on combat service

Source: The Hindu

What is the News?

Indo-Tibetan Border Police (ITBP) force which guards the Line of Actual Control (LAC) along the India-China border has commissioned its first two women officers in combat after they completed their training here.

Women in ITBP:
  • The ITBP started recruiting women combat officers in its cadre from 2016 through an all-India examination conducted by the Union Public Service Commission (UPSC). 
  • Before this, it had combat women only in the constabulary ranks.
  • These women officers recruited will now be posted across ITBP formations in the country, including along the LAC with China and the anti-Naxal operations theatre in Chhattisgarh.
About ITBP:
  • Indo-Tibetan Border Police Force (ITBPF) is a Central Armed Police Force(CAPF) functioning under the Ministry of Home Affairs. 
  • Origin: ITBP was initially raised in 1962 under the Central Reserve Police Force (CRPF) Act, 1949 in the backdrop of 1962 during the India-China War
  • However, in 1992, parliament enacted the ITBPF Act and the rules were framed in 1994.
  • Mandate: ITBP is India’s primary border patrol organization for its border with China’s Tibet Autonomous Region. It is also deployed for Anti Naxal Operations and other internal security duties.
  • Moreover, ITBP personnel have also been deployed abroad in UN peacekeeping missions.

For top military posts, MoD weighs merit over seniority

Source: Times of India

What is the news?

The Defence ministry is “examining” a proposal that the commanders-in-chief (Cs-in-C) in the Army, Navy and IAF should primarily be selected on merit rather than seniority.

  • A tri-service committee of the vice chiefs of the Army, Navy and IAF is likely to be formed to study the proposal and recommend suitable merit based criteria for selection of commander in chief
Existing rule

As per the existing policy, promotion to the C-in-C level is based on an officer’s date of birth and his date of commissioning almost four decades ago.

Rationale
  • With the ongoing creation of Integrated theatre commands, the recent proposal aims to formally evolve a more progressive, common and merit based policy for the promotion of officers to three-star ranks in general and the commander in chiefs in particular.
Arguments
  • For: The proponents of the change in policy argue that merit, not just seniority, should be the deciding factor in selecting the top ranks to effectively build tri-service theatre command.
  • Against: According to some sections within the armed forces, only a handful of officers reach three-star rank after being assessed on merit at every stage of their careers. The existing policy is working well and thus there is no need to bring any changes. This will lead to politicization of top ranks.

Centre ropes in NCAER to help expand vocational education in CBSE schools

Source: Livemint

Syllabus: GS-2 – Issues relating to development and management of Social Sector/Services relating to Human Resources.

What is the News:

Even as the national skill mission failed to expand vocational education in schools, the Union education ministry has recently tied up with the National Council for Applied Economic Research (NCAER).

National Council for Applied Economic Research (NCAER) will help CBSE schools to expand vocational education & to make skilling programmes more effective in schools

Why Skill India Mission failed?

  1. Skill India mission was launched by the government in 2015 under which the flagship scheme Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is managed.
  2. PMKVY, launched in various phases, aims to empower India’s youth with employable skills by 2022
  3. But the scheme failed to complete its target. It has trained only 6.59mn people against the target of 7.62 mn in the short term category.
  4. Similarly, the government has failed to achieve its 70% target of placement of these people.
Read more: Skills mission underperforms on training, placement goals

About the NCAER: 

  • It was established in 1956. It is India’s oldest and largest independent, non-profit, economic policy research institute.
  • Furthermore, it undertakes grant-funded research and commissioned studies for governments and industry, and is one of the few think tanks globally that also collect primary data.

How NCAER will help to improve vocational education?

  • It will help to address the challenges halting the implementation of National Education Policy by identifying the constraints through policy road map and field studies.
  • It will provide measures to overcome those constraints and strengthen the skilling programmes in CBSE schools.

In Tokyo, India discovered

Source: ToI

What is the news?

Neeraj Chopra, became the first India to win an athletic gold medal for independent India. India made a profound statement in Tokyo asserting that ‘We too can do it.’

India’s record in Olympics
  • As a colony, India first took part in the Paris Olympics in 1900 and won two medals.
  • It took 108 years to better that tally to 3 in Beijing and another 4 years to go up to 6 in London. But then the medal count fell to 2 in the 2016 Rio Olympics.
  • Till the last Rio games, India could fetch only 27 medals in 24 Olympic ventures.
  • When other similarly placed countries made rapid strides towards the medal stand.
Mission ahead
  • Four gold medals would have placed India among the top 20 in the medal tally and another four among the top ten.
  • This is imminently feasible in the future given our show in Tokyo, as detailed and explained above.
  • The thrust given by GoI on identifying and promoting sporting excellence since 2015 bore results in Tokyo.
  • This mission can be achieved by nurturing the culture of sports across the country and through necessary professional and scientific help to our future stars.

Conclusion

Tokyo games, our best moment in 121 years of Olympic history, demonstrated that India can do it. It is now Target Paris in 2024.


New licensing regime for UCBs in the pipeline

Source: Business Standard

What is the news?

A brand-new licensing regime for urban co-operative banks (UCBs) is on the cards for financially sound and well-managed co-operative credit societies. This comes 17 years after the Reserve Bank of India (RBI) stopped issuing them. 

Expected Reforms in UCBs
  • Constituting a board of management (BoM) for UCBs with deposits of over Rs 100 crore. BoM would have specialists drawn from accountancy, agriculture and rural economy, banking, co-operation, economics, finance, law, small-scale industry, and information technology
  • Framing of modalities for a national umbrella organization
  • Refresh of the National Cooperative Development Policy (2002)
N S Vishwanathan committee  
  • The expert committee on primary (urban) co-operative banks, headed by former RBI deputy governor N S Vishwanathan, is expected to submit its report within a fortnight.  
  • Its mandate is to take stock of the regulatory measures taken by the RBI and other authorities for UCBs and assess their impact over the past five years. 
  • It will also identify key constraints and enablers in fulfillment of their socio-economic objective, and review the current regulatory and supervisory approach. 

The RBI’s Report on Trend and Progress of Banking in India about UCB’s 

  • Co-operative banks, with their grass-root level customer base and domain knowledge, can attract new customers and retain existing clientele. 
  • However, A change in outlook, processes, business model, and strategy are, required to achieve goals in a new development strategy that is in sync with the fast-changing landscape 
  • On the technology front, more than 99% of them are now compliant with the adoption of core banking solutions norms. 

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