9 PM Daily Current Affairs Brief – July 29th, 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 1

GS Paper 2

GS Paper 3

Prelims Oriented Articles (Factly)


Mains Oriented Articles


GS Paper 1

It begs the question- Begging is a matter of survival, not choice. Invisibilising destitute solve nothing-

Source – Times of India

Syllabus – GS 1- Society- poverty and developmental issues, urbanization, their problems, and their remedies.

Relevance – SC has ruled against the criminalization of begging.

Synopsis – The Supreme Court refuses to ban begging amid pandemics.

Introduction-

  • The Supreme Court turned down a petition demanding to restrain vagabonds and the homeless from begging at traffic lights, markets, and public places, to prevent the spread of corona virus.
  • The Supreme Court also stated that it is a socio-economic issue that requires a compassionate and humanitarian solution. It asked the Centre and State governments to ensure vaccinations for the homeless and providing them with shelter and food amid the pandemic.
  • The SC observed that vagabonds, homeless, are compelled to beg on the streets to make a living owing to a lack of education and work.

Begging law in India-

  • There is no central law on begging and destitution. Most states [20 states and two UTs] have adopted the Bombay Prevention of Begging Act, 1959, which criminalizes begging or has modeled their laws on it.
  • The Bombay Prevention Act allows the police and social welfare departments to simply seize homeless people, or indeed anyone who looks destitute, and send them to detention centers.

Previous stance over begging-

In 2018, Delhi High Court decriminalized begging in the national capital and pointed out that nobody begs out of choice or to shirk other employment.

Way forward-

In a society where the government is unable to provide food or work, how can begging be considered a restraint or an offense? It is immoral to turn the poor into criminals until the government can offer good livelihoods for everybody.


No need for a drastic population policy

Source: The Hindu

Syllabus: GS 1 – Population and associated issues

Relevance: Population control measures have to be rational and focus on the welfare-based approach

Synopsis: 

Data from Assam and Uttar Pradesh show that fertility rates have been reducing over time.

Introduction

The Uttar Pradesh Population (Control, Stabilisation and Welfare) Bill of 2021 promotes a two-child policy. A similar law has also been proposed in Assam as well. The Assam CM announced a ‘population armyto curb the birth rate in Muslim-dominated areas in lower Assam.

Read more: Why UP’s proposed population control bill is bad as policy and politics
Decreasing fertility rates in India:

The population projection published by the Union Ministry of Health and Family Welfare in 2019 mentioned that U.P. will reach a replacement rate (the rate at which women give birth to enough babies to sustain population levels) of 2.1 by 2025, and Assam by 2020.

  • According to the National Family Health Survey (NFHS)-2 data, the total fertility rate (TFR) in 1998-99 in U.P. was 3.87. It was decreasing in UP. The NFHS-5 data for 2019-20 for U.P. has not been published.
  • The fertility trend for Assam is even starker. According to NFHS data, Assam had a TFR of 3.5 in 1992-93, which decreased to 1.9 in 2019-20.
Read more: Population populism: UP draft population bill fails tests of necessity, intrusiveness
Does the fertility rate depend on religion?

The fertility rate does not depend on religion. It depends on socio-economic characteristics like education, income, maternal and child health conditions, and other associated factors.

Fertility rates
Source: The Hindu

The district-wise fertility rates for Hindus and Muslims in four States: U.P., Assam, West Bengal, and Bihar have shown in the graph. It is clear from the graphs that there is a positive relationship between the fertility rates of Hindus and Muslims.

In other words, in districts where Hindus have a high fertility rate, the fertility rate of Muslims is also high.

Problem of ageing

As per the population projection report, the proportion of people aged 60 years and above will increase from 13.8% in 2011 to 23.1% in 2036.

Conclusion

India’s decades-old population policy has achieved replacement level fertility in the country without taking any coercive measures. Governments should have faith in these time-tested policies and respect the choices of people, rather than impose warped and motivated ideas regarding demography on the people.

Read more: Population control measures in India – Explained, pointwise 

GS Paper 2

A judgment that must be taken in the right spirit

Source: The Hindu

Syllabus: GS 2 – Indian Constitution—Historical Underpinnings, Evolution, Features, Amendments, Significant Provisions, and Basic Structure.

Relevance: Judgment is related to the procedures and steps required to enact a particular bill.

Synopsis:

The striking down of the 97th Amendment is a reminder that the power to regulate cooperatives must stay with States.

Background:

  • The 97th Constitutional Amendment came into effect on February 15, 2012, and brought about many changes to the legal regime of cooperative societies.
  • However, it was recently struck down by the Supreme court in a limited manner in the Union of India vs Rajendra N. Shah case.

About the 97th Constitutional amendment:

  • The amendment added “cooperative societies” to the protected forms of association under Article 19(1)(c), elevating it to a fundamental right. 
  • It also inserted Part IXB in the Constitution which laid down the terms by which cooperative societies would be governed, in more granular detail than was palatable.

How to amend the constitution?

  • It can be amended only by the procedure provided in Article 368
  • The amendment procedure requires a majority of the total strength of each of the Houses of Parliament and two-thirds majority of those present and voting
  • A proviso to the Article lists out some articles and chapters of the Constitution, which can be amended only by a special procedure
  • The special procedure requires that the amendment will also have to be ratified by the legislatures of half of the States.

Why was the amendment challenged?

  • The challengers pointed towards the procedural lacuna in passing the amendment. They said the government failed to ratify the amendment from at least half the states as per the proviso of Article 368.
  • The proviso desires ratification whenever there is a change in the distribution of powers between the Centre and the States.

Judgement of Courts:

  • Gujarat High Court (2013): It struck down the amendment in 2013 on the grounds that it had failed to comply with the requirements under Article 368(2). Because it was not ratified by the States.
  • It had also given an additional finding that the 97th Amendment violated the basic structure of the Constitution.
  • The Union Government challenged the Gujarat High Court judgment before the Supreme Court. It argued that the amendment neither directly nor effectively changed the scheme of distribution of powers between the Centre and the States.
  • Supreme Court (July 2021): The court took the example of the 73rd and 74th Amendments which introduced the chapters on panchayats and municipalities, respectively. Those amendments, similar in impact on the legislative power of the States, had been passed by the special procedure involving ratification by State legislatures. 
  • The court noted that the procedure had not been followed in this case. It did not go into the question of the amendment being violative of the basic structure of the Constitution. Hence it struck down provisions related to it. 

Way Forward:

  • The cooperative sector has always been in the domain of the States or provinces.
    • The organising principles and mechanisms of these cooperatives differ from area to area. They depend on the industry or crop which forms the fulcrum of the cooperative.
  • Hence, it is best that the Government takes this judgement in the right spirit. It should stay away from further meddling in the cooperative sector, notwithstanding the creation of the new Ministry.

Mending the British-made Assam-Mizoram dispute

Source: Times of India, Indian express 

Syllabus: GS 1 + 2- Regionalism , issues and challenges pertaining to the federal structure

Synopsis

Northeast needs creative solutions like building economic and technology hubs in contested zones. Further, the contested areas should be administered by a central agency to prevent future claims and counter-claims.

Background:

  • Recent border clashes on Assam-Mizoram Border and Assam-Meghalaya border points to the failure of central and state governments to solve the boundary issue.
  • Today the borders between Assam-Meghalaya, Assam-Mizoram, Assam-Nagaland and Assam-Arunachal Pradesh are all hotly contested spaces and marked by frequent bloodbaths.

Read moreAssam Mizoram Border Dispute – Explained, Pointwise

Reasons behind continued tensions:

  1. First, the boundary division in colonial times was done to serve the commercial interests of the British. While post-independence, it was more focused on administrative convenience. Thus, in both scenarios, the tribal rights were not given much respect while undertaking the demarcation exercise.
  2. Second, there is a tussle between adherence to the constitutional boundary versus obedience to the cultural boundaryThe people of new states like Mizoram, Meghalaya (which have been carved out of Assam) show greater respect to cultural boundaries. For the tribes of the Northeastern states, the word ‘country’ is restricted to their respective homelands. A nation is a place where they are free to live the way their ancestors lived. However, Assam is tilted towards the constitutional boundaries, which gives it more control over forest regions that have been historically under the control of tribals.
  3. Third, the state and center governments have failed to focus on long-lasting solutions.
    • In the past, Assam had inflicted economic blockades on Mizoram and Nagaland after every border tussle. No central government has taken these border disputes seriously, much less tried to resolve them. 

Way Ahead:

  • In the past, there were proposals to turn the disputed areas into economic zones, which would benefit the states concerned.
  • Disputed borders can also become educational hubs, IT parks, health centres, and tourist destinations. Here investments can come from DoNER and the benefits will be shared by people on both sides.
  • Further, it would be in the interest of all concerned if these contested areas were administered by a central agency to prevent future claims and counter-claims. 
  • Politically mediated practices of “fixing” borders and enclosure of the forest commons need to be centred around people, their longstanding practices, and concerns for forest commons.

The Housing Boost

Source: Indian Express

GS2: Welfare Schemes for Vulnerable Sections of the population by the Centre and States

Synopsis: The Model Tenancy Act can benefit homeowners and tenants.

Introduction:

India is set to double its urban population between 2018 and 2030. By 2028, New Delhi would become the most populous city on the planet. Thus, large-scale migration to urban centers in India is bound to create pressure on housing markets.

As per the Report of the Technical Group (TG-12) on Estimation of Urban Housing Shortage (2012), the economically weaker sections and low-income groups currently face 96 percent of the total housing shortage in India.

Policy bottlenecks:

First, homeowners prefer to keep their homes vacant instead of renting them out due to the existence of pro-tenant rent control laws. As per the National Sample Survey Organization’s data of 2012, 71 percent of households living in rented accommodations did not have a written contract.

Second, judicial delays in case of disputes. In India, an average commercial civil suit was disposed of in 1,445 days in a district court, as per World Bank’s Doing Business Report in 2018.

How the Model Tenancy Act, 2021 can significantly boost India’s rental markets?

  • First, the Act calls for the repeal of existing rent control laws in all states and Union territories. It also seeks to remove monetary ceilings on the rent amount.
  • Second, the Act addresses various challenges such as the fear of illegal occupation/eviction, arbitrary security deposit and structural maintenance-related demands, and high transaction and legal costs.
  • Third, the Act facilitates special fast-track courts to settle rental disputes. It envisions improved contract enforcement through a three-tier dispute redressal mechanism. The adjudicatory bodies at the second and third-tier of appeal are required to dispose of cases within a 60-day timeline.
  • Fourth, the private sector can enter into affordable rental housing markets through models like “Build to Rent” and “Rent to Own”. Under the “Build to Rent” model, private residential properties can serve as a reliable option for prospective tenants. Under the “Rent to Own” model, the owner agrees to sell the house to the tenant in the future and the initial contract contains the necessary clauses to affect the future transfer of ownership. This model is popular in the United Kingdom, Middle East, and Africa.
  • Lastly, the Model Tenancy Act, 2021 provides a promising framework for tenancy agreements. The meagre rents under the rent control laws are the reason behind many housing units and chawls. This points to the need for a separate mechanism beyond the Model Tenancy Act that ensures the provision of safe and good quality rental units for tenants.

The states should use this opportunity to unlock the economic value of vacant housing and increase access to good-quality housing.


The vision of the National Education Policy must be served by its implementation

Source: The Indian Express

Syllabus: GS 2 – Issues relating to development and management of Social Sector/Services relating to education

Relevance: National Education Policy (NEP) has to learn from public policy challenges for transforming education in India.

Synopsis: To successfully implement the National Education Policy (NEP), India needs to learn from public policy challenges

About the National Education Policy:

On July 29 last year, the Government of India (GoI) announced the National Education Policy (NEP) 2020 as a pathbreaking initiative to reimagine the future of education.

It “proposed the revision and revamping of all aspects of the education structure, including its regulation and governance, to create a new system that is aligned with the aspirational goals of 21st-century education.

Ever since the announcement of the NEP, the government is focused on laying the foundation for its implementation. But, before we work towards implementation, there is a strong need to understand why policies fail and what we need to do to ensure their success.

Public policy and its challenges
  • Public policies do not settle in equilibrium and are hard to predict: The history of the evolution of failed public policies is filled with predictions that went wrong.
  • Further, Public policies evolve and coevolve: The evolutionary nature of public policy needs to be recognised and accepted.
  • Apart from that, the public policies are embedded in complex systems. A complex system is one in which diverse agents linked in networks interact selectively following simple rules without centralised control, and from which emerge (often unpredictable) patterns, structures, uses, and functionalities. The Indian education system is also positioned itself in this complex system.
  • Public policies are subject to cognitive biases: The dominant thinking while designing public policy is a rational choice theory (assumes decision-making as a part of rational human behaviour). But it is time that we recognise that there are pre-existing biases, prejudices, and opinions.
  • Also, public policies are subject to reactivity and the Lucas critique. This will result in policy-altering behaviour after some time of policy implementation. Lucas critique is about the limitations of predicting the effects of change in economic policy through historical data.

To become successful, the NEP has to address the above challenges.

How NEP will get implemented?

The implementation of NEP should be based on the following five initiatives.

  1. There is an urgent need to establish a new organisational structure, the National Education Policy Commission, whose sole mandate is to work towards implementing the NEP.
  2. Accountability of public officials: India needs institutional checks and balances that will ensure that the NEP’s responsibility goes along with the powers and functions of the individuals and institutions entrusted with the tasks.
  3. Establishing institutional mechanisms and empowered steering committees, within the existing mandate of the Ministry of Education. The UGC and other such state and central level regulatory bodies can continuously monitor the implementation.
  4. Providing the necessary financial resources:
    • A special purpose vehicle (SPV) needs to be created to ensure NEP funds are available and that the implementation process is not delayed.
    • India also needs to promote private philanthropy for funding both public and private higher education institutions.
    • New and additional forms of tax incentives and other forms of incentives need to be evolved.
  5. Empowering institutions of eminence and other institutions: The policy of selecting and empowering “institutions of eminence” in India with a view to propelling them to become world-class institutions is a landmark and transformative idea. But there is a lot that needs to be done for fulfilling the vision of the NEP.

A pandemic-optimized plan for kids to resume their education

Source: Livemint

Syllabus: GS 2 – Issues relating to development and management of Social Sector/Services relating to education

Relevance: To improve education, reopening the schools is the way forward.

Synopsis: 

India’s hard-won educational gains could be lost if India still did not reopen schools.

Introduction

Schools must reopen and our children must return to education. Some systematic state efforts and voluntary initiatives by teachers for in-person engagement, including mohalla classes, have been laudable but grossly inadequate, to compensate for closed schools.

Why do we need to reopen schools?

This pandemic has driven education into an unprecedented crisis.

  • Children have not only lost over a year of education, but they have also lost a lot of what they had learned before—the phenomenon of learning loss.
  • Economic devastation, combined with a break in habit, may result in large numbers of students dropping out.
  • Children are being ‘promoted to the next class, without addressing the lost year of education.
  • Careless and misinformed decisions, the kind of which we have seen too often for comfort during the pandemic, would be disastrous for education.
How to reopen schools?
  • No school should be opened till all its teachers and other team members have been fully vaccinated. This is to protect them and minimize the risk of their being carriers of the covid virus to children. Vaccination priority should be accorded to school staff.
Read more: Recognising teachers as front line workers
  • Schools will have to be opened even though children have not been vaccinated. But we should plan our vaccination program for children. This should include trials and approvals, the procurement and delivery of vaccines, mobilization, including efforts to address any hesitancy.
  • Decisions to open schools should be taken for geographic units that encompass relatively proximate communities, and certainly not for an entire state or district simultaneously. As a default option, these units can be panchayats in rural areas and wards in urban areas.
    • Schools serving tight and small communities can open with relatively low levels of vaccination of the relevant population. This is because children and adults from such communities intermingle anyhow, and thus open schools do not materially increase the risk of transmission.
    • Schools that serve dispersed communities would require higher levels of vaccination before they open.
    • In general, early opening of primary and middle schools, particularly in rural areas, with higher classes having to wait longer, especially in large cities.

Overall, India must open schools at the earliest, but it must do so with rigorous procedures along with genuine expert advice, and recognise that the biggest priority today for education is vaccination.


India-US ties key to anchoring Indo-Pacific region

Source: Livemint, Indian Express

Syllabus: GS2 – International Relations

Relevance: Indo-US ties under the new Biden administration

Synopsis: US Secretary of State Antony Blinken’s first visit to India after the Biden administration took office in January 2021. Key points that were discussed and the significance of the visit.

Relevant points

During talks the emphasis seemed to be on building on the convergences and not allowing irritants – like India’s alleged record on minority rights and freedom of the press – to overshadow ties.

  • Meeting with Tibetan spiritual leader: Blinken also met with a representative of the Tibetan spiritual leader the Dalai Lama in New Delhi, Geshe Dorji Damdul, a move that could elicit an angry response from China. It should be noted that The US supports the Tibetan leader the Dalai Lama with many thousands of Tibetan refugees seeking asylum in the US.
  • On Indo-US partnership: Blinken also said that strengthening the partnership with India is one of the US top foreign policy priorities, stating that this partnership will be critical to delivering stability and prosperity in the Indo-Pacific region and beyond
  • On Afghanistan: It was agreed that the peace negotiations should be taken seriously. It is the only way to create a lasting solution and that the diversity of Afghanistan must be taken into account for finding that lasting solution
Significance of the visit
  • Expansion of strategic partnership: The visit highlights the commitment of Delhi and Washington to expand the scope and intensity of their strategic partnership while avoiding a potential split over the question of human rights.
  • Concerns over India’s democratic deficit: Visit assumes importance due to America’s apprehensions of India’s democratic backsliding in terms of rising of majoritarian politics and the undermining of institutions. Such concerns were expressed by President Barack Obama too during his visit to India in January 2015. But the idea that India has become an illiberal democracy has gained much ground since then.
  • Meeting of the QUAD: the Visit to New Delhi is also aimed at laying the groundwork for an in-person meeting of the leaders of the four Quad countries – i.e. the US, India, Australia, and Japan – who back a free and open Indo-Pacific.

GS Paper 3

Oxygen for fiscal federalism

Source: The Hindu 

Syllabus: GS 2 – Issues and Challenges Pertaining to the Federal Structure

Relevance: This article focuses upon the aspects of Fiscal federalism in India.

Synopsis:

A special GST rate could be levied by using the power under Article 279A. This would enable the States to raise more resources during the pandemic.

Background:

  • India has a federation with a strong centralizing policy. Nonetheless, India maintained its limited federal characteristics for a fairly long time.
  • However, many experts now feel that federal characteristics are being threatened and undermined in recent times.

Undermining Federalism:

  • First, the Goods and Services Tax (GST) law assured States a 14% increase in their annual revenue for five years (up to July 1, 2020). However, the Union government has deviated from the statutory promise and has been insisting that States avail themselves of loans. Kerala is entitled to a GST compensation of Rs. 4,041 crore for the financial year 2020-21. But the Union government has been disregarding this obligation. 
  • Second, last year, the Union government increased the borrowing ceiling of the States from 3% to 5% for FY 2020-21. But the conditions are attached to 1.5% out of this 2% increase of ceiling. States will have to bear the burden of welfare and relief measures during the pandemic. These conditions go against the principle of cooperative federalism.
  • Third, the 15th Finance Commission had recommended Rs. 2,412 crore as a sector-specific grant and Rs. 1,100 crore as a State-specific grant for Kerala. But this amount has not been released. 
  • Fourth, the expenditure rules attached to the Disaster Management Fund are unviable. This inhibits the state’s discretion in doing disaster-related expenditures. 

Suggestions:

  • The present GST compensation period will end in 2021-22. Beyond this period, it is going to be very difficult to convince the Union government to provide compensation, as there is no constitutional obligation to do so to the States.
    • The Union government can consider using its powers under Section 4(f) of Article 279A to raise additional resources during the pandemic.
    • Section 4(f): It enables the Goods and Services Tax Council to make recommendations on any special rate or rates for a specified period. In order to raise additional resources during any natural calamity or disaster.
  • The future interest liability of loans should not be placed on the shoulders of the States. Moreover, the borrowing limit of States, as per the Fiscal Responsibility and Budget Management Act, should not be built into these loans.
  • The Corporate Social Responsibility Fund could be remitted to the Chief Minister’s Relief Fund in order to augment disaster management resources.

These are some urgent necessary measures that are to be taken for pumping oxygen to fiscal federalism in India.


How to Exit Farming Risk Trap

Source: Indian Express

GS3: Issues related to Direct and Indirect Farm Subsidies and Minimum Support Prices

Relevance: The article highlights issues in Indian agriculture

Synopsis: Reforms in agriculture are needed to extract ourselves out of the risk-laden currents of agriculture.

State’s interference in agriculture:

Indian agriculture was saved from nationalization due to opposition of Swatantra Party in Parliament against Jawaharlal Nehru’s farm collectivization efforts in the 1950s. However, even today, government agencies have a say on all aspects of the farmer’s livelihood. It includes 13 central and countless state ministries and agencies that oversee rural property rights, commodity prices, input subsidies and taxes, agribusiness and research, etc.

The result has been a suffocating mix of arbitrary and conflicting policy interventions by both the central and state government agencies. For example, poor and varying levels of provision of basic public goods, including irrigation.

Implications of state’s interference:

  • First, relatively low productivity levels with high levels of variation in crop yields across the country. It has resulted in lower levels of individual welfare and higher levels of overall risk. The large gap in rice and wheat yields between Punjab and Haryana and the farm districts in the rest of the country remains far from being closed.
  • Second, there is severe unevenness in the provision of common goods. The absence of well-functioning markets for agricultural land, crops, inputs, poor quality of education, and slow progress achieved on labor reform have reduced overall resource mobility. They have limited the mobility of ideas and technology.
  • Third, the real promise of a decentralised system has failed to materialize due to highly fragmented efforts with different “agricultural models” for different farming districts.
  • Four, the various input subsidies and minimum price guarantee procurement schemes have worsened the overall levels of productivity. It has resulted in the degradation of our water resources, soil, health, and climate. Thus, it is no surprise then that the farm households of Punjab and Haryana fear both, the loss of state support for rice and wheat and the higher risks implied by a switch to other crops.

Suggestions

Farm reforms must be oriented towards minimizing risk and increasing returns for farmers. Farmers must be free to determine the best mix of resources, land, inputs, technology, and organizational forms for their farms. Farmers must be allowed to enter and exit agriculture on their own terms and contract with whomever they wish.


Govt must not micromanage

Source: Business Standard

Syllabus – GS-3: Changes in Industrial Policy and their Effects on Industrial Growth.

Relevance: The article highlights lacunas in present government policies for industrial development.

Synopsis: The Centre should focus on a broad policy framework rather than micromanaging the industrial and developmental activities of States.

Background

At present, the Union government has adopted the approach of micromanagement of industrial policy and to develop activities that have to be implemented by the states. Government intervention lies in the belief that East Asian growth rested on direct interventions by public officials in the decisions taken by corporations about investment, technology, and trade.

What is Micromanagement?

Micromanagement is when matters that should be left for decision by a lower level are controlled and decided at a higher level. The main problem with this is that the focus on the broad policy framework is lost.

Read about – What is PLI Scheme?

The PLI reflects a micromanagement approach to policy

  • it gives government officials, with little experience of commercial activities, the discretionary authority to define who is eligible for the incentives.
  • It is a business-friendly approach not a market-friendly approach and will lead, sooner or later, to favouritism and possibly even corruption.
  • A business-friendly approach based on subsidies may show some immediate gains, as the increase in the domestic production of mobile phones. But a market-friendly approach will lead to broader gains that are not dependent on subsidies.
  • A market-friendly approach will set a stable framework of regulations and taxes, macroeconomic stability, and a correctly valued exchange rate and leave it to the market to pick winners and losers.
  • In fact, such a market-friendly approach may achieve more than micromanagement by bureaucrats and politicians, as it will offer incentives for all sectors.

Areas where government should involve itself:

  • It can address more specific factors that are holding back industrial growth and exports like
    • inadequacies of infrastructure,
    • inadequate research and development in industry,
    • shortages of skilled labor,
    • imperfections in the capital market for MSMEs, and so on.
  • If the government had chosen to spend Rs 1.9 trillion on correcting these impediments, we would have achieved much more by way of growth and competitiveness.

Union government Micromanaging the development efforts of states

  • Another area is the growing intrusion of the Union government in the development efforts of states through conditional grants given under centrally-sponsored schemes. The budget provision for this has gone up from Rs 3.4 trillion in 2020-21 to Rs 3.8 trillion in 2021-22.
  • There is a great diversity between the states, but also within the states. A standardized approach of the Union government for designing public interventions in the agriculture, health, and education sector are not right. Here, policies must suit local conditions. For instance, the terms of a grant for drinking water supply for Kerala and Rajasthan can’t be the same.

Way forward

  • The Union government must not try and micro-manage what corporate management and state governments have to implement.
  • It should recognize that now these lower-level decision-making entities have the competence and will make the right choices.
  • It should focus more on building a framework for these decisions that is stable and consistent in a market-friendly and federal economy, and on promoting decentralized collaboration on matters of inter-state significance.

Richer, and poorer: Inequality will continue to scar the economy long after Covid leaves us

Source: Times of India

Syllabus: GS- 3 – Inclusive growth and issues arising from it

Relevance: COvid pandemic has increased the already huge inequality in the world. Steps to tackle this should be initiated.

Synopsis: There is a high possibility that the post-Covid world would be a more unequal world.

Introduction

Mass deaths reduced the labor force, and post-pandemic labor scarcity resulted in increased pay. Inequality decreased as wages increased disproportionately faster than profits.

  • Inequality caused by Covid is a global issue. In the midst of the second wave, when millions of poor people were gasping for oxygen outside hospitals, Mercedes achieved the highest monthly sales of its ultra-luxury SUV in June.
  • The number of billionaires in the country climbed from 102 to 140 last year, when the economy saw its worst downturn since independence. 75 million people fell into poverty, accounting for 60% of the global rise in poverty, according to Pew Research.
  • Despite last year’s strict lockdown, listed company earnings as a percentage of GDP achieved a ten-year high of 2.6 percent. Whereas CMIE data showed the jobless rate had risen to 23.5 percent at the peak of the lockdown.

How has inequality risen during the pandemic?

Sharpening of disparities came from a variety of places and angles.

  • Firstly, people who lived in slums and other densely populated places were more susceptible to the virus, and they were compelled to spend their savings on treatment and survival. The wealthy could either defend themselves or if they became infected, could afford treatment, isolation, relaxation, and recuperation.
  • Secondly, poorer people, who work in contact-based industries like restaurants, hotels, travel, and tourism, have seen their jobs and wages suffer as a result of the lockdowns. Those in white-collar employment could easily adjust to remote working, have their paychecks safeguarded, and even exploit the lockout to save money.
  • Thirdly, large corporations were able to take advantage of low financing rates and raw material costs, as well as brutally eliminate jobs. While small businesses and micro-businesses in the informal sector were forced to close.
  • Fourthly, to maintain financial stability and keep the economy moving, the Reserve Bank of India, like other central banks, lowered interest rates and injected massive amounts of cash. Instead of going into productive activity via loans, all of that money has gone into the stock market, fueling an asset price boom. The poor have been hammered hard by inflation, which is already over 6% and above the upper limit of the goal band.
  • Lastly, this heightened inequity will linger long after Covid has passed away. For example, online education has widened an already wide digital gap. Only about a third of the youngsters had access to online classrooms, according to the Annual Status of Education Report (ASER).
    • Learning quality is questionable, given that virtual teaching is a novel experience for both teachers and students, raising fears that school accomplishment levels, which are currently alarmingly low, could be further undermined.

Inequalities are both morally and politically damaging. Our largest growth driver is the enormous consumption base of the lowest half of our population. They will spend more if they earn more, which will result in increased output, jobs, and growth. This virtuous loop is what we need to focus on.


Depositors to get up to Rs 5 lakh within 90 days if bank under moratorium

Source: The Hindu and Business Standard

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

Relevance: The DICGC Bill provide big relief to small depositors

Synopsis: 

The Union Cabinet has cleared the Deposit Insurance and Credit Guarantee Corporation (DICGC) Bill, 2021 which will allow depositors to withdraw up to Rs 5 lakh in 90 days.

About the Deposit Insurance and Credit Guarantee Corporation (DICGC) Bill, 2021
  • The DICGC Bill, 2021, will cover banks that have been already placed under a moratorium and will insure savings deposits, fixed deposits, current and recurring deposits.

Procedure:

DICGC Bill
Source: Business Standard
  • Each depositor’s balance of ₹5 lakh is guaranteed for both principal and interest.
  • In the first 45 days, after the bank is placed under a moratorium by the Reserve Bank of India (RBI), the lender will collect all depositor claims and submit them to DICGC.
  • The corporation will process the claims in real time. Within 90 days, the process will be completed, even when the bank resolution is ongoing.
  • For delay in payment of premium, the bank is liable to pay interest at the rate of 8 percent above the Bank Rate on the default amount from the beginning of the relevant half-year till the date of payment.
What is DICGC and how it will function?
  • DICGC is a fully owned subsidiary of the Reserve Bank of India (RBI) and was established in the year 1978.
  • DICGC collects insurance premiums from the insured banks for the administration of the deposit insurance system. The premiums to be paid by the insured banks are computed on the basis of their assessable deposits.
  • The Insured banks pay advance insurance premiums to the corporation semi-annually within two months from the beginning of each financial half-year, based on their deposits as at the end of the previous half-year.
  • The premiums paid by the insured banks to the DICGC are required to be borne by the banks themselves and are not passed on to the depositors.
What is Deposit Insurance Fund (DIF)?

The amount in Deposit Insurance Fund (DIF) is used for the settlement of claims of depositors of banks under liquidation, reconstruction and amalgamation.

The DIF is built out of the premium paid by insured banks and the coupon income received on investments in central government securities.

Significance of the changes:
  • This will be the biggest relief to small depositors, nearly covering 98.3 percent of depositors and 50.9 percent of the deposit value.
    • Globally, the deposit insurance coverage was around 80 percent of all accounts and 20-30 percent of the deposit value.
  • This would address the woes of depositors who were not able to get their funds due to problems of banks.
  • Normally, it takes about 8-10 years, after the complete liquidation of the bank, to get the depositors’ money. But the bill will provide it within 90 days of the RBI’s imposition of a moratorium on a bank’s operations.
Challenges:
  • The revival of banks facing problems will become difficult as they will have to return money to the depositors.
  • Although the change will cover 98.3 percent of accounts, there is certainly scope for raising the limit further. Since the middle-income depositors may still not get full benefit in the case of a failure of a bank.
    • Currently, they rely upon a merger with another bank as a bailout to take care of customers’ money.

Private partners could help RBI run a digital currency

Source: Livemint

Syllabus: GS3 – Information Technology

Relevance: Issues in the implementation of a retail CBDC

Synopsis: A two-tiered model for retail issuance of CBDC should be implemented by India. Issues involved and the way forward.

Background

Recently, a deputy governor of the Reserve Bank of India (RBI) announced that RBI is working on a “phased implementation strategy” for the issuance of a central bank digital currency (CBDC), including a possible pilot project in the retail segment.

What is a retail CBDC?

A retail CBDC is a digital version of a fiat currency that’s available to the general public. It will be part of the payments ecosystem, which already consists of banks and payment service providers (PSPs).

Issues involved

One significant issue in the design of a retail CBDC is the role of the private sector. A retail CBDC issuance will include the

  • Introduction of public services needed for customer on-boarding
  • Systems for due diligence
  • Compliance with anti-money laundering laws
  • Transaction authorization and maintenance of cyber security

Such activities mark a departure from existing central bank functions that focus on monetary stability and do not require direct interaction with retail users.

Global models

A recent report by the Vidhi Centre for Legal Policy, notes that globally many central banks are exploring a retail CBDC that involves private-sector participation through a two-tiered model.

Let us first understand about the direct model.

Direct model

A direct model will allow the central bank to exercise more control over the CBDC design. It will also require the bank to assume a more active role in payment services for CBDC transactions, raising questions over the institutional capacity of a central bank to undertake such activities.

In economies like India’s that have well-developed digital-payment markets, this may lead to the central bank competing with PSPs, which would raise concerns of disintermediation.

Note: Disintermediation means the removal of intermediaries from a supply chain, or “cutting out the middlemen” in connection with a transaction or a series of transactions.

Two-tiered model

The two-tiered model seeks to address the concerns of disintermediation. Under this model, a central bank develops the core CBDC system and the private sector takes up operational tasks.

Why this model? – Private-sector PSPs are “best placed to use their expertise” to promote innovation and integrate payment services with other financial products and platforms.

Direct model vs two-tiered model
  • Differences: In a direct model, the central bank is responsible for all aspects of CBDC issuance and its access to end-users while in a two-tiered model a central bank develops the core CBDC system and the private sector takes up operational tasks.
  • Similarities: Under both models, a CBDC remains a direct central bank liability.
Global examples of two-tiered model
  • Bahamas: This model has been adopted by the central bank of the Bahamas that launched its CBDC (Sand Dollar) in 2020. Financial intermediaries in the private sector (banks, money-transmission businesses, PSPs, etc) provide wallet services for holding and using the Sand Dollar issued by the central bank.
  • China: A CBDC pilot project launched by the People’s Bank of China in 2020 relied on a similar model, whereby it issued its e-CNY (China’s CBDC) through ‘authorized operators’ such as commercial banks and licensed non-bank payment institutions.
What should RBI do?

In India, to take advantage of the potential of the country’s payments sector, RBI should consider a two-tiered model for its retail CBDC.

  • Development of oversight & risk management functions: RBI will have to develop oversight and risk management functions vis-à-vis CBDC intermediaries. It will have to establish systems to address operational failures or cybersecurity breaches.
  • Appropriate regulatory architecture needs to be established to empower RBI to regulate CBDC intermediaries and oversee the soundness and operational resilience of private entities, while ensuring overall financial stability and the safety of customer funds.
Way forward

A two-tiered model based on public-private partnerships would present us with an opportunity to leverage our private-sector potential to engage customers while promoting CBDC-oriented innovation in the payments sector.

Terms to know


Prelims Oriented Articles (Factly)


PM to roll out academic credit bank

Source: The Hindu

About the news:

On the first anniversary of the National Education Policy (NEP), the Centre plans to officially roll out some initiatives promised in the policy.

About the implementation of National Education Policy:
About the planned initiatives under NEP:

Credit transfer system:

  • All institutions in the top 100 of the National Institutional Ranking Framework as well as those who have achieved an A grade under the National Assessment and Accreditation Council will be allowed to participate in the credit transfer system.
  • This system will also allow multiple entry and exit options for students.
  • Academic Bank of Credit will keep records of the academic credits of a student. It will not accept any credit course document directly from the students for any course they might be pursuing, but only from higher education institutes, who will have to make deposits in students’ accounts.
    • This will help in credit verification, credit accumulation, credit transfer and redemption of students, and promotion of the students

Engineering in regional languages: The government will also announce the launch of engineering degrees in regional languages in about 14 smaller institutions.

The government will also announce the establishment of the National Digital Education Architecture and National Education Technology Forum.

Multidisciplinarity is also being encouraged under the NEP. With the guidelines to be issued by the government, this will allow the merger of institutes as well as to give students the choice of taking subjects such as social sciences, music and sports while getting engineering degrees, or even get a minor degree in emerging areas while majoring in a different subject.


Centre launches Secured Logistics Document Exchange and Calculator for GreenHouse Gas Emissions Initiatives

Source: PIB

What is the News?

Government of India has launched the Secured Logistics Document Exchange Initiative along with a Calculator for GreenHouse Gas Emissions Initiative.

 About Secured Logistics Document Exchange(SLDE) Initiative:

  • SLDE platform is a solution that aims to replace the present manual process of generation, exchange and compliance of logistics documents with a digitized, secure and seamless document exchange system.
  • The platform will enable generation, storage and interchange of logistics-related documents digitally using Aadhaar and blockchain based technology.
  • Developed by: The platform has been developed and executed with banks (ICICI, Axis Bank, State Bank of India and HDFC Bank) and stakeholders including freight forwarders, exporters, importers and vessel operators.
  • Benefits of the Platform: The platform will provide a
    • complete audit trail of document transfer
    • faster execution of transaction
    • lower cost of shipping and overall carbon footprint
    • easy verification of authenticity of documents
    • lowered risk of fraud, etc.

About Greenhouse Gas(GHG) Emission calculator Initiative:

  • The GHG Calculator is an efficient, user-friendly tool that provides for calculating and comparing GHG emissions across different modes.
  • The calculator allows for commodity-wise comparison of GHG emissions and total cost of transportation, including their environmental cost, between movement by road and rail.

King Chilli ‘Raja Mircha’ from Nagaland exported to London for the first time

Source: PIB

What is the News?

The consignment of ‘Raja Mircha’ also referred as king chilli from Nagaland was exported to London via Guwahati by air for the first time.

About Raja Mircha:

  • Raja Mircha is a chilli from Nagaland. It is also referred to as king chilli or Bhoot Jolokia and Ghost pepper.
  • Genus: This chilli belongs to the genus Capsicum of the family Solanaceae.
  • GI Tag: It got the Geographical Indication(GI) certification in 2008.
  • Significance: It has been considered as the world’s hottest chilli and is constantly on the top five in the list of the world’s hottest chilies based on the Scoville Heat Units (SHUs).

About Scoville heat units(SHU):

  • Scoville heat units(SHU) measure how much sugar-water needs to be diluted into a chili pepper mash to get to the point where you no longer feel the heat at all.The higher the Scoville rating, the hotter the pepper.

India has 500 million tonnes of gold ore reserves: Govt

Source: Down To Earth

What is the News?

The Union Minister of Mines has informed Rajya Sabha about the Gold Ore Reserves present in India.

Gold Ore Reserves in India:

  • According to National Mineral Inventory data, India has 501.83 million tonnes of gold ore reserves as of April 1, 2015.
  • Out of these, 22 million tonnes were placed under reserves category and the rest under remaining resources category.
  • The largest reserves of gold ores are located in Bihar (44%), followed by Rajasthan (25%), Karnataka (21%), West Bengal (3%), Andhra Pradesh (3%) and Jharkhand (2%).
  • The remaining 2% reserves are in Chhattisgarh, Madhya Pradesh, Kerala, Maharashtra and Tamil Nadu.

Government Initiatives to Extract Minerals:

  • The Geological Survey of India(GSI) is engaged in geological mapping followed by mineral exploration and surveys of various mineral commodities with an aim to identify potential mineral rich zones and establish resources.
  • Moreover, the Government of India has amended the Minerals Evidence of Mineral Contents Rules to allow auction of composite licence at G4 level for deep-seated minerals including gold.
    • Mining leases are for areas with proven reserves of minerals. On the other hand, composite licences are for areas where preliminary exploration has been done by the government but further exploration is required by mining companies.
  • This is expected to bring more participation from private players with advanced technology in the field of exploration and mining of deep seated minerals which is expected to reduce the cost of extraction of gold.

Parliament Passes Juvenile Justice (Care and Protection of Children) Amendment Bill 2021

Source: PIB

What is the News?

Parliament has passed the Juvenile Justice (Care and Protection of Children) Amendment Bill, 2021.

About Juvenile Justice (Care and Protection of Children) Amendment Bill, 2021:

  • The Juvenile Justice Amendment Bill, 2021 seeks to amend the Juvenile Justice Act, 2015.

Key Provisions of the Bill:

          Category Juvenile Justice Act,2015Juvenile Justice Amendment Bill, 2021
         AdoptionUnder the Act, once prospective adoptive parents accept a child, an adoption agency files an application in a civil court to obtain the adoption order. The adoption order issued by the court establishes that the child belongs to the adoptive parents.The Bill provides that instead of the court, the district magistrate (including an additional district magistrate) will perform these duties and issue all such orders.
       AppealsThe Act provides that there will be no appeal for any order made by a Child Welfare Committee concluding that a person is not a child in need of care and protection.The Bill provides that any person aggrieved by an adoption order passed by the district magistrate may file an appeal before the Divisional Commissioner, within 30 days of such order.
    Serious offencesThe Act provides that the Juvenile Justice Board will inquire about a child who is accused of a serious offense.  Serious offences are those for which the punishment is imprisonment between three and seven years.The Bill adds that serious offences will also include offences for which maximum punishment is imprisonment of more than seven years, and minimum punishment is not prescribed or is less than seven years
Child Welfare Committees (CWCs)The Act provides that states must constitute one or more CWCs for each district for dealing with children in need of care and protection. It provides certain criteria for the appointment of members to CWC.The Bill adds certain criteria for a person to be ineligible to be a member of the CWC.

Jawahar Navodaya Vidyalaya students detect asteroids under Khagolshala Asteroid Search Campaign 2021

Source: PIB

What is the News?

Jawahar Navodaya Vidyalaya students have detected Eight Asteroids as part of the Khagolshala Asteroid Search Campaign 2021.

About Khagolshala Asteroid Search Campaign:

  • Khagolshala Asteroid Search Campaign(KASC) is an initiative of the Office of Principal Scientific Adviser, Government of India, and SPACE Foundation.
  • The campaign is the India chapter of an international student research program that has got students involved in the search for asteroids.
  • Under the campaign, high-quality astronomical data sets are distributed to students through the PANSTARRS telescope for analysis and identification of asteroids.
  • The students then analyze the data using software, which then leads to potential discoveries.
  • These observations feed into the Near-Earth Object(NEO) data being compiled by NASA and the Jet Propulsion Lab (JPL).
  • As part of the campaign, Space India has established Khagolshala Astronomy and Space Education Labs (ASELs) across 20 Jawahar Navodaya Vidyalayas till date.

About Asteroids:

  • Asteroids are small, rocky objects that orbit the Sun. Although asteroids orbit the Sun-like planets, they are much smaller than planets.
  • There are lots of asteroids in our solar system. Most of them live in the main asteroid belt—a region between the orbits of Mars and Jupiter.

About PANSTARRS Telescope:

  • Panoramic Survey Telescope and Rapid Response System (Pan-STARRS) is a telescope located in Hawaii, US.
  • The telescope consists of astronomical cameras, telescopes and a computing facility that is surveying the sky for moving or variable objects on a continual basis. It is also producing accurate astrometry and photometry of already-detected objects.

About SPACE Foundation:

  • SPACE Foundation was established in 2001. It aims to popularize science and inculcate scientific temperament among the masses, especially students in India.

KVIC & BSF Launch Project BOLD in Jaisalmer to Prevent Desertification and Support Rural Economy

Source: PIB

What is the News?

Khadi and Village Industries Commission(KVIC) in collaboration with the Border Security Force (BSF) has planted 1000 bamboo saplings at Tanot village in Jaisalmer, Rajasthan under Project BOLD.

About Project BOLD:

  • Project BOLD (Bamboo Oasis on Lands in Drought) is an initiative of Khadi and Village Industries Commission(KVIC).
  • Purpose: The project seeks to create bamboo-based green patches in arid and semi-arid land zones of the country.
  • It is a unique scientific exercise serving the combined national objectives of reducing desertification and providing livelihood and multi-disciplinary rural industry support

Why was Bamboo chosen for the Project?

  • Bamboo grows very fast and in about three years’ time. Hence, they could be harvested.
  • Bamboo is also known for conserving water and reducing evaporation of water from the land surface, which is an important feature in arid and drought-prone regions.

Benefits:

  • The Project will reduce desertification and provide livelihood and multi-disciplinary rural industry support.
  • Moreover, it will also act as a haven for sustainable development and food security.

International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021

Source: PIB

What is the News?

International Financial Services Centres Authority (IFSCA) has released the proposed IFSCA (Capital Market Intermediaries) Regulations, 2021.

  • The regulations provide for regulatory requirements in respect of registration, obligations and responsibilities of various types of capital market intermediaries.

 About IFSCA:

  • International Financial Services Centres Authority (IFSCA) was established in 2020 under the International Financial Services Centres Authority Act, 2019.
  • Role of IFSCA: The IFSCA is a unified authority for the development and regulation of financial products, financial services and financial institutions in the International Financial Services Centre (IFSC) in India.
  • At present, the GIFT IFSC in Gandhinagar, Gujarat is the maiden international financial services centre in India.
  • Prior to the establishment of IFSCA, the domestic financial regulators, namely, RBI, SEBI, PFRDA and IRDAI regulated the business in IFSC.

What are Intermediaries?

  • The intermediaries play an important role by providing intermediation facilities between their clients and the various regulated financial products and financial services in the IFSC.
  • Various types of Capital Market intermediaries include: broker dealers, clearing members, depository participants, investment bankers, portfolio managers, investment advisers, custodians, credit rating agencies, debenture trustees and account aggregators.

Distressed banks: Deposit insurance payout within 90 days gets approval

Source: Indian Express

What is the News?

The Union Cabinet has approved amendments to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961.

What are the amendments approved? 

Faster Process:

  • The depositors will be provided funds up to Rs 5 lakh within 90 days in the event of a bank coming under the moratorium imposed by the RBI.
    • Earlier, depositors end up waiting for 8-10 years before they are able to access their deposits in a distressed bank only after its complete liquidation.
  • Coverage: All commercial banks and even branches of foreign banks operating in India will come under the purview of this amendment and this will be applicable to banks which are at present under moratorium.
  • Prospective: The proposed law is prospective and not retrospective.But it will cover banks already under moratorium and those that could come under moratorium.

Increase in Insurance Premium:

  • The government has increased the deposit insurance premium by 20% immediately, and maximum by 50%.The premium is paid by banks to the DICGC.

Earlier Changes:

  • In 2020, the Government of India has raised the Deposit insurance cover from Rs 1 lakh to Rs 5 lakh.
  • Due to this, 3% of all deposit accounts by number and 50.9% of deposits by value were covered under Deposit insurance.
    • Globally, deposit insurance coverage is only 80% globally and it covers only 20-30% of deposit value.

About DICGC:

  • Deposit Insurance and Credit Guarantee Corporation(DICGC) is a subsidiary of the Reserve Bank of India(RBI).
  • It was established in 1978 as a statutory body under Deposit Insurance and Credit Guarantee Corporation Act,1961.
  • The act provides for the establishment of a Corporation for the purpose of insurance of deposits and guaranteeing of credit facilities and for other matters connected therewith or incidental thereto.
  • The Deputy Governor of RBI acts as its Chairman of DICGC.It is headquartered in Mumbai.

Coverage of DICGC:

  • Deposits in public and private sector banks, local area banks, small finance banks, regional rural banks, cooperative banks, Indian branches of foreign banks and payments banks are all insured by the DICGC.
  • In the event of a bank going distressed in India, a depositor can claim a maximum of Rs 5 lakh per account as insurance cover — even if the deposit in their account far exceeds Rs 5 lakh.

Researchers develop nano-structured aluminium surface having multiple applications

Source: PIB

What is the News?

A group of researchers has developed a nano-structured, self-cleaning, sustainable aluminium surface by utilizing a simple and environment-friendly fabrication route.

  • This could have multiple applications ranging from biomedical to aerospace and automobiles to household appliances.

Why was this developed?

  • Aluminum is a light metal. It has many industrial applications as it can be easily cast, machined, and shaped.
  • However, atmospheric degradation due to the accumulation of contaminants and humidity significantly limits its performance and sustainability.
  • Besides, the leaching of aluminum also causes environmental and health-related issues.
  • Hence, to overcome these problems, the nano-structured, self-cleaning, sustainable aluminium surface has been developed.

Scheme Mentioned in the Article:

About Fund for Improvement of S&T Infrastructure(FIST):

  • The FIST program was launched by the Department of Science & Technology in 2000.
  • The program aims to provide basic infrastructure and enabling facilities for promoting R&D activities in new and emerging areas and attract fresh talents in universities & other educational institutions.
  • Duration: The duration of support for each project will be for a period not exceeding 5 years.
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