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IASBUZZ APRIL 2020 EDITION
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Contents GEOGRAPHY, ENVIRONMENT AND ECOLOGY ............................................................................................................... 4
The Science of Earthquakes ....................................................................................................................................... 4
Eastern Ghats As Cultural Heritage ......................................................................................................................... 10
Plate Tectonics ......................................................................................................................................................... 12
POLITY AND GOVERNANCE .......................................................................................................................................... 21
Caste System In India ............................................................................................................................................... 21
Political Parties Under RTI ....................................................................................................................................... 24
Water Policy Of India And Water Crises In India ..................................................................................................... 27
Self Help Groups (SHGs) .......................................................................................................................................... 30
Lok Adalat And Revitalising Rural Area .................................................................................................................... 34
Domestic Violence In The Time Of Lockdown ......................................................................................................... 38
Competition Commission of India (CCI) ................................................................................................................... 39
Top 10 NGOs In India: Making A Difference ............................................................................................................ 42
40 Landmark Judgements That Changed The Course Of India (Part1) .................................................................... 44
ACTS AND BILLS ........................................................................................................................................................... 49
Pre-conception & Pre-natal Diagnostics Techniques (PC & PNDT) Act, 1994.......................................................... 49
Wage Code Bill ......................................................................................................................................................... 50
ECONOMY .................................................................................................................................................................... 56
Land Reforms In India .............................................................................................................................................. 56
Industrial Revolution ............................................................................................................................................... 59
What Is Keynesian Economics?................................................................................................................................ 61
Share Market Explained ........................................................................................................................................... 64
Balance of payments (BOP) and Exchange Rate System (Part 1) ............................................................................ 70
Balance of payments (BOP) and Exchange Rate System (Part 2) ............................................................................ 75
Taxation System Of India ......................................................................................................................................... 78
Balance Of Payments ............................................................................................................................................... 82
SCIENCE AND TECHNOLOGY ........................................................................................................................................ 87
Nano Technology ..................................................................................................................................................... 87
Cryptocurrency Ban In India .................................................................................................................................... 89
Artificial Intelligence (AI) ......................................................................................................................................... 91
Infodemic and Google thinking................................................................................................................................ 93
India As Pharmacy Of The World ............................................................................................................................. 97
SECURITY.................................................................................................................................................................... 100
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Naxalism In India.................................................................................................................................................... 100
INTERNATIONAL AFFAIRS AND GLOBAL ISSUES ........................................................................................................ 104
Nuclear Supplier Group (NSG) and India’s Membership ....................................................................................... 104
COVID-19 And Diplomatic Relations ...................................................................................................................... 106
WHO funding and USA ........................................................................................................................................... 108
Reports Published By Different Organisations ...................................................................................................... 110
World Trade Organization (WTO)-Part 1 ............................................................................................................... 111
World Trade Organisation (WTO) Part-2 ............................................................................................................... 113
World Trade Organization (WTO) Part-3 ............................................................................................................... 118
ETHICS ........................................................................................................................................................................ 123
Techonology Ethics ................................................................................................................................................ 123
Media Ethics .......................................................................................................................................................... 125
Education System And Values ............................................................................................................................... 127
HISTORY AND CULTURE ............................................................................................................................................. 130
Classical Languages Of India .................................................................................................................................. 130
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GEOGRAPHY, ENVIRONMENT AND ECOLOGY
The Science of Earthquakes
Topics covered Earthquakes and its mechanism Types of earthquakes Sesmic waves (P-Waves, S-Waves, R-Waves, L-Waves) Swarms Reasons and place of origin Measuring earthquakes Shadow zones Earthquake perdiction Wadati–Benioff zone: Earthquakes along the Convergent boundary Distribution of earthquakes in the world and in India
What Is An Earthquake?
An earthquake is what happens when two blocks of the earth suddenly slip past one another.
The surface where they slip is called the fault or fault plane.
The location below the earth’s surface where the earthquake starts is called the hypocenter, and the location directly above it on the surface of the earth is called the epicenter.
Seismic waves studies offer a full picture of the layered interior.
Sometimes an earthquake has foreshocks.
The largest, main earthquake is called the mainshock. Mainshocks always have aftershocks that follow.
Aftershocks are smaller earthquakes that occur afterwards in the same place as the mainshock.
Depending on the size of the mainshock, aftershocks can continue for weeks, months, and even years after the mainshock
Types of Earthquakes
Tectonic earthquakes: The most common form of earthquakes, it is caused by the movement of loose fragmented pieces of land on earth’s crust knowns as tectonic plates.
Volcanic earthquake: The less prevalent compared to the tectonic variety, these earthquakes happen before or after the eruption of a volcano. It is caused when magma leaving the volcano are filled by rocks being pushed to the surface.
Collapse earthquake: This earthquake occurs in underground mines. The main cause is due to pressure generated within the rocks.
Explosion earthquakes: The occurrence of this type of earthquake is artificial in nature. High-density explosion such as nuclear explosions is the primary cause.
Causes of Earthquakes
It is caused due to the tectonic movements of the earth.
The energy release produces waves which travel in all directions.
The point where energy is released is called the focus or hypocentre. It is generally located at a depth of 60 km.
This causes a release of energy, and the energy waves travel in all directions.
The point where the energy is released is called the focus of an earthquake or hypocentre.
The point on the surface of the earth which is vertically above the focus is called the epicentre. It is the first place to experience the waves.
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The tectonic plates divide the Earth's crust into distinct "plates" that are always slowly moving. Earthquakes are
concentrated along these plate boundaries
Earthquake waves or Seismic waves
The earthquake which originates in the lithosphere propagates different seismic waves or earthquake waves.
Earthquake waves are basically of two types – body waves and surface waves.
Body waves
They are generated due to the release of energy at the focus and moves in all directions traveling through the body of the earth. Hence, the name – body waves.
They travel only through the interior of the earth.
Body waves are faster than surface waves and hence they are the first to be detected on a seismograph.
There are two types of body waves as primary waves and secondary waves.
P waves are like the lightning, and S waves are like the thunder. Primary waves (P- Waves)
P-waves are also known as the Primary waves. They are the first waves to arrive at the surface.
Sesm
ic W
aves
Body Waves
Primary Waves (p-waves)
Secondary Waves (S-waves)
Surface Waves
Love waves (L-waves)
Rayleigh waves (R-waves)
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The characteristics of P-waves are like sound waves. They travel through all three mediums- solid, liquid and gas.
These waves have a tendency to vibrate parallel to the direction of wave propagation. This causes density differences in the material through which they travel.
These waves are responsible for elongating and squeezing of material. Secondary waves (S- Waves)
S- Waves arrive after some time after the happening of Earthquake and they are called secondary waves.
A significant characteristic of these S-waves is that they travel only through a solid medium.
The direction of vibration of this S-wave is perpendicular to the direction of wave propagation, thereby creating crests and troughs in the material of their transmission.
Surface Waves
When the body waves interact with surface rocks, a new set of waves is generated called as surface waves.
These waves move along the earth surface.
Surface waves are also transverse waves in which particle movement is perpendicular to the wave propagation.
Hence, they create crests and troughs in the material through which they pass.
Surface waves are considered to be the most damaging waves.
Two common surface waves are Love waves and Rayleigh waves. Love waves (L-waves)
This kind of surface waves causes horizontal shifting of the earth during an earthquake.
They have much slower than body waves but are faster than Rayleigh.
They exist only in the presence of semi-infinite medium overlain by an upper finite thickness.
Confined to the surface of the crust, Love waves produce entirely horizontal motion. Rayleigh waves (R-waves)
These waves follow an elliptical motion.
A Rayleigh wave rolls along the ground just like a wave rolls across a lake or an ocean.
Because it rolls, it moves the ground up and down and side-to-side in the same direction that the wave is moving.
Most of the shaking felt from an earthquake is due to the Rayleigh wave, which can be much larger than the other waves.
Swarms
Large numbers of small earthquakes may occur in a region for months without a major earthquake.
Such series of earthquakes are called earthquake swarms.
Earthquakes associated with volcanic activity often occur in swarms.
Earthquake swarms can serve as markers for the location of the flowing magma throughout the volcanoes.
Measurement
Seismometers are the instruments which are used to measure the motion of the ground, which including those of seismic waves generated by earthquakes, volcanic eruptions, and other seismic sources.
A Seismograph is also another term used to mean seismometer though it is more applicable to the older instruments.
The recorded graphical output from a seismometer/seismograph is called as a seismogram. (Note: Do not confuse seismograph with seismogram. Seismograph is an instrument while seismogram is the recorded output)
There are two main scales used in the seismometers: o Magnitude scale
Richter scale is used to measure the magnitude of the earthquake The energy released during a quake is expressed in absolute numbers of 0-10.
o Intensity scale
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The Mercalli scale is used to measure the intensity of an earthquake It measures the visible damage caused due to the quake. It is expressed in the range of 1-12.
Shadow Zone Of Earthquakes
When an earthquake occurs, earthquake waves radiate out spherically from the earthquake's focus. Earthquake waves get recorded in seismographs located at far off locations.
A shadow zone is an area of the Earth's surface where seismographs do not detect any earthquake waves.
For each earthquake, there exists an altogether different shadow zone.
As P waves are refracted by the liquid outer core, the shadow zone of P-waves appears as a band around the earth between 103 and 142 away from the epicentre.
S waves cannot pass through the liquid outer core and are not detected beyond 103 . Thus, the entire zone beyond 103 is referred as Shadow zone of S-waves
The shadow zone of S-wave is much larger than that of the P-waves.
It is also a little over 40 percent of the earth surface.
How Can Scientists Tell Where The Earthquake Happened?
By looking at the amount of time between the P and S wave on a seismogram recorded on a seismograph, scientists can tell how far away the earthquake was from that location.
However, they can’t tell in what direction from the seismograph the earthquake was, only how far away it was.
If they draw a circle on a map around the station where the radius of the circle is the determined distance to the earthquake, they know the earthquake lies somewhere on the circle. But where?
Scientists then use a method called triangulation to determine exactly where the earthquake was.
It is called triangulation because a triangle has three sides, and it takes three seismographs to locate an earthquake.
If you draw a circle on a map around three different seismographs where the radius of each is the distance from that station to the earthquake, the intersection of those three circles is the epicenter!
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Triangulation can be used to locate an earthquake. The seismometers are shown as green dots. The calculated
distance from each seismometer to the earthquake is shown as a circle. The location where all the circles
intersect is the location of the earthquake epicenter.
Can Scientists Predict Earthquakes?
No, and it is unlikely they will ever be able to predict them.
Scientists have tried many different ways of predicting earthquakes, but none have been successful. On any particular fault, scientists know there will be another earthquake sometime in the future, but they have no way of telling when it will happen.
Is there such a thing as earthquake weather? Can some animals or people tell when an earthquake is about to
hit?
These are two questions that do not yet have definite answers.
If weather does affect earthquake occurrence, or if some animals or people can tell when an earthquake is coming, we do not yet understand how it works.
Wadati–Benioff zone: Earthquakes along the Convergent boundary
Wadati Benioff zone is a zone of subduction along which earthquakes are common. The most powerful earthquakes occur along this zone (most powerful earthquakes occur along the convergent boundary).
Differential motion along the zone produces numerous earthquakes, the foci of which may be as deep as about 700 kilometres.
Wadati–Benioff zones can be produced by slip along the subduction thrust fault (Himalayan Region – C-C convergent boundary) or slip on faults within the downgoing plate (O-O and C-O convergent boundary).
Distribution of Earthquakes
There are two well-defined belts where earthquakes frequently occur – The Circum-Pacific Belt and The Mid-World Mountain Belt.
About 68% of earthquakes in the world occur in the Circum-Pacific Belt.
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Mid-World Mountain belt extends from the Alps with their extension into Mediterranean, the Caucasus, and the Himalayan region and continues to Indonesia.
21% of earthquakes are occurring in this belt.
The remaining 11% occur in the other parts of the world. Earthquake-Prone Zones In India
Over 55% of the land area in India is vulnerable to earthquakes. Some of the most vulnerable states are Jammu and Kashmir, Himachal Pradesh, Uttarakhand, Sikkim, and the Darjiling and subdivision of West Bengal and all the seven states of the northeast.
Apart from these regions, the central-western parts of India, particularly Gujarat and Maharashtra have also experienced some severe earthquakes.
Bureau of Indian Standards, based on the past seismic history, grouped the country into four seismic zones, viz. Zone II, III, IV and V. Of these, Zone V is the most seismically active region, while zone II is the least. The current division of India into earthquake-prone zones does not use Zone I.
The Modified Mercalli (MM) intensity, which measures the impact of the earthquakes on the surface of the earth, broadly associated with various zones, is as follows:
Seismic Zone Description Intensity on MM scale
Zone II Low intensity zone VI (or less)
Zone III Moderate intensity zone VII
Zone IV Severe intensity zone VIII
Zone V Very severe intensity zone IX (and above)
Areas Covered Under Different Seismic Zones
Zone - V covers 10.79% area of the country. It comprises entire northeastern India, parts of Jammu and Kashmir, Himachal Pradesh, Uttaranchal, Rann of Kutch in Gujarat, part of North Bihar and Andaman & Nicobar Islands.
Zone - IV covers 17.49% area of the country. It comprises remaining parts of Jammu and Kashmir and Himachal Pradesh, National Capital Territory (NCT) of Delhi, Sikkim, Northern Parts of Uttar Pradesh, Bihar and West Bengal, parts of Gujarat and small portions of Maharashtra near the west coast and Rajasthan.
Zone III covers 30.79% area of the country. It comprises Kerala, Goa, Lakshadweep islands, remaining parts of Uttar Pradesh, Gujarat and West Bengal, Parts of Punjab, Rajasthan, Madhya Pradesh, Bihar, Jharkhand, Chhattisgarh, Maharashtra, Orissa, Andhra Pradesh, Tamil Nadu and Karnataka.
Zone - II covers 40.93% area of the country. It comprises major parts of peninsular region. Karnataka Plateau falls in this zone.
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Eastern Ghats As Cultural Heritage
Relevancy
G.S. Paper 1
Objective questions: eastern ghats, location and climate, eastern ghats vs western ghats
Subjective questions: significance and conservation of eastern ghats, UNESCO cultural heritage site
Why in news?
Environmental groups demands that all the historically and culturally significant mountains of the Eastern
Ghats should be declared UNESCO cultural heritage sites.
The five States that the Ghats encompass – Tamil Nadu, Andhra Pradesh, Telangana, Karnataka and
Odisha should prepare an action plan to protect and conserve their ecology and natural resources, the
Greens’ Alliance for Conservation of Eastern Ghats (GRACE) and the Council for Green
Revolution (CGR) have said.
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About Eastern Ghats:
The Eastern Ghats run parallel to the eastern coastal plains of India.
Unlike the Western Ghats, they are discontinuous in nature and is dissected by the rivers that drain into
the Bay of Bengal.Most of these rivers have their origin in the Western Ghats.
Eastern Ghats are lower in elevation than the western Ghats.
The highest peak of western Ghats is the Mahendragiri.
The difference in the elevation levels of the highest peaks in both the ghats can also be compared.
Anaimudi which is the highest peak of the western Ghats has a height of 2695 mts whereas Mahendragiri
of eastern Ghats is of 150 mts.
This gives us a fair idea of the differences in elevation levels of the hills in both the Ghats.
The main crop produced in the Eastern Ghats is the Rice, which is also the staple food of the people living
in the region.
The Eastern Ghats reappear as more or less a continuous hill range in Cuddapah and Kurnool districts of
Andhra Pradesh where they are called as Nallamalai Range [Naxalite hideout in AP] with general elevation
of 600-850 m.
The southern part of this range is called the Palkonda range.
Significance of Eastern Ghats
In these mountains exist a reservoir of about 3,000 flowering plant species, nearly 100 of them endemic,
occurring in the dry deciduous, moist deciduous and semi-evergreen landscapes.
Fostering biodiversity and storing energy in trees.
Many animals, including tigers and elephants, and some 400 bird species are found in these discontinuous
forests
Modulating Climate especially during the retreat of Monsoons (North Eastern Monsoon)
Provides ecosystem services to millions
‘Eastern Ghats – Environment Outlook’ Report
The Greens’ Alliance for Conservation of Eastern Ghats (GRACE) and the Council for Green
Revolution (CGR) have demanded that the Central government form a Regional Coordination Committee
of States on Eastern Ghats with a mandate for linking and coordinating activities relating to the Ghats.
It should have sought the appointment of a Nature Ombudsman for the Eastern Ghats and the publication
of an Environmental Atlas of the Eastern Ghats, incorporating various ecological, social, cultural and
heritage information, among others.
These were all laid out in a report titled ‘Eastern Ghats – Environment Outlook’.
According to the report, the situation was grave due to the threats and challenges to floral and faunal
elements, and the bio-geographic significance of the Eastern Ghats was declining fast.
The report also said the degradation of the Eastern Ghats, which began a century ago, had accelerated
since the 1970s, and the ecosystem of the hills had lost their natural species composition, forest
structure, size, scale and character.
The region hosts wildlife sanctuaries, biosphere reserves and Ramsar convention sites. However, a large
part of the Eastern Ghats wilderness is yet to be covered under the conservation umbrella.
The time has come for all the local governments to ensure that the conservation of the Eastern Ghats and
the regeneration of all its biodiversity are top priority, the report said.
Due to global warming, there is change in average annual rainfall and temperature which can put plant
species at risk.
The study finds herb species (771 herb species followed by 451 tree species) dominating in the Eastern
Ghats landscape.
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The seasonal dryness and moderate to low rainfall favour the (herbs) growth.
Number of tree species have declined because of the dense population and anthropogenic disturbance.
Difference between Eastern Ghats and Western Ghats:
Elevation: Western Ghats average elevation is 900 to 1,100 meters above sea-level. But the average
elevation of Eastern Ghats is about 600 metres above sea level.
Width: Western Ghat’s average width is 50 to 80 km. But Eastern Ghat’s width varying from 100 to 200
km.
Direction: Western Ghats runs parallel to the western coast in a north-south direction from the Tapi River
to Kanayakumari. But Eastern Ghats runs in a north-east to south-west direction parallel to the eastern
coast from Orissa to the Nilgiri hills.
Rainfall: Western Ghats is almost perpendicular to the south-west monsoons coming from the Arabian
Sea and causes heavy rainfall in the west coastal plain. But Eastern Ghats is almost parallel to the
monsoons coming from the Bay of Bengal and does not cause much rainfall.
Source of rivers: Western Ghats is source of many large rivers which flow in the Peninsular India. But no
big river originates from the Eastern Ghats.
Physical divisions: Western Ghats continuous and can be crossed through passes only. But Eastern Ghats
has been divided into several parts by large rivers.
UNESCO world heritage site:
A UNESCO World Heritage Site is a place that is listed by the United Nations Educational, Scientific and
Cultural Organization (UNESCO) as of special cultural or physical significance.
The list is maintained by the international World Heritage Programme administered by the UNESCO World
Heritage Committee, composed of 21 UNESCO member states which are elected by the General
Assembly.
Each World Heritage Site remains part of the legal territory of the state wherein the site is located and
UNESCO considers it in the interest of the international community to preserve each site.
Conclusion:
Conservation action and protection is mostly focused on hotspots such as the Himalayas and the Western
Ghats.
But we are losing species that are not included in the hotspots, said IIT Kharagpur scientists, referring to
the 1600-km stretch of rich, biodiverse forests on discontinuous hills lying parallel to the Bay of Bengal.
The biological integrity of the Eastern Ghats had to be protected on a war-footing, and a Marshall
Plan was needed for the revival of its natural glory and green cover and for ensuring that wildlife was free
from the fear of extinction.
Plate Tectonics
Topics covered Concept of tectonics and plate tectonics Major and minor tectonic plates Divergent, convergent and transform boundaries Paleomagnetism Earthquakes and Volcanoes Distribution Of Earthquakes And Volcanoes Along The Mid-Ocean Ridges Continental Drift Theory (CDT) Reason Behind Continental Drifting Evidence That Supports The Theory and its drawbacks
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Seafloor spreading Ocean floor mapping and convention current theory Comparison: Continental Drift – See Floor Spreading – Plate Tectonics
Concept Of Tectonics in Geology
During WW II, it was discovered that the ocean floor had some unique relief features like ridges, trenches, seamounts, shoals etc.
Ridges and trenches gave insights into natural boundaries between various lithospheric plates (tectonic plates). These important discoveries led to the field of tectonics in geology.
Tectonics is the scientific study of forces (convection currents in the mantle) and processes (collisions of the lithospheric plates, folding, faulting, volcanism) that control the structure of the Earth’s crust and its evolution through time.
It is basically about understanding the large-scale deformation of the lithosphere (crust and upper mantle above asthenosphere) and the forces that produce such deformation.
It deals with the folding and faulting associated with mountain building; the large-scale, gradual upward and downward movements of the crust (epeirogenic movements); the growth and behaviour of old cores of continents known as cratons; and sudden horizontal displacements along faults.
Plate Tectonics
It was from the continental drift theory, convection current theory and the theory of seafloor spreading, the theory of Plate Tectonics was formulated.
In 1967, McKenzie and Parker suggested the theory of plate tectonics. Morgan later outlined the theory in 1968.
According to the theory of plate tectonics, the earth’s lithosphere is broken into distinct plates which are floating on a ductile layer called asthenosphere (upper part of the mantle).
Plates move horizontally over the asthenosphere as rigid units.
The lithosphere includes the crust and top mantle with its thickness range varying between 5-100 km in oceanic parts and about 200 km in the continental areas.
The oceanic plates contain mainly the Simatic crust and are relatively thinner, while the continental plates contain Sialic material and are relatively thicker.
Lithospheric plates (tectonic plates) vary from minor plates to major plates, continental plates (Arabian plate) to oceanic plates (Pacific plate), sometimes a combination of both continental and oceanic plates (Indo-Australian plate).
The movement of these crustal plates (due to convection currents in the mantle) causes the formation of various landforms and is the principal cause of all earth movements.
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Major tectonic plates
Antarctica and the surrounding oceanic plate
North American plate
South American plate
Pacific plate
India-Australia-New Zealand plate
Africa with the eastern Atlantic floor plate
Eurasia and the adjacent oceanic plate Minor tectonic plates
Cocos plate: Between Central America and Pacific plate
Nazca plate: Between South America and Pacific plate
Arabian plate: Mostly the Saudi Arabian landmass
Philippine plate: Between the Asiatic and Pacific plate
Caroline plate: Between the Philippine and Indian plate (North of New Guinea)
Fuji plate: North-east of Australia
Turkish plate
Aegean plate (Mediterranean region)
Caribbean plate
Juan de Fuca plate (between Pacific and North American plates)
Iranian plate. Divergent boundaries
Plates moving away from each other
Phases → Rift valley formation → Nascent Sea Formation → Ocean formation
Examples → The Great African rift valley + Red sea – Nascent sea Convergent boundaries
Formation of volcanic mountains + folded mountains
Plates come closer & collide with each other
Andes , Rockies, Atlas mountain (Africa)
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Transform Boundaries
Two Adjacent plates slipping horizontally past one another along a transform fault
No mountains but seismic activity → Characteristics of Earthquake
No volcano + No Mountains but Earthquakes
Example → San Andreas fault in California, USA Evidence in Support of Plate Tectonics
Evidence for both See Floor Spreading and Plate tectonics are complimentary (almost same evidences).
Paleomagnetism
Paleomagnetic rocks are the most important evidence.
The orientation of iron grains on older rocks shows an orientation which points to the existence of the South Pole, once upon a time, somewhere between present-day Africa and Antarctica (polar wandering).
Older rocks form the continents while younger rocks are present on the ocean floor
On continents, rocks of up to 3.5 billion years old can be found while the oldest rock found on the ocean floor is not more than 75 million years old (western part of Pacific floor).
As we move, towards ridges, still younger rocks appear. This points to an effective spread of seafloor along oceanic ridges which are also the plate margins.
Gravitational Anomalies
In trenches, where subduction has taken place (convergent edge), the value of gravitational constant ‘g’ is less. This indicates a loss of material.
For instance, gravity measurements around the Indonesian islands have indicated that large gravity anomalies are associated with the oceanic trench bordering Indonesia.
Earthquakes and Volcanoes
The fact that all plate boundary regions are areas of earthquake and volcanic disturbances goes to prove the theory of plate tectonics.
The significance of Plate Tectonics o Almost all major landforms formed are due to plate tectonics. o New minerals are thrown up from the core with the magmatic eruptions. o Economically valuable minerals like copper and uranium are found near the plate boundaries. o From present knowledge of crustal plate movement, the shape of landmasses in future can be
predicted. o For instance, if the present trends continue, North and South America will separate. A piece of
land will separate from the east coast of Africa. Australia will move closer to Asia. Distribution Of Earthquakes And Volcanoes Along The Mid-Ocean Ridges
The normal temperature gradient on the sea floor is 9.4° C/300 m, but near the ridges it becomes higher, indicating an upwelling of magmatic material from the mantle.
Dots in the central parts of the Atlantic Ocean and other oceans are almost parallel to the coastlines. This indicates that the seafloor has widened with time.
In general, the foci of the earthquake in the areas of mid-oceanic ridges are at shallow depths whereas, along the Alpine-Himalayan belt as well as the rim of the Pacific, the earthquakes are deep-seated ones.
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Continental Drift Theory
Continental drift theory was proposed by Alfred Wegener in 1912.
It was first put forward by Abraham Ortelius in 1596 before fully being developed by Albert Wegener.
The theory deals with the distribution of the oceans and the continents.
According to Wegener’s Continental Drift theory, all the continents were one single continental mass (called a Super Continent) – Pangaea and a Mega Ocean surrounded this supercontinent. The mega ocean is known by the name Panthalassa.
Although Wagners initial theory did not cover mantle convection until Arthur Holmes later proposed the theory.
The supercontinent was named Pangaea and the Mega-ocean was called Panthalassa.
According to this theory, the supercontinent, Pangaea, began to split some two hundred million years back.
Pangaea first split into 2 big continental masses known as Gondwanaland and Laurasia forming the southern and northern modules respectively.
Later, Gondwanaland and Laurasia continued to break into several smaller continents that exist today.
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Reason Behind Continental Drifting
According to Wegener, the drift was in two directions: o equator wards due to the interaction of forces of gravity, pole-fleeing force (due to centrifugal
force caused by earth’s rotation) and buoyancy (ship floats in water due to buoyant force offered by water), and
o westwards due to tidal currents because of the earth’s motion (earth rotates from west to east, so tidal currents act from east to west, according to Wegener).
Wegener suggested that tidal force (gravitational pull of the moon and to a lesser extent, the sun) also played a major role.
The polar-fleeing force relates to the rotation of the earth. Earth is not a perfect sphere; it has a bulge at the equator. This bulge is due to the rotation of the earth (greater centrifugal force at the equator).
Centrifugal force increases as we move from poles towards the equator. This increase in centrifugal force has led to pole fleeing, according to Wegener.
Tidal force is due to the attraction of the moon and the sun that develops tides in oceanic waters (tides explained in detail in oceanography).
According to Wegener, these forces would become effective when applied over many million years, and the drift is continuing.
Evidence That Supports The Theory
The Matching of Continents (Jig-Saw-Fit): The shorelines of Africa and South America facing each other match remarkably.
Rocks of Same Age Across the Oceans: radiometric dating methods have correlated the rock formation in different continents.
Tillite: The glacial tillite found in Gondwana system of sediments has its resemblance to six different landmasses of the Southern Hemisphere. Counterparts of this succession are found in Africa, Falkland Island, Madagascar, Antarctica and Australia besides India.
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Placer Deposits: The placer deposits of gold in the Ghana coast do not have source rock in the region. The gold deposits of Ghana have been derived from the Brazil plateau when the two continents lay side by side
Distribution of Fossils: identical species of plants and animals adapted to living on land or in freshwater are found on either side of the marine barriers. For example remains of Mesosaurus, a freshwater crocodile-like reptile that lived during the early Permian (between 286 and 258 million years ago), are found solely in Southern Africa and Eastern South America.
Drawbacks of Continental Drift Theory
Wegener failed to explain why the drift began only in Mesozoic era and not before.
The theory doesn’t consider oceans.
Proofs heavily depend on assumptions that are generalistic.
Forces like buoyancy, tidal currents and gravity are too weak to be able to move continents.
Modern theories (Plate Tectonics) accept the existence of Pangaea and related landmasses but give a very different explanation to the causes of drift.
Seafloor Spreading
The theory of Sea Floor Spreading states that new oceanic crust is being formed continuously at mid-oceanic ridges, while the older rocks move away from the ridge.
That is, it explains why the age, thickness, and density of the oceanic crust increases with distance from the mid-oceanic ridge.
Ocean Floor Mapping
The ocean floor is found to be having mountain ranges, plains, canyons, submarine ridges, deep trenches and other relief features.
It has also been found that along the mid-oceanic ridges, volcanic eruptions are most active. Further, the dating of rocks suggests that the oceanic crust rocks are much younger than the continental rocks.
Also, the rocks which are equidistant from the crest of oceanic ridges on both sides have been found with utmost similarities in terms of their age, constituents, chemical composition and magnetic properties. And the sediments on the ocean floor near the ridge has been found to be thinner.
Convection Current Theory
Convection Current Theory is the soul of Seafloor Spreading Theory.
Arthur Holmes in 1930s discussed the possibility of convection currents in the mantle.
These currents are generated due to radioactive elements causing thermal differences in the mantle. Convection currents in the mantle
According to this theory, the intense heat generated by radioactive substances in the mantle (100-2900 km below the earth surface) seeks a path to escape and gives rise to the formation of convection currents in the mantle.
Wherever rising limbs of these currents meet, oceanic ridges are formed on the seafloor due to the divergence of the lithospheric plates (tectonic plates), and wherever the failing limbs meet, trenches are formed due to the convergence of the lithospheric plates (tectonic plates).
The movement of the lithospheric plates is caused by the movement of the magma in the mantle.
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Comparison: Continental Drift – See Floor Spreading – Plate Tectonics
Continental Drift See Floor Spreading Plate Tectonics
Explained by Put forward by Alfred Wegener in 1920s
Arthur Holmes explained Convectional Current Theory in the 1930s. Based on convection current theory, Harry Hess explained See Floor Spreading in the 1940s
In 1967, McKenzie and Parker suggested the theory of plate tectonics. Morgan later outlined the theory in 1968
Theory Explains the Movement of Continents only
Explains the Movement of Oceanic Plates only
Explains the Movement of Lithospheric plates that include both continents and oceans.
Forces for movement Buoyancy, gravity, pole-fleeing force, tidal currents, tides,
Convection currents in the mantle drag crustal plates
Convection currents in the mantle drag crustal plates
Evidence Apparent affinity of physical features, botanical evidence, fossil evidence, Tillite deposits, placer deposits, rocks of same age across different continents etc.
Ocean bottom relief, Paleomagnetic rocks, distribution of earthquakes and volcanoes etc.
Ocean bottom relief, Paleomagnetic rocks, distribution of earthquakes and volcanoes, gravitational anomalies at trenches, etc.
Drawbacks Too general with silly and sometimes illogical evidence.
Doesn’t explain the movement of continental plates
———————
Acceptance Discarded Not complete Most widely accepted
Usefulness Helped in the evolution of convection current theory and seafloor spreading theory
Helped in the evolution of plate tectonics theory
Helped us understand various geographical features.
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POLITY AND GOVERNANCE
Caste System In India
Relevancy G.S. Paper 2 Objective Questions- History Of Caste System, Features, Varna Vs Caste Subjective Question- Theories Of Origination Of Caste System In India And Its Significance, Benefits And
Challenges
What is Jana, Jati and Caste?
The word caste derives from the Spanish and Portuguese “casta”, means “race, lineage, or breed”.
Portuguese employed casta in the modern sense when they applied it to hereditary Indian social groups called as ‘jati’ in India.
‘Jati’ originates from the root word ‘Jana’ which implies taking birth. Thus, caste is concerned with birth. What Is Caste System?
Caste refers to a broad hierarchical institutional arrangement along which basic social factors like birth, marriage, food-sharing etc are arranged in a hierarchy of rank and status.
These sub-divisions are traditionally linked to occupations and decide the social relations with respect to other upper and lower castes.
The traditional hierarchical ordering of castes was based on the distinction between ‘purity’ and ‘pollution’. While the manifestation of the order has changed to a large extent in the recent times, the system itself has not changed much.
How did Caste System originate in India: Various Theories
Traditional Theory
According to this theory, the caste system is of divine origin. It says the caste system is an extension of the varna system, where the 4 varnas originated from the body of Bramha.
o BRAHMINS: under this system were Priest and teachers. o KSHATRIYAS: under this system were warriors, rulers, administrators. o VSHAYIAS: under this system were farmers, traders. o SHUDRAS: under this system were artisans and laborers.
The sub-castes emerged later due to intermarriages between the 4 varnas.
The proponents of this theory cite Purushasukta of Rigveda, Manusmriti etc to support their stand. Racial Theory
The Sanskrit word for caste is varna which means colour.
The caste stratification of the Indian society had its origin in the chaturvarna system – Brahmins, Kashtriyas, Vaishyas and Shudras.
Indian sociologist D.N. Majumdar writes in his book, “Races and Culture in India”, the caste system took its birth after the arrival of Aryans in India.
Rig Vedic literature stresses very significantly the differences between the Arya and non-Aryans (Dasa), not only in their complexion but also in their speech, religious practices, and physical features.
The Varna system prevalent during the Vedic period was mainly based on division of labour and occupation. The three classes, Brahma, Kshatra and Vis are frequently mentioned in the Rig Veda.
Brahma and Kshatra represented the poet-priest and the warrior-chief. Vis comprised all the common people.
The name of the fourth class, the ‘Sudra’, occurs only once in the Rig Veda. The Sudra class represented domestic servants.
Political Theory
According to this theory, the caste system is a clever device invented by the Brahmins in order to place themselves on the highest ladder of social hierarchy.
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Dr. Ghurye states, “Caste is a Brahminic child of Indo-Aryan culture cradled in the land of the Ganges and then transferred to other parts of India.”
The Brahmins even added the concept of spiritual merit of the king, through the priest or purohit in order to get the support of the ruler of the land.
Occupational Theory
Caste hierarchy is according to the occupation.
Those professions which were regarded as better and respectable made the persons who performed them superior to those who were engaged in dirty professions.
According to Newfield, “Function and function alone is responsible for the origin of caste structure in India.”
With functional differentiation there came in occupational differentiation and numerous sub-castes such as Lohar(blacksmith), Chamar(tanner), Teli(oil-pressers).
Evolution Theory
According to this theory, the caste system did not come into existence all of a sudden or at a particular date. It is the result of a long process of social evolution.
o Hereditary occupations; o The desire of the Brahmins to keep themselves pure; o The lack of rigid unitary control of the state; o The unwillingness of rulers to enforce a uniform standard of law and custom o The ‘Karma’ and ‘Dharma’ doctrines also explain the origin of caste system. Whereas the Karma
doctrine holds the view that a man is born in a particular caste because of the result of his action in the previous incarnation, the doctrine of Dharma explains that a man who accepts the caste system and the principles of the caste to which he belongs, is living according to Dharma. Confirmation to one’s own dharma also remits on one’s birth in the rich high caste and violation gives a birth in a lower and poor caste.
o Ideas of exclusive family, ancestor worship, and the sacramental meal; o Clash of antagonistic cultures particularly of the patriarchal and the matriarchal systems; o Clash of races, colour prejudices and conquest; o Deliberate economic and administrative policies followed by various conquerors o Geographical isolation of the Indian peninsula; o Foreign invasions; o Rural social structure.
Principal Features Of Caste System In India
Hierarchy: According to Louis Dumont, castes teach us a fundamental social principle of hierarchy. At the top of this hierarchy is the Brahmin caste and at the bottom is the untouchable caste. In between are the intermediate castes, the relative positions of which are not always clear.
Segmental Division of Society: The society is divided into various small social groups called castes. Each of these castes is a well developed social group, the membership of which is determined by the consideration of birth.
Jati Panchayat: The status of each caste is carefully protected, not only by caste laws but also by the conventions. These are openly enforced by the community through a governing body or board called Jati Panchayat. These Panchayats in different regions and castes are named in a particular fashion such as Kuldriya in Madhya Pradesh and Jokhila in South Rajasthan.
Endogamy: Endogamy is the chief characteristic of caste, i.e. the members of a caste or sub-caste should marry within their own caste or sub-caste. The violation of the rule of endogamy would mean ostracism and loss of caste. However, hypergamy (the practice of women marrying someone who is wealthier or of higher caste or social status.) and hypogamy (marriage with a person of lower social status) were also prevalent. Gotra exogamy is also maintained in each caste. Every caste is subdivided into different small units on the basis of gotra. The members of one gotra are believed to be successors of a common ancestor-hence prohibition of marriage within the same gotra.
Restriction on Food and Drink: Usually a caste would not accept cooked food from any other caste that stands lower than itself in the social scale, due to the notion of getting polluted. There were also variously
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associated taboos related to food. The cooking taboo, which defines the persons who may cook the food. The eating taboo which may lay down the ritual to be followed at meals. The commensal taboo which is concerned with the person with whom one may take food. Finally, the taboo which has to do with the nature of the vessel (whether made of earth, copper or brass) that one may use for drinking or cooking. For eg: In North India Brahmin would accept pakka food (cooked in ghee) only from some castes lower than his own. However, no individual would accept kachcha(cooked in water) food prepared by an inferior caste. Food prepared by Brahmin is acceptable to all, the reason for which domination of Brahmins in the hotel industry for a long time. The beef was not allowed by any castes, except harijans.
Hereditary status and occupation: Megasthenes, the Greek traveller to India in 300 B. C., mentions hereditary occupation as one of the two features of caste system, the other being endogamy.
The Concept of Purity and Pollution: The higher castes claimed to have ritual, spiritual and racial purity which they maintained by keeping the lower castes away through the notion of pollution. The idea of pollution means a touch of lower caste man would pollute or defile a man of higher caste. Even his shadow is considered enough to pollute a higher caste man.
A Particular Name: Every caste has a particular name though which we can identify it. Sometimes, an occupation is also associated with a particular caste.
Varna Vs Caste – The Difference
Varna and caste are 2 different concepts, though some people wrongly consider it the same.
Varna Caste
Literally ‘Varna’ means colour and originates from the world ‘Vri’ meaning the choice of one’s occupation. Hence Varna is concerned with one’s colour or occupation.
Caste or ‘Jati’ originates from the root word ‘Jana’ which implies taking birth. Thus, caste is concerned with birth.
Varna’s are only four in number i.e. Brahmin, Kshatriya, Vaishya and Sudra
Castes are very large in number. Castes also have many subdivisions known as sub-castes.
It is an all-India phenomenon Presence of regional variations mostly based on linguistic differences.
Mobility pattern Varna’s are relatively flexible with one’s talent and knowledge, compared with the castes.
It is based on rigid principles and mobility is less. It is a closed type of stratification
Varna system is free from socio-economic and political disabilities
Imposes many restrictions on the members.
Varna-class correlation is mostly positive Caste-class correlation is not always positive, There may be variations in the placement due to economic, political arid educational status of various groups.
Functions Of The Caste System
It has accommodated multiple communities by ensuring each of them a monopoly of a specific means of livelihood.
It continued the traditional social organization of India.
It has handed over the knowledge and skills of the hereditary occupation of a caste from one generation to another, which has helped the preservation of culture and ensured productivity.
Provided social security and social recognition to individuals. It is the individual’s caste that canalizes his choice in marriage, plays the roles of the state-club, the orphanage and the benefits society. Besides, it also provides him with health insurance benefits. It even provides for his funeral.
Maintained racial purity through endogamy.
Caste plays a crucial role in the process of socialization by teaching individuals the culture and traditions, values and norms of their society.
Promoted political stability, as Kshatriyas were generally protected from political competition, conflict and violence by the caste system.
It has also led to interdependent interaction between different castes, through jajmani relationships. Caste acted as a trade union and protected its members from the exploitation.
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Specialization led to quality production of goods and thus promoted economic development. For eg: Many handicraft items of India gained international recognition due to this.
Disadvantages Of The Caste System
It undermines the efficiency of labour and prevents perfect mobility of labour, capital and productive effort
The caste system is a check on economic and intellectual advancement and a great stumbling block in the way of social reforms because it keeps economic and intellectual opportunities confined to a certain section of the population only.
It has inflicted untold hardships on women through its insistence on practices like child-marriage, prohibition of widow-remarriage, seclusion of women etc.
It has given scope for religious conversion. The lower caste people are getting converted into Islam and Christianity due to the tyranny of the upper castes.
It perpetuates the exploitation of the economically weaker and socially inferior castes, especially the untouchables.
It has stood in the way of national and collective consciousness and proved to be a disintegrating rather than an integrating factor. Caste conflicts are widely prevalent in politics, reservation in jobs and education, inter-caste marriages etc. eg: Demand for Jat reservation, agitation by Patidar community.
It opposes real democracy by giving a political monopoly to Kshatriyas in the past and acting as a vote bank in the present political scenario. There are political parties which solely represent a caste. eg: BSP was formed by Kanshi Ram mainly to represent SC, ST and OBC.
The caste system by compelling an individual to act strictly in accordance with caste norms stands in the way of modernization, by opposing change.
Caste System Around The Globe
The caste system is found in other countries like Nepal, Pakistan and Sri Lanka. Caste-like systems are also found in countries like Indonesia, China, Korea, Yemen and certain countries in Africa, Europe as well.
But what distinguishes Indian caste system from the rest is the core theme of purity and pollution, which is either peripheral or negligible in other similar systems of the world.
In Yemen, there exists a hereditary caste, Al-Akhdam who are kept as perennial manual workers.
Burakumin in Japan, originally members of outcast communities in the Japanese feudal era, includes those with occupations considered impure or tainted by death.
Political Parties Under RTI
Relevancy G.S. Paper2 Objective question- Importance of RTI Act, About CIC, public authorities and political parties Subjective questions- Arguments against and in favour of bringing Political Parties under RTI
Why in news?
The Supreme Court has issued a notice to the centre and the Election Commission (EC) on an application seeking political parties to be declared public authorities in order to make them transparent and accountable to the public.
The PIL filed by Ashwini Kumar Upadhyay, a BJP leader, wants political parties registered under section 29A of Representation of People Act, 1951 to be declared as ‘public authority’ under the Right to Information Act, 2005, (RTI).
His plea also included that all registered and recognized political parties should be directed to appoint public information officer and appellate authority within 4 weeks and make disclosures in letter and spirit of the RTI Act.
In the event of non-compliance of provisions of RPA, RTI Act, Income Tax Act, Moral Code of Conduct and other election laws and rules, political parties shall be derecognized by the ECI.
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Right To Information Act 2005
Right to Information Act 2005 mandates timely response to citizen requests for government information. It replaces the erstwhile Freedom of information Act, 2002.
The Act applies to all States and Union Territories of India except Jammu & Kashmir, where J&K Right to Information Act is in force.
The Central Information Commission (CIC) has also held that the political parties are public authorities and are answerable to citizens under the RTI Act.
Under the provisions of the Act, any citizen may request information from a “public authority” (a body of Government or “instrumentality of State”) which is required to reply expeditiously or within thirty days.
Private bodies are not within the Act’s ambit directly. In a decision of Sarbajit Roy versus Delhi Electricity Regulatory Commission, the Central Information Commission affirmed that privatised public utility companies continue to be within the RTI Act.
The Act also requires every public authority to computerise their records for wide dissemination and to proactively certain categories of information so that the citizens need minimum recourse to request for information formally.
Central Information Commission (CIC)
The Central Information Commission (CIC) is set up under the Right to Information Act and is the authorised body, established in 2005, under the Government of India.
The Chief Information Commissioner heads the Central Information Commission, the body that hears appeals from information-seekers who have not been satisfied by the public authority, and also addresses major issues concerning the RTI Act.
The Chief Information Commissioner and Information Commissioners are appointed by the President on the recommendation of a committee consisting of—
o The Prime Minister, who shall be the Chairperson of the committee; o The Leader of Opposition in the Lok Sabha; and o A Union Cabinet Minister to be nominated by the Prime Minister.
Who is Public authority?
As defined in Section 2 (h) “public authority” means any authority or body or institution of self-Government established or constituted –
o Under the constitution o By any law by Parliament o By any law by State Legislature o By an order made by the Government, including:
· Body owned, controlled or substantially financed by the Government · Non-Government organization substantially financed, directly or indirectly by funds
provided by the Government What Are Political Parties?
The Political Parties have been given statutory status under Section 29A of the Representation of the People Act, 1951.
RPA also allows political parties to receive voluntary contributions from anyone including corporate companies (but not government companies) and exclude contributions from foreign sources.
Why Political Parties Need To Be Urgently Brought Under The RTI?
No transparency: Electoral Bonds are also not promoting transparency in political funding as donors remain anonymous to public.
Tax exemptions for political parties: Political parties are exempted from paying income tax under the law as long as they file their income tax return every assessment year. In such a case, they enjoy 100% tax exemption from all sources of income. These exemptions are leading towards enormous wealth creation of political parties.
Unknown sources have surpassed known sources of funding: The unknown sources are the income that is declared in the IT returns but without giving a source of income for donations below Rs 20,000. For 11
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years, between FY2004-05 and FY2014-15, national political parties have received 71% of their total income which is worth Rs 6612.42 crore from sources that cannot be traced and are therefore unknown.
Lack of proper scrutiny: Political parties rely heavily on ‘voluntary contributions/donations’ for fighting elections and running their daily operations. They receive huge sums of money in the form of voluntary contributions and donations from corporate, trusts and individuals. Between FY 2004-05 and 2014-15, national political parties have received the highest amount worth Rs 4,453 crore from voluntary contributions/donations, which forms 48% of the total income of national political parties.
Corporates donating to national parties: Corporates have increased their control over the political arena by funding political parties and their election campaigns. This is how the corporations that are essentially unaccountable to the general public influence many of the major political-economic decisions in the country.
No ceiling on expenditure during elections: There is no ceiling on expenditure incurred by the political parties at the time of elections. There no information on election expenditure of the political parties is available in public.
Challenges and concerns:
Reluctance of political parties: Political parties are reluctant to disclose their internal working as well as their decision making system.
Absence of law governing political parties: Political parties, unlike any other public or private institutions, are integral to the functioning of our democracy. They enjoy unique privileges. Despite their obvious crucial role in the past almost seven decades, lawmakers have not framed any regulation or law governing the functioning of political parties. The Law Commission of India’s report of 1999 also had detailed observations on the need for regulatory oversight on the functioning of parties.
Misuse of RTI: The disclosure of information under RTI act may give advantage to the competitors of political parties.
Arguments Against Bringing Political Parties Under RTI:
Political parties are not public authorities as they are not set up under the Constitution or any law enacted by Parliament – they can’t be treated as an institution or establishment.
Political parties were not established by the constitution or an act of parliament and therefore should not be under the RTI.
If political parties come under the RTI it will affect their smooth internal functioning.
They are formed under Representation of People Act, which is not the same as being created by the parliament.
Political rivals will start using RTI tool with malicious intent.
Information about a political body is already in the public domain on the website of the Election Commission.
There are already provisions in the Income Tax Act, 1961, and Representation of the People Act, 1951, which demand necessary transparency regarding financial aspects of political parties. These mechanisms ensure transparency in financial dealings of parties.
Arguments In Favour Of Bringing Political Parties Under RTI:
Strategy regarding their functioning and all need not be disclosed to the public but financial matters should be available to the public because they are public institutions, they get money from public
Political parties in our country occupy a very central space in democracy. People don’t vote so much for individuals as they do for parties.
If political parties are kept out, it sets a precedent whereby other institutions can argue that they too be kept out of its purview because there are too many frivolous claims, too much paperwork, too many NGOs with suspect motivations and so on and so forth.
Parties come out with great statements before elections. People vote on the basis of which party says what. Parties finally form the government. And the government’s policies are decided based on the ideologies of the political parties.
In India, it is widely accepted notion that fountain head of the corruption is political funding.
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Almost all political parties have got very valuable plots allotted by the Government at prime places in New Delhi and in their respective capital cities.
It is therefore, necessary to introduce internal democracy, financial transparency and accountability in the working of the political parties.
To ensure less influence of industrial houses on policy making: Most of the parties have almost 75% of their income from unknown sources. Generally corporate and industrial houses give them funds to change policies, give illegal clearance and to hamper their competitor’s interest. It may also hamper people and national interest.
Political parties enjoy a “stronghold” over their elected MPs and MLAs under Schedule 10 of the Constitution. The Schedule makes it compulsory for MPs and MLAs to abide by the directions of their parent parties.
It would be within the average voter’s fundamental right to information to know the financial details of political parties.
Under Section 29A of the Representation of the People Act, 1951 all political parties must affirm their allegiance to the Constitution of India and such allegiance is made compulsory for the purpose of registration under sub-section (7) of Section 29A. Therefore, political parties so registered must furnish information to the public under the right of information under Article 19(1) (a) of the Constitution of India, since right of information has been held to be a part of freedom of speech and expression under Article 19(1)(a).
The Law Commission of India in its 170th Report on ‘Reform of the Electoral Laws’ in May 1999 had recommended transparency in the functioning of political parties.
Water Policy Of India And Water Crises In India
Relevancy G.S. Paper 2 Objective Questions: National Water Policy, Its Features, Water Scarsity-Its Types, Water Footprint Subjective Questions: Water Crises In India, Measures, Causes And Way Forward, Cooperative Fedralism
Why in news?
Government plans to come out with an updated version of National Water Policy with key changes in governance structures and regulatory framework.
Plans are also to set up a National Bureau of Water Use Efficiency. Building consensus among the states within the constitutional framework is the pre-condition for making
this changes. National Water policy was formulated to govern the planning and development of water resources and
their optimum utilization. The first National Water Policy was adopted in 1987, it was reviewed and updated in 2002 and later in
2012. Key Highlights
Composition: The committee will be chaired by Mihir Shah (former Planning Commission member and a water expert) and comprises of 10 principal members. National Bureau of Water Use Efficiency is proposed to be set up in order to enhance water usage efficiency, especially in domestic and industrial sectors.
To update the National Water Policy, 2012 and recommend key changes in water governance structure and regulatory framework.
Salient Features Of National Water Policy 2012
Emphasis on the need for a national water framework law, comprehensive legislation for optimum development of inter-State rivers and river valleys.
Water, after meeting the pre-emptive needs for safe drinking water and sanitation, achieving food security, supporting poor people dependent on agriculture for their livelihood and high priority allocation
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for minimum eco-system needs, be treated as economic good so as to promote its conservation and efficient use.
Ecological needs of the river should be determined recognizing that river flows are characterized by low or no flows, small floods (freshets), large floods and flow variability and should accommodate development needs. A portion of river flows should be kept aside to meet ecological needs ensuring that the proportional low and high flow releases correspond in time closely to the natural flow regime.
Adaptation strategies in view of climate change for designing and management of water resources structures and review of acceptability criteria has been emphasized.
A system to evolve benchmarks for water uses for different purposes, i.e., water footprints, and water auditing be developed to ensure efficient use of water. Project financing has been suggested as a tool to incentivize efficient & economic use of water.
Setting up of Water Regulatory Authority has been recommended.
Incentivization of recycle and re-use has been recommended.
Water Users Associations should be given statutory powers to collect and retain a portion of water charges, manage the volumetric quantum of water allotted to them and maintain the distribution system in their jurisdiction.
Removal of large disparity in stipulations for water supply in urban areas and in rural areas has been recommended.
Water resources projects and services should be managed with community participation. Wherever the State Governments or local governing bodies so decide, the private sector can be encouraged to become a service provider in public private partnership model to meet agreed terms of service delivery, including penalties for failure.
Adequate grants to the States to update technology, design practices, planning and management practices, preparation of annual water balances and accounts for the site and basin, preparation of hydrologic balances for water systems, and benchmarking and performance evaluation etc.
What Is Water Scarsity?
Water scarcity is insufficient freshwater resources to meet the human and environmental demands of a given area.
Adequate access to safe drinking water is a priority for global development.
However, given the challenges of population growth, profligate use, growing population, and changes in weather patterns due to global warming, many countries, both wealthy and poor are facing water scarcity in the 21st century.
Types of Water Scarcity
Physical Water scarcity o Physical or absolute water scarcity is the result of regions demand outpacing the limited water
resources found in that location. o As per the Food and Agricultural Organisation (FAO) of the United Nations, around 1.2 Billion
people live in areas of physical scarcity; many of these people live in arid or semi-arid regions. o People impacted by this kind of water scarcity are expected to grow as populations increase and
as weather patterns become more unpredictable due to climate change.
Economic Water scarcity o This kind of water scarcity primarily arises due to the lack of water infrastructure in general or
due to the poor management of water resources where the infrastructure is in place. o As per FAO estimates more than 1.6 Billion people face economic water shortage. o Economic water scarcity can also arise due to unregulated water use for agriculture and industry
at the expense of the general population. What is Water Footprint?
Water footprint measures the amount of water used to produce each of the goods and services we use.
It can be measured for any process, like growing crops, for producing clothes, for the fuel we use in our travels, or for a multinational company.
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A nation’s water footprint is defined as the total amount of water needed for the production of goods and services calculated by adding all the water consumed plus the water inherent in products imported, then subtracted by water in exports.
India’s water footprint is 980 cubic metres per capita, ranks below the global average of 1243 cubic metres.
India contributes roughly 12 % of the world’s total water footprint. Water Scarcity in India
India has 4 % of the world’s freshwater which has to cater to 17 % of the world’s population.
As per NITI Aayog report released in June 2019, India is facing the worst-ever water crisis in history.
Approximately 600 million people or roughly around 45 % of the population in India is facing high to severe water stress.
As per the report, 21 Indian cities will run out of their main source of water i.e. groundwater by 2020.
The report goes on to say that nearly 40 % of the population will have absolutely no access to drinking water by 2030 and 6 % of India’s GDP will be lost by 2050 due to the water crisis.
Causes of Water Scarcity
Overuse of Water
Geographical distribution
Pollution of Water
Conflict among states
Distance from the source of water
Drought
Climate Change Need for an Updated National Water Policy
There are lots of changes that are required in the policy.
Privatization of water usage should be defined.
Agriculture was there but not included in the policy parameters.
River revitalization is required to be revised.
Technological innovation is required with the sensors, GIS and satellite imagery.
Need to modulate the water by having a good picture of its path and quantity.
Need to go back from basin to sub-basin to watershed and down into village water budgeting level.
Policy does not deter use among those who can afford to pay for water.
Policy does not follow polluter pay principle, rather it gives incentives for effluent treatment.
Policy is criticized for terming water as an economic good.
It does not focus on water pollution Calibrating agriculture with Water Management
Region Based Water Availability: We need to focus on the water availability according to the particular agro climatic zones and find suitable cropping patterns suiting the particular needs.
For example Paddy in Punjab and Sugarcane in Maharashtra are not agro climatically suitable crops because they need more water in these areas and deprive other crops from getting sufficient water.
Restructuring Subsidies: There needs to be a shift from the freebie culture to some paying mechanisms because the water or power provided to the farmers are not their personal resources instead common pool resources.
Pricing of resources is of two types- One price is of the resource itself and the other is for the system which conveys the resource.
Volumetric supply of water should be there according to the sector specific needs.
Better Funding: The communication, transmission and distribution systems are run by central or state government distribution centres so they will also be able to work better with more monetary help and support.
Better Technologies: Globally available technologies like micro irrigation should be implemented where every single drop of water is used. India is still following age old practice of dam construction and then
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conveying water through open canals which creates problems like water logging and does not even transfer the real quantum of water to the source which is uneconomical and creates water hazards.
Functions of National Bureau on Water Use Efficiency
To evolve a mechanism to set up an efficiency bar especially in domestic and industrial sectors.
To bring a paradigm shift in water management and to look at the river basin or the sub basin as the hydrological unit instead of the administrative and political boundaries.
To propose a River Basin Management Bill which envisages setting up of river basin authorities which would be managed by a two tier structure- a governing council and an executive board.
The governing council will mainly be executing a river basin management plan. If river basin has to be taken as a hydrological unit, consensus is required at the basin level between the states involved and within the constitutional framework.
It will be the first time when there will be a consensus building mechanism at the political level in the river basin ensuring solving issues and problems at the basin level only instead of coming to the centre. This will save time and efforts of the dispute tribunals.
To take care of the integrated water management. It forces the integration of water resources with other resources like land and issues like the environment and quality of the resource. It also forces integration of water resources with themselves- groundwater, surface water and planning and policy formation for the entire water available in the basin.
Cooperative Federalism
In the earlier water policies, state water policies were also incorporated so involvement and contribution from the states is important. However, it is a challenging task to achieve.
States have to be involved in a very cooperative and consultative approach where there is a win-win situation for both centre and states.
It is a very emotive, political and highly divisive issue and the centre-states relations are going to be highlighted by this, testing Indian federalism.
Although water is a state subject but centre has always played an active role in the decision taking process and in interstate disputes.
The process has to be dialogue driven taking care of the sensitivities of the states and should not be imposed on them.
Conclusion
Hydrological boundaries, rather than administrative or political boundaries, should be part of the water governance structure in the country.
Building consensus among the States within the Constitutional framework is a pre-condition for making the changes.
Water conservation, along with water harvesting and judicious and multiple use of water, are key to tackling the water challenges that India faces.
Rejuvenation and revitalisation of traditional water bodies and resources through the age-old conservation methods.
Need for disseminating modern water technologies in an extensive fashion.
Relook basin and sub-basin planning
Water policy should take in all recommendations and warning given by NITI Aayog
Batting for policy changes for giving incentive to crops using less water.
Participatory groundwater management should be promoted in a big way to maintain quality and sustainability.
Self Help Groups (SHGs)
Topics covered: About SHGs and its composition
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Role of animator Need of SHGs Members and meetings of SHG Keeping SHG accounts Functions, benefits and challenges of SHG SHG Movement In India
What are Self Help Groups?
Self Help Groups (SHGs) are small groups of poor people. The members of an SHG face similar problems. They help each other, to solve their problems.
SHGs promote small savings among their members. The savings are kept with the bank.
This is the common fund in the name of the SHG.
The SHG gives small loans to its members from its common fund.
SHG is an informal group and registration under any Societies Act, State cooperative Act or a partnership firm is not mandatory vide Circular RPCD.No. Plan BC.13/PL -09.22/90- 91 dated July 24th, 1991.
Composition of SHGs
A reasonably educated and helpful local person has to initially help the poor people to form groups. He or She tells them about the benefits of thrift and the advantages of forming groups. This person is called an ‘animator’ or ‘facilitator’. Usually, the animator is a person who is already known to the community.
Any of the following persons can be a successful animator: o Retired school teacher or a retired government servant, who is well known locally. o A health worker/a field officer/staff of a development agency or department of the State
Government. o Field officer or a staff member of a commercial bank/regional rural bank or a field staff from the
local co-operative bank or society o A field level functionary of an NGO. o An unemployed educated local person, having an inclination to help others. o A member/participant in the Vikas Volunteer Vahini (VVV) Programme of NABARD. o Woman animators can play more effective role in organising women SHGs.
The animator cannot organise the groups all alone.
He or she will need guidance, training, reading material, etc.
Usually, one of the following agencies help: o A voluntary agency or Non Governmental Organization (NGO). o The development department of the State Government. o The local branch of a bank.
Role Of An Animator
The animator talks to people in the village or at their homes.
He or she explains the benefits of thrift and group formation.
No promise of bank loan is given to anyone.
He or she helps the group members to hold one or two initial meetings.
The group finds a group leader, for holding meetings, keeping books, etc.
The animator guides and encourages the leader and the group members. Need for SHGs
One of the reasons for rural poverty in our country is low access to credit and financial services.
A Committee constituted under the chairmanship of Dr. C. Rangarajan to prepare a comprehensive report on 'Financial Inclusion in the Country' identified four major reasons for lack of financial inclusion:
o Inability to provide collateral security, o Poor credit absorption capacity, o Inadequate reach of the institutions, and o Weak community network.
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The existence of sound community networks in villages is increasingly being recognised as one of the most important elements of credit linkage in the rural areas.
They help in accessing credit to the poor and thus, play a critical role in poverty alleviation.
They also help to build social capital among the poor, especially women. This empowers women and gives them greater voice in the society.
Financial independence through self-employment has many externalities such as improved literacy levels, better health care and even better family planning.
Size of the SHG
The ideal size of an SHG is 10 to 20 members. (Advantage: In a bigger group, members cannot actively participate. Also, legally it is required that an informal group should not be of more than 20 people.).
The group need not be registered. Membership
From one family, only one person can become a member of an SHG. (More families can join SHGs this way.)
The group normally consists of either only men or of only women. Mixed groups are generally not preferred.
Women’s groups are generally found to perform better. (They are better in savings and they usually ensure proper use of loans.)
Members should have the same social and financial background.
Some Common factors for Membership in an SHG o Women/men from very poor households. o Those who depend on moneylenders even for daily necessities. o Those with a per capita income not exceeding Rs. 250 per month. o Those having dry land holding not exceeding 2.5 acres. o Common living conditions for the Group Members eg. Living in kutcha houses, Having no access
to safe drinking water, Presence of illiterate adults in the family etc Meetings
The group should meet regularly. Ideally, the meetings should be weekly or at least monthly. They become closer, if they meet regularly. This helps them to understand each other’s difficulties better.
Compulsory attendance: Full attendance in all the group meetings will make it easy for the SHG to stabilise and start working to the satisfaction of all.
Membership register, minutes register etc., are to be kept up to date by the group by making the entries regularly. This helps you to know about the SHG easily. It also helps to build trust among the SHG members.
Keeping of Accounts by the SHG
Simple and clear books for all transactions to be maintained.
If no member is able to maintain the books, the SHG may take outside help. (It has been seen that a boy or a girl from the village with some educational qualification does this job enthusiastically. After some months, the group can even consider giving him or her a small reward for this job.). Animator can also help.
All registers and account books should be written during the course of the meeting. (Advantage: This creates confidence in the minds of members who are unable to read and write.)
Books to be kept by an SHG o Minutes Book: The proceedings of meetings, the rules of the group, names of the members etc.
are recorded in this book. o Savings and Loan Register: Shows the savings of members separately and of the group as a
whole. Details of individual loans, repayments, interest collected, balance, etc. are entered here. o Weekly /Fortnightly/Monthly Register: Summary of receipts and payments, updated in every
meeting. o Members’ Passbooks: Individual members’ pass books in which individual’s savings and loan
balance outstanding is regularly entered. (Advantage: this encourages regular savings.)
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Functions
It looks to build the functional capacity of the poor and the marginalized in the field of employment and income generating activities.
It resolves conflicts through collective leadership and mutual discussion.
It provides collateral free loan with terms decided by the group at the market driven rates.
Such groups work as a collective guarantee system for members who propose to borrow from organised sources. The poor collect their savings and save it in banks. In return they receive easy access to loans with a small rate of interest to start their micro unit enterprise.
Consequently, Self-Help Groups have emerged as the most effective mechanism for delivery of microfinance services to the poor.
Benefits of SHGs
Social integrity – SHGs encourages collective efforts for combating practices like dowry, alcoholism etc.
Gender Equity – SHGs empowers women and inculcates leadership skill among them. Empowered women participate more actively in gram sabha and elections.
There is evidence in this country as well as elsewhere that formation of Self-Help Groups has a multiplier effect in improving women’s status in society as well as in the family leading to improvement in their socio-economic condition and also enhances their self-esteem.
Pressure Groups – their participation in governance process enables them to highlight issues such as dowry, alcoholism, the menace of open defecation, primary health care etc and impact policy decision.
Voice To Marginalized Section – Most of the beneficiaries of government schemes have been from weaker and marginalized communities and hence their participation through SHGs ensures social justice.
Financial Inclusion – Priority Sector Lending norms and assurance of returns incentivize banks to lend to SHGs. The SHG-Bank linkage programme pioneered by NABARD has made access to credit easier and reduced the dependence on traditional money lenders and other non-institutional sources.
Improving efficiency of government schemes and reducing corruption through social audits.
Alternate Source Of Employment – it eases dependency on agriculture by providing support in setting up micro-enterprises e.g. personalised business ventures like tailoring, grocery, and tool repair shops.
Changes In Consumption Pattern – It has enabled the participating households to spend more on education, food and health than non-client households.
Impact on Housing & Health – The financial inclusion attained through SHGs has led to reduced child mortality, improved maternal health and the ability of the poor to combat disease through better nutrition, housing and health – especially among women and children.
Banking literacy – It encourages and motivates its members to save and act as a conduit for formal banking services to reach them.
Weaknesses of SHGs
Though there has been social empowerment of the poor, the economic gain to bring about a qualitative change in their life has not been satisfactory.
Members of a group do not come necessarily from the poorest families.
There is a lack of qualified resource personnel in the rural areas who could help in skill upgradation or acquisition of new skills by group members. Further, institutional mechanisms for capacity building and skill training have been lacking.
Many of the activities undertaken by the SHGs are still based on primitive skills related mostly to primary sector enterprises. With poor value addition per worker and prevalence of subsistence level wages, such activities often do not lead to any substantial increase in the income of group members.
Lack of resources and means to market their goods.
Poor accounting practices and incidents of misappropriation of funds.
SHGs are heavily dependent on their promoter NGOs and government agencies. The withdrawal of support often leads to their collapse.
Challenges
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Lack of rural banking facilities – There are about 1.2 lakh bank branches and over 6 lakh villages. Moreover, many public sector banks and micro-finance institutions are unwilling to provide financial services to the poor as the cost of servicing remains high.
Lack of knowledge and proper orientation among SHG-members to take up suitable and profitable livelihood options.
Patriarchal mindset – primitive thinking and social obligations discourages women from participating in SHGs thus limiting their economic avenues.
Sustainability and the quality of operations of the SHGs have been a matter of considerable debate.
Only a minority of the Self-Help Groups are able to raise themselves from a level of micro-finance to that of micro-entrepreneurship.
No Security – The SHGs work on mutual trust and confidence of the members. The deposits of the SHGs are not secured or safe
Measures to Make SHGs Effective
Positive Attitude – Government functionaries should treat the poor and marginalized as viable and responsible customers and as possible entrepreneurs.
The Government should play the role of a facilitator and promoter, create a supportive environment for the growth and development of the SHG movement.
Expanding SHG Movement to Credit Deficient Areas of the Country - such as Madhya Pradesh, Rajasthan, States of the North-East.
Extension of Self-Help Groups to Urban/Peri-Urban Areas – efforts should be made to increase income generation abilities of the urban poor as there has been a rapid rise in urbanisation and many people remain financially excluded.
Rapid expansion of financial infrastructure (including that of NABARD) and by adopting extensive IT enabled communication and capacity building measures in these States.
Need Based Approach – Commercial Banks and NABARD in collaboration with the State Government need to continuously innovate and design new financial products for these groups.
Monitoring – Need to establish a separate SHG monitoring cell in every state. The cell should have direct links with district and block level monitoring system. The cell should collect both quantitative and qualitative information.
SHG Movement In India
Formation of SHGs for savings and credit and their linkage to commercial banks was initiated in India by MYRADA (Mysore Resettlement and Development Agency), an NGO, in the mid-1980s.
However, SHGs as a tool to address poverty became significant only when the Reserve Bank of India (RBI) issued a circular in 1992 to link about 500 groups under the NABARD-SHG bank linkage pilot program.
This success has led to mainstreaming of SHGs into the financial landscape and especially the Indian banking system, with about 94 million poor linked with banks through 7.5 Million SHGs, availing them of collateral-free credit.
As a part of the poverty alleviation measures, the Government of India launched the Swarnjayanti Gram Swarozgar Yojna (SGSY) in April 1999 where the major emphasis is on SHG formation, social mobilization and economic activation through micro-credit finance
This success led to the genesis of a massive community mobilization initiative by the Government of India as National Rural Livelihoods Mission (NRLM) in 2011
Lok Adalat And Revitalising Rural Area
Relevancy G.S. Paper 2 Objective questions- lok adalat features, advantages and origin, national, permanent and mobile lok
adalat
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Subjective questions- significance and need for lok adalat, Legal Services Authorities Act, 1987
What Is A Lok Adalat?
The concept of Lok Adalat (People’s Court) is an innovative Indian contribution to the world jurisprudence.
The introduction of Lok Adalats added a new chapter to the justice dispensation system of this country and succeeded in providing a supplementary forum to the victims for a satisfactory settlement of their disputes.
This system is based on Gandhian principles.
It is one of the components of ADR (Alternative Dispute Resolution) systems.
In ancient times, the disputes were referred to “Panchayats”, which were established at the village level.
Panchayats resolved the disputes through arbitration. It has proved to be a very effective alternative to litigation.
The First Lok Adalat was held in Gujarat in 1982.
Lok Adalat accepts the cases pending in the regular courts within their jurisdiction which could be settled by conciliation and compromise.
This concept of the settlement of disputes through mediation, negotiation or arbitration is conceptualized and institutionalized in the philosophy of Lok Adalat.
It involves people who are directly or indirectly affected by dispute resolution. Background
The concept of Lok Adalats was pushed back into oblivion in last few centuries before independence and particularly during the British regime.
Now, this concept has, once again, been rejuvenated. It has become very popular and familiar amongst litigants.
This is the system, which has deep roots in Indian legal history and its close allegiance to the culture and perception of justice in Indian ethos.
Experience has shown that it is one of the very efficient and important ADR mechanisms and most suited to the Indian environment, culture and societal interests.
Legal Services Authorities Act, 1987
The advent of Legal Services Authorities Act, 1987 gave a statutory status to Lok Adalats, pursuant to the constitutional mandate in Article 39-A of the Constitution of India.
It contains various provisions for settlement of disputes through Lok Adalat.
This Act mandates constitution of legal services authorities to provide free and competent legal services to the weaker sections of the society and to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities.
It also mandates organization of Lok Adalats to secure that the operation of the legal system promotes justice on the basis of equal opportunity.
When statutory recognition had been given to Lok Adalat, it was specifically provided that the award passed by the Lok Adalat formulating the terms of compromise will have the force of decree of a court, which can be executed as a civil court decree.
The evolution of movement called Lok Adalat was a part of the strategy to relieve heavy burden on the Courts with pending cases and to give relief to the litigants who were in a queue to get justice.
It contains various provisions for settlement of disputes through Lok Adalat. Statutory Provisions
The Central Government, taking note of the need for legal aid for the poor and the needy, had introduced Article 39 (A) in the Constitution in February 1977.
Article 39 A of the Constitution of India provides for equal justice and free legal aid. It is, therefore clear that the State has been ordained to secure a legal system, which promotes justice on the basis of equal opportunity.
The language of Article-39 A is understood in mandatory terms. This is made more than clear by the use of the word “shall” in Art-39 A.
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It is emphasized that the legal system should be able to deliver justice expeditiously on the basis of equal opportunity and provide free legal aid to ensure that opportunities for securing justice are not denied to any citizens by reasons of economic or other disabilities.
It was in this context that the Legal Services Authorities Act, 1987 has been enacted by the Parliament. One of the aims of this Act is to organize Lok Adalats to secure that the operation of legal system promotes justice on the basis of equal opportunity.
Chapter VI of the Act deals with Lok Adalats. The Act created National, State and District Legal Service Authorities with the power to organize Lok Adalats.
The poor and resourceless persons need justice, they require for that, an access to justice.
Mere recognition of rights does not help them, without providing for necessary infrastructure to secure them justice whenever needed.
Even if the infrastructure is created, if he does not get the ‘legal aid’ to reach it, the purpose of entire justice system suffers a defeat.
Salient features of Lok Adalat
It is based on settlement or compromise reached through systematic negotiations.
It is one among the Alternate Dispute Resolution (ADR) systems. It is an alternative to "Judicial Justice".
It is a win - win system where all the parties to the dispute have something to gain.
The award can be passed by Lok Adalat, only after obtaining the assent of all the parties to dispute.
The parties to a dispute can interact directly with the presiding officer, which is not possible in the case of a court proceeding.
It is economical - No court fee is payable. If any court fee is paid, it will be refunded.
A Permanent Lok Adalat can pass an award on merits, even without the consent of parties. Such an award is final and binding. From that no appeal is possible.
Lok Adalat is having certain powers of a civil court.
Lok Adalat is deemed to be civil court for certain purposes.
An award passed by the Lok Adalat is final and no appeal is maintainable from it.
The award passed by the Lok Adalat is deemed to be a decree of a civil court.
An award passed by the Lok Adalat can be executed in a court.
The appearance of lawyers on behalf of the parties, at the Lok Adalat is not barred. (Regulation 39 of the Kerala State Legal Services Authority Regulations, 1998.
Code of Civil Procedure and Indian Evidence Act are not applicable to the proceedings of Lok Adalat. Jurisdiction of Lok Adalats
A Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or settlement between the parties to a dispute in respect of:
o Any case pending before; or o Any matter which is falling within the jurisdiction of, and is not brought before, any court for
which the lok adalat is organized. o The lok adalat can compromise and settle even criminal cases, which are compoundable under
the relevant laws. Cases Suitable For Lok Adalats
Lok Adalats have competence to deal with a number of cases like:
Compoundable civil, revenue and criminal cases.
Motor accident compensation claims cases
Partition Claims
Damages Cases
Matrimonial and family disputes
Mutation of lands case
Land Pattas cases
Bonded Labour cases
Land acquisition disputes
Bank’s unpaid loan cases
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Arrears of retirement benefits cases
Family Court cases
Cases which are not sub-judice Need For Lok Adalats
Justice Ramaswamy says: “ Resolving disputes through Lok Adalat not only minimizes litigation expenditure, it saves valuable time of the parties and their witnesses and also facilitates inexpensive and prompt remedy appropriately to the satisfaction of both the parties”
Law Courts in India face mainly four problems: o The number of courts and judges in all grades are alarmingly inadequate o Increase in flow of cases in recent years due to multifarious Acts enacted by the Central and
State Governments o The high cost involved in prosecuting or defending a case in a court of law, due to heavy court
fee, lawyer's fee and incidental charges o Delay in disposal of cases resulting in huge pendency in all the courts
Lok Adalat has a positive contributory role in the administration of justice.
It supplements the efforts and work of the courts.
Area of contribution chosen for the purpose specially concerns and helps the common man, the poor, backward and the needy-most sections of the society.
National Lok Adalat
National Level Lok Adalats are held for at regular intervals where on a single day Lok Adalats are held throughout the country, in all the courts right from the Supreme Court till the Taluk Levels wherein cases are disposed off in huge numbers.
Permanent Lok Adalat
The other type of Lok Adalat is the Permanent Lok Adalat, organized under Section 22-B of The Legal Services Authorities Act, 1987.
Permanent Lok Adalats have been set up as permanent bodies with a Chairman and two members for providing compulsory pre-litigative mechanism for conciliation and settlement of cases relating to Public Utility Services like transport, postal, telegraph etc. Here, even if the parties fail to reach to a settlement, the Permanent Lok Adalat gets jurisdiction to decide the dispute, provided, the dispute does not relate to any offence.
Further, the Award of the Permanent Lok Adalat is final and binding on all the parties. The jurisdiction of the Permanent Lok Adalats is upto Rs. Ten Lakhs. Here if the parties fail to reach to a settlement, the Permanent Lok Adalat has the jurisdiction to decide the case.
The award of the Permanent Lok Adalat is final and binding upon the parties.
The Lok Adalat may conduct the proceedings in such a manner as it considers appropriate, taking into account the circumstances of the case, wishes of the parties like requests to hear oral statements, speedy settlement of dispute etc.
Mobile Lok Adalats
They are also organized in various parts of the country which travel from one location to another to resolve disputes in order to facilitate the resolution of disputes through this mechanism.
Advantages Of Lok Adalats
Speedy Justice And Saving From The Lengthy Court Procedures
Justice At No Cost
Solving Problems Of Backlog Cases
Maintenance Of Cordial Relations Conclusion
Objective of Lok Adalat is to settle the disputes which are pending before the courts, by negotiations, conciliation and by adopting persuasive common sense and human approach to the problems of the disputants.
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The system has received laurels from the parties involved in particular and the public and the legal functionaries, in general. It also helps in emergence of jurisprudence of peace in the larger interest of justice and wider sections of society.
Its process is voluntary and works on the principle that both parties to the disputes are willing to sort out their disputes by amicable solutions.
Through this mechanism, disputes can be settled in a simpler, quicker and cost-effective way at all the three stages i.e. pre-litigation, pending-litigation and post-litigation.
Domestic Violence In The Time Of Lockdown
Relevancy G.S. Paper 2,3 Global lockdown- impact and rise in domestic violence Reccomendations to the government Domestic violence act 2005
Why in news?
Globally, violence against women affects one in three women. Closer home, the National Family Health Survey-4 (2015-16) (NFHS-4) suggests that 30 per cent women in
India in the age group of 15-49 have experienced physical violence since the age of 15. The report further reveals that 6 per cent women in the same age group have experienced sexual violence
at least once in their lifetime. About 31 per cent of married women have experienced physical, sexual or emotional violence by their
spouses. Other Studies On Domestic Violence
In 2018, a United Nations study suggested globally, home was the most unsafe place for women.
Of all female murders, an overwhelming 82 per cent happen in their marital homes, and are committed by an intimate partner or a family member.
As special cases, the dowry related death and honour killings have found special mention in the report, where the natal home of a woman also frequently becomes a dangerous place for her.
Global Lockdown And The Rise In Domestic Violence Cases
As more and more countries have entered lockdown, globally there is an alarming upshot in domestic violence related distress calls to support helplines and response shelters.
In the province of Hubei in Wuhan, China, which is the heart of the first outbreak of the Coronavirus, domestic violence reports to police tripled during the February lockdown period and rose to 162 from 47 last year.
In Brazil state-run shelters are estimating 40-50 per cent rise in demands from endangered women.
European countries report 20-30 per cent increases in calls to domestic violence helplines, from Catalonia to Cyprus.
In Spain, where lockdown rules are among the strictest, with heavy fines levied on anyone not complying, domestic violence related fatalities have been reported in Valencia.
In France, the interior minister has reported domestic violence incidents have shot up by more than 30 per cent since the country went into lockdown on March 17.
In the UK, calls to the national abuse hotline has gone up to 65 per cent last weekend. Impact Of Lockdown On Domestic Violence In India
In India, the National Commission of Women has recorded 291 complaints of domestic violence in March and is now only receiving complaints via email.
Alarmingly, the hotlines run by NGOs and volunteer organisations, that are usually the avenues for women to report such attacks are eerily silent.
Most activists, believe that this drop probably reflects the continuous presence of the abuser at home during the lockdown.
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With curtailed mobility and a police force that is more than apathetic towards gender-based violence, women are losing even the avenues that could have saved them from abuse, and in extreme cases, death.
Under the Protection of Women from Domestic Violence Act (PWDVA), police are not the first responder for women who experience domestic violence. The counselling centres are supposed to reach out to the complainants.
Measures Taken At International Level
UN Secretary General Antonio Guterres has described the surge in domestic violence across the globe horrifying and has urged all governments to think of this problem when they create and enforce policies.
The Gender Equality Minister of France has announced that the French government will pay for up to 20,000 hotel nights for survivors and finance pop-up counselling centres at grocery stores for easy access to abuse survivors.
Inspired by Spain, women are being given codewords such as “Mask-19” in pharmacy stores, which can act as an alarm-response mediator.
Recommendations To The Government
It is critical that governments utilise a human rights and intersectional based approach to ensure that everyone, including the most marginalised, has access to necessary information, support systems and resources during the current crisis.
The state governments need to declare helplines as “essential services” that should remain open during lockdowns. Disseminate information about gender-based violence and publicise resources and services available.
Increase resourcing for NGOs that respond to domestic violence and aid — including shelter, counselling, and legal aid — to survivors, and promote those that remain open.
Encourage the equitable sharing of domestic tasks at home.
Provide for the continued provision of healthcare services based on medical research and tests — unrelated to the virus — for women and girls.
Ensure women’s timely access to necessary and comprehensive sexual and reproductive health services during the crisis, such as maternal health services, safe abortion etc.
As the steps to contain the transmission of the virus might require more stretches of isolation and confinement for the public, the government at the Centre and state levels need to address the upsurge in domestic violence immediately. For a lot of women, home is not the safe haven as normally believed. Their lives depend on the emergency response systems remaining functional.
Salient features of Protection of Women from Domestic Violence Act 2005
Includes physical and mental ill-treatment.
Primarily meant for the protection of wife or female live-in partners.
Law also extends to sisters, widows or mothers.
Harassment in the form of dowry demands also included in this law.
Gives women right to secure housing.
Court can also issue protection orders that prevent the abuser to harass the women by acts at her workplace.
Act proposes appointment of protection officers and NGOs.
Breach of protection order is a non-bailable offense.
Competition Commission of India (CCI)
Relevancy G.S. Paper 2 Composition, functions and role of Competition Commission of India (CCI) Competition Act 2002 Judgements of CCI
Introduction
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Competition Commission of India (CCI) is a statutory body of the Government of India responsible for enforcing the Competition Act, 2002, it was duly constituted in March 2009.
The Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) was repealed and replaced by the Competition Act, 2002, on the recommendations of Raghavan committee.
A need was felt to promote competition and private enterprise especially in the light of 1991 Indian economic liberalisation.
Competition Commission of India aims to establish a robust competitive environment. o Through professionalism, transparency, resolve and wisdom in enforcement. o Through proactive engagement with all stakeholders, including consumers, industry, government
and international jurisdictions. o By being a knowledge intensive organization with high competence level.
Competition Act, 2002
It follows the philosophy of modern competition laws.
The Competition Act was passed in 2002 and has been amended by the Competition (Amendment) Act, 2007.
In accordance with the provisions of the Amendment Act, the Competition Commission of India and the Competition Appellate Tribunal have been established.
The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.
Government replaced Competition Appellate Tribunal (COMPAT) with the National Company Law Appellate Tribunal (NCLAT) in 2017.
Composition of CCI
The commission is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases.
The Commission consists of one Chairperson and six Members as per the Competition Act who shall be appointed by the Central Government.
The Chairperson and other Members shall be whole-time Members.
Eligibility of members: The Chairperson and every other Member shall be a person of ability, integrity and standing and who, has been, or is qualified to be a judge of a High Court, or, has special knowledge of, and professional experience of not less than fifteen years in international trade, economics, business, commerce, law, finance, accountancy, management, industry, public affairs, administration or in any other matter which, in the opinion of the Central Government, may be useful to the Commission.
Role of CCI
To promote and sustain competition
To eliminate practices having adverse effect on competition
To give opinion on competition issues on a reference received from a statutory authority established under any law
To protect the interests of consumers
To ensure freedom of trade in the markets of India.
To impart training on competition issues.
To undertake competition advocacy
To create public awareness Functioning of CCI
The Competition Commission of India takes the following measures to achieve its objectives:
Consumer welfare: To make the markets work for the benefit and welfare of consumers.
Inclusive growth: Ensure fair and healthy competition in economic activities in the country for faster and inclusive growth and development of the economy.
Efficient use of economic resources: Implement competition policies with an aim to effectuate the most efficient utilization of economic resources.
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Balancing regulatory and competition law: Develop and nurture effective relations and interactions with sectoral regulators to ensure smooth alignment of sectoral regulatory laws in tandem with the competition law.
Promoting healthy competition: Effectively carry out competition advocacy and spread the information on benefits of competition among all stakeholders to establish and nurture competition culture in Indian economy.
Regulating competition: The Competition Commission is India’s competition regulator, and an antitrust watchdog for smaller organizations that are unable to defend themselves against large corporations.
Protecting domestic market: CCI has the authority to notify organizations that sell to India if it feels they may be negatively influencing competition in India’s domestic market.
Keeping check on large enterprises: The Competition Act guarantees that no enterprise abuses their 'dominant position' in a market through the control of supply, manipulating purchase prices, or adopting practices that deny market access to other competing firms.
Regulating foreign companies in India: A foreign company seeking entry into India through an acquisition or merger will have to abide by the country’s competition laws.
Keeping track of assets and turnovers of companies: Assets and turnover above a certain monetary value will bring the group under the purview of the Competition Commission of India (CCI).
Judgements of CCI
CCI imposed a fine of INR 63.07 billion (US$910 million) on 11 cement companies for cartelisation in June 2012. It claimed that cement companies met regularly to fix prices, control market share and hold back supply which earned them illegal profits.
CCI imposed a fine of INR 258 crores upon Three Airlines in 2015.
Competition Commission of India (CCI) had penalized the three airlines for cartelisation in determining the fuel surcharge on air cargo.
CCI imposed a penalty of INR 522 million (US$7.6 million) on the Board of Control for Cricket in India (BCCI) in 2013, for misusing its dominant position.
The CCI found that IPL team ownership agreements were unfair and discriminatory and that the terms of the IPL franchise agreements were loaded in favor of BCCI and franchises had no say in the terms of the contract.
CCI imposed a fine of INR 10 million upon Google in 2014 for failure to comply with the directions given by the Director General (DG) seeking information and documents.
CCI ordered a probe into the functioning of Cellular Operators Association of India (COAI) following a complaint filed by Reliance Jio against the cartelization by its rivals Bharti Airtel, Vodafone India and Idea cellular.
The commission ordered an antitrust probe against Google for abusing its dominant position with Android to block market rivals. This probe was ordered on the basis of the analysis of a similar case in the EU where Google was found guilty and fined.
CCI issued letters to handset makers in 2019, seeking details of terms and conditions of their agreement with Google.
This is to ascertain if Google imposed any restrictions on them for using the company's apps in the past 8 years from 2011.
Need of CCI
Promote free enterprise: Competition laws have been described as the Magna Carta of free enterprise. Competition is important for the preservation of economic freedom and our free enterprise system.
Promotes domestic industries: During the era in which the economies are moving from closed economies to open economies, an effective competition commission is essential to ensure the continued viability of domestic industries, carefully balanced with attaining the benefits of foreign investment increased competition.
Protect against market distortions: The need for competition law arises because market can suffer from failures and distortions, and various players can resort to anti- competitive activities such as cartels, abuse of dominance etc. which adversely impact economic efficiency and consumer welfare.
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Thus, there is a need for competition law to provide a regulative force which establishes effective control over
economic activities.
Top 10 NGOs In India: Making A Difference
Relevancy G.S. Paper2 and 4 What are NGOs NGOs in India
What are NGOs?
As defined by the World Bank NGOs refers to not-for-profit organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development.
The term NGO in India denotes wide spectrum of organisations which may be non-governmental, quasi or semi governmental, voluntary or non-voluntary etc.
These organisations are not a part of the governement, have a legal status and are registered under the specific Act (Societies Registration Act, 1860 in India) of the government.
In India, based on the law under which they operate and the kind of activities they take up, civil society groups can be classified into following broad categories:
o Registered Societies formed for specific purposes o Local Stakeholders Groups, Microcredit and Thrift Enterprises, Self Help Groups o Charitable Organizations and Trusts o Cooperatives o Professional Self-Regulatory Bodies o Government promoted Third Sector Organizations o Bodies without having any formal organizational structure
Top 10 NGOs in India
Sightsavers o It is a charity for blind people that has been in action in India since 1966 and is registered with
the government. o The charitable organisation believes in providing all students with a chance to prove their skills
despite their disabilities. o The organization, along with local institutions, helps meet the unique educational needs with a
team approach of professionals, teachers, parents, and students. o Sightsavers is an NGO that works for the rural population. o It has a mission to completely eradicate curable blindness and give access to preventive, curative
and rehabilitative services without financial hardship. o Sightsavers too accept online donations for the NGO which is fully utilized for the growth of the
unfortunate ones.
Child Rights and You (CRY) o CRY is a non-governmental organization that helps restore the rights of children to build a
society that promises equality, justice, and dignity to all irrespective of their birth. o It is among the top 10 NGOs in Delhi. o CRY partners with organizations to uplift thousands of underprivileged children. o CRY works at all levels including advocacy, spreading awareness, direct action and policy
changes. They dedicate both their time and funds for ensuring healthy, happy and creative childhood.
Help Age India
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o Help Age India is among the leading charities in India that work for the elderly who’ve no source of livelihood. Its main focus is to provide free medicines and free consultations to help improve the quality of life. They’ve also been pushing the government to frame new legislation to improve the plight of the elderly. It aims to serve the needs of elderly people in a holistic manner, enabling them to live a life of dignity.
Give Foundation o Give India falls in the category of best NGO in India. o It provides a platform to all those who wish to support a noble cause. o It allows an individual to support a cause of his/her choice while making sure that the
organizations to which the funds are being transferred has been evaluated for transparency and credibility.
o Give India is the largest and one of the most trustworthy NGOs in India.
GOONJ – a voice, an effort o It’s a renowned NGO in India that won “ The NGO of the Year Award in 2007”. o Started by Anshu Gupta, its main objective is to provide disaster relief, humanitarian aid, and
leverage community development. o Some of its projects that garnered huge support were “Cloth for Work”, “Not Just a Piece of
Cloth”, and “School to School” o Goonj is also one of the top 10 NGOs in Delhi.
Smile Foundation o This NGO for education in India was formed in 2002 with a purpose to promote education among
the underprivileged. o Their developmental programme includes the provision of health care, education, livelihood for
children and women, equally affected by the lack of resources. o Some of their programs are Smile on wheels, mission education and smile twin e-learning
program.
K. C. Mahindra Education Trust (Nanhi Kali) o The K.C Mahindra Education Trust initiated the project Nanhi Kali in a bid to provide basic
primary education to underprivileged girls in India. o The nation has also seen a huge development brought about by the education of the girl child. o Academy support with study material, good teaching methodology, and community support have
brought about a massive change in the outlook of women in India
Pratham Education Foundation o Pratham came into existence in 1995 and turned into an NGO for education in India starting with
the slum children in Mumbai. o From there it has made significant strides in the direction of education in India. It is an innovative
learning organization that focuses on high quality, low-cost repeated interventions to fill the gaps in the education system.
o It is one of the most respected organizations in India.
LEPRA India o LEPRA Society is a non-governmental organization aiming to promote quality healthcare. o The Society aims to support marginalized children, women, youngsters, slum dwellers, and
migrants by providing them medical help. o They try to bring a positive change in people’s lifestyle by giving them the confidence to live a
dignified life. o You can make an online donation in India for LEPRA through their online portal.
Sammaan Foundation o Samman, as the name suggests, provides marginalized groups with an opportunity to live a
dignified life. o It is a charitable organisation based in India that promotes financial inclusion, micro-
entrepreneurship, health and agriculture at the grass-root level. o It has been extensively working with rickshaw pullers and street vendors.
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o Now, the Samman Foundation is launching innovative health services like Mobile Medical Unit, Medical Ambulances and mortuary vans with the support of the government.
40 Landmark Judgements That Changed The Course Of India
(Part1)
Topics covered 1. KM Nanavati v State of Maharashtra - 1961 2. IC Golaknath v State of Punjab - 1967 3. Elected representatives cannot be given the benefit of doubt 4. Indira Gandhi v Raj Narain - 1975 5. ADM Jabalpur v Shivakant Shukla Case - 1976 6. Overlapping zones of laws rectified thanks to a writ petition 7. Minerva Mills v Union of India - 1980 8. Waman Rao v Union of India - 1981 9. Mohd Ahmed Khan v Shah Bano Begum - 1985 10. MC Mehta v Union Of India - 1986 11. Indra Sawhney v UOI November - 1992 12. Supreme Court Advocates-on-Record - Association and another versus Union of India - 1993 13. SR Bommai v Union of India - 1994
1. Jury decision overturned by High Court (KM Nanavati v State of Maharashtra) - 1961
Hardly an open-and-shut case, the nature of the crime garnered media attention.
This case is notable for being the last case when a jury trial was held in India. KM Nanavati, a naval officer, murdered his wife's lover, Prem Ahuja. The jury ruled in favour of Nanavati and declared him "not guilty" which was eventually set aside by the Bombay High Court.
2. Amendment masquerades as law (IC Golaknath v State of Punjab) - 1967
Parliament's prevented from taking away individual rights.
In the highly famous case of Golaknath V State of Punjab in 1967 the Supreme Court ruled that Parliament could not curtail any of the Fundamental Rights of individuals mentioned in the Constitution. Parliament's overarching ambitions nipped in the bud (Keshavananda Bharti vs State of Kerala) 1973.
3. Elected representatives cannot be given the benefit of doubt
A highly notable case which introduced the concept of "basic structure" of the constitution of India and declared that those points decided as basic structure could not be amended by the Parliament.
The case was triggered by the 42nd Amendment Act.
4. Beginning of the fall of Indira Gandhi (Indira Gandhi v Raj Narain) - 1975
The trigger that led to the imposition of emergency.
In this landmark case regarding election disputes, the primary issue was the validity of clause 4 of the 39th Amendment Act.
The Supreme Court held clause 4 as unconstitutional and void on the ground that it was outright denial of the right to equality enshrined in Article 14.
The Supreme Court also added the following features as “basic features” laid down in Keshavananda Bharti case – democracy, judicial review, rule of law and jurisdiction of Supreme Court under Article 32.
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5. A step backward for India (ADM Jabalpur v Shivakant Shukla Case) - 1976
Widely considered a violation of Fundamental Rights.
In this landmark judgment, the Supreme Court declared that the rights of citizens to move the court for violation of Articles 14, 21 and 22 would remain suspended during emergencies.
Triumph of individual liberty (Maneka Gandhi vs UOI) 1978.
6. Overlapping zones of laws rectified thanks to a writ petition
The case caused a huge uproar over the definition of Freedom of Speech.
The court ruled that the procedure must be fair and the law must not violate other Fundamental Rights.
7. Parliament limited by itself (Minerva Mills v Union of India) - 1980
In this landmark judgment, the Supreme Court of India in 1980 strengthened the doctrine of the basic structure which was propounded earlier in the Keshavananda Bharti Case.
Two changes which were made earlier by the 42nd Amendment Act were declared as null and void by the Supreme Court in this particular case.
8. Constitutional validity of individual rights upheld (Waman Rao v Union of India) - 1981
SC ruled that Parliament had transgressed its power of constitutional amendment.
This case was a landmark decision in the constitutional jurisprudence of India.
This case has helped in determining a satisfactory method of addressing grievances pertaining to the violation of fundamental rights by creating a fine line of determination between the Acts prior to and after the Keshavananda Bharati case.
9. Maintenance lawsuit sets precedent (Mohd Ahmed Khan v Shah Bano Begum) - 1985
Shah Bano won the right to get alimony from her husband.
The petitioner challenged the Muslim personal law.
The Supreme Court ruled in favour of Shah Bano and granted her alimony.
Most favoured it as a secular judgment but it also invoked a strong reaction from the Muslim community, which felt that the judgment was an encroachment on Muslim Sharia law and hence led to the formation of the All India Muslim Personal Law Board in 1973.
10. MC Mehta v Union Of India - 1986
Mounting environment-related concerns.
A PIL filed by MC Mehta in 1986 enlarged the scope and ambit of Article 21 and Article 32 to include the right to healthy and pollution-free environment.
11. Reservation in central government jobs (Indra Sawhney v UOI November) - 1992
Attempt to correct historic injustices constitutionally.
The constitutional bench of the Supreme Court held in this matter that caste could be a factor for identifying backward classes.
12. Wrangle over Supreme Court judge appointments (Supreme Court Advocates-on-Record - Association and another versus Union of India) - 1993
The National Judicial Appointments Commission Act and Constitutional amendment Act passed in 2014 aimed at replacing the collegium system of appointing Supreme Court judges.
The act was struck down as unconstitutionalby the Supreme Court in October 2015.
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13. Power of President's Rule curtailed (SR Bommai v Union of India) - 1994
Persecution of state governments stalled.
This landmark case had major implications on Center-State relations. Post this case the Supreme Court clearly detailed the limitations within which Article 356 has to function.
14. Scam-tainted politicians - 1997
The Jain Hawala case exposed bigwigs.
The Hawala scandal was an Indian political scandal involving payments allegedly received by politicians through four hawala brokers, the Jain brothers.
In 1991, an arrest linked to militants in Kashmir led to a raid on hawala brokers, revealing evidence of large-scale payments to national politicians.
The prosecution that followed was partly prompted by a public interest litigation.
Many were acquitted, partly because the hawala records (including diaries) were judged in court to be inadequate as the main evidence.
The high court decreed that the CBI had not brought on record any material which could be converted into legally admissible evidence.
15. Foundation for a female workforce (Vishaka v State of Rajasthan) - 1997
Definition of sexual harrassment and guidelines to deal with it laid down.
In this case Vishakha and other women groups filed a Public Interest Litigation (PIL) against State of Rajasthan and Union of India to enforce fundamental rights for working women under Articles 14, 19 and 21 of the Constitution.
This resulted in the introduction of Vishaka Guidelines.
The judgment of August 1997 also provided basic definitions of sexual harassment at the workplace and provided guidelines to deal with it. Hence the importance of the case as a landmark judgment.
16. Afzal Guru's death sentence sparked protests - 2002
Awarded death sentence for role in 2001 Parliament attacks.
Afzal Guru was sentenced to death on February 2013 for his role in the December 2001 attacks on the Indian Parliament.
The judgment faced widespread criticism on three grounds – lack of proper defense, lack of primary evidence and judgment based on collective conscience rather than rule of law.
17. Justice deferred in Best Bakery case - 2003
Miscarriage of justice as a large number of witnesses turn hostile.
The Best Bakery was burned down, killing 14 people on March 1, 2002 as part of the 2002 Gujarat violence.
The Supreme court, in a rarest of rare case, ordered a re-trial outside of Gujarat in which nine out of the seventeen accused were convicted by a special court in Mumbai in 2006.
18. State of Tamil Nadu V Suhas Katti - November 2004
Short conviction time of seven months.
This was notable for being the first case involving conviction under the Information Technology Act, 2000.
A family friend of a divorced woman was accused of posting her number online on messenger groups which led to her being harassed by multiple lewd messages.
The accused was later convicted and sentenced.
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19. Rameshwar Prasad v Union Of India - 2005
Dissolution of Bihar Assembly unwarranted.
In this case, the petitioner challenged the constitutional validity of a notification which ordered dissolution of the legislative Assembly of the state of Bihar.
The dissolution had been ordered on the ground that attempts were being made to cobble a majority by illegal means and lay claim to form the government in the state which if continued would lead to tampering with constitutional provisions.
The Supreme Court held that the aforementioned notification was unconstitutional.
20. Victims of sexual assault or not? (Om Prakash v Dil Bahar) - 2006
Controversial ruling had many opponents.
The Supreme Court in the above case declared that a rape accused could be convicted on the sole evidence of the victim in spite of medical evidence not proving that it was rape.
21. Priyadarshini Mattoo case - October 2006
14-year-old fight for justice gets results.
In this matter the Supreme Court had commuted the death sentence awarded to prime accused Santosh Singh (son of former IPS officer), to life imprisonment for the rape and murder of the 23-year-old law student, Priyadarshini Mattoo.
22. Jessica Lal Murder Case - December 2006
Civil society makes big gains.
A model in New Delhi working as a bartender was shot dead and the prime accused Manu Sharma, son of Congress MP Vinod Sharma who was initially acquitted in February 2006 was later sentenced to life imprisonment in December 2006 by a fast track hearing by the Delhi High Court.
On 19 April 2010, the Supreme Court of India approved the sentence.
23. Sanjay Dutt plays prisoner in real life - 2007
Conviction under TADA changed under milder Arms Act.
Well-known actor Sanjay Dutt was sentenced to five year imprisonment by the Supreme Court for illegal weapons possession in a case linked to the 1993 serial blasts in Mumbai.
The Supreme Court also cited that the circumstances and nature of offence were too serious for the 53-year-old actor to be released on probation.
24. Nithari serial murders - 2009
Koli was served with multiple death sentences.
A Special Sessions Court awarded death sentence in 2009 to Surinder Koli and Moninder Singh Pandher for the murder of a 14-year-old girl.
The murders believed to have been committed through 2006 involved instances of cannibalism.
Pandher was later acquitted by the Allahabad High Court and was released on bail but Koli’s death sentence was upheld by both the High Court as well as the Supreme Court.
25. Aarushi Talwar murder - 2008
Verdict delivered under unusual circumstances.
A case which received heavy media attention involved the double murder of 14-year-old Aarushi Talwar and her 45-year-old domestic help in Noida.
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After five years a Sessions court convicted both her parents Rajesh and Nupur Talwar and sentenced them to life imprisonment.
26. Section 377 case (Naz Foundation v Govt of NCT of Delhi) - July 2009
Cause for rejoicing for homosexuals.
In 2009 the Supreme Court declared Section 377 of the Indian Penal Code, 1860 as unconstitutional.
The said section earlier criminalised sexual activities “against the order of nature” which included homosexual acts. This judgment however, was overturned by the Supreme in December, 2013.
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ACTS AND BILLS
Pre-conception & Pre-natal Diagnostics Techniques (PC &
PNDT) Act, 1994
Relevancy G.S. Paper 2 About the act, provisions and amendements Implementation and conclusion Other Government Initiatives To Address Declining Sex Ratio
Why in news?
In view of the ongoing lockdown, due of COVID19 pandemic, the Health Ministry has issued a Notification dated April 4, 2020 to defer/suspend certain provisions under the PC&PNDT Rules 1996.
These Rules pertain to applying for renewal of registration if falling due in this period, submission of reports by diagnostics centres by 5th day of the following month and submission of quarterly progress report (QPR) by the States/UTs.
But, a section of the media is speculating that the PC&PNDT (Pre Conception and Pre Natal Diagnostic Techniques (Prohibition of Sex Selection)) Act 1994 has been suspended by the Ministry of Health and Family Welfare.
Pre-Conception and Pre-Natal Diagnostic Techniques (PCPNDT) Act, 1994
Pre-Conception and Pre-Natal Diagnostic Techniques (PCPNDT) Act, 1994 is an Act of the Parliament of India enacted to stop female foeticides and arrest the declining sex ratio in India. The act banned prenatal sex determination.
The main purpose of enacting the act is to ban the use of sex selection techniques before or after conception and prevent the misuse of prenatal diagnostic technique for sex selective abortion.
Offences under this act include conducting or helping in the conduct of prenatal diagnostic technique in the unregistered units, sex selection on a man or woman, conducting PND test for any purpose other than the one mentioned in the act, sale, distribution, supply, renting etc. of any ultra sound machine or any other equipment capable of detecting sex of the foetus.
Amendments:
The act was amended in 2003 to improve the regulation of the technology used in sex selection.
The Act was amended to bring the technique of pre conception sex selection and ultrasound technique within the ambit of the act.
The amendment also empowered the central supervisory board and state level supervisory board was constituted.
Implications Of The Amendment
Amendment of the act mainly covered bringing the technique of pre conception sex selection within the ambit of the act
Bringing ultrasound within its ambit
Empowering the central supervisory board, constitution of state level supervisory board
Provision for more stringent punishments
Empowering appropriate authorities with the power of civil court for search, seizure and sealing the machines and equipments of the violators
Regulating the sale of the ultrasound machines only to registered bodies. Provisions of the act
The Act provides for the prohibition of sex selection, before or after conception.
It regulates the use of pre-natal diagnostic techniques, like ultrasound and amniocentesis by allowing them their use only to detect few cases.
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No laboratory or centre or clinic will conduct any test including ultrasonography for the purpose of determining the sex of the foetus.
No person, including the one who is conducting the procedure as per the law, will communicate the sex of the foetus to the pregnant woman or her relatives by words, signs or any other method.
Any person who puts an advertisement for pre-natal and pre-conception sex determination facilities in the form of a notice, circular, label, wrapper or any document, or advertises through interior or other media in electronic or print form or engages in any visible representation made by means of hoarding, wall painting, signal, light, sound, smoke or gas, can be imprisoned for up to three years and fined Rs. 10,000.
The Act mandates compulsory registration of all diagnostic laboratories, all genetic counselling centres, genetic laboratories, genetic clinics and ultrasound clinics.
Other Government Initiatives To Address Declining Sex Ratio
To check the declining child sex ratio, the government has taken various initiatives like Beti Bachao, Beti Padhao Yojana, Sukanya Samriddhi Yojana, PC&PNDT Act etc.
Some State government initiatives: o The Girl Child Protection Scheme of Andhra Pradesh government. o Aapki Beti, Humari beti by Haryana government. o Sivagami Ammaiyar memorial girl child protection scheme of Tamil Nadu government. o Ashray scheme of Rajasthan government. o Mukhya Mantri Kanya Suraksha Yojana of Bihar government.
Wage Code Bill
Topics covered About the bill Concept of wage Background Problems of labour market in India Need of the bill Highlights and key issues of the bill Key features of 4 labour codes Impact
About The Bill
The Code on Wages, 2019 was introduced in Lok Sabha by the Minister of Labour, Mr. Santosh Gangwar on July 23, 2019.
It seeks to regulate wage and bonus payments in all employments where any industry, trade, business, or manufacture is carried out.
The Code replaces the following four laws: (i) the Payment of Wages Act, 1936, (ii) the Minimum Wages Act, 1948, (iii) the Payment of Bonus Act, 1965, and (iv) the Equal Remuneration Act, 1976.
The Code will apply to all employees.
The central government will make wage-related decisions for employments such as railways, mines, and oil fields, among others.
State governments will make decisions for all other employments. Concept Of Wage
According to the bill, wages include salary, allowance, or any other component expressed in monetary terms. This does not include bonus payable to employees or any traveling allowance, among others.
Minimum Wage: International Labour Organisation defines it as “the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract”. Or, the minimum wage includes the bare needs of life like food, shelter, and clothing.
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Fair Wage: A ‘fair wage’ is a mean between ‘living wage’ and ‘minimum wage’.
Living Wage: It is the wage needed to provide the minimum income necessary to pay for basic needs based on the cost of living in a specific community. In addition to bare needs, a ‘living wage’ includes education, health, insurance, etc.
Background
One of the biggest issues faced by employers in India is the number of laws governing the employer-employee relationship.
The government is in the process of introducing four codes, leading to uniformity in the coverage of various laws, that would subsume 44 labour laws with certain amendments such as:
o Welfare, o Industrial relations, o Safety, o Wages, o Social security, o Working conditions etc.
Notably, the Centre started notifying a uniform national floor level minimum wage from 1996, which is non-binding on states.
The national floor level was last revised by 10% to Rs 176 a day in July 2017.
The Government has recently introduced The Code on Wages Bill ,2017 , which is expected to benefit over 50 crores employees across the country.
Problems of Labour Market in India
Poor Social Security: o Social security to organised labour force in India is provided through a variety of legislative
measures. o Workers of small unorganised sector as well as informal sectors remain outside the purview of
these arrangements.
Indian labour market is characterised by a Sharp Dichotomy. o Sharp contrast between organized and unorganized sector where there is difference in job
security as well as wages are ‘too high’ in the organised sector and ‘too low’, even below the subsistence level in the unorganised sector.
Trade Union Issues: o Trade Union Act, 1926 provide that any seven employees could form a union. o During the freedom struggle, Indian trade union contributed handsomely. It is now better
organized.
Multiplicity of Archaic Labour Laws o Labour Laws govern trade unions, industrial relations, and job security o Labour is a concurrent subject and more than 40 Central laws more than 100 state laws govern
the subject.
Low labour Productivity: o Promotions are based on seniority and thus workers get fixed annual wage increments unrelated
to work performance. o The labour market policies followed in India in the past have led to serious problems due to low
labour productivity even in the context of an economy where the firms were shielded from both international competition (by the very high import tariffs) and domestic competition (by the li-censing policies).
Frequent Strikes: o Trade unions resorted to militancy in the 1960s and early 1970s. o Multiplicity of trade unions hamper dispute resolution. o Inter-union rivalry and political rivalries are considered to be the major impediments to have a
sound industrial relation system in India. o Indian labour laws are highly protective of labour, and labour markets are relatively inflexible. As
usual, these laws are applicable in the organised sector only.
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Unskilled labour o Lack of enough skilled workers is a common concern raised by the employers in defence of their
inability to hire more. o They resort to contract employment o They adopt hire and fire policy.
Rigid Laws: o India’s labour laws for the workers in the organised sector give workers permanent employment,
after a probation period ranging from 6 months to 2 years. o Job security in India is so rigid that workers of large private sector employing over 100 workers
cannot be fired without government’s permission.
Gender gap o Low female labour force participation o 71% of men above 15 years are a part of the workforce as compared to just 22 percent women
(Labour Force Survey) Need
The definition has been simplified and is expected to reduce litigation and will entail at a lesser cost of compliance for an employer.
To streamline the definition of wages as present labour laws consist of 12 different definition of wages which is the major cause of litigation and inefficiency in the implementation of labour laws.
An establishment will also be benefited as the number of registers, returns, forms, etc., not only can be electronically filed and maintained, but it is envisaged that through rules, not more than one template will be prescribed.
Highlights of the Bill
The bill aims to transform the old and obsolete labour laws into more accountable and transparent ones and seeks to pave the way for the introduction of minimum wages and labour reforms in the country.
It regulates the wages and bonus payments in all employments where any industry, trade, business, or manufacturing is being carried out.
o The bill subsumes the following four labour laws: o The Payment of Wages Act, 1936 o The Minimum Wages Act, 1948 o The Payment of Bonus Act, 1965 o The Equal Remuneration Act, 1976.
It universalizes the provisions of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling and seeks to ensure "Right to Sustenance" for every worker and intends to increase the legislative protection of minimum wage.
It has been ensured in the bill that employees getting monthly salary shall get the salary by 7th of next month, those working on a weekly basis shall get the salary on the last day of the week and daily wagers should get it on the same day.
The provisions of the bill will apply to all the employees.
At present, the provisions of both the Minimum Wages Act and Payment of Wages Act apply on workers below a particular wage ceiling working in Scheduled Employments only.
Many unorganized sector workers like agricultural workers, painters, persons working in restaurants and dhabas, chowkidars, etc. who were out of the ambit of minimum wages will get legislative protection of minimum wages after the bill becomes an Act.
The Central Government is empowered to fix the floor wages by taking into account the living standards of workers. It may set different floor wages for different geographical areas.
The minimum wages decided by the central or state governments must be higher than the floor wage.
It simplifies the methodology to fix minimum wage by doing away with the “type of employment” as one criterion. The minimum wage fixation would primarily be based on geography and skills.
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In order to ensure transparency and accountability, the bill seeks to reform the inspection regime by introducing web based random computerised inspection scheme, jurisdiction-free inspections, calling of information electronically, the composition of fines, etc.
To streamline the claims of workers, the limitation period for filing claims for minimum wages, bonus, equal remuneration has been raised to 3 years.
It prohibits gender discrimination in matters related to wages and recruitment of employees for the same work or work of similar nature.
Key Issues with the bill
Time Period: The time period for revising minimum wages will be set at five years. Currently, state governments have flexibility in revising minimum wages, as long as it is not more than five years. It is unclear why this flexibility has been removed, and five years has been set for revision.
Implementation: This bill sets separate national minimum wages for different states or regions which questions the rationale for a national minimum wage, and whether the central government should set one or multiple national minimum wages.
Bad legal principle: The Code leaves a lot to the discretion of the administrators to determine minimum wages and thus temporal or spatial differences will emerge.
Conflict between centre and state: States have to ensure that minimum wages set by them are not lower than the national minimum wage. If existing minimum wages set by states are higher than the national minimum wage, they cannot reduce the minimum wages. This may affect the ability of states to reduce their minimum wages if the national minimum wage is lowered.
Variations in consumer’s needs: There is a major difficulty in constructing the National Minimum Wage as there are large variations in consumption patterns of persons in different regions, the wide variety of items used by them, regional price variations and so on.
Gender Bias based on recruitment: The Equal Remuneration Act, 1976, prohibits employers from discriminating in wage payments as well as recruitment of employees based on gender. While the Code prohibits gender discrimination on wage-related matters, it does not include provisions regarding discrimination during recruitment.
Determination of minimum wages: The Code stipulates that minimum wages will be determined by skill, arduousness at the workplace, and geographical peculiarities. Employers have been calling for fixing minimum wages on the basis of paying capacity of the industry and productivity of workers.
Failure of digitization: Digitization is unlikely to be successful for several reasons, primarily the lack of adequate banking/digital infrastructure, awareness on the part of workers and inspection mechanisms. Envisaging digital payments to construction workers or even domestic workers in rural areas shows up its impracticality.
Inspection problem: The Code labels inspectors as “facilitators” and provides for web-based transparent and accountable inspection and a responsive prosecution system. The organisational measures to reform inspection and prosecution prevent harassment, remove discretion at the lower levels and pave the way for a persuasive/educative system. But the reforms shift the probability of incidence of discretion to the higher officials in the hierarchy, hence abuse is still possible.
Key features of 4 labour codes
The 2nd National Commission of labour had recommended simplification, amalgamation and rationalisation of Central Labour Laws. The central government is compressing of 44 central labour laws into four ‘codes’ or broad categories — wages, social security, industrial relations and occupational health and safety.
Labour Code on Occupational Safety, Health & Working Conditions, 2018 o Centre has been empowered to prescribe standards on occupational safety and health o Annual health check to be made mandatory in factories and its charge will be borne by the
employers o Appointment letters for all workers (including those employed before this code), underlying their
rights to statutory benefits o At least 50% of penalty levied on employers could go towards providing some relief to families of
workers who die or are seriously injured while working
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o National Occupational Safety and Health Advisory Board at national level and similar bodies at state level, have been proposed to recommend standards on related matters.
o Appointment of facilitators with prescribed jurisdiction for inspection, survey, measurement, examination or inquiry has been proposed
o Mandatory license for every contractor who provides or intends to provide contract labour. Also, license is needed for industrial premises as well.
Labour Code on Social Security & Welfare, 2017 o Definition of employee and categorization of workers covers all kinds of employment including
part-time workers, casual workers, fixed term workers, piece rate/ commission rated workers, informal workers, home-based workers, domestic workers and seasonal workers.
o A proper percentage-based structure for contribution, vis-à-vis socio economic category and minimum notified wage, has been put in place under the Code.
o It introduces new approaches to ensure a transparent and fair financial set up, such as, o Time bound preparation of Accounts within six months of the end of the financial year; o Provision for social audit of social security schemes by State Boards after every five years; o Accounts of Intermediate Agencies to be subject to CAG Audit on the same lines as that of Social
Security Organizations. o Wage Ceiling and Income Threshold: The term 'wage ceiling' is for the purpose of determining a
maximum limit on contribution payable; whereas the term 'income threshold' is for the purpose of enabling the government to provide for two different kind of schemes (for same purpose) for two different class of workers.
o Contribution Augmentation Funds would be established through which governments could contribute to the social security in respect of workers who are unable to pay contribution.
o National Stabilization Fund will be used for harmonizing the Scheme Funds across the country and will be managed by the Central Boards.
Labour Codes on wages Bill, 2019 o The Code will apply to any industry, trade, business, manufacturing or occupation including
government establishments. o Wages include salary, allowance, or any other component expressed in monetary terms. This will
not include bonus payable to employees or any travelling allowance, among others. o It differentiates the central and State Jurisdiction in determining the wage related decision for
establishment such as Railways Mines and oil fields. o A concept of statutory National Minimum Wage for different geographical areas has been
introduced. It will ensure that no State Government fixes the minimum wage below the National Minimum Wages for that particular area as notified by the Central Government.
Labour Code on Industrial relations, 2019 o It seeks to allow companies to hire workers on fixed-term contract of any duration. o The code has retained the threshold on the worker count at 100 for prior government
approval before retrenchment, but it has a provision for changing ‘such number of employees’ through notification.
o It also provides setting up of a two-member tribunal (in place of one member) wherein important cases will be adjudicated jointly and the rest by a single member, resulting speedier disposal of cases.
o It has vested powers with the government officers for adjudication of disputes involving penalty as fines.
o Introduces a feature of ‘recognition of negotiating union’ under which a trade union will be recognized as sole ‘negotiating union’ if it has the support of 75% or more of the workers on the rolls of an establishment.
o Underlines that fixed-term employees will get all statutory benefits on a par with the regular employees who are doing work of the same or similar nature.
o Under the code, termination of service of a worker on completion of tenure in a fixed-term employment will not be considered as retrenchment.
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o Proposes setting up of a “re-skilling fund” for training of retrenched employees. The retrenched employee would be paid 15 days’ wages from the fund within 45 days of retrenchment.
o While this means workers can be hired seasonally for six months or a year it also means that all workers will be treated at par with regular workers for benefits.
Impact
It is expected to reduce litigation as it streamlines the definition of wages.
It seeks to reduce compliance costs for employers.
It will substantially reduce the number of minimum wages in the country from the existing more than 2000 rates of minimum wages.
This would ensure that every worker gets a minimum wage which will also be accompanied by an increase in the purchasing power of the worker thereby giving a fillip to growth in the economy.
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ECONOMY
Land Reforms In India
Topics covered Zamindari/ permanent settlement system Ryotwari system Mahalwari system Land reforms (abolition of intermediateries, tenancy reforms, reorganization of ownership of land) Cooperative farming
Introduction
Land reforms refer to changes in the agrarian structure through direct intervention by the state.
Land reforms were introduced to overcome the problems associated with the land revenue systems introduced by the British, namely, Zamindari, Mahalwari, and Ryotwari system. :
Zamindari Or Permanent Settlement System
The Zamindari system was introduced over Bengal, Bihar, Orissa, and Eastern Uttar Pradesh. The system was also called Permanent Settlement System because it involved direct settlement with Zamindars.
Under this system, Zamindars were required to pa/ a fixed annual sum (10/11 parts of the collected rent) to the East India Company and in return they were given the right to collect revenue from peasants.
Since a large part of the collected rent was appropriated by the British, Zamindars often collected very high rent from peasants and the methods of collection were also extremely harsh.
Zamindars became rich on account of high rates of collection, but they were not interested in the development of agriculture.
At the same time, peasants turned poor and consequently the investment in agriculture fell, leading to decline in agriculture.
Ryotwari System
The Ryotwari system was introduced in South India and Western India.
Under the system, direct settlement was reached with "Ryot" or peasant.
Though the British used to collect revenue from peasants directly, the rate of collection was extremely high and the method of collection was equally harsh.
The revenue rates under the system were as high as 50% where the lands were un-irrigated and 60% where the lands were irrigated.
As a result, peasants were often required to borrow from moneylenders who used to charge very high rates of interest.
Thus, again under the Ryotwari system, most of the peasants remained poor.
Agriculture became non-remunerative, and there was a continuous decline in agricultural investment. Mahalwari System
The Mahalwari system was introduced in Punjab and Western Uttar Pradesh.
In this system, land was divided into Mahals and each Mahal comprised one or more villages. Collective assessment of a Mahal was made.
The ownership rights of peasants were recognized, and a leading family of village, known as Mahaldar, was given rights by the company to fix individual share and collect the revenue.
Sometimes, Mahaldars used to exploit peasants and fix share of land revenue arbitrarily. Outcomes of landowning systems during the colonial era
Poverty was entrenched into the farmer class.
Creation of a class of a rich few who mostly exploited the poor peasant.
Extreme peasant indebtedness due to sky-high tax rates.
Peasants lived in constant fear of eviction. Objectives of land reforms
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Redistribution of land across society so that land is not held in the hands of a few people.
Land ceiling to disburse surplus land amongst small and marginal farmers.
Removal of rural poverty.
Abolition of intermediaries.
Tenancy reforms.
Increasing agricultural productivity.
Consolidation of land holdings and prevention of land fragmentation.
Developing cooperative farming.
To ensure social equality through economic parity.
Tribal protection by ensuring their traditional land is not taken over by outsiders.
Land reforms were also for non-agricultural purposes like development and manufacturing. Zamindari Abolition Acts
At the time of independence, 57% of cropped area in India was under the Zamindari system.
There was a strong opinion to abolish these Zamindars (intermediaries between the administration and peasants) from the agrarian system.
As a result, laws were passed by all the states to abolish intermediaries from agriculture.
Initially when these acts were passed in various states, they were challenged in the courts as being against the right to property enshrined in the Indian Constitution.
So, amendments were passed in the Parliament to legalise the abolition of landlordism.
By 1956, Zamindari abolition acts were passed in many states.
As a result of this, about 30 lakh tenants and share-croppers acquired ownership rights over a total of 62 lakh acres of land all over the country.
Land Ceilings Act
Land ceiling refers to fixing a cap on the size of land holding a family or individual can own. Any surplus land is
distributed among landless people like tenants, farmers, or agricultural labourers.
Classification of tenants
Tenants can be classified into three categories:
Occupancy tenants: Occupancy tenants enjoy permanent rights over land and do not face fear of eviction as long as they pay rent on time. Moreover, they are entitled to compensation for improvements in land.
Tenants at will: Tenants at will do not enjoy security of tenure and could be evicted from land whenever landlord desires so.
Sub-tenants: Sub-tenants are tenants employed by occupancy tenants. Their rights over land are also not recognized.
Tenancy reforms
Regulation of rent
The landowner used to charge a very high rent from tenants.
The tenants were forced to pay the high rent because they faced risk of eviction on non-payment of land revenue.
The tenants also lacked bargaining power because the difference in social status of tenants and landowners was large.
As a result, various states passed laws to regulate the land rent.
Most states regulated land rent in the range of one-fifth to one-fourth of the total agricultural produce and in some states such as Punjab and Haryana, rent was fixed at one-third of the agricultural produce.
However, these laws are often violated on account of the following reasons:
Agreements between owner and tenant are often oral and informal. It has been estimated that nearly 40% of tenancy agreements are oral.
On refusal to pay high rents, tenants faced the risk of eviction from the land.
Landowners enjoy strong socioeconomic and political hold. Consequently, tenants cannot effectively bargain with the landowners.
Tenure security
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Tenants lacked bargaining power against landowners on account of continued threat of eviction from land.
Moreover, due to the fear of eviction, tenants were apprehensive of bringing improvement in agricultural land.
Aims of Tenure security legislation
Eviction should not take place except in accordance with the provisions of law.
Land cultivation may be resumed by the owner, if at all, only on grounds of personal cultivation.
On the resumption of cultivation by the owner, the tenant is assured of a prescribed minimum area.
The degree of protection to tenants under these laws depends on the following factors:
Definition of tenant: In all the tenancy laws of the country, persons cultivating the lands of others on payment of rent either in cash or kind or both are treated as tenants. However, in some states, sharecroppers who pay rent in kind are not covered under definition of tenants.
o Right to resume cultivation: The landowners could evict tenants on grounds of resumption of cultivation. Moreover, the definition of personal cultivation included supervision by any member of the family.
o Provision of voluntary surrenders: Many landlords compelled their tenants to give up tenancies to avoid tenancy laws because tenancy laws were not applicable on voluntary surrenders of land.
o Consequently, the Fourth Five-year Plan recommended that voluntary surrenders should be regulated by the state in such a way that landowners were prohibited from taking possession of the surrendered land.
o The surrendered land could be given to either an eligible tenant selected by the government or to the government only. However, only a few states have incorporated this provision into their laws.
o State of land records: Land records are often incomplete and unwritten. In such as case, a person cannot claim to be a tenant.
Conferring Ownership To Tenants
Some states have passed laws to confer ownership rights to the tenants.
In implementing such laws, West Bengal, Karnataka, and Kerala have achieved more success than other states.
In West Bengal, over 14 lakh sharecroppers (locally called Bargardars) are given ownership rights under "Operation Barga".
Factors Hampering The Transfer Of Ownership To Peasants
The purchase price for land was required to be paid in instalments. However, still many tenants could not afford to pay it.
Unwillingness of tenants to purchase land on account of threats by landowners.
Resumption of personal cultivation by landowner.
Oral tenancy agreements.
Outcomes of Land Reforms
Abolition of middlemen like Zamindars and Jagirdars.
Reduced the exploitation of peasants.
With a cap on the size of land holding an individual/family could hold equitable distribution of land was possible to an extent.
Land reforms made it mandatory to have records of holdings, also to register all tenancy arrangements.
More land came under cultivation and since tillers themselves became the landowners, productivity increased.
Cooperative Farming
Cooperative farming refers to a system in which each member-farmer remains the owner of his land individually, but farming is done jointly.
Profit is distributed among the member-farmers in the ratio of land owned by them.
Wages are distributed among the member-farmers according to the number of days they worked.
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Advantages Of Cooperative Farming
Allocation of tasks among farmers makes tasks easier.
Agricultural input can be purchased in bulk at cheaper rates.
It resolves the problem of subdivision of land.
Agricultural machinery such as tractors can be shared leading to lower cost of cultivation.
Agricultural output can be transported to markets in bulk at cheaper rates. Critical Evaluation of Cooperative Farming in India
To promote cooperative farming, the government has offered a number of incentives such as financial assistance, technical assistance, preference in supply of input, etc.
The progress of cooperative farming has been extremely slow. Only 0.38% of cultivated land is operated under cooperative farming
Cooperative farming has been unsuccessful in India on account of numerous reasons such as lack professional management of farms, lack of trust among members, etc.
The motivation behind the formation of cooperative societies in the farming sector has not been genuine.
Most cooperatives are formed not on the basis of spirit of cooperation but to avoid government laws and to gain benefits from the government.
Conclusion
To conclude, land reforms in India have largely been a failure.
Apart from the factors mentioned earlier, other factors that have proved to be a hindrance in land reforms are as follows:
o Lack of political will o Apathy of bureaucracy o Corruption o Land owning by bureaucracy and political class o Linkage between bureaucracy, politicians, and land-owning class
Industrial Revolution
Relevancy G.S. Paper 2 And 3 Objective Questions- Innovations During Industrial Revolution, Its Inception, IR 4.0 Subjective Questions- India And Industrial Revolution, Significance And Impact
What Is Industrial Revolution?
The Industrial Revolution, which took place from the 18th to 19th centuries, was a period during which predominantly agrarian, rural societies in Europe and America became industrial and urban.
Prior to the Industrial Revolution, which began in Britain in the late 1700s, manufacturing was often done in people’s homes, using hand tools or basic machines.
However, these cottage industries were enormously labour intensive, with the merchants supplying the raw materials and collecting the finished goods later.
The whole process was largely inefficient.
The supply was erratic as the self- employed workers had to tend other works. Why Industrial Revolution first in England?
End of Feudalism & rise of capitalism
Renaissance & Reformation + democracy via Glorious Revolution 1688
Accumulation of money from trade with the rest of the world
Being an island, England had a natural barrier → Protection + Natural harbours
Rich in natural resources like coal and iron
Natural network of tributaries of navigable rivers → cheaper transport of goods and raw materials Components of Industrial Revolution
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Started with revolution in the Textile Industry
Development of powerloom running on hydropower + Development of cotton gin
Development of Steam Engine by James Watt in 1769
Deployed for running spinning machines and for powerlooms + used in coal mines to pump out water
Water transport using steam powered ships was much cheaper than transport through land
Development of Blast furnaces, which allowed for use of coke instead of charcoal
Allowed the British steel industry to produce high-grade cast iron instead of just the pig iron
McAdamized Roads + Development of rail-road network complemented by Canal Network building
Business transactions could be effected from remote locations with the arrival of Postal services & telegraph.
New farm machinery reduced the labor requirement in the Agriculture sector & led to the production of more cash crops
Enclosure Movement led to availability of lot of labor for the Industry in the towns Some of the innovations of the first industrial revolution:-
Steam engine
Flying shuttle
Spinning Jenny
Cotton Gin
Telegraph
Cement
Modern roads
Bessemer process
Power loom Impact of Industrial Revolution
Political administration impact. After industrial revolution the power and the responsibility of the government sharply increased because now the state had to deal with a number of questions or problems arising out of industrialisation. For example, the state had to legislate a number of factory laws” in order to regulate the relationship between the labour and the capital, it is in this context that the concept of welfare state developed.
Economic impact: There was the sharp increase in the production and the distribution as the result of the application of new technology to production and transportation. Before Industrial Revolution there was the almost direct relationship between producers and consumers. But after this revolution this direct relationship just gave way to the very distant relationship. It resulted into the growing exploitation of consumers.
Later a number of consumer forums developed in order to give protection to consumers. Industrial revolution prepared the way for imperialism in Asia and Africa because the rivalry for market started among European powers.
Social Impact: Industrial revolution encouraged the division in society. After industrial revolution middle class emerged to be more powerful. On the other hand a new class called proletariat class came into existence. So the conflict between the middle class and proletariat class started. As a result of this conflict some new ideologies developed such as Socialism, utilitarianism, Marxism etc.
Cultural impact: Industrial revolution developed a new culture. There was a general decline in the sense of compassion among men towards their fellows. On the other hand the attraction towards the luxuries and comforts in life sharply increased.
India and Industrial Revolution
India was famous for her handicrafts from the pre-British times.
In Mughal periods such as the variety of handicrafts that it became famous in the global market.
However, the Industrial Revolution came late to India.
This was mainly because of India’s complicated political and economic relations with Britain. Impact Of The Revolution:-
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India dominated the cotton textile market in the 18th century. It took a severe hit when the Industrial Revolution began in England around 1760s.
The use of steam power in British mills reduced the cost of cotton by 85 %.
In order to protect its domestic industry, it began to restrict textile imports from India. On the other hand, it started to import textiles to India.
British protectionist laws led to deindustrialization in India.
The new colonial law forced the farmers to grow cash crops like cotton instead of food crops, leading to famine and poverty.
The third Industrial Revolution started in India in 1980s. Advancement in this phase encompasses the spread of personal computers, internet, and ICT.
In India, the Industrial Revolution 4.0 is mainly based on Big Data and Artificial Intelligence. What is the Fourth Industrial Revolution?
Building on the foundation given by the third Industrial Revolution, the fourth Industrial Revolution is moving from an electronic based industry to a process which is the combination of human beings and electronics.
It includes cyber-physical systems, the Internet of things, big data analytics, cloud computing, cognitive computing, artificial intelligence, 3-D printing, and autonomous vehicles etc.
The best example would be processed artificial intelligence has broken the distinction between the Man, The Machine and Intelligence.
Impact of Industry 4.0
Services and business models improvement.
Reliability and continuous productivity.
IT security and better resource utilization.
Machine safety and better working condition.
What Is Keynesian Economics?
Topics coverd Background The Revolutionary Idea Keynesian Versus Classical Economic Theories Three Principal Tenets On Working Of An Economy Criticism Keynesianism Evolves New Keynesian Theory
Background
During the Great Depression of the 1930s, existing economic theory was unable either to explain the causes of the severe worldwide economic collapse or to provide an adequate public policy solution to jump-start production and employment.
British economist John Maynard Keynes spearheaded a revolution in economic thinking that overturned the then-prevailing idea that free markets would automatically provide full employment—that is, that everyone who wanted a job would have one as long as workers were flexible in their wage demands.
The main plank of Keynes’s theory, which has come to bear his name, is the assertion that aggregate demand—measured as the sum of spending by households, businesses, and the government—is the most important driving force in an economy.
Keynes further asserted that free markets have no self-balancing mechanisms that lead to full employment.
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Keynesian economists justify government intervention through public policies that aim to achieve full employment and price stability.
The Revolutionary Idea
Keynes argued that inadequate overall demand could lead to prolonged periods of high unemployment.
An economy’s output of goods and services is the sum of four components: consumption, investment, government purchases, and net exports (the difference between what a country sells to and buys from foreign countries).
Any increase in demand has to come from one of these four components. But during a recession, strong forces often dampen demand as spending goes down.
For example, during economic downturns uncertainty often erodes consumer confidence, causing them to reduce their spending, especially on discretionary purchases like a house or a car.
This reduction in spending by consumers can result in less investment spending by businesses, as firms respond to weakened demand for their products. This puts the task of increasing output on the shoulders of the government.
According to Keynesian economics, state intervention is necessary to moderate the booms and busts in economic activity, otherwise known as the business cycle.
Keynesian Versus Classical Economic Theories
Classical economic theory promotes laissez-faire policy. It says the free market allows the laws of supply and demand to self-regulate the business cycle. It argues that unfettered capitalism will create a productive market on its own.
It will enable private entities to own the factors of production.
These four factors are entrepreneurship, capital goods, natural resources, and labor.
In this theory, business owners use the most efficient practices to maximize profit.
Classical economic theory advocates for a limited government. It should have a balanced budget and incur little debt.
Government spending is dangerous because it crowds out private investment. But that only happens when the economy is not in a recession. In that case, government borrowing will compete with corporate bonds.
The result is higher interest rates, which make borrowing more expensive.
If deficit spending only occurs during a recession, it will not raise interest rates. For that reason, it also won't crowd out private investment.
Three Principal Tenets On Working Of An Economy
There are three principal tenets in the Keynesian description of how the economy works:
Aggregate demand is influenced by many economic decisions—public and private.Private sector decisions can sometimes lead to adverse macroeconomic outcomes, such as reduction in consumer spending during a recession. These market failures sometimes call for active policies by the government, such as a fiscal stimulus package (explained below). Therefore, Keynesian economics supports a mixed economy guided mainly by the private sector but partly operated by the government.
Prices, and especially wages, respond slowly to changes in supply and demand, resulting in periodic shortages and surpluses, especially of labor.
Changes in aggregate demand, whether anticipated or unanticipated, have their greatest short-run effect on real output and employment, not on prices. Keynesians believe that, because prices are somewhat rigid, fluctuations in any component of spending—consumption, investment, or government expenditures—cause output to change. If government spending increases, for example, and all other spending components remain constant, then output will increase. Keynesian models of economic activity also include a multiplier effect; that is, output changes by some multiple of the increase or decrease in spending that caused the change. If the fiscal multiplier is greater than one, then a one dollar increase in government spending would result in an increase in output greater than one dollar.
Criticism
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Supply-side economists say that increasing business growth, not consumer demand, will boost the economy. They agree the government has a role to play, but fiscal policy should target companies. They rely on tax cuts and deregulation.
Proponents of trickle-down economics say that all fiscal policy should benefit the wealthy. Since the wealthy are business owners, benefits to them will trickle down to everyone.
Monetarists claim that monetary policy is the real driver of the business cycle. Monetarists like Milton Friedman blame the Depression on high-interest rates. They believe the expansion of the money supply will end recessions and boost growth.
Socialists criticize Keynesianism because it doesn't go far enough. They believe the government should take a more active role to protect the common welfare. This means owning some factors of production. Most socialist governments own the nation's energy, health care, and education services.
Even more critical are communists. They believe the people, as represented by the government, should own everything. The government completely controls the economy.
Keynesianism Evolves
Even though his ideas were widely accepted while Keynes was alive, they were also scrutinized and contested by several contemporary thinkers.
Keynesian economics dominated economic theory and policy after World War II until the 1970s, when many advanced economies suffered both inflation and slow growth, a condition dubbed “stagflation.”
Keynesian theory’s popularity waned then because it had no appropriate policy response for stagflation. Monetarist economists doubted the ability of governments to regulate the business cycle with fiscal policy and argued that judicious use of monetary policy (essentially controlling the supply of money to affect interest rates) could alleviate the crisis.
Members of the monetarist school also maintained that money can have an effect on output in the short run but believed that in the long run, expansionary monetary policy leads to inflation only. Keynesian economists largely adopted these critiques, adding to the original theory a better integration of the short and the long run and an understanding of the long-run neutrality of money—the idea that a change in the stock of money affects only nominal variables in the economy, such as prices and wages, and has no effect on real variables, like employment and output.
Both Keynesians and monetarists came under scrutiny with the rise of the new classical school during the mid-1970s.
The new classical school asserted that policymakers are ineffective because individual market participants can anticipate the changes from a policy and act in advance to counteract them.
A new generation of Keynesians that arose in the 1970s and 1980s argued that even though individuals can anticipate correctly, aggregate markets may not clear instantaneously; therefore, fiscal policy can still be effective in the short run.
The global financial crisis of 2007–08 caused a resurgence in Keynesian thought. It was the theoretical underpinnings of economic policies in response to the crisis by many governments, including in the United States and the United Kingdom.
The 2007–08 crisis also showed that Keynesian theory had to better include the role of the financial system. Keynesian economists are rectifying that omission by integrating the real and financial sectors of the economy.
New Keynesian Theory
In the 1970s, rational expectations theorists argued against the Keynesian theory. They said that taxpayers would anticipate the debt caused by deficit spending.
Consumers would save today to pay off future debt. Deficit spending would spur savings, not increase demand or economic growth.
The rational expectations theory inspired the New Keynesians.
They said that monetary policy is more potent than fiscal policy. If done right, expansionary monetary policy would negate the need for deficit spending.
Central banks don't need politicians’ help to manage the economy. They would merely adjust the money supply.
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Share Market Explained
Topics covered Financial Market And Its Categorization Money Market And Capital Market Stock Markets And Its Importance BSE, Sensex, Demutulization SEBI And IOP Derivatives Commodity Exchanges Forward Market Commission (FMC), FII, GDR, ADR Participatory Notes Mutual Funds- Close-End And Open-End Hudge Fund And Pension Fund Clearing House Equity, Shares, Bond Blue Chip Share Company- Private Limited And Public Limited Midcap Company Short Selling Andinsider Trading Financial Sector Regulators In India Credit Rating Agencies
What Is A Financial Market?
A market is a medium that allows buyers and sellers of a specific good or service to interact and facilitate an exchange.
This type of market may either be a physical marketplace where people come together to exchange goods and services in person (as in a bazaar or shopping centre), or a virtual market wherein buyers and sellers do not interact, as in an online market.
Financial market is a market for exchange of funds. In a financial market, people with surplus funds such as lenders or investors give funds to people in need, such as borrowers or other receivers for interest or share in profits.
Primary And Secondary Market
A primary market is a market where an initial public offer (IPO) is made or in other words, the financial instruments are issued for the first time to the public at large. Primary markets facilitate the channelization of savings into investment, leading to the capital formation in the economy.
A secondary market facilitates sale and purchase of already issued financial instruments. The market provides liquidity to investors, i.e. investors can convert the financial instrument held by them into cash in the shortest possible duration and with minimal cost.
Money Market
A money market is a market where funds are exchanged for a period of less than 1 year. Various money market
instruments are as follows:
Promissory Note: A promissory note is a money market financial instrument in which the maker of document (debtor) promises in writing to pay a certain sum of money at certain period of time to the first owner (creditor) or bearer of the document.
Bill Of Exchange: It is a money market financial instrument. In a bill of exchange, the debtor is required to pay a fixed sum of money after a certain period of time to the creditor or bearer of bill of exchange as the
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case may be. The creditor writes the bills of exchange and the debtor signs it. On maturity of the bill, the bill is presented to the debtor for payment.
Short-Term Loans: These are loans for a duration of less than 1 year. Long-term loans are considered part of capital market.
Treasury Bills: These are money market instruments issued by the government to collect funds to meet expenditure for a short period of time. The holders of treasury bills are given principal along with the interest.
Commercial Paper: It is a promissory note issued by large corporations to obtain funds in order to meet their short-term obligation. It is usually unsecured. The corporation promises to make payment along with interest to the holder of the document.
Capital Market
A capital market is a financial market where exchange of funds is for a period of 1 year or more. Various capital
market instruments are as follows:
Long-Term Loans: These loans are taken for a period of more than 1 year.
Shares: A share is one of the equal parts into which a company's capital is divided, entitling the holder to a proportion of the profits. Shareholders are owners of the company. Shares are of two types: equity and preference.
o Equity shareholders are given share out of profits or repayment of capital on liquidation only after settling the claims of preference shareholders. Thus, they are the primary risk bearers in the company.
o Preference shares are called so because their claim in profits and repayment of capital on liquidation is settled before payment is made to equity shareholders.
Capital Market Reforms
Since 1991 when the Government launched economic reforms, the following measures were taken.
SEBI given statutory status- that is Act of Parliament
Electronic trade
Rolling settlement to reduce speculation
Fiis are permitted since 1992
Setting up of clearing houses
Settlement guarantee funds at all stock exchanges
Compulsory dematerialization of share certificates so as to remove problems associated with paper trading; and speed up the transfer
Clause 49 of the listing agreement for corporate governance
Restrictions on PNs Stock Markets
A stock exchange is an organization which provides a platform for trading shares- either physical or virtual.
The origin of the stock, market dates back to the year 1494, when the Amsterdam Stock Exchange was first set up.
In a stock exchange, investors through stock brokers buy and sell shares in a wide range of listed companies.
A given company may list in one or more exchanges by meeting and maintaining the listing requirements of the stock exchange
Importance of Stock Exchanges
An efficient medium for raising long term resources for business
For efficient working of the economy and for the smooth functioning of the corporate form of organization, the stock exchange is an essential institution.
Help raise savings from the general public by the way of issue of equity debt capital
Exercise discipline on companies and make them profitable
Attract foreign currency
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Another vehicle for investors savings
Investment in backward regions for job generation List of Approved Stock Exchanges in India
Bombay Stock Exchange (BSE)
Ahmedabad Stock Exchange (ASE)
Calcutta Stock Exchange(CSE)
India International Exchange (India INX)
Metropolitan Stock Exchange of India
National Stock Exchange of India
NSE IFSC Ltd. Bombay Stock Exchange (BSE)
The Bombay Stock Exchange, or BSE) is the oldest stock exehange in Asia located at Dalal Street in Mumbai, India.
Established in the year 1875, it is the largest securities exchange in India with more than 6,000 listed Indian companies.
BSE is also the fifth largest exchange in the world with market capitalization of US $1.6 trillion (2011).
About 5000 companies are listed on the BSE. Sensex
Sensex or Sensitive Index is a value-weighted index composed of 30 companies with the base 1978- 1979 = 100.
It consists of the 30 largest and most actively traded blue chip stocks, representative of various sectors, on the Bombay Stock Exchange.
Demutualization
Demutualization is when management and ownership are separated.
Ownership is divested from the brokers and the company becomes a public company.
All stock exchanges are to be demutualised according to the Government law made in 2004.
Demutualization, thus means that ownership, management and trading rights are separated in a stock exchange.
Securities and Exchange Board of India (SEBI)
The capital markets in India are regulated by the Securities and Exchange Board of India (SEBI).
It was established in 1988 and given a statutory basis in 1992 on the basis of the Parliamentary Act- SEBI Act 1992 to regulate and develop capital market.
SEBI regulates the working of stock exchanges and intermediaries such as stock brokers and merchant bankers, accords approval for mutual funds, and registers Foreign Institutional Investors who wish to trade in Indian scrips.
Derivatives
Derivative is a financial instrument.
It derives from an underlying asset- securities, debt instruments, commodities etc.
The price of the derivative is directly dependent upon the value of the underlying asset in the present and the projected future trends. Futures and options are the two classes of derivates
Buyback of Shares
Buy back of shares is the process of a corporation’s repurchase of stock it has issued.
In the case of stocks, this reduces the number of shares outstanding, giving each remaining shareholder a larger percentage ownership of the company.
This is usually considered a sign that the company’s management is optimistic about the future and believes that the current share price is undervalued.
Rolling Settlement
Rolling Settlements is a mechanism of settling trades.
In Rolling Settlements, trades done on a single day are settled separately from the trades of another day on the basis of Trade day + 2 days (T+2).
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Such petting of trades is done only for the day.
As such, in Rolling Settlement, settlement is carried out on a daily basis. Since trades done on a given day can not be bunched with those of another day. Thus, speculation is drastically reduced
Commodity Exchanges
Commodity exchanges are institutions which provide a platform for trading in ‘commodity futures’ just as how stock markets provide space-for trading in equities and their derivatives.
They thus play a critical role in price discovery where several buyers and sellers interact and determine the most efficient price for the product
Commodity Exchanges In India
There are two types of commodity exchanges in the country: national level and regional.
There are five national exchanges
National Commodity & Derivatives Exchange Limited (NCDEX) Multi Commodity Exchange of India Limited (MCX)
National Multi-Commodity Exchange of India Limited (NMCEIL)
ACE Derivatives and Commodity Exchange
Indian Commodity Exchange (ICEX) FMC (Forward Market Commission)
Forward Markets Commission (FMC) headquartered at Mumbai is a regulatory authority, which is overseen by the Ministry of Consumer Affairs and Public Distribution, Govt. of India.
It is a statutory body set up in 1953 under the Forward Contracts (Regulation) Act, 1952.
The Commission consists of 2-4 members.
It monitors and disciplines the working of the exchanges.
It recognizes an exchange or can withdraw such recognition.
It collects and whenever the Commission thinks it necessary publishes information regarding the trading conditions in respect of goods.
Foreign Institutional Investors (FII)
Foreign institutional investors are organizations which invest huge sums of money in financial assets - debt and shares- of companies and in other countries- a country different from the one where they are incorporated.
They include banks, insurance companies retirement or pension funds hedge funds and mutual funds.
Foreign individuals are not allowed to participate on their own but go through FIIs Global Depository Receipts (GDR)
Indian companies are allowed to raise equity capital in the international market through the issue of Global Depository Receipt (GDRs) GDRs are designated in dollars euro.
American Depository Receipts (ADRS)
American depository receipts are like shares.
They are issued to US retail and institutional investors.
They are entitled like the shares to bonus, stock split and dividend.
They are listed either on Nasdaq or NYSE. Participatory Notes
Participatory notes are instruments used for making investments in the stock markets.
In India, foreign institutional investors (FIIs) use these instruments for facilitating the participation of overseas funds like hedge funds and others who are not registered with the SEBI and thus are not directly eligible for investing in Indian stocks.
Mutual fund
A mutual fund is a pool of funds collected from many investors for the purpose of investing in securities such as shares, bonds, money market instruments, and similar assets.
Mutual fund units are issued to the participants of the mutual fund.
These units can typically be purchased or redeemed as needed at the fund's current net asset value (NAV) per unit.
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A fund's NAV per unit is derived by dividing the total value of its investments by the total number of units outstanding.
Closed-End Funds
A closed-end fund has a fixed number of shares outstanding and operates for a fixed duration (generally ranging from 3 to 15 years).
The fund would be open for subscription only during a specified period, and there is an even balance of buyers and sellers, thus someone should be selling in order for the other to be able to buy.
Closed-end funds are also listed on the stock exchange, so they are traded just like other shares on an exchange.
Usually the redemption is also specified, which means that they terminate on specified dates when the investors can redeem their units.
Open-End Funds
An open-end fund is one that is available for subscription and is not listed on the stock exchanges. The majority of mutual funds are open-end funds.
Investors have the flexibility to buy or sell any part of their investment at any time at a price linked to the fund's NAV.
Hedge Fund
A hedge fund is an investment fund open to only a limited range of investors.
They are mostly unregulated.
The term- hedge funds, is used to distinguish them from regulated investment funds such as mutual funds and pension funds, and insurance companies.
Hedge funds are not allowed into India as they do not disclose data required by the SEBI. Pension Fund
A pension fund works like a mutual fund.
The funds are accumulated from regular contributions by employers, employees, or both.
These funds are invested, and thereafter based on the contributions and additions on account of the growth in investments, pension is paid to the employees post-retirement.
Clearing House
An organisation which registers, monitors, matches and guarantees the trades of its members and carries out the final settlement of all futures transactions.
The National Securities Clearing Corporation is the clearing house for the NSE. Equity
Common stock and preferred stock that is, shares issued by the company. Also, funds provided to a business by the sale of stock.
Share
Share is a certificate representing ownership of the company that issued it. Shares can yield dividends and entitle the holder to vote at general meetings.
The company may be listed on a stock exchange. Shares are also known as stock or equity. Bond
A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing.
Blue Chip Share
Blue chip shares are the shares of the companies that are the most valuable.
Companies that are profit making; usually dividend —paying and are liquid in the market- that is there is almost always in demand on the market.
Company
A company is a legal entity made up of an association of people, be they natural, legal, or a mixture of both, for carrying on commercial activities.
Company members share a common purpose and unite in order to pool their talents and resources.
Company uses the word "Limited" or "Ltd." at the end of their name.
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The word means that the shareholders of the company have limited liability, i.e. the liability of shareholders is to the extent of value of shares subscribed by them.
Thus, in case of losses, shareholders will not be required to contribute from their private assets. Types of Companies
Mainly, there are two types of companies: private limited and public limited.
Private Limited Companies
Private limited companies are those companies whose capital is held by people who are closely known to each other.
The maximum number of members in a private limited company is 100.
As the capital in these companies is contributed by the people who are closely known to each other, these companies are not required to be listed on stock exchanges.
Listing of a company on a stock exchange is required to facilitate trading of its securities. Such companies use the word "Private Limited" or "Pvt. Ltd." at the end of their name.
Public Limited Companies
Public limited companies are those companies whose capital is held by the public at large. There is no restriction on the number of members.
These companies use the word "Limited" or "Ltd." in the end of their name.
As public limited companies raise capital from the public at large, they are required to follow excessive regulations as compared to those followed by private limited companies and are mandatorily required to be listed on a stock exchange.
Midcap Company
Generally, companies with a market capitalization that is very high are called large caps and the next one below is mid cap and the bottom one is small cap companies.
Limits are not statutorily laid down and vary from institution to institution. Short Selling
The sale of a security made by an investor who does not own the security;
The short sale is made in expectation of a decline in the price of a security, which would allow the investor to then purchase the shares at a lower price in order to deliver the securities earlier sold short
In short sale, shares are borrowed at a -fees/price and returned when the sell-buy operation is completed.
Naked short selling, or naked shorting, is the practice of short-selling a financial instrument without first borrowing the security or ensuring that the security can be borrowed, as is conventionally done in a short sale. It is banned.
Insider Trading
Insider trading occurs when any one with information related to strategic and price-influencing information
purchases or sells stocks so as to make speculative profits.
Financial Sector Regulators In India
The two most important financial sector regulators have already been discussed, namely, the Reserve Bank of India (regulator of banking sector and non-banking financial companies) and the Securities and Exchange Board of India (regulator of stock exchanges).
The other regulators are as follow: o Competition Commission of India o Insurance Regulatory Development Agency o Pension Fund Regulatory Development Authority o Financial Stability and Development Council
Big Three Rating Agencies: Moody's Investors Service, Standard & Poor's (S&P), and Fitch
"Big Three" credit rating agencies control approximately 95% of the ratings business.
Moody's Investors Service and Standard & Poor's (S&P) together control 80% of the global market, and Fitch Ratings controls a further 15%.
The largest credit rating agency in India is CRISIL (Credit Rating Information Services of India Limited).
Ratings are based on the lending risks or estimation of the borrower's ability to repay debt.
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Balance of payments (BOP) and Exchange Rate System (Part 1)
Topics covered Exchange Rate System, types and evolution in India Devaluation and Depreciation Reasons, Objectives and disadvantages Of Currency Devaluation Impact Of Currency Devaluation And Depreciation Appreciation and Revaluaation Reasons and causes for Currency Revaluation Appreciation versus Revaluation Impacts Of Appreciation And Revaluation Of A Currency
Exchange Rate System
An exchange-rate regime is the way an authority manages its currency in relation to other currencies and the foreign exchange market.
Between the two limits of fixed and freely floating exchange regimes, there can be several other types of regimes.
In their operational objective, it is closely related to monetary policy of the country with both depending on common factors of influence and impact.
The exchange rate regime has a big impact on world trade and financial flows. The volume of such transactions and the speed at which they are growing makes the exchange rate regime a central piece of any national economic policy framework.
Types of Exchange Rates
Free Floating o A free-floating exchange rate rises and falls due to changes in the foreign exchange market.
Restricted Currencies o Some countries have restricted currencies, limiting their exchange to within the countries'
borders. Also, a restricted currency can have its value set by the government.
Currency Peg o Sometimes a country will peg its currency to that of another nation. For instance, the Hong Kong
dollar is pegged to the U.S. dollar in a range of 7.75 to 7.85.2 This means the value of the Hong Kong dollar to the U.S. dollar will remain within this range.
Onshore Vs. Offshore o Exchange rates can also be different for the same country. In some cases, there is an onshore
rate and an offshore rate. o Generally, a more favorable exchange rate can often be found within a country’s border versus
outside its borders. China is one major example of a country that has this rate structure. o Additionally, China's yuan is a currency that is controlled by the government. o Every day, the Chinese government sets a midpoint value for the currency, allowing the yuan to
trade in a band of 2% from the midpoint.
Spot vs. Forward o Exchange rates can have what is called a spot rate, or cash value, which is the current market
value. o Alternatively, an exchange rate may have a forward value, which is based on expectations for the
currency to rise or fall versus its spot price. o Forward rate values may fluctuate due to changes in expectations for future interest rates in one
country versus another.
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Exchange Rate System Evolution In India
1947-71 o During the period from 1947 to 1971, India followed the par value system of the exchange rate
whereby the rupee's external par value was fixed at 4.15 grains of fine gold. o The RBI maintained the par value of the rupee within the permitted margin of ±1% using pound
sterling as the intervention currency. o Pound sterling was adopted as intervention currency because the United Kingdom was the
largest trading partner of India.
1971-75 o With the breakdown of the Bretton Woods System in 1971, major currencies adopted the
market-determined exchange rate system. o Rupee was linked to the pound sterling in December 1971. Thus, the government used to review
the value of rupee in comparison to the value of pound sterling.
1975-92 o To ensure stability of the rupee and avoid the weaknesses associated with a single currency peg,
the rupee was pegged to a basket of currencies. o Currency selection and weight assignment were left to the discretion of the RBI and not publicly
announced. o Pegging against a single currency creates volatility in the value of the domestic currency because
the domestic currency will fluctuate according to the changes in the value of the currency against which it is pegged.
1992-93 o It was a transition period during which 40% of currency was converted at the government-
determined rate and 60% of currency was converted at market-determined rate.
1993 ONWARDS o India adopted the flexible or market-determined exchange rate system replacing the fixed
exchange rate system. The flexible exchange rate system is also called the floating exchange rate system.
o Under the market-determined exchange rate system, the value of currency is determined on the basis of demand and supply of that currency vis a vis foreign currencies.
Fixed Exchange Rate System Versus Market-Determined Exchange Rate System
Criteria Fixed exchange Market-determined
rate system exchange rate
Criteria for determining the
exchange rate
The government determines the
exchange rate
Exchange rate is determined on the
basis of demand and supply of
currency Fluctuation in exchange rate As exchange rates are fixed, there are
no fluctuation in exchange rates.
Thus, there is certainty over
exchange rates.
Exchange rate fluctuates according to
the demand and supply of currency.
The fluctuation in exchange rate
creates uncertainty for exporters,
importers, investors, etc.
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Suitable for type of
economy
This type of exchange rate system is
suitable for economies that have
fewer transactions with other
economies. Under the market-
determined exchange rate system, a
small number of foreign exchange
transactions leads to heavy
fluctuations in the foreign exchange
rate. Thus, the fixed rate system is
more suitable for economies with
fewer number of foreign exchange
transactions.
This type of exchange rate system is
suitable for economies with a large
number of transactions with other
economies. The larger the number of
foreign exchange transactions, the less
is the fluctuation in exchange rate.
Availability of Forex This type of system is based on the
presumption that demand for foreign
exchange far outweighs the supply of
foreign exchange and thus foreign
exchange based transactions and
rates are to be strictly controlled.
This type of system is based on the
presumption that the demand for
foreign exchange balances the supply
of foreign exchange and thus foreign
exchange based transactions are less
regulated and rates are
market determined.
_ Adoption in India Fixed exchange system was followed
in India till 1993.
In 1993, post-liberalization, the
government adopted the flexible
exchange rate system.
Devaluation vs Depreciation
Devaluation is the phenomena associated with fixed exchange rate regime. Whereas, depreciation of a currency is associated with the floating or managed floating exchange rate regime.
Devaluation of currency is done occasionally by the central bank, whereas depreciation and appreciation of currency occur on a daily basis.
Devaluation is the official reduction in the value of a currency, while depreciation refers to an unofficial decline in the currency’s value.
The impact of currency devaluation is for short term, while the depreciation of currency can affect the economy for a longer time.
Devaluation of the currency is done purposely by the central bank or the government. Whereas the market forces of demand and supply are responsible for the depreciation of a currency.
Devaluation of a currency
Devaluation of a currency is associated with countries having a fixed exchange rate regime.
Under the fixed rate regime, the central bank or the government decides the value of the currency with respect to other foreign currencies.
The central bank or the government purchases or sells its currencies to maintain the exchange rate.
When the government or the central bank reduces the value of its currency, then it is known as the devaluation of the currency.
Under this, the value of the domestic currency is deliberately reduced in terms of other foreign currencies.
Reasons And Objectives Of Currency Devaluation
Competitive devaluation (race to the bottom): if one country devalues its currency other countries are also incentivized to devalue their own currency to maintain their competitiveness and the international
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export market. This situation can lead to tit for tat currency wars which is also known as the “race to the bottom”. Competitive devaluation can lead to rise in unchecked inflation.
To increase Exports: countries go for currency devaluation to boost their exports in the international market. Devaluation of currency makes its goods cheaper compared to its International competitors. This can also increase the economic growth rate of the country due to higher exports and an increase in the aggregate demand and the economy.
To reduce the sovereign debt burden: countries may opt for currency devaluation and weak currency policy to reduce the government issued sovereign debt burden. If the debt payments are fixed, devaluation of currency will make the domestic currency weaker and will ultimately make the payments less expensive over time.
To reduce trade deficits: currency devaluation makes a countries exports cheaper, while imports become more expensive. This leads to an increase in exports and decrease in imports. This situation favors the improved balance of payment and reduces trade deficits. However, devaluation of currency also increases the debt burden of foreign denominated external loans.
Disadvantages Of Currency Devaluation
It reduces the purchasing power of the country’s citizens and foreign goods and foreign tours become expensive for them.
It can lead to increase in the inflation rate as essential imports such as oil etc will become more expensive. It can also lead to demand-pull inflation.
Devaluation of currency negatively impacts the corporates and individuals who hold debt in the foreign currency.
Large and quick devaluation of currency may reduce the faith of international investors in the domestic economy. Foreign investors would be less interested in holding the government debt as devaluation reduces the value of their holdings.
Depreciation of a Currency
Depreciation of a currency is a phenomenon associated with countries with floating exchange rate regime.
In the floating exchange rate regimes, the value of a country's currency is determined by the market forces of demand and supply.
The exchange rate of the currency changes on daily basis as per the demand and supply of that currency with respect to foreign currencies.
A currency depreciates with respect to foreign currency when the supply of currency in the market increases while its demand falls.
Reasons Responsible For Currency Devaluation
Large increase in imports: a large increase in the demand for imported goods and services can lead to a trade deficit. Increase in the current account deficit can lead to a net outflow of the currency which can weaken the exchange rate leading to currency depreciation.
Decline in exports: the decline in a country's overall exports leads to a decline in export revenues. This reduces the demand for the country's currency and leads to its depreciation.
Open market operations of the central bank: if the Central bank undertakes open market operations to buy foreign currency and gold etc it can lead to the depreciation of domestic currency. RBI undertakes open market operations in case of rapid appreciation or depreciation of the rupee and to reduce volatility in the foreign exchange market.
Monetary policy of Central Bank: if the central bank reduces its policy interest rates it can lead to the outflow of hot money such as foreign portfolio investment etc. This can lead to the depreciation of domestic currency.
Impact Of Currency Devaluation And Depreciation
Inflation: depreciation and devaluation of currency can have a similar impact on the inflation rate. Increase in the cost of imports can lead to cost-push inflation, whereas an increase in the domestic demand can lead to demand-pull inflation.
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Impact on foreign investment: The foreign investors may get attracted to invest in domestic assets such as housing market etc because depreciation and devaluation make it cheaper for foreigners to buy the local real estate. However, too frequent devaluations of currency in the fixed exchange rate regimes can negatively impact foreign investment due to speculations about the economic instability of the domestic economy.
Impact on the property: The value of the domestic property for the country’s citizens does not change much. However, the existing foreign investors may lose money as the value of existing property in that country would be now lesser in foreign currency.
Aggregate demand: devaluation and depreciation would increase the consumption of domestic goods at the cost of imported goods leading to an increase in economic growth rate.
Impact on exports and imports: in both devaluation and depreciation, the impact on exports and imports is similar. Exports become cheaper in the international market which increases its demands. Imports become expensive and the overall imports reduce.
Impact on the exchange rate and the current account balance of payments: depreciation and devaluation improve in the current account balance of payments due to a relative increase in exports with respect to imports.
Fall in the real wages: depreciation and devaluation induced inflation can lead to fall in the real wages if the nominal wages are not increased in response to the increase in the inflation rate.
Long term impacts: the long-term impacts of devaluation and depreciation differ. The depreciation of the domestic currency in a floating exchange rate regime, can increase its exports, boost spending and can make the economy look better for the foreign investors. This can increase the flow of foreign investment which can cancel out some of the effects of depreciation. However, this is not possible in a fixed rate economy as only the government or Central bank change the exchange rates.
Revaluation and Appreciation
Revaluation
Revaluation refers to an upward adjustment to the country's official exchange rate the relative to either price of gold or any other foreign currency.
Revaluation increases the value of the domestic currency with respect to the foreign currency.
Revaluation is opposite to devaluation, which is a downward adjustment.
Revaluation is a feature of the fixed exchange rate regime, where the exchange rate is determined by the central bank or the government.
Reasons for currency Revaluation
Current account surplus: the government can go for currency revaluation for reducing the current account surplus. This happens for economies where exports are higher than imports.
To manage inflation: the government may go for currency revaluation in order to manage that inflation rate. Revaluation can lead to either higher inflation or even lower inflation. Currency revaluation can make the imports cheaper which can reduce the inflation rate in the domestic economy.
Changes in the interest rates of other countries and changes in the global economic environment can also lead to currency revaluation in order to manage its impact on the domestic economy.
Currency Appreciation
Currency appreciation refers to the increase in the value of one currency with respect to other foreign currencies.
Currency appreciation is the unofficial increase in the value of any currency.
It is a feature associated with floating or managed floating exchange rate regimes.
Appreciation of a currency takes place when the supply of the currency is lesser than its demand in the foreign exchange market.
Causes Of Currency Appreciation
Current account surplus: current account surplus can cause an inflow of foreign exchange in the economy leading to appreciation in the exchange rate of the domestic currency.
Increase in the policy interest rate by the central bank: if the central bank increases the policy interest rate, it would make the investors attractive to invest in the government bonds and domestic securities
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which can lead to inflow of foreign investment in the form of hot money. This can lead to the appreciation of the domestic currency.
Intervention by the central bank through open market operations: buying of domestic currency from the foreign exchange market by the central bank can lead to an appreciation of the domestic currency.
Increase in exports: increase in exports can increase the demand for the domestic currency leading to its appreciation with respect to foreign currencies.
Higher economic growth can increase foreign investment in the economy which can cause appreciation in the exchange rate.
Appreciation versus revaluation
Both appreciation and revaluation have similar impacts but they have some differences.
Appreciation of a currency associated with a floating or managed floating exchange rate system.
Whereas revaluation of a currency is associated with the fixed exchange rate regime. Impacts Of Appreciation And Revaluation Of A Currency
Balance of Payment (BOP): Successive appreciation of domestic currency can make the BOP adverse.
Exports: Appreciation and revaluation of currency make the exports less competitive in the international market. This leads to a decrease in the country's exports.
Imports: The imports become cheaper and thus there is an overall increase and the imports.
Inflation: The overall inflation can decrease because the imports would become cheaper.
Remittances: The value of the remittances is coming from abroad decreases in the domestic currency.
Balance of payments (BOP) and Exchange Rate System (Part 2)
Topics covered Hard Currency and Soft Currency The Nominal Effective Exchange rate (NEER) The Real Effective Exchange Rate (REER) Currency Convertability Current and Capital Account Convertibility Merits and concerns of Capital Account Convertibility The First Tarapore Committee (1997) The Second Tarapore Committee (2005)
Hard Currency and Soft Currency
Currencies having stable exchange rate over a longer period like the US dollar, British pound sterling, Euro, German mark, and Japanese yen are called hard currencies
While the currencies whose exchange rate fluctuates from time to time are called soft currencies. The Nominal Effective Exchange rate (NEER)
The nominal effective exchange rate (NEER) is the weighted average of a country's currency relative to an index or basket of other major currencies.
The weights are determined by comparing the relative trade balance of a country's currency against each country within the index.
This exchange rate is used to determine an individual country's currency value relative to other major currencies in the index, such as the US dollar, Japanese yen, and the euro.
The NEER describes the relative value only; it cannot definitively show whether a currency is strong or gaining strength in real terms.
It only describes whether a currency is weak or strong, or weakening or strengthening, compared to foreign currencies.
The Real Effective Exchange Rate (REER)
The real effective exchange rate (REER) is the weighted average of a country's currency relative to an index or basket of other major currencies, adjusted for the effects of inflation.
In other words, REER is NEER adjusted for inflation, i.e. REER = NEER/ Inflation
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An increase in REER implies that exports become more expensive and imports become cheaper; therefore, an
increase indicates a loss in trade competitiveness.
Currency Convertability
Currency convertibility is the extent to which a country's currency can be converted into gold or another currency.
Currency convertibility is decided by the government of a country by permitting certain foreign exchange transactions while prohibiting others.
There can be neither complete convertibility, nor complete prohibition on every kind of foreign exchange transaction.
On the basis of nature of transactions, convertibility can be of two types: o (i) Current Account Convertibility o (Ii) Capital Account Convertibility.
Current Account Convertibility
Current account convertibility refers to the extent to which a rupee can be converted into foreign currency and vice versa for current account transactions.
At present, current account transactions are largely convertible with very few restrictions.
For instance, individuals while travelling abroad can get foreign currency upto a certain limit depending on the purpose of foreign travel.
Capital Account Convertibility
Capital account convertibility refers to the extent to which a rupee can be converted into foreign currency and vice versa for capital account transactions.
Presently, the government is taking gradual reforms in the direction of capital account convertibility.
However, it aims at "fuller" convertibility and not full convertibility.
"Fuller" means convertibility in relative sense. Thus, more capital account transactions would be permitted in the future but not all the transactions.
Merits of Capital Account Convertibility
If capital account convertibility is enhanced, it will lead to the following benefits:
It will enable Indian enterprises to borrow from anywhere in the world at the cheapest possible interest rates.
It will provide opportunity to invest in global assets.
As the number of foreign exchange transactions will increase, the cost behind every single foreign exchange transaction would reduce.
Concerns Regarding Capital Account Convertibility
In the case of inflow of large capital, there will be unprecedented appreciation of rupee, leading to fall in export competitiveness.
In the case of slowdown in Indian economy, investors would prefer to invest their money abroad, leading to flight of capital, which will have further implications over the output, employment, and even on balance of trade.
Thus, capital-account convertibility may bring volatility to our economy. The First Tarapore Committee (1997)
The Committee on Capital Account Convertibility (CAC) or Tarapore Committee was constituted by the Reserve Bank of India for suggesting a roadmap on full convertibility of Rupee on Capital Account.
The committee submitted its report in May 1997.
The committee observed that there is no clear definition of CAC.
The CAC as per the standards, refers to the freedom to convert the local financial assets into foreign financial assets or vice versa at the market determined rates of exchange. The Tarapore committee observed that the Capital controls can be useful in insulating the economy of the country from the volatile capital flows during the transitional periods and also in providing time to the authorities, so that they can pursue discretionary domestic policies to strengthen the initial conditions.
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The CAC Committee recommended the implementation of Capital Account Convertibility for a 3 year period viz. 1997-98, 1998-99 and 1999-2000.
But this committee had laid down some pre conditions as follows: o Gross fiscal deficit to GDP ratio has to come down from a budgeted 4.5 per cent in 1997-98 to
3.5% in 1999-2000. o A consolidated sinking fund has to be set up to meet government’s debt repayment needs; to be
financed by increased in RBI’s profit transfer to the govt. and disinvestment proceeds. o Inflation rate should remain between an average 3-5 per cent for the 3-year period 1997-2000. o Gross NPAs of the public sector banking system needs to be brought down from the present
13.7% to 5% by 2000. o At the same time, average effective CRR needs to be brought down from the current 9.3% to 3% o RBI should have a Monitoring Exchange Rate Band of plus minus 5% around a neutral REER o RBI should be transparent about the changes in REER o External sector policies should be designed to increase current receipts to GDP ratio and bring
down the debt servicing ratio from 25% to 20% o Four indicators should be used for evaluating adequacy of foreign exchange reserves to
safeguard against any contingency. o Plus, a minimum net foreign asset to currency ratio of 40 per cent should be prescribed by law in
the RBI Act.
The above committee’s report was not translated into any actions. India is still a country with partial convertibility.
The Second Tarapore Committee (2006)
Reserve Bank of India appointed the second Tarapore committee to set out the framework for fuller Capital Account Convertibility.
The committee was established by RBI in consultation with the Government to revisit the subject of fuller capital account convertibility in the context of the progress in economic reforms, the stability of the external and financial sectors, accelerated growth and global integration.
The report of this committee was made public by RBI on 1st September 2006.
In this report, the committee suggested 3 phases of adopting the full convertibility of rupee in capital acount.
o First Phase in 2006-07 o Second phase in 2007-09 o Third Phase by 2011.
Committee reccomendations:
The ceiling for External Commercial Borrowings (ECB) should be raised for automatic approval.
NRI should be allowed to invest in capital markets NRI deposits should be given tax benefits.
Improvement of the Banking regulation.
FII (Foreign Institutional Investors) should be prohibited from investing fresh money raised to participatory notes.
Existing PN holders should be given an exit route to phase out completely the PN notes.
At present the rupee is fully convertible on the current account, but only partially convertible on the capital account.
Tarapore Committee mentioned the following benefits of capital account convertibility to India:
Improved access to international financial markets and reduction in cost of capital
Availability of large funds to supplement domestic resources and thereby promote economic growth
Improvement of the financial system in the context of global competition.
Incentive for Indians to acquire and hold international securities and assets
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Taxation System Of India
Topics covered Categorization and types of taxes in India Average and marginal tax rate Important taxes in India Value Added Tax (VAT) Minimum Alternate Tax (MAT) Ad valorem versus Specific Tax GST in India- advantages and limitations GSTN Laffer curve
General categorization of Taxes
REGRESSIVE TAXES: Regressive taxes are those that have a greater impact on low-income individuals or entities than high-income earners. Tax rates reduce with rise in income. Thus, marginal tax rates are lower than average tax rates. This system is not followed because it adversely affects the poor people of a country.
PROGRESSIVE TAXES: A progressive tax has more impact on high income individuals and businesses, and less financial impact on low income earners. The current income tax is a progressive tax system; the proportion of tax liability rises as an individual or entity's income increases. Under a progressive tax system, taxes assessed on income and business profits are based on a progressive or increasing tax rate schedule. Marginal tax rates under a progressive tax system are often higher than the average tax rates.
PROPORTIONAL TAXES: A proportional tax, also referred to as a flat tax, impacts low, middle, and high income earners relatively equally. Under a proportional tax system, individual tax payers pay a set percentage of their income regardless of the total income earned. In this taxation system, the marginal tax rate is equal to the average tax rate.
Type of Taxes levied in India
Direct taxes – A tax that is paid directly by an individual or organization to the imposing entity (generally government) and it cannot be shifted to another individual or entity. The Central Board of Direct Taxes (CBDT) is the authority that looks after the administration of laws related to direct taxes through the Department of Income Tax.
Indirect taxes – An indirect tax (such as sales tax, a specific tax, value-added tax (VAT), or goods and services tax (GST)) is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the consumer)
Basis for comparison
Direct tax
Indirect tax
Meaning
Direct tax is referred to as the tax levied on a person's income and is paid by the same person to the government.
Indirect tax is referred to as the tax levied on a person who consumes the goods and services and is paid by other person to the government.
Nature Progressive in nature because tax slab rate increase with increase in income.
Regressive in nature. A particular commodity is taxed at the same rate. A poor person with limited resources finds it difficult to purchase the commodity when compared to the rich.
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Incidence and, impact Falls on the same person Falls on different persons
Examples Wealth tax, income tax, property tax, corporate tax
Goods and services tax (GST), security transaction tax (STT), excise duty, custom duty
Evasion Tax evasion is possible. Tax evasion is difficult because the taxes on commodity are included in the price of that commodity.
Inflation Direct tax helps in reducing inflation. Indirect taxes promote inflation.
Event Taxable income or wealth of the person
Purchase/sale/manufacture of goods and delivery of services
Marginal Tax Rate
The marginal tax rate is applied to the last rupee added to your taxable income. For example, if you are earning INR 500,001 per year, then your 500,001st rupee will be taxed at the 20% tax rate.
The 20% tax rate is the marginal tax rate in this case. It is important to mention that not all the income will be taxed at the 20% rate.
Average Tax Rate
The average tax rate is calculated by dividing the total taxes paid by your total income.
Total income taxes paid
Average tax rate (ATR) = Total income
The average tax rate incorporates taxes paid at all levels of income, so it is obvious that it will be less than the marginal rate.
Important Taxes In India
Income Tax o Income tax is a direct tax levied on the income of individuals or organizations. o When Income tax is levied on individuals, it is called income tax. o When income tax is levied on organizations (such as partnership firms, companies, etc.), it is
called Corporate Tax. o The various types of incomes covered under income tax are as follows:
Salary Business or profession profits Rental income from property Gains arising from sale of asset (capital gains) Interest income, etc.
Excise Duty o Excise duty is an indirect tax levied at the time of manufacture of any product. o The manufacturer is liable to pay excise duty when the goods are taken out of premises. o Excise duty is no longer applicable from 1 July 2017. It has been replaced by Goods and Services
Tax (GST).
Customs Duty o Customs duty is an indirect tax paid on the import of any product into the country or export of
any product from the country.
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o Customs duty has not been replaced with GST. On the other hand, additional customs duty has been replaced by GST. It is over and above the customs duty.
o It is levied by importing nation to increase the price of an imported commodity when the price is low because exporting nation is providing subsidy on exports.
Service Tax o Service tax is an indirect tax paid on the sale of services. o In the case of goods, there are two separate events of production and sale, whereas in the case
of services, the production and sale of services occur simultaneously. o In case of goods, excise duty is levied on manufacture, and sales tax is levied on sale of goods. o In case of services, single tax is levied, namely, service tax. o Service tax is no longer applicable from 1 July 2017. It has been replaced by Goods and Services
Tax (GST).
Sales Tax or VAT o Sales tax is levied on the sale of goods. In India, sales tax on intra-state sale is called value added
tax (VAT) and inter-state sale is called the central sales tax. o VAT and central sales tax are no longer applicable from 1 July 2017. They have been replaced by
Goods and Services tax (GST). Value Added Tax (VAT)
VAT means a tax on the sale of goods at every stage when it changes hands with the provision of credits for input tax paid at the time of purchase of goods.
Although VAT is used as a term for intra-state sales tax in India, it is a methodology to levy indirect taxes.
VAT is a multi-point levy of sales tax that enables the person to claim set off of tax (input credit), which he/she has already paid on the purchases.
The system of VAT is so designed that the final levy and burden of the tax on the goods is borne by the final consumer of the goods.
VAT is a method used to charge indirect taxes including GST.
The primary objective of VAT is to remove the cascading effect of taxes. The dealer is able to claim the tax paid on purchase against the tax payable on sales.
Tax evasion is also difficult because the dealer would not purchase goods on which tax has not been paid because in such a scenario, he would have to pay full tax on the whole value of item and not just on value addition.
Minimum Alternate Tax (MAT)
The concept of minimum alternate tax (MAT) was introduced to tax companies making high profits and declaring dividends to their shareholders under the Companies Act but have no significant taxable income under the Income Tax Act because of exemptions, deductions and incentives provided under the Income Tax Act.
The intent of introducing MAT was to ensure that no taxpayer with substantial income can avoid tax liability by using exclusions, deductions, and incentives.
Under the provisions of the Income Tax Act, where the income tax calculated is less than 18.5% of the book profits (as per the Companies Act), such book profits shall be deemed to the total income of the assesse and tax payable by the assesse shall be 18.5% on book profits.
Ad valorem versus Specific Tax
Ad Valorem Specific
Ad valorem tax is based on the assessed value of the product. In Fact, ‘Ad Valorem’ is a Latin word meaning ‘According to Value’.
Specific tax is a fixed amount tax based on the quantity of unit sold.
Most Ad valorem taxes are levied based on the value of the item purchased.
Specific tax is levied based on the volume of the item purchased.
The tax is usually expressed in percentage. Example GST in India has 5 tax rate slabs- 0, 5. 12, 18 and 28 percent.
The tax is usually expressed in specific sums. Example: Excise Duty on Petrol.
Example: GST, Property tax, sales tax. Example: Excise duty on petrol and liquor products.
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They are progressive in nature. They are regressive in nature.
Goods And Services Tax (GST): Change In Indirect Taxation System
It is a destination-based taxation system.
It is an indirect tax for the whole country on the lines of “One Nation One Tax” to make India a unified market.
It has been established by the 101st Constitutional Amendment Act.
It is calculated only in the “Value addition” at any stage of a goods or services.
It is a single tax on supply of Goods and Services in its entire product cycle or life cycle i.e. from manufacturer to the consumer.
There is a provision of GST Council to decide upon any matter related to GST whose chairman in the finance minister of India.
The final consumer will pay only his part of the tax and not the entire supply chain which was the case earlier.
GST Council
It is the 1st Federal Institution of India, as per the Finance minister.
It consists of Centre, 29 states, Delhi and Puducherry.
It will approve all decision related to taxation in the country.
Decisions are taken after a majority in the council.
Centre has 1/3rd voting rights and states have 2/3rd voting rights. Components of GST
The GST levied on the intra-state (within a state) supply of goods or services by the Centre is called central GST (CGST) and that by the states is called state GST (SGST).
On inter-state (between states) supply of goods and services, integrated GST (IGST) is collected by Centre.
IGST is also applicable on imports. Advantages of Implication of GST in India
In the GST system, both Central and state taxes will be collected at the point of sale. Both components (the Central and State GST) will be charged on the manufacturing cost.
GST will boost up economic unification of India which ultimately assist in better conformity and revenue resilience.
It will result in a simple, transparent and easy tax structure as it involves the provision of merging all levies on goods and services into one GST.
It will reduce the burden of tax for consumers
The global market will witness a comparative cost in the value of goods and services.
It will set a uniformity level in tax rates with only one or two tax rates across the supply chain
There are chances of the tax base broadening
This taxation system will reduce transaction costs for taxpayers through simplified tax compliance and will also result in increased tax collections due to a wider tax base and better conformity.
It will result in a good administration of tax structure
This implementation will increase tax collections due to the wide coverage of goods and services. Limitations in implementing GST in India
Amendment of Constitution is required for which consensus of at least half of the states is needed, which is very difficult in today’s rise of regional politics.
India’s tax collecting authority is not equipped technically to handle it. Computerization of data is needed.
Experience of various countries shows that it is very difficult to manage the GST system. Even various developed countries find it difficult.
GSTN
GSTN is registered as a not-for-profit company under the companies Act.
It has been formed to set up and operate the information technology backbone of the GST.
While the Central (24.5%) and the state (24.5%) governments hold a combined stake of 49%, the remaining 51% stake is divided among five financial institutions—LIC Housing Finance with 11% stake and ICICI Bank, HDFC, HDFC Bank and NSE Strategic Investment Corporation Ltd with 10% stake each.
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GSTN had awarded Infosys Ltd the contract to develop the hardware and software for GST.
The idea behind GSTN was to set up an entity that is equidistant from both the Central government and the state governments, as it will advise both the Centre and the states on the information technology network
Laffer Curve
The Laffer curve was developed by economist Arthur Laffer to show the relationship between tax rates and the amount of tax revenue collected by governments.
According to the curve, increase in tax rate up to a certain point leads to an increase in tax revenues. Beyond that point, any increase in tax rate leads to fall in tax revenues. This is due to the fact that high tax rates discourage economic activity.
Balance Of Payments
Topics covered About BOP and its components Purposes of calculation of Balance of Payment Causes of deficit in BOP Current Account Capital Account India's Foreign Reserves Use Of Forex Sovereign Wealth Funds Current account deficit and its impact Twin deficit and twin deficit hypothesis
About Balance of Payments
Balance of payments is a statement that summarizes an economy's transactions with the rest of the world for a specified time period.
Balance of payments records only those transactions that have implications on forex reserves with the country.
Also known as balance of international payments, it records all trades involving forex conducted by both the private and public sectors in order to determine how much money is going in and out of a country.
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The balance of payments classifies these transactions in two accounts: current account and capital account.
Purposes of calculation of Balance of Payment:
The basic purpose of BOP accounting is to know the strength and weaknesses of the Economy in international relations.
BPO statements give warning signals for future policy formation.
By analyzing the BOP accounts of the last year one can come to know the overall gains and losses from international trade. It can be ascertained that whether composition and direction of international trade and capital movements have improved or caused deterioration in the economic condition of the country.
Components of the Balance of payments (BOP)
The components of the balance of payment are:
Current account: It includes the financial transactions dealing with the export and import of goods, services, unilateral transfers, investment income etc.
Capital account: It includes the financial transactions dealing with assets such as foreign direct investment, foreign portfolio investment, foreign loans etc.
Official reserve transactions: It conducted by the central bank in case of the BOP deficit or BOP surplus.
Errors and omissions: It is the element of BOP (other than the current account and the capital account) which refers to the balancing items reflecting the inability to record all the international financial transactions.
Causes of deficit in BOP
Social causes
Changes in taste, preferences, fashion, and style, etc. o A favorable change for imported goods increases the demand for imported goods and lead to a
deficit in the balance of payment.
Population explosion o Population explosion in underdeveloped nations, also generally, results in large scale imports and
causes a deficit in the Balance of Payment.
Demonstration effect o Most of the developing countries get influenced by developed nations and start adopting the
foreign pattern of consumption. o This results in a sharp rise in imports leading to a deficit in the Balance of Payment.
Economic causes
Inflation o Inflation i.e. continuous rise in prices in a country makes foreign goods relatively cheaper. o It increases imports which cause a deficit in the Balance of Payment.
Fast Economic Development o For fast development, developing countries import machines, technology, and other equipment.
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o This leads to a high level of outflows of foreign exchange that can result in a deficit in the BOP account.
Political causes
Political disturbances o Frequent changes in government, unstable tax structure, etc. result in loss of trust of foreign
investors and discourage inflows of capital. o Domestic investors also prefer to invest outside the economy. As a result, an adverse position
created in the balance of Payment.
Political Instability o Due to uncertainty, there may be large capital outflows and lesser inflows of foreign funds. It can
create an adverse position in the Balance of Payment.
Current Account Transactions
Current Account is the record of business in commodities, transfer payments and services. Trade-in commodities comprises exports and imports of commodities.
Trade-in services comprise factor income and non-factor income transactions or undertakings. Transfer payments are the receipts which the citizens of a nation get for ‘free’, without having to provide any commodities or services in return.
They comprise of remittances, grants and gifts. They could be provided by the government or by private residents living abroad.
Capital Account Transactions
Capital Account records all international undertakings of assets.
An asset is any one of the types in which wealth can be held, for instance: stocks, bonds, Government debt, money, etc., Purchase of assets is a debit on the capital account. If an Indian purchases a UK Car Company, it enters capital account undertakings as a debit (as foreign exchange is going out of India).
On the other hand, sale of assets like sale of the share of an Indian company to a Japanese customer is a credit on the capital account.
These items are Foreign Direct Investments – FDIs, Foreign Institutional Investments – FIIs, assistance and external borrowings.
External Commercial Borrowing
Any money that has been borrowed from foreign sources for financing commercial activities in India are called external commercial borrowings (ECBs). ECBs are defined as money borrowed from foreign resources, including the following:
o Commercial bank loans o Buyers' credit and suppliers' credit
Credit from official export credit agencies and commercial borrowings from the private-sector window of multilateral financial institutions such as International Finance Corporation (Washington), ADB, AFIC, CDC, etc.
How ECB Is Different from FDI?
ECB means any kind of funding other than equity. If foreign money is used to finance equity capital, it would be termed foreign direct investment.
ECB should satisfy the ECB regulations stipulated by the government or its agencies such as the RBI.
India's Foreign Reserves
Gold: The stock of gold with the central bank is also considered part of forex. In the present scenario, governments are purchasing gold to replace foreign currencies because gold is believed to appreciate in the long run.
Foreign currency assets: Foreign currency assets are the chief constituent of foreign exchange reserves. In India, foreign currency assets contribute nearly 93.5% (as on 31 March 2017) of foreign exchange reserves. Hard currencies are given preference as part of foreign currency assets. A large part of foreign currency assets is in US dollars.
Reserve tranche position: Contribution by member nations to IMF higher than its assigned quota is called reserve tranche position (RTP). RTP is accounted among a country's foreign exchange reserves.
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Special drawing rights: These are the rights over the use of foreign currency. These rights are based on the currency a nation has contributed to International Monetary Fund (IMF) quota. The primary means of financing the IMF is through members' quotas. Each member of the IMF is assigned a quota, part of which is payable in special drawing rights (SDRs) or specified usable currencies (reserve assets).
Use Of Forex
India has utilized its forex for early repayment of high cost loan and investing in government securities of the developed countries. Presently, there is a debate on efficient use of foreign reserves and various suggestions have been put forward:
o Use of foreign reserves to import important technology into India o Use of foreign reserves for infrastructure-related imports
Creation of Sovereign Wealth Funds to invest money in global assets such as shares of foreign companies, lands, and other global assets that are expected to generate higher returns
Sovereign Wealth Funds
A sovereign wealth fund is a state-owned investment fund that invests in various assets globally. These are assets of the sovereign nations that are typically held in domestic and different reserve currencies (such as the dollar, euro, pound, and yen).
The accumulated funds may have their origin in, or may represent, foreign currency deposits, gold, SDRs, and IMF reserve positions held by central banks and monetary authorities, along with other national assets such as pension investments, oil funds, or other industrial and financial holdings.
Current account deficit
Current account deficit refers to a situation when the value of goods and services imported by a country exceeds the value of goods and services exported by it. In other words, it simply means that a country imports more than what it exports.
This current account deficit is paid through surplus in the capital account i.e through surplus foreign investments or foreign loans or through the forex reserves. When foreign exchange reserves fall below the critical level, the country faces the balance of payment crisis.
Impact Of Current Account Deficit
The financing of CAD through hot money such as foreign Institutional Investment (FII) is also risky as when the confidence of market falls, the hot money flows out quickly leading to rapid depreciation of currency as happened during the East Asian crisis.
The impact of the current account deficit depends upon the manner in which this deficit is financed. If it is financed through loans and borrowings from foreign countries, it becomes unsustainable in the long run because large borrowings ultimately leads to high interest payments in the future.
Running CAD means the claims of foreigners are increasing in the countries assets which could be redeemed by them at any point of time.
However, the impact of CAD may not be necessarily negative as CAD during the period of inward investment through FDI can create jobs and growth in the economy. This improves the health of the country's economy and the country will be able to pay its debts back.
A moderate CAD of around 2% of GDP is stable for the economy and can be helpful in long run to improve its productivity.
The developing countries usually run CAD for buying capital goods, and later they export the consumer goods for repaying their debts.
Twin Deficit
Economies that have both a fiscal deficit (budget deficit) and a current account deficit are often referred to as having "twin deficits".
For instance, the United States has fallen firmly into this category for years. India also experiences both the deficits year after year.
The opposite scenario, featuring a fiscal surplus and a current account surplus, is generally viewed as a much better financial position.
China is often cited as an example of a nation that has enjoyed long-term fiscal and current account surpluses.
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Twin Deficit Hypothesis
Some economists believe that a large budget deficit is correlated to a large current account deficit.
This macroeconomic theory is known as the twin deficit hypothesis.
The logic behind the theory is that government tax cuts, which reduce revenue and increase the deficit, result in increased consumption by taxpayers.
The increased spending reduces the national savings rate, causing the nation to increase the amount it borrows from abroad.
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SCIENCE AND TECHNOLOGY
Nano Technology
Relevancy G.S. Paper 3 Objective Questions- Nano Technology And Its Applications, Approaches Of Nanotechnology Subjective Questions- History Of Nano Technology, India’s Initiative, India’s Nano Mission
What Is Nano Technology?
Nanotechnology is the study of matter at a miniature level called the nano scale. A nano meter is equal to one billionth of a meter. Nanotechnology facilitates research on particles less than one billionth of a meter in diameter, and thus paves way to some amazing inventions and discoveries. The properties of atoms and molecules are found to greatly differ on a nano scale, i.e., at 100 nm or below compared to what they are in bulk matter. Exploiting this feature of matter, nanotechnology manipulates single atoms to discover new properties and then uses these to create improved materials, devices and systems.
Today, from agriculture to aerospace research, nanotechnology’s impact is being felt. Research in nanotechnology spans across an array of fields such as health, environment, agriculture, food and beverages, product development, space technology, power generation, genetics, biotechnology, forensic science, electronics and communications.
Inception Of Nano Technology
The concept behind this principle originated in a talk entitled, “There’s Plenty of Room at the Bottom” by physicist Richard Feynman in 1959. The term nanotechnology was actually coined by Professor Norio Taniguchi. In 1981, the scanning tunneling microscope was invented which made it possible to “see” individual atoms. This, and the invention of the atomic force microscope (AFM) made it possible for nanotechnology to become reality. Nanotechnology has come a long way since then and now affects many industries. It is an interdisciplinary field converging many streams of engineering and science.
Approaches Of Nanotechnology
Nanotechnology embrace number of technology fields especially in electronics.
Bottom up: In the bottom up approach, different materials and devices are built from molecular components of their own. They chemically assemble themselves by recognizing the molecules of their own breed. For examples molecular self-assembly are Watson crick base pairing, nanolithography.
Top down: In top down approach, nano objects and materials are formed by larger entities without bouncing its atomic reactions. Usually top down approach is practiced less as compared to the bottom up approach. Solid-state techniques can also be used to create devices known as nano electromechanical systems or NEMS, which are related to micro elctromechanical systems or MEMS. MEMS became practical once they could be fabricated using modified semiconductor device fabrication technologies, normally used to make electronics.
Application of Nanotechnology
Agriculture and Food
Nanofertilisers
Hybrid polymers are used in packaging and to reduce spoilage
Sensors for food-borne pathogens
Nanoemulsions – to reduce bacteria on produce
Nanoparticles based on titanium dioxide – used as antimicrobial agents Electronics
Nano-RAM: It is a non-volatile RAM (Random Access Memory) based on carbon nanotubes deposited on a chip-like substrate. Its small size permits very high density memories.
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Nano optomechanical SRAM (Static RAM): This shows faster read/write time as compared to a MEMS memory. Also, the processes take place without interference which further reduces time when compared to a traditional electrical enabled SRAM.
Energy
Solar paints or photovoltaic paints – can replace solar panels. Applying solar paints to any surface will enable it to capture energy from the sun and transform it into electricity. This can be used in houses and cars.
Wind power generations – nanogenerators – these are flexible thin sheets which when bent can generate potential power.
Nanobatteries – these are used to help rechargeable lithium ion batteries last longer. Healthcare and Medicine
Nanotech detectors for heart attack
Nanochips to check plaque in arteries
Nanocarriers for eye surgery, chemotherapy, etc.
Diabetic pads for regulating blood sugar levels
Nanoparticles for drug delivery to the brain – for therapeutic treatment of neurological disorders
Nanosponges – are polymer nanoparticles coated with a red blood cell membrane, can be used for absorbing toxins and removing them from the bloodstream
NanoFlares – used for detection of cancer cells in the bloodstream
Nanopores – use in making DNA sequencing more efficient Nanotechnology In India
Research and work on nanotechnology in India started in 2001 with the formation of the NanoScience and Technology Initiative with an initial funding of Rs. 60 crores.
In 2007, the GOI launched a 5-year program called Nano Mission. It had a wider scope of objectives and much larger funding.
Fields involved in the mission were: basic research in nanotechnology, infrastructure development, human resources development and global collaboration.
Many institutions and departments were roped in for the work such as Department of IT, DRDO, Department of Biotechnology, Council of Scientific and Industrial Research (CSIR), etc.
In both IIT Bombay and IISC Bangalore, National Centers for Nanofabrication and Nanoelectronics were established.
Results of these initiatives o India has published over 23000 papers in nanoscience. o India ranked 3rd in papers published in 2013 behind only the USA and China. o There have been many patent applications in this field.
Nano Mission Of India
The Nano Mission is an umbrella programme for capacity building which envisages the overall development of this
field of research in the country and to tap some of its applied potential for nation’s development. In brief, the
objectives of the Nano-Mission are:
Basic Research Promotion – Funding of basic research by individual scientists and/or groups of scientists and creation of centers of excellence for pursuing studies leading to fundamental understanding of matter that enables control and manipulation at the nanoscale.
Infrastructure Development for Nano Science & Technology Research – Investigations on the nano scale require expensive equipments like Optical Tweezers, Nano Indenter, Transmission Electron Microscope (TEM), Atomic Force Microscope (AFM), Scanning Tunneling Microscope (STM), Matrix Assisted Laser Desorption Time of Flight Mass Spectrometer (MALDI TOF MS), Microarray Spotter & Scanner etc. For optimal use of expensive and sophisticated facilities, it is proposed to establish a chain of shared facilities across the country.
Nano Applications and Technology Development Programmes- To catalyze Applications and Technology Development Programmes leading to products and devices, the Mission proposes to promote application-oriented R&D Projects, establish Nano Applications and Technology Development Centers, Nano-
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Technology Business Incubators etc. Special effort will be made to involve the industrial sector into nanotechnology R&D directly or through Public Private Partnership (PPP) ventures.
Human Resource Development – The Mission shall focus on providing effective education and training to researchers and professionals in diversified fields so that a genuine interdisciplinary culture for nanoscale science, engineering and technology can emerge. It is planned to launch M.Sc./M.Tech. Programmes create national and overseas post-doctoral fellowships, chairs in universities, etc.
International Collaborations – Apart from exploratory visits of scientists, organization of joint workshops and conferences and joint research projects, it is also planned to facilitate access to sophisticated research facilities abroad, establish joint centers of excellence and forge academia-industry partnerships at the international level wherever required and desirable.
Cryptocurrency Ban In India
Relevancy G.S. Paper 3 Objective Questions- Cryptocurrency And Virtual Currency, Advantages And Disadvantages Subjective Questions- Ban In India, Significance And Result
Why In News?
Headed predominantly by Bitcoin, there’s been a phenomenal rise in the price of cryptocurrencies.
Recently,Tech giant Facebook proposed to launch a new global cryptocurrency called Libra.
However, the rapid growth and use of cryptocurrencies does not come without risk What is a Cryptocurrency?
It is a digital or virtual currency that uses cryptography for security.
Cryptocurrencies use decentralized technology to let users make secure payments and store money without the need to use their name or go through a bank.
They run on a distributed public ledger called blockchain, which is a record of all transactions updated and held by currency holders. The most common cryptocurrencies are Bitcoin, Ethereum, Ripple, and Litecoin.
Facebook has announced a digital currency called Libra that will roll out for use in 2020 and allow the platform’s billions of users across the globe to make financial transactions online.
What Are Virtual Currencies? Are They Different From Crypto Currencies?
There is no globally accepted definition of what exactly is virtual currency. Some agencies have called it a method of exchange of value; others have labelled it a goods item, product or commodity.
Virtual currencies are mostly created, distributed and accepted in local virtual networks.
Satoshi Nakamoto, widely regarded as the founder of the modern virtual currency bitcoin and the underlying technology called blockchain, defined bitcoins as “a new electronic cash system that’s fully peer-to-peer, with no trusted third party”.
All users of such virtual currencies would be able to see and keep track of the transactions taking place.
This essentially meant there would be no central regulator for virtual currencies as they would be placed in a globally visible ledger, accessible to all the users of the technology.
Cryptocurrencies, on the other hand, have an extra layer of security, in the form of encryption algorithms.
Cryptographic methods are used to make the currency as well as the network on which they are being traded, secure.
Most crypto currencies now operate on the blockchain or distributed ledger technology, which allows everyone on the network to keep track of the transactions occurring globally.
Advantages Of Using Crypto Currencies
Easy access and globally recognized
Free from the risk of identity theft
Quick and easy payments
Private and secured
Facilitate e-commerce trade
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Facility of faster settlement Disadvantages Of Using Crypto Currencies
It can be difficult to understand
Problem of scaling
No way to reverse the payment
Uncertainty and volatility
Losing wallet password and losing all the data
Still not accepted by all Why did the RBI banned virtual currencies?
Owing to the lack of any underlying fiat, episodes of excessive volatility in their value, and their anonymous nature which goes against global money-laundering rules, the RBI initially flagged its concerns on trade and use of the currency.
Risks and concerns about data security and consumer protection on the one hand, and far-reaching potential impact on the effectiveness of monetary policy itself on the other hand, also had the RBI worried about virtual currencies.
Reccomendations Of Garg Committee
Inter-Ministerial Committee on Virtual Currencies headed by finance secretary Subhash Chandra Garg has
submitted its report to the government.
Ban on all forms of private cryptocurrencies.
RBI and the government may look at the introduction of an official digital currency in the country.
Impose a fine of up to Rs 25 crore and imprisonment of as much as 10 years for anyone dealing in them.
The panel backed use of distributed ledger technology (DLT) or blockchain for selected areas. It has asked the department of economic affairs to take the necessary measures to facilitate the use of DLT in the financial field after identifying its uses.
Establish a specific group by the department of economic affairs with participation by the RBI, department of financial services and the ministry of electronics and information technology (MeitY) for examining and developing an appropriate model of digital currency in India.
Data localisation requirements proposed in the draft Data Protection Bill may need to be applied carefully, including with respect to the storage of critical personal data so as to ensure that there is no adverse impact on Indian firms and Indian consumers who may stand to benefit from DLT-based services.
It has also suggested the use of DLT to reduce compliance costs for know-your-customer (KYC) requirements.
Challenges
The government is wary that regulation will provide legitimacy to “what is currently ambiguous,” and may lead to further rise in its valuation and end up contributing “to the investment bubble”.
Bitcoin’s value, astronomical even now at about $8,300 but much below January 2018’s stratospheric levels, is based on demand for a fixed supply of Bitcoins in the future it cannot exceed 21 million in number, of which 18 million has already been mined.
A currency that is not based on any real economic activity, unlike a sovereign currency whose value is based on the relative value of a tradeable basket of goods and services, cannot prima facie inspire much comfort.
The online use of this currency, was without any border restrictions or geographical constraints, resulting in danger to the integrity and sovereignty of the nation.
Virtual currency is being traded anonymously over the Internet and used for a host of anti-national and illegal activities, from terror funding to illicit trade of arms and drugs and so on.
Cryptos are feared not just for their sheer speculative propensities, but also for their capacity to undermine sovereign currencies (the latter is an exaggerated apprehension).
However, it does not make sense to go overboard and criminalise merely adventurous crypto speculators. There are no official or other data available that point towards misuse of cryptocurrencies for illegal ends
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Artificial Intelligence (AI)
Topics covered What is AI? Applications of AI Artificial intelligence technologies Benefits and challenges with AI in India Machine learning vs deep learning Centre for artificial intelligence and robotics (CAIR)
What Is Artificial Intelligence?
Artificial Intelligence is intelligence exhibited by machines.
It is a branch of computer science which deals with creating computers or machines as intelligent as human beings.
The term was coined in 1956 by John McCarthy at the Dartmouth conference, Massachusetts Institute of Technology.
It is a simulation of human intelligence processes such as learning (the acquisition of information and rules for using the information), reasoning (using the rules to reach approximate or definite conclusions), and self-correction by machines, especially computer systems.
Nowadays it has become an umbrella term which encompasses everything from robotic process automation to actual robotics.
Recently it has become widely popular and gained prominence due to its multifaceted application ranging from healthcare to military devices.
Applications of Artificial Intelligence (AI)
Self-driving Cars
Facial recognition: Facial recognition is one of the most popular applications of artificial intelligence. It has many uses, including unlocking your phone, paying with your face, and detecting intruders in your home.
Digital assistants and smart speakers: Siri, Alexa, Cortana, and Google Assistant use artificial intelligence to transform spoken words to text and map the text to specific commands.
Translation : For many decades, translating text between different languages was a pain point for computers.
Agriculture Sector : AI can be used to predict advisories for sowing, pest control, input control can help in ensuring increased income and providing stability for the agricultural community.
Medicine: From detecting skin cancer and analyzing X-rays and MRI scans to providing personalized health tips and managing entire healthcare systems, artificial intelligence is becoming a key enabler in healthcare and medicine.
Business Sector: To take care of highly repetitive tasks Robotic process automation is applied which perform faster and effortlessly than humans.
Manufacturing sector: Robots are being used for manufacturing since a long time now, however, more advanced exponential technologies have emerged such as additive manufacturing (3D Printing) which with the help of AI can revolutionize the entire manufacturing supply chain ecosystem.
Education Sector: AI may change where and how students learn, perhaps even replacing some teachers.
Legal Sector: Automation can lead to faster resolution of already pending cases by reducing the time taken while analyzing cases thus better use of time and more efficient processes.
Financial Sector: It can be applied to the personal finance applications and could collect personal data and provide financial advice.
Gaming : AI has a crucial role in strategic games such as chess, poker, tic-tac-toe, etc., where the machine can think of a large number of possible positions based on heuristic knowledge.
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Intelligent Robots: Robots can perform the tasks given by a human because of sensors to detect physical data from the real world such as light, heat, temperature, movement, sound, bump, and pressure.
Smart Cities and Infrastructure : Use of AI to monitor patronage and accordingly control associated systems such as pavement lighting, park maintenance and other operational conditions could lead to cost savings while also improving safety and accessibility.
Cyber Security: In the 20th conference on e-governance in India it was discussed that AI can provide more teeth to cyber security and must be explored.
Examples of Artificially Intelligent Technologies
Robotics is a field of engineering focused on the design and manufacturing of robots. Robots are often used to perform tasks that are difficult for humans to perform or perform consistently.
Robotic process automation: Automation is the process of making a system or processes function automatically.
Pattern recognition is a branch of machine learning that focuses on identifying patterns in data.
Natural language processing (NLP) is the processing of human language and not computer language by a computer program.
Machine learning: Field of study that gives computers the ability to learn without being explicitly programmed. Deep learning is a subset of machine learning and can be thought of as the automation of predictive analytics.
Machine vision is the science of making computers visualize by capturing and analyzing visual information using a camera, analog-to-digital conversion, and digital signal processing.
Benefits:
NITI Aayog estimates that adopting AI means a 15% boost for the gross value added (GVA) for the economy by 2035.
In agriculture, it can contribute towards enhancing farmers’ income, increase farm productivity and reduce wastage.
AI can increase access and affordability of quality healthcare.
It can help build efficient infrastructure for the increasing urban population.
AI could create jobs in the country that would be higher than the number of jobs becoming redundant due to innovation in technology.
It can also improve access and quality of education.
Develop smarter and safer modes of transportation to address traffic and congestion problems.
Increase efficiency and enhance governance across the government.
‘Make in India’ programme can be strengthened and help India in becoming a major manufacturing hub with AI-assisted technology.
Helps in improving the ease of doing business, as well as making the lives of people simpler. Challenges with AI in India
Lack of AI awareness in resolving business-related issues in most of the public enterprises and government agencies has led to the scarcity of AI professionals in obstructing adoption.
Absence of collaborative effort between various stakeholders
Lack of sufficient talent to build and deploy AI systems at scale.
Concerns on privacy and security of data, including lack of formal regulation around anonymisation of data.
High cost and low availability of computing infrastructure required for development, training and deployment of AI-based services.
Difficulty in access to industry-specific data required to build customised platforms and solutions is now currently in the hands of a few major players.
Lack of infrastructure is the major reason for many Indian AI start-ups that aims to incorporate their business outside the country, thus, making AI outside the reach of Indian researchers in government labs and many industries. Initiatives like GI Cloud (MeghRaj), are in the right direction.
Machine learning vs deep learning
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Machine Learning Deep Learning
This term was coined by Artur Samuel in 1959, meant “the ability to learn without being explicitly programmed.”
It is a technique for implementing Machine Learning. It was inspired by the structure and function of the brain, specifically the interconnecting of many neurons.
It involves the use of algorithms to parse data and learn from it, and making a prediction as a result.
Artificial Neural Networks (ANNs) are algorithms that are based on the biological structure of the brain.
The machine gets “trained” using large amounts of data and algorithms, and in turn gains the capability to perform specific tasks.
In ANNs, there are ‘neurons’ which have discrete layers and connections to other “neurons”. Each layer picks out a specific feature to learn. It’s this layering that gives deep learning its name.
Centre For Artificial Intelligence And Robotics (CAIR),
Centre for artificial intelligence and robotics (CAIR), is the primary laboratory of DRDO for research and development in different areas of defense, Information and Communication Technology (ICT) and is located in Bangalore.
It is involved in the Research & Development of high-quality Secure Communication, Command, and Control, and Intelligent Systems.
CAIR came into existence in 1986.
Projects: NETRA- software to intercept online communication, SECOS- Secure operating system.
Infodemic and Google thinking
Topics covered What is infodemic and google thinking? How WHO is tackling current infodemic? How other countries undertook infodemic in past? Infodemic in India Why The Infodemic Can Be Deadly? Laws in India related to cyber security
Why in news?
WHO is leading the effort to slow the spread of the 2019 coronavirus disease (COVID-19) outbreak. But a global epidemic of misinformation—spreading rapidly through social media platforms and other
outlets—poses a serious problem for public health. “We’re not just fighting an epidemic; we’re fighting an infodemic”, said WHO Director-General Tedros
Adhanom Ghebreyesus at the Munich Security Conference on Feb 15,2020. What is infodemic?
An excessive amount of information concerning a problem such that the solution is made more difficult.
It is basically a digital flood of fake information or rumors about a particular problem.
It is important to control infodemic and encourage use of genuine sourse of information. What is Google Thinking?
Google thinking means when a person, without undertaking any kind of expert advise on a particular problem, asks Google and trust it.
Today everyone search Google asking solutions for everyday problems as well as epidemic issues like COVID-19.
Due to large amount of misinformation and fake rumors, this poses a serious problem for public health as it hinders with the actual genuine information available online.
How WHO is tackling current infodemic (COVID-19)?
WHO's newly launched platform aims to combat misinformation around COVID-19.
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Immediately after COVID-19 was declared a Public Health Emergency of International Concern, WHO's risk communication team launched a new information platform called WHO Information Network for Epidemics (EPI-WIN), with the aim of using a series of amplifiers to share tailored information with specific target groups.
About 20 staff and some consultants are involved in WHO's communications teams globally, at any given time. This includes social media personnel at each of WHO's six regional offices, risk communications consultants, and WHO communications officers.
WHO is in touch with Facebook, Twitter, Tencent, Pinterest, TikTok, so when WHO see some questions or rumours spreading, they write it down, go back to risk communications colleagues and who help in find evidence-based answers.
Another thing WHO is doing with social media platforms is to ensure no matter where people live, when they’re on Facebook, Twitter, or Google, when they search for ‘coronavirus’ or ‘COVID-19’ or a related term, they have a box that directs them to a reliable source: either to [the] WHO website to their ministry of health or public health institute or centre for disease control.
Google, has created an SOS Alert on COVID-19 for the six official UN languages, and is also expanding in some other languages. The idea is to make the first information that the public receive be from the WHO website and the social media accounts of WHO and Dr Tedros.
WHO also uses social media for real-time updates.
WHO is also working closely with UNICEF and other international agencies that have extensive experience in risk communications, such as the International Federation of Red Cross and Red Crescent Societies.
How other countries undertook infodemic in past?
Australia
Action: Government task force and media literacy campaign
Focus: Foreign disinformation campaigns* and media literacy
In June 2018, four units of the government set up a task force to identify potential cyberattacks and foreign influence campaigns targeting upcoming Australian elections.
In February of 2019, an investigation by the ABC revealed that the Australian Electoral Commission notified Twitter and Facebook they must comply with notifications of illegal ads on their platform.
In April, they also launched a “Stop and Consider” campaign encouraging voters to pay attention to the sources of their information in light of the federal elections held in May.
Bangladesh
Action: Law and arrests
Focus: Propaganda and media regulation
In October 2018, the Bangladeshi government passed a bill that imprisons people for spreading “propaganda” about the 1971 war in which the country won independence from Pakistan.
It also bans the posting of “aggressive and frightening” content.
In August, a photographer was arrested for “spreading false information” after speaking in support of a student protest. He faces up to seven years in prison for spreading false news against the government under an act that has already been used to detain dozens of social media users over the past year, according to Freedom House.
In January, the Dhaka Tribune reported that 22 people had been arrested on cybercrime charges in the past two months.
China
Action: Laws and online reporting portal
Focus: Misinformation
China has some of the strictest laws in the world when it comes to misinformation.
In 2016, the government criminalized creating or spreading rumors that “undermine economic and social order,” Foreign Policy reported.
Another law in 2017 requires social media platforms to solely republish and link to news articles from registered news media.
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In late August 2018, Chinese authorities launched an app that lets people report potential fakery. Reuters reported that the app, which also leverages artificial intelligence to automatically detect rumors, has accounts on platforms like Weibo and WeChat, on which it broadcasts reports from state-owned media.
In 2020, authorities went one step further and started requiring microblogging sites to highlight and refute rumors on their platforms.
Pakistan
Action: Government Twitter account
Focus: Misinformation
In early October 2018, the Pakistani government started going after misinformation on a platform where it regularly appears: Twitter.
Dawn reported that the Ministry of Information and Broadcasting launched an account called Fake News Buster in an attempt to debunk “fake and negative propaganda” online.
Saudi Arabia
Action: Government threats
Focus: Misinformation
After the reported murder of Washington Post columnist Jamal Khashoggi in October 2018, Saudi authorities started threatening people who post “fake news” online with up to five years in prison and heavy fines.
Gizmodo reported that officials cited Article 6 of Saudi Arabia’s cybercrimes regulations, which makes it a crime to breach “public order, religious values, public morals and privacy.”
United States
Action: Proposed federal law, platform testimonies, failed state advisory group, state media literacy law, threat
assessment, state media literacy initiatives and state lawsuits
Focus: Political ads, foreign disinformation, general misinformation, media literacy and deepfake videos
Congress announced a bill in October 2017 that would require online platforms such as Facebook and Google to keep copies of ads, make them public and keep tabs on who is paying — and how much. Essentially, the legislation attempts to impose existing TV and radio ad regulations on social media companies.
The California state government passed a law in September 2018 that bolsters media literacy in public schools. It requires the Department of Education to list instructional materials and resources on how to evaluate trustworthy media.
In mid-September 2018, two Democrats and one Republican representative sent a letter to the director of national intelligence asking the intelligence community to assess the possible national security threats posed by deepfake technology and present a report to Congress by the end of 2018.
In January 2019, a company that created fake social media profiles to make millions of dollars in revenue settled a case with the New York state attorney, CNN reported. The settlement is the first case in which law enforcement has concluded that selling fake social media activity is illegal.
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The figure here represents actions that were taken by different countries around the world in the wake of
spreading of misinformation.
Infodemic in India (in the past)
Action: Database, proposed state law, proposed law amendment and internet shutdowns
Focus: Misinformation
A state government in India is considering creating legislation aimed at punishing purveyors of online misinformation — specifically doctored photographs.
The Economic Times reported in mid-June 2018 that West Bengal officials want to clarify how the state could additionally prosecute the publication of misinformation. Currently, citizens can be jailed in the state for posting misinformation if it causes fear or alarm in the public.
The efforts come amid rising tensions related to misinformation in India. Rumors on messaging platforms like WhatsApp have allegedly incited violence across the country and the national government itself has tried to issue anti-fake news guidelines in the past.
In October, Wired reported that the Indian government had turned off the internet more than 100 times over the past year to quell the spread of rumors on WhatsApp.
In 2018, the international nonprofit Access Now documented 134 internet shutdowns in India, and a study done at Stanford found that 47% of these took place in the politically tumultuous northern state of Jammu and Kashmir.
Shutdowns vary from total internet blackouts to slowing down mobile internet speed, and they’re often ordered by local governments in an attempt to stop the spread of false rumors on WhatsApp and quell public unrest.
The shutdowns have cost the country billions of dollars and are more frequent than in any other country, according to Freedom House. Some research also suggests that these are ineffective, and that misinformation, political turbulence and rioting still occur during shutdowns.
In December, the Ministry of Electronics and Information Technology released draft changes to the 2000 IT Act that would require social media platforms to start tracing the originators of messages when compelled by the government. The effort is aimed at curbing the spread of unlawful content and misinformation on platforms like WhatsApp.
Why The Infodemic Can Be Deadly?
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In a country such as India, where 400 million turn to a single messaging app for sharing news and stories about any and everything, more than 240 million are on Facebook and, often, using it as the predominant source of news, a critical mass of misinformation leads to mis-directed behaviours.
Wrong behaviours propel the pandemic, the right ones can slow its spread.
A steep rise of infections will overwhelm the healthcare systems almost immediately.
It is essential to get ahead of the digital virus because if the biological virus hits India with the force with which it has arrived elsewhere, the outcomes will be catastrophic.
It is clear from the varied experiences between South Korea and Italy, that small changes in behaviours can have enormous consequences.
Italy, for all its problems, had 4.1 doctors per 1,000 people in 2017; India had 0.8 per 1,000. Now is the time in India to make those small changes.
Laws in India related to cyber security
Information Technology Act, 2000 o The act regulates use of computers, computer systems, computer networks and also data and
information in electronic format. o The act lists down among other things, following as offences:
Tampering with computer source documents. Hacking with computer system Act of cyber terrorism i.e. accessing a protected system with the intention of
threatening the unity, integrity, sovereignty or security of country. Cheating using computer resource etc.
Strategies under National Cyber Policy, 2013 o Creating a secure cyber ecosystem. o Creating mechanisms for security threats and responses to the same through national systems
and processes. o National Computer Emergency Response Team (CERT-in) functions as the nodal agency for
coordination of all cyber security efforts, emergency responses, and crisis management. o Securing e-governance by implementing global best practices, and wider use of Public Key
Infrastructure. o Protection and resilience of critical information infrastructure with the National Critical
Information Infrastructure Protection Centre (NCIIPC) operating as the nodal agency. o NCIIPC has been created under Information Technology Act, 2000 to secure India’s critical
information infrastructure. It is based in New Delhi. o Promoting cutting edge research and development of cyber security technology. o Human Resource Development through education and training programs to build capacity.
India As Pharmacy Of The World
Relevancy G.S. Paper 3 Role of India as Pharmacy of the world Issues faced by Indian Pharmacy companies and suggestions to overcome those
Why India is pharmacy of the world
India is one of the largest producers of pharmaceuticals as it being the third largest in production volume (10 per cent share) and fourteenth by value (1.4 per cent share) worldwide.
India has the largest number of United States Food and Drug Administration (USFDA) recognized plants outside the US.
Around 584 Indian companies/sites are registered with the USFDA. There are around 10000 registered pharmaceutical companies in India.
India exports to over 200 countries and it is one of the top ten pharmaceutical exporters.
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The US is the largest importer of Indian products. Reasons why India is the pharmacy to the world
In 2001, Africa was facing a major health crisis. Sub-Saharan Africa alone had 22.5 million HIV-positive people. The disease was assuming epidemic proportions. The price of patented drugs supplied by western drug companies was a prohibitive $10,000 per patient per year – way out of reach of the average patient.
Cipla’s entry, which was followed by several other Indian generic drug companies, saved hundreds of thousands of lives in Africa and the led to an 18-fold increase in the number of AIDS patients being treated between 2003 and 2009.
It has been estimated that Africa now spends about $2 billion every year on treating millions of AIDS patients.
Indian companies are also the largest supplier of anti-malaria and tuberculosis drugs in Africa.
India exported pharmaceutical products worth about $4 billion to Africa in 2015. This is expected to grow to more than $10 billion by 2020.
In recent times, Indian drug companies have begun facing competition from Israeli, Japanese and Chinese drug companies and is facing a renewed attack and intense lobbying from Big Pharma companies over alleged patent violations.
The government is under massive pressure to bring its patent laws in line with those of the US and EU. This would hurt Indian drug companies and severely impair its ability to produce generic versions of patented drugs at a fraction of their cost.
Issues
Road taken by the pharma companies is hampering the productive and competitive thrust of domestic firms.
The Indian drug industry is increasingly becoming dependent on China for the supply of bulk drugs and intermediaries.
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While China’s growth is led by state-owned enterprises and very strong R&D-industry interaction, India has neglected its public sector drug manufacturers which have all closed down.
India focused too much on cost advantage while neglecting other aspects of competitiveness.
Compulsory licensing and other patent issues.
US: There is going to be expedited approvals coming in from FDA and that would actually mean the intensity of competition is also going to be little more rampant.
RCEP negotiations: Japan and South Korea are also demanding a ‘data exclusivity’ period of “no less than five years.” Data exclusivity creates a barrier to entry for generic producers, even when patents no longer apply or exist.
Suggestions
Every industry has its own protocol to serve the society. Therefore, the pharma industry should train students as per their need. Only a few industries are thinking in this line. Industries should contact Indian academic institutions to get qualified students who have the knowledge and aptitude for research and development in pharma.
Incentives should be paid to students contributing towards the development of any research formula for the industry.
Indian pharma industry can explore these ideas for future progress.
There are ample opportunities for industries to represent their data via academic pharma institutions.
Research schemes should be initiated by the industry via direct contact with identified researcher/faculty.
Industry should explore the availability of qualified students beyond metro cities.
With changing times, students are getting exposure through the internet about research/ technology around them.
Adoption of user-friendly policies will help establish small scale industry and encourage students and middle class business owners with ambitions in this line. This will also help overcome the problem of unemployment for pharmacists and promote entrepreneurship in the nation.
Pharmacy students are highly qualified persons in handling instruments with having good knowledge of data interpretation and data mining. The important part is that there is no significance of instrumental data without interpretation. Therefore, such knowledge of students can be explored by the industry at the cost of living wedges.
Indian academic institutions are full of ideas born from the young, creative brains of students.
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SECURITY
Naxalism In India
Topics Covered Who Are Naxals? Naxal Movement In India Causes Of Naxalism Phases Of Spread Naxalism Steps Taken By Government Ways To End Naxalism In India Other Terms Related To Naxalism
Who are Naxals?
The Naxals are far-left radical communists whose military strategies are loosely based on the ideology of Chinese Revolutionary Mao Tse Tung.
The term Naxalism derives its name from the village Naxalbari of West Bengal.
It originated as rebellion against local landlords who bashed a peasant over a land dispute. The rebellion was initiated in 1967, with an objective of rightful redistribution of the land to working peasants under the leadership of Kanu Sanyal and Jagan Santhal.
Started in West Bengal, the movement has spread across the Eastern India; in less developed areas of states such as Chhattisgarh, Odisha and Andhra Pradesh.
It is considered that Naxals support Maoist political sentiments and ideology.
Maoism is a form of communism developed by Mao Tse Tung. It is a doctrine to capture State power through a combination of armed insurgency, mass mobilization and strategic alliances.
Evolution of Naxalism:
First Phase:
1967- Naxalbari uprising- a class conflict between peasants and landlords
1969- Communist Party of India (Marxist-Leninist) (CPI (ML)). Declared illegal by the government
Naxal violence was mainly concentrated in West Bengal, Bihar
1971-The arrest and subsequent death of Charu Majumdar marked the end of the first phase of the movement.
Second Phase:
In 1980, the formation of the People’s War Group in Andhra Pradesh marked the revival of the movement and the beginning of its second phase.
In 1991, Naxalite extremism reached its peak
However, the movement faced a setback due to security operations taken across different states. Internal conflicts within the group further weakened the movement
Third Phase:
In 2000, the third phase of the movement began with the establishment of the People’s Guerilla Army
In 2004, the People’s War Group merged with Maoist Communist Centre and formed CPI (Maoist). This augmented the strength of the movement
The Naxalite movement spread across 233 districts in 20 states Causes:
Political Factors
Inability of political authority in India to provide avenues for structural uplift to the deprived sections of society in the affected states.
Nature and apathy of the political system towards tribals remained one of the most important factors that led to such uprisings.
Lack of political participation by the tribal community
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Economic Factors
Indigenous tribal population deprived of their lands, uprooted from their traditional source of livelihood.
Poverty and economic inequality and underdevelopment in the naxal affected regions.
Entry of mining companies in Tribal lands and forests, posing threat to the livelihood of the tribals.
The benefits of the resource exploitation are not passed on the tribals. Environmental Degradation
Environmental degradation in the form of destruction of land and water resources due to mining and industrial activates.
Lack of basic facilities
Lack of basic facilities like education, freedom, sanitation and food.
The socially backward tribals form the major support base for Naxalites because of inequality, illiteracy and lack of opportunities.
Phases of spread Naxalism:
Maoists spread their ideology very systematically and in a phased manner as follows:
Preparatory phase: Detailed survey of new areas identifying important people, public issues on which masses can be mobilised.
Perspective phase: Mobilisation through frontal organizations staging demonstration against Government or administration based on local public grievances.
Guerrilla phase: converting the public movement into violent guerrilla warfare.
Base phase: Establishment of their base and change the guerrilla zone into a liberated zone.
Liberated phase: Establishment of people’s Government. Steps taken by the Government
Expert committee headed by D. Bandopadhyay by Planning Commission in 2006 o It underscored the Political, Economic, Social and Cultural discrimination faced by SC/ST across
the country. o Lack of empowerment of local communities is the main reason for spread of Naxalism. o State bureaucracy failed miserably with respect to governance in affected areas. o Recommended tribal friendly land acquisition and rehabilitation policy.
Creation of “Naxal Management division” – a separate division in Home Ministry. o Deal in areas of security, development, administration and public perception in a holistic manner
Public awareness etc.
Special Infrastructure Scheme (SIS) : o Approved in 11th Plan – Rs. 500Cr for special infrastructure in affected areas – mobility, road,
weapons, etc. o To cater to critical infrastructure gaps, which can’t be covered under existing schemes.
Central Scheme for assistance to civilian victims/family of victims of terrorists, communal and Naxal violence, 2009: It earmarked Rs.3 lakh as relief amount.
Security related Expenditure (SRE) Scheme : o Funds for expenditure related to insurance, training, operational needs of security forces,
rehabilitation of surrendered LWE cadres, infra for village defence committee and publicity material.
Integrated Action Plan (IAP) : o By Planning Commission o Accelerated development in 88 selected tribal and backward districts. o Its aim was to provide public infrastructure and services. o 30Cr to each district through District level committee, comprising
District Magistrate – The head SP District Forest Officer
o Construction of schools, Anganwadis, drinking water facilities, minor irrigation projects, health care centres, etc.
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Scheme of Fortified Police Stations o Sanctioned 400 police stations in 9 affected states. o 2 Cr per police station.
Road Requirement Plan for extremist affected areas Phase 1: 2009 o For improvement of road connectivity in 8 extremely affected states = Andhra Pradesh,
Chattisgarh, Uttar Pradesh, Jharkhand, Bihar, Odisha, Madhya Pradesh and Maharashtra. o 7300 Cr project
Roshni Scheme o Under Ministry of Rural Development o It focusses on Skill Development. o It targets nearly 50,000 rural men and women, mostly tribal. o It covers Particularly Vulnerable Tribal Groups (PVTG) on priority basis. o It is operational in 24 worst affected LWE districts.
Civic Action Program (CAP) o Financial grants sanctioned to CAPs o In development affected states o It is a successful scheme – building bridge between local population and security forces o It is a program Ministry of Home Affairs, focussing on “individual-oriented” approach over
“Project-oriented” approach. o Central Reserve Police force and BSF are responsible for development projects costing 20Cr per
annum on welfare schemes. Ways to end Naxalism in India
Dialogue
Dialogues between the Naxal leaders, and the government officials can be a way work out a solution.
The government should initiate sincere dialogue with Naxalites.
Generate more employment and increase wages
Insecure livelihood and unemployment in the areas have left the people with no option but to join the Naxals.
If we are actually thinking of ways to end Naxalism, we’ll first have to provide the people of the area with proper employment opportunities with increased wages
Good governance
The presence of Naxals in the country also reveals the loopholes in the law and order of the country which has failed to curb the menace.
Central government needs to implement a coherent national strategy to end Naxalism. Prevent Environmental Degradation
Environmental degradation in the form of destruction of land and water resources due to mining and industrial activates
The locals are left with disrupted lives and adversely affecting tourism Rehabilitation and resettlement
mining grounds, irrigation areas, industries, etc., in the area without any provision for the resettlement of the displaced people has only added to the woes of the poor
There needs to be more emphasis on rehabilitation of these affected population Take steps for welfare of the tribals
The socially backward tribals form the major support base for Naxalites because of inequality, illiteracy and lack of opportunities.
It’s important to prevent these people from falling in the Naxal trap. Remove disparity
Economic disparity and the growing distance between rich and the poor is one of the main problems that has contributed to the growth of Naxalism
This distance needs to be filled to an extent hastily to stop Naxalism Modernize law enforcement agencies
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the major policing lies in the hands of the state governments
At federal level, many agencies are under the command of Union Ministry of Home Affairs
Central government must inroads into these disturbed states with their agencies well-equipped with modern artillery and assist the usually poorly-equipped agencies of the state.
Stop the political marginalization of weaker sections
Weaker sections of the society, the schedule castes and schedule tribes still face discrimination from the upper class.
These downtrodden sections don’t enjoy equal participation in casting and contesting politically, making them soft targets of Naxals.
Let ordinary citizens have access to basic resources
One of the major reasons for unrest is the exploitation of forest and lands of the tribal people for industrial purposes.
The loss of land and the lack of basic facilities like education, freedom, sanitation and food Definitions of Naxalism and other related terms:
Naxalism: Naxalism signifies a particular kind of militant and violent armed struggle by the peasants and tribal who accept Maoist ideology.
Insurgency: It is a violent struggle of a group of people who refuse to accept their government’s power or it is an occasion when a group of people attempt to take control of their country by force.
Terrorism: Terrorism is, in the broadest sense, the use of intentionally indiscriminate violence as a means to create terror among masses of people; or fear to achieve a religious or political aim. It is used in this regard primarily to refer to violence against peacetime targets or in war against non-combatants.
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INTERNATIONAL AFFAIRS AND GLOBAL ISSUES
Nuclear Supplier Group (NSG) and India’s Membership
Table of Contents About NSG Main Functions Of NSG: Nations in the NSG India is not a member of NSG. Why? NPT and NSG China’s Opposition NSG membership – Is it important for India? Factors in favor of India’s membership Conclusion
Introduction
Nuclear Suppliers Group (NSG) is a group of nuclear supplier countries that seek to prevent nuclear proliferation by controlling the export of materials, equipment, and technology that can be used to manufacture nuclear weapons.
NSG was formed with the objective of averting the proliferation of nuclear weapons and preventing acts of nuclear terrorism.
Main Functions Of NSG
Transfer of nuclear-related dual-use materials, software and related technology.
Controlling the export of nuclear material, equipment and technology.
NPT will not be the only body responsible for governing the export of nuclear products.
Each member country must be informed about the supply, import or export of any nuclear-based product.
It will be divided between NPT and NSG. Members of NSG
NSG consists of 48 members which include the five nuclear weapon states US, UK, France, China, and Russia. It is not a formal organization, and its guidelines are not binding.
Decisions, including on membership, are made by consensus Why India is not a member of NSG?
In answer in short – opposition from come countries like China as India has not signed Nuclear Non-Proliferation Treaty.
NPT(Nonproliferation Treaty) and NSG
NPT (Nonproliferation Treaty) is an international treaty, which came into force in 1970. The main objective was to prevent the spread of nuclear weapons and weapons technology.
Apart from India, Pakistan and Israel have also not signed NPT.
India refused to sign NPT because The NPT defines “nuclear weapons states” as those that tested devices before 1967, which means India cannot ever be one. No fixed timelines have been mentioned for disarmament.
NPT is unfair treaty as nuclear weapon states have no obligation to give them up while non-nuclear states are not allowed to have them.
India conducted its first Nuclear test -Pokhran-I (Smiling Buddha), in 1974.
The nuclear powers were convinced that the Nuclear Non-Proliferation Treaty (NPT) alone would not halt the spread of nuclear weapons. Consequently, NSG was formed in 1974.
The current guidelines of NSG state that a non-NPT state cannot become a member of NSG which keeps India out of the group.
In 1998 India conducted the second nuclear Test (Operation Shakti).
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India is committed to voluntary, unilateral moratorium on nuclear testing. It has taken voluntary measures to ensure strong nuclear export control.
However, new sanctions were imposed on India by Western Countries, especially US.
In the pre-2005 period, the NSG denied fuel for the Tarapur Atomic Power station, while the US used MTCR (Missile Technology Control Regime) provisions to prevent the transfer of cryogenic engine technology from Russia.
India finally managed to have some relief when the US relented and agreed to a civil nuclear deal with India in 2008. This agreement has been done in view of the requirement for the US under Section 123 of its Atomic Energy Act 1954, hence also known as 123 Agreement. Under this, India signed a civil-military separation plan and India-IAEA safeguard agreement. In return, US diplomacy helped us to get NSG waiver.
During a state visit to India in November 2010, U.S. President Barack Obama announced U.S. support for India’s participation in the Nuclear Suppliers Group, the Wassenaar Arrangement, the Australia Group and the Missile Technology Control Regime, “in a phased manner,” and to encourage the evolution of regime participation criteria to that end, “consistent with maintaining the core principles of these regimes”.
India has taken a formal pledge stating that it would not share sensitive nuclear technology or material with others and would uphold its voluntary moratorium on testing nuclear weapons.
Due to which the NSG participating governments agreed to grant India a “clean waiver” from its existing rules, which forbid nuclear trade with a country which has not signed the Nuclear Non-Proliferation Treaty (NPT). This made India eligible to receive advanced nuclear technologies that could be used to enrich uranium and reprocess plutonium. This has helped India a lot.
However, being out of the elite NSG group has kept India still out of latest technologies as it is the NSG members that have the latest and the most efficient technology.
In 2016 India applied for NSG membership. Pakistan and Namibia followed the suite. China’s Opposition
While a majority of the 48-member group backed India’s membership, China along with New Zealand, Ireland, Turkey, South Africa and Austria were opposed to India’s admission.
China insisted that India should sign NPT for NSG membership. It wants a non-discriminatory criterion for the admission of countries who have not signed NPT. It is an open secret that China’s resistance is to facilitate the entry of Pakistan a close ally of China.
But Pakistan’s credentials for NSG membership are highly flawed and inadequate.
On the other hand, over the years India has shown adherence to IAEA safeguards and has taken voluntary measures to abide by NPT and NSG guidelines while Pakistan has not taken any such initiatives.
NSG membership – Is it important for India?
Membership to the NSG will essentially increase India’s access to state-of-the-art technology from the other members of the Group.
As per India’s INDC under the Paris Climate agreement, we have committed to reducing dependence on fossil fuels and ensuring that 40% of its energy is sourced from renewable and clean sources.
In order to achieve this target, we need to scale up nuclear power production. This can only happen if India gains access to the NSG.
Access to technology and being allowed to produce nuclear equipment will give a boost to the Make in India program. That will, in turn, boost the economic growth of our country.
Namibia is the fourth-largest producer of uranium and it agreed to sell the nuclear fuel to India in 2009. However, that hasn’t happened, as Namibia has signed Pelindaba Treaty, which essentially controls the supply of uranium from Africa to the rest of the world. If India joins the NSG, such reservations from Namibia are expected to melt away.
Benefit For India In Joining NSG
The Make In India programme will also see a boost if India becomes a member of NSG because nuclear power production would increase.
Increasing business of these nuclear materials will enable India to make better versions of nuclear breeders and export them to smaller countries, thereby increasing the economic growth of the country.
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It will provide the country with access to foreign-sourced nuclear material and equipment, reducing the risk faced by foreign nuclear industries in doing business with India.
India aims to minimize the use of fossil fuels by 40 per cent and use more natural and renewable resources of energy. This is only possible if India gets access to nuclear power supply.
It will also gain India an opportunity to initiate talks about the plutonium trade for its thorium program and gain massive domestic profits.
Factors In Favor Of India’s Membership
France got membership in the elite group without signing the NPT.
Commitment to nonproliferation: India’s commitment to bifurcate its civilian and military nuclear programs along with its nonproliferation record ensured indigenously developed technology is not shared with other countries.
Transparency: India has also ratified an Additional Protocol with the International Atomic Energy Agency (IAEA) which means that its civilian reactors are under IAEA safeguards and open for inspections.
Conclusion
The recently framed draft proposal for accepting new members into the Nuclear Suppliers Group increases India’s chances of entry into NSG.
It’s a welcome development for India as NSG membership would definitely boost the economic and strategic development in the future.
Therefore, India should take up this opportunity to aggressively pursue the development of nuclear energy while providing the essential emphasis on safety and addressing concerns of the public.
It will also pave the way for clean energy initiatives and continued focus to achieve our commitments to reduce the carbon footprint pledged during the climate summit.
COVID-19 And Diplomatic Relations
Topics covered COVID-19 and the World Economy Global Economic Crisis: Problem faced by Emerging and Developing Economies: Disruption of Global Value Chain: Effect Of COVID-19 On Diplomatic Relations Worldwide India’s Indian Ocean Diplomacy In The COVID-19 Crisis
COVID-19 and the World Economy
According to a report published by United Nations Conference on Trade and Development (UNCTAD), has observed that the economic uncertainty sparked by the Covid-19 will likely cost the global economy $1 trillion in 2020.
Global financial market is fluctuating due to the supply-chain interruptions from China and oil price uncertainty among major producers.
European economies had already been performing extremely badly towards the end of 2019. o Europe is almost certain to go into recession over the coming months. o German economy is in a fragile state. o Italian economy and other parts of the European periphery are also facing very serious
stresses right now. o Many parts of the Latin American region are also vulnerable. o Argentina in particular will be struggling as a consequence of the knock-on effects of this
pandemic. o The least developed countries whose economies are driven by the sale of raw materials will also
face hard consequences.
Heavily-indebted developing countries, particularly commodity exporters, face a particular threat due to the weaker export returns linked to a stronger US dollar.
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The likelihood of a stronger dollar as investors seek safe-havens for their money and the almost certain rise in commodity prices as the global economy slows down, means that commodity exporters are particularly vulnerable.
Global Economic Crisis
United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) in its annual Economic and Social Survey, held that the Covid-19 crisis is a challenge never seen before and it is going to be a bigger shock for the world economy than the GFC.
This may act as severe blow tp liberal world order dominated by globalisation. Problem faced by Emerging and Developing Economies
The United Nations Conference on Trade and Development held that emerging and developing economies which rely on export-led growth, will now be severely impacted as the global economy contracts and the world opts protectionism policies.
Disruption of Global Value Chain
Covid-19 crisis is having devastating repercussions for corporations and businesses that have benefited from economic interdependence supported by cross-border supply chains.
China is the world’s largest production base, and lies at the heart of many supply chains. Since the outbreak of this coronavirus, many companies that had come to depend on China were hard hit.
Effect Of COVID-19 On Diplomatic Relations Worldwide
Due to this outbreak, countries all over the world are blaming china for not taking precautionary measumers to contain it before it crossed its border
US President Donald Trump, who as expressed his disappointment over handling of the coronavirus disease (COVID-19) by China, alleged non-transparency and initial non-cooperation with the US on this issue.
China’s role in the pandemic is likely to have a negative impact on Sino-Indian relationship. If China had been transparent, the pandemic could have been tackled much more efficiently, and this is clear for all to see including India.
The COVID-19 episode has resulted in public outrage against the initial cover-up attempts of the Chinese authorities.
After the initial phase, authoritarian attempts to halt the disease, use of high-tech surveillance, mass quarantine camps and state of lockdown has once again brought forth questions regarding the balance between freedom of citizens and dealing with a serious national problem.
The impact on the legitimacy of Chinese President Xi Jinping and the reputation of the Communist Party of China will be judged on how well the crisis will be handled. However, this episode has exposed a systemic weakness in the Chinese top-down model.
India’s Indian Ocean Diplomacy In The COVID-19 Crisis
India’s role could be considered at both the domestic level – the steps taken to tackle the crisis at home — and the diplomatic level — India’s assistance to other countries, especially in the Indian Ocean Region (IOR), amid the pandemic.
One of the first steps taken by India was to evacuate citizens of different countries along with its own citizens from Wuhan, China, the epicenter of the first COVID-19 outbreak. Those evacuated as compassionate cases included citizens from IOR countries such as Bangladesh, Myanmar, the Maldives, South Africa, and Madagascar. India not only evacuated these people, but also quarantined them in India as a precautionary measure before sending them to their respective countries.
India has emerged as a major supplier of medicines to different countries worldwide in the fight against COVID-19. As part of that effort, India was the first responder to Mauritius and the Seychelles. Prime Minister Narendra Modi had assured all possible help to both these countries to face the challenge of COVID-19. Accordingly India sent a consignment of life-saving drugs, including hydroxychloroquine, to Mauritius and the Seychelles.
India and Iran cooperated with each other in order to evacuate the Indians stranded in Iran. Later Iran’s President Hassan Rouhani wrote to Modi seeking India’s assistance to deal with COVID-19. Rouhani also reached out to Modi with the expectation that India would stand with Iran against the United States’
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sanctions. Apart from this, India has sent a wheat consignment to Afghanistan through Iran’s Chabahar port. With respect to Malaysia, India has agreed to supply anti-malarial drugs, indicating improvement in the bilateral relations.
India’s recent actions, which could be termed as humanitarian assistance and disaster relief (HA/DR) operations, build upon its outreach to the IOR, in particular the western Indian Ocean
India has also concentrated most of its efforts in the strategically important Indian Ocean Region, which has given it leverage. India’s diplomacy in the IOR could define its position in the changed world order.
WHO funding and USA
Relevancy G.S. Paper 2 and 3 Objective questions: WHO, its functions and funding, largest contributor Subjective questions: WHO and USA issue, India and WHO relations
Why in news?
US President Donald Trump threatened to freeze US funding to the World Health Organization (WHO), then backtracked and said he would strongly consider such a move, saying the international group had “missed the call” on the coronavirus pandemic.
Trump said the body had “called it wrong” on COVID-19 and that it was very “China centric” in its approach, suggesting that the WHO had gone along with Beijing’s efforts months ago to under-represent the severity of the outbreak.
About WHO:
WHO came into existence on 7 April, 1948 – a date which is now celebrated every year as World Health Day.
The organisation has more than 7,000 people working in 150 country offices and 6 regional offices.
Its headquarters in Geneva, Switzerland. How WHO is governed?
The World Health Assembly (delegations from all members countries) determines the policies of the organisation.
Each Member is represented by not more than three delegates, one of whom is designated by the Member as chief delegate.
These delegates are chosen from among persons most qualified by their technical competence in the field of health, preferably representing the national health administration of the Member.
The executive board is composed of members technically qualified in health, and gives effect to the decisions and policies of the health assembly.
Its core function is to direct and coordinate international health work through collaboration. How is the WHO funded?
There are four kinds of contributions that make up funding for the WHO.These are:
Voluntary contributions come from Member States (in addition to their assessed contribution) or from other partners. They can range from flexible to highly earmarked.
Core voluntary contributions allow less well-funded activities to benefit from a better flow of resources and ease implementation bottlenecks that arise when immediate financing is lacking.
Assessed contributions are the dues countries pay in order to be a member of the Organization. The amount each Member State must pay is calculated relative to the country’s wealth and population.
Pandemic Influenza Preparedness (PIP) Contributions were started in 2011 to improve and strengthen the sharing of influenza viruses with human pandemic potential, and to increase the access of developing countries to vaccines and other pandemic related supplies.
Largest Contributors:
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The United States (14.67 per cent of total funding by providing $553.1 million)
The Bill & Melinda Gates Foundation (9.76 %)
GAVI Vaccine Alliance (8.39%)
UK (7.79 per cent)
Germany (5.68 per cent)
United Nations Office for the Coordination of Humanitarian Affairs (5.09 per cent)
World Bank (3.42 per cent)
Rotary International (3.3 per cent)
The European Commission (3.3 per cent) Key Issues for the U.S. with WHO:
The U.S. government has long supported WHO and continues to be its largest donor at a moment when WHO is undergoing major reforms.
Going forward, there are several key questions regarding U.S. engagement with the WHO, including: o The quality of technical and governance partnerships between the U.S. and WHO, especially in
the event of a new public health emergency or outbreak in the future. o The progress made by WHO under the leadership of its new Director-General in improving the
effectiveness of the organization and addressing its challenges; and o The extent to which the U.S. will continue its financial and other support of WHO and what role it
will play in WHO’s governance and helping it enact needed reforms; India and the WHO
WHO has been working closely with the Ministry of Health and Family Welfare and various state governments on preparedness and response measures for Covid-19, including
o Surveillance and contact tracing. o Laboratory and research protocols. o Risk communications. o Hospital preparedness. o Training on infection prevention o Control and cluster containment plan.
However, on March 26,2020 addressing the virtual G-20 summit to deal with Covid-19, the Prime Minister of India underscored the need to strengthen and reform intergovernmental organisations like WHO.
The government of India has also been seen sidestepping the periodic advisories from the WHO in key aspects of COVID-19 management.
It has leaned on the Indian Council of Medical Research (ICMR) and the experience of several state governments — from Kerala and Uttar Pradesh to Rajasthan and Maharashtra.
Challenges faced by WHO
A budget that has become less flexible with greater reliance on voluntary contributions often earmarked for specific activities
A scope of responsibility that has grown over time while its budget has remained flat or been reduced
A cumbersome, decentralized, and bureaucratic governance structure
A dual mandate of being both a technical agency with health expertise and a political body where states debate and negotiate on sometimes divisive health issues.
Conclusion
As an intergovernmental body, WHO is not immune to global power-play as is being witnessed by reports of the director-general having shied away from naming the virus after the country where it originated China and delaying the declaration of a pandemic.
Only a quarter of its budget comes from contributions from UN member-states
The real money to power its work is from voluntary funding by countries and organisations.
WHO, as a global convener, plays a key role in standard-setting in public health. This is a matter of much importance to the “haves” of the global economy, especially those with a vibrant pharmaceutical industry.
The United States is the largest contributor, but the Chinese have also recognised WHO’s importance.
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The main decision-making body at WHO is the annual World Health Assembly (WHA), attended by all member-states.
With demands for a better, real-time response from WHO, the Executive Board (EB) should be made a standing body with the elected countries having Geneva-based permanent representatives on it.
The EB should meet when required and direct action by WHO.
Reports Published By Different Organisations
Relevancy G.S. Paper 2 and 3 Reports published by different international and National organisations
Names of Reports published by Organisations
Sl.No Report title Organisation
1. Asian Development Outlook ADB (Asian Development bank)
2. Global Financial System Report BIS (Bank for International Settlements)
3. Global Money Laundering Report FATF (Financial Action Task Force)
4. India State of Forest Report Forest Survey of India
5. Change the World List Data Fortune
6. Technical Cooperation Report IAEA (International Atomic Energy Agency)
7. Nuclear Technology Review
8. Ease of Doing Business IBRD (World Bank)
9. World Development Report
10. Safety Reports ICAO (International Civil Aviation Organization)
11. Global Hunger Index report IFPRI (International Food Policy Research Institute)
12. World Social Protection Report ILO (International Labour Organization)
13. World Employment and Social Outlook
14. World of Work Report
15. Global Wage Report
16. Global Financial Stability Report IMF (International Monetary Fund)
17. World Economic Outlook
18. Global Innovation Index Cornell University INSEAD and the World Intellectual Property Organization (WIPO)
19. World Energy Outlook (WEO) International Energy Agency
20. Southeast Asia Energy Outlook
21. OPEC Monthly Oil Market Report OPEC (Organization of the Petroleum Exporting Countries ) 22. World Oil Outlook
23. World Happiness Report Sustainable Development Solutions Network (SDSN)
24. Global Corruption Report (GCR) Transparency International
25. Levels and Trends in Child Mortality Report UN Inter-agency Group
26. World Investment Report UNCTAD (United Nations Conference on Trade and Development)
27. Actions on Air Quality UNEP (United Nations Environment Programme )
28. Global Environment Outlook
29. The Rise of Environmental Crime UNEP & INTERPOL
30. Global education monitoring Report UNESCO (United Nations Educational, Scientific and Cultural Organization)
31. State of world population UNFPA (United Nations Population Fund)
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32. World Cities Report UN-Habitat
33. The Global Report UNHCR (United Nations High Commissioner for Refugees )
34. Report on Regular Resources UNICEF (United Nations Children’s Emergency Fund )
35. The State of the World’s Children reports
36. Reports on Counterfeiting and Organized Crime UNICRI (United Nations Interregional Crime and Justice Research Institute)
37. Industrial Development Report UNIDO(United Nations Industrial Development Organization)
38. Global Assessment Report UNISDR (United Nations Office for Disaster Risk Reduction)
39. Global Report on Trafficking in Persons UNODC (United Nations Office on Drugs and Crime)
40. World Drug Report
41. World Wildlife Crime Report
42. Global Information Technology Report WEF (World Economic Forum)
43. Travel and Tourism Competitiveness Report
44. Global Competitiveness Report (GCR)
45. World Intellectual Property Report (WIPR) WIPO (World Intellectual Property Organization)
46. The Energy Report & Living Planet Report WWF (World Wildlife Fund)
World Trade Organization (WTO)-Part 1
Topics covered About WTO- Objectives and aims General Agreement on Trade and Tariffs (GATT) Why WHO replaced GATT? Uruguay round- outcomes GATT and WTO
About WTO
The World Trade Organisation (WTO) is an international organisation which sets the rules for global trade.
This organisation was set up in 1995 as the successor of the General Agreement on Trade and Tariffs (GATT).
The WTO has 164 members (including European Union) and 23 observer governments (like Iran, Iraq, Bhutan, Libya etc).
All decisions are taken unanimously but the major economic powers such as the US, EU and Japan has managed to use the WTO to frame rules of trade to advance their own interests.
Objectives of WTO
The WTO ensures that individuals, companies, and governments know the trade rules and there are no sudden changes in the rules. In other words, the rules are "transparent" and predictable.
The purpose of WTO is to help trade flow as freely as possible—so long as there are no undesirable effects of free trade—because free trade is important for economic development and well-being.
Background
From the early days of the Silk Road to the creation of the General Agreement on Tariffs and Trade (GATT) and the birth of the WTO, trade has played an important role in supporting economic development and promoting peaceful relations among nations.
The General Agreement on Tariffs and Trade (GATT) traces its origins to the 1944 Bretton Woods Conference, which laid the foundations for the post-World War II financial system and established two key institutions, the International Monetary Fund (IMF) and the World Bank.
The conference delegates also recommended the establishment of a complementary institution to be known as the International Trade Organization (ITO), which they envisioned as the third leg of the system.
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In Havana in 1948, the UN Conference on Trade and Employment concluded a draft charter for the ITO, known as the Havana Charter, which would have created extensive rules governing trade, investment, services, and business and employment practices.
The Havana Charter never entered into force, primarily because the U.S. Senate failed to ratify it. As a result, the ITO was stillborn.
Meanwhile, an agreement as the GATT signed by 23 countries in Geneva in 1947 came into force on Jan 1, 1948.
The GATT became the only multilateral instrument (not an institution) governing international trade from 1948 until the WTO was established in 1995.
What is GATT and its purpose?
General Agreement on Tariffs and Trade (GATT) was an international trade agreement signed in 1947.
23 nations were signatories of this trade agreement. GATT came into effect on January 1, 1948.
The purpose of GATT was to liberalise trade by reducing tariffs and reducing quotas among member countries.
The member nations had to remove all the trade discriminations.
The 7 rounds of negotiations from 1947 to 1993 reduced average tariffs on industrial goods from 40% to 5%.
The steps taken at GATT led to economic globalization.
GATT was replaced by WTO in 1995 and currently act as umbrella treaty for trade in goods.
Uruguay round of GATT negotiations started in September 1986, and it concluded on 15 April 1994 after nearly 8 years of negotiations. This culminated in the formation of the World Trade Organisation (WTO).
Why WTO replaced the GATT?
The GATT was only a set of rules and multilateral agreements and lacked institutional structure.
The trade in services and intellectual property rights were not covered by regular GATT rules.
The GATT 1947 was terminated and WTO preserved its provisions in form of GATT 1994 and continues to govern trade in goods.
The GATT did not set out a dispute procedure with great specificity resulting in lack of deadlines, laxity in the establishment of a dispute panel and the adoption of a panel report by the GATT Parties.
The GATT provided for consultations and dispute resolution, allowing a GATT Party to invoke GATT dispute settlement articles if it believes that another Party’s measure caused it trade injury.
It made the GATT as a weak Dispute Settlement mechanism. Uruguay Round and its Outcomes (1986-1994)
Uruguay Round of negotiations covered more issues and involved more countries than any previous round.
It prescribes, among other things, that tariffs on industrial products be reduced by an average of more than one-third, that trade in agricultural goods be progressively liberalized, and that a new body, the World Trade Organization, be established both to facilitate the implementation of multilateral trade agreements and to serve as a forum for future negotiations.
Agreements to liberalize trade in industrial products include reductions in tariffs and removal of quantitative restrictions.
Outcomes of the round were: o Libralisation of trade o Tariffs on industrial products be reduced by an average of more than one-third o A new body, World Trade Oraganization, be established both to facilitate and the
implementation of multilateral trade agreements and to serve as a forum for future negotiations o Trade in agriculture good be progressively liberalized o The advanced countries agreed to reduce tariffs on industrial product o Dismantling of multi fiber agreement (MFA) o The developing countries also committed to reduce triffs on 1/3
rd of their imports
o Tariff reductions are to be completed by the year 2000 except for certain sensitive sectors such as textiles, for which the reductions must be completed by 2005.
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o Mandatory reduction of import duty on Tropical Products, which are mainly exported by developing and least developed countries.
GATT and WTO:
GATT is different from WTO in two essential respects- GATT is a treaty while WTO is an organization.
GAIT had no dispute settlement process while WTO has.
The GATT was essentially concerned with traditional trade issues such as tariffs and quotas in international trade. It had only a relatively small secretariat with no institutional foundation to implement these rules.
Like WTO, it is headquarter in Geneva, Switzerland. It has 157 members.
Russia, montenegroo & Samoa has given membership status in 8th ministerial centre in 2011.
The current Director-General is Roberto Azevêdo of Brazil, since 1 September 2013.
The WTO states that its aims are to increase international trade by slashing trade barriers and providing a platform for the negotiation of trade and related issues. Basically, it sets up a rule based multilateral trading System to liberalise the regime and boost world trade.
World Trade Organisation (WTO) Part-2
Topics covered Goals of WTO Dispute settlement at WTO Trade related intellectual property rights (TRIPS) Patents- TPRB, DSB Good council and services council GATS, TRIMS, AOA
Goals of WTO
The WTO’s global system lowers trade barriers through negotiation and operates under the principle of non-discrimination.
The result is reduced costs of production (because imports used in production are cheaper), reduced prices of finished goods and services, more choice and ultimately a lower cost of living.
The WTO’s system deals with these in two ways. o One is by talking: countries negotiate rules that are acceptable to all. o The other is by settling disputes about whether countries are playing by those agreed rules.
The WTO can cut the cost of doing business internationally.
The WTO can stimulate economic growth and employment.
Rules reduce arbitrariness and opportunities for corruption.
The WTO can encourage good governance. Transparency — shared information and knowledge — levels the playing field.
Dispute Settlement:
World Trade Organization (WTO) has a dispute settlement body (DSB) that settles trade disputes among members. Disputes can arise from trade policies of members that are violative of the WTO rules.
There is no separate DSB but the General Council which is the second highest body in the organization works as the DSB while giving verdict on the trade dispute. DSB conclusion can be challenged in an appellate body.
WTO procedures require sixty days of ‘consultations’ among the disputants to resolve the dispute falling which a disputes panel is set up.
The process of taking the decision by the DSB requires that the ruling of the Panel should be adopted “unless” there is a consensus of the members against adoption.
Over the last couple of years, the membership of the body has declined to three persons instead of the required seven.
US has blocked the appointments of new members, and the reappointments of members who had completed their four-year tenures.
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It believes the WTO is biased against it, and has criticised it for being “unfair”.
Over 20 developing countries met in New Delhi in the summer to discuss ways to prevent the WTO’s dispute resolution system from collapsing all together. Their efforts have not produced the desired results.
TRIPS:
Intellectual property (IP) is the work of intellect or mind to create products that have commercial uses- products like drugs, literature, paintings etc.
It is protected like the physical property with trade marks, patents etc.
Holders’ of the patents etc are entitled to the commercial proceeds for a specified time period, exclusively.
Types of intellectual property rights:
A patent may be granted for a new, useful, and non-obvious invention, and gives the patent holder an exclusive right to commercially exploit the invention for a certain period of time (typically 20 years from the filing date of a patent application)
A trademark is a distinctive sign which is used to distinguish the products or services of different businesses.
Copyright is given for creative and artistic works (e.g. books, movies, music, paintings, photographs, and software) and give a copyright holder the exclusive right to control reproduction or adaptation of such works for a certain period of time.
An industrial design right protects the form of appearance, style or design of an industrial object (e.g. spare parts, furniture, or textiles).
Agreement on TRIPS lays down legal standards for the member Countries to protect intellectual property by way of copyright rights; geographical indications industrial designs; integrated circuit layout design patents; monopolies for the developers of new plant varieties; trademarks TRIPS regulates dispute resolution procedures and enforcement procedures.
The need for agreement on TRIPS arises from the fact that the commercial proceeds from international trade in intellectual property are growing in worth.
Geographical Indication
A geographical indication is a recognition issued by the government in the name of the whole community.
It is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
In order to function as a geographical indication, a sign must identify a product originating in a given place.
A geographical indication conveys that a particular product or design exists on account of traditional knowledge of the community and/or the geographical conditions of the region.
Patents:
A patent is an exclusionary right. It grants the right to exclude others from making use of the patented invention for the given period of 20 years from the filing date.
In return for the patent, the inventor offers the knowledge with commercial use to be put in public domain after the expiry of the patent.
Patent is an incentive to innovate and invent. It sustains research and development (R and D). Copyright
Copyright (or author's right) is a legal term used to describe the rights that creators have over their literary and artistic works.
Works covered by copyright include books, music, paintings, sculpture, films, computer programs, databases, advertisements, maps, and technical drawings.
Copyright protection extends only to expressions and not to ideas, procedures, methods of operation, or mathematical concepts as such.
Copyright may or may not be available for a number of objects such as titles, slogans, or logos, depending on whether they contain sufficient authorship.
Trademarks
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A trademark is a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises.
Trademarks are protected by intellectual property rights.
At the national/regional level, trademark protection can be obtained through registration, by filing an application for registration with the national/regional trademark office, and paying the required fees.
Negative implications of TRIPS on India
As most of the intellectual property is held by organizations of developed nations, TRIPS facilitate transfer of funds from developing to developed nations.
Recognition of patents sometimes leads to rise in the prices of essential items, including medicines.
Strong intellectual property protection regime requires investment in the administration dealing with intellectual property. At present, India cannot afford heavy investment in intellectual property protection.
As intellectual property is costlier, people from developing countries find it difficult to afford. Thus, either they do not consume intellectual property or use pirated versions of intellectual property. Widespread use of pirated versions in developing nations hampers the trade relations between India and developed nations.
Positive implications of TRIPS on India
A strong intellectual property regime would facilitate protection of indigenous intellectual property. A strong intellectual property regime would generate awareness among people about the intellectual property. Much of intellectual property in India is not recognized due to the lack of awareness among people.
India possesses large number of high skill and low cost workforce. Stronger intellectual property protection regime will encourage foreign firms to establish research and development centres in India.
The Agreement on Trade-Related Investment Measures (TRIMS)
TRIMS recognizes that certain investment measures can restrict and distort trade.
The agreement, concluded in 1994, was negotiated under the WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), and came into force in 1995. The agreement was agreed upon by all members of the World Trade Organization.
It states that WTO members may not apply any measure that discriminates against foreign products or that leads to quantitative restrictions, both of which violate basic WTO principles.
Trade-Related Investment Measures is one of the four principal legal agreements of the WTO trade treaty.
Policies such as local content requirements and trade balancing rules that have traditionally been used to both promote the interests of domestic industries and combat restrictive business practices are now banned.
The following is an illustrative list of restrictions considered inconsistent to TRIMS: o Local content requirement: Foreign investors are required to procure a certain proportion of raw
materials or supplies from domestic producers. o Foreign exchange requirements: Foreign investors are compulsorily required to invest or earn a
mandatory amount of foreign exchange. o Employment generation requirement: Foreign investors are compulsorily required to provide
employment to a certain number of people The Trade Policy Review Body (TPRB)
The WTO General Council meets as the TPRB to undertake trade policy reviews of Members under the TPRM and to consider the Director-General's regular reports on trade policy development.
The TPRB is thus open to all WTO Members. Dispute Settlement Body (DSB)
The General Council convenes as the Dispute Settlement Body (DSB) to deal with disputes between WTO members.
Such disputes may arise with respect to any agreement contained in the Final Act of the Uruguay Round that is subject to the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU).
The DSB has authority to:
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o Establish dispute settlement panels, o Adopt panel, appellate body and arbitration reports, o Refer matters to arbitration, o Authorize suspension of concessions in the event of non-compliance with those
recommendations and rulings. o Maintain surveillance over the implementation of recommendations and rulings contained in
such reports, The Council for Trade in Goods (Goods Council)
The General Agreement on Tariffs and Trade (GATT) covers international trade in goods.
The workings of the GATT agreement are the responsibility of the Council for Trade in Goods (Goods Council) which is made up of representatives from all WTO member countries.
The Goods Council has following committees dealing with specific subjects. These committees consist of all member countries-
o Market access o Agriculture o Technical barriers to trade o Sanitary and Phytosanitary (measures for the control of plant diseases especially in agricultural
crops) Measures o Subsidies and countervailing measures o Anti-dumping measures o Rule of origin o Importing licensing o Safeguards o Trade related Investment Measures o Customs valuation. o Trade facilitation
The Council for Trade in Services (Services Council)
It operates under the guidance of the General Council and is responsible for facilitating the operation of the General Agreement on Trade in Services (GATS) and for furthering its objectives.
It is open to all WTO members, and can create subsidiary bodies as required.
Presently, the Council oversees the work of four such subsidiary bodies: o The Committee on Specific Commitments, o The Committee on Trade in Financial Services: It carries out discussions on matters relating to
trade in financial services and formulate proposals or recommendations for consideration by the Council.
o The Working Party on GATS Rules o The Working Party on Domestic Regulation,
General Agreement on Trade in Services – GATS
The General Agreement on Trade in Services (GATS) is a treaty of the World Trade Organization (WTO) that entered into force in January 1995 as a result of the Uruguay Round negotiations.
The treaty was created to extend the multilateral trading system to service sector, in the same way the General Agreement on Tariffs and Trade (GATT) provides such a system for merchandise trade.
All members of the WTO are parties to the GATS.
The basic WTO principle of most favoured nation (MFN) applies to GATS as well.
Many countries directly have laws, which restrict entry of foreign services enterprises in areas like finance, media, communications, transport etc.
The GATT looks upon these regulations relating to investment in the service sector as distorting factors affecting free trade. Hence these distortions have to be eliminated or minimized.
The GATS Agreement covers all services (there are 161 tradable services under GATS) – financial services (banking insurance etc), education, telecommunications, maritime transport etc.
The Four Modes of Services Supply
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The GATS define services in four ‘modes’ of supply: cross-border trade, consumption abroad, commercial
presence, and presence of natural persons.
Mode 1: Cross Border o Services which themselves cross-frontiers from one country to another e.g. Distance learning,
consultancy, BPO services.
Mode 2: Consumption abroad o Services, which are made available within a country for foreign consumers’, e.g.: tourism,
educational students for students, medical treatment etc.
Mode 3: Commercial Presence o Services supplied by an entity of one country, which is commercially pressed in another e.g.:
banking, hotel etc.
Mode 4: Movements of natural persons o This is a foreign national providing services like that of doctor, nurse, IT engineer etc. functioning
as a consultant, employee, from one country to another. Agreement on Agriculture (AOA)
WTO’s agreement on agriculture was concluded in 1994, and was aimed to remove trade barriers and to promote transparent market access and integration of global markets.
Agreement is highly complicated and controversial; it is often criticized as a tool in hands of developed countries to exploit weak countries.
The WTO Agreement on Agriculture negotiated in the Uruguay Round (1986–1994) includes the classification of subsidies by "boxes" depending on consequences of production and trade:
o Amber Box: It contains all domestic support measures that are mean to distort trade practices in agriculture. All these types of supports are subject to limits which are termed as ‘de minimis’ levels.
o Blue Box: It includes subsidies that are linked to one product, but that do not increase according to production levels. At present there are no limits on spending on blue box subsidies.
o Green Box: These are subsidies which causes no or little trade distortion in agriculture sector. They tend to be programs that are not targeted at particular products and not include direct income supports for farmers. They may include environmental protection, regional development, R&D or farmer training programs etc. “Green box” subsidies are therefore allowed without limits.
o Special And Differential Box Subsidies: The reduction commitments from developed nations are larger than the commitments from developing nations. Thus, developing nations can provide more subsidies. These subsidies are called special and differential box subsidies.
De-Minimis provision
Under this provision developed countries are allowed to maintain trade distorting subsidies or ‘Amber box’ subsidies to level of 5% of total value of agricultural output. For developing countries this figure was 10%.
So far India’s subsidies are below this limit, but it is growing consistently.
This is because MSP are always revised upward whereas Market Prices have fluctuating trends.
In recent times when crash in international market prices of many crops is seen, government doesn’t have much option to reduce MSP drastically.
By this analogy India’s amber box subsidies are likely to cross 10% level allowed by de Minimis provision. WTO and India
India is a founder member of the General Agreement on Tariffs and Trade (GATT) 1947 and its successor, the WTO.
India's participation in an increasingly rule based system in the governance of international trade is to ensure more stability and predictability, which ultimately would lead to more trade and prosperity.
Services exports account for 40% of India's total exports of goods and services. The contribution of Services to India's GDP is more than 55%.
India's exports are mainly in the IT and IT enabled sectors, Travel and Transport, and Financial sectors.
The main destinations are the US (33%), the EU (15%) and other developed countries.
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The sector (domestic and exports) provides employment to around 142 million people, comprising 28% of the work-force of the country.
India has an obvious interest in the liberalisation of services trade and wants commercially meaningful access to be provided by the developed countries.
Since the Uruguay Round, India has autonomously liberalised its Services trade regime across the board.
India is persistently demanding for a permanent solution on public stockholding subsidies at WTO.
At 2013 Ministerial Conference (MC9) in Bali, an interim agreement (a peace clause) was made on “public stockholding” continuing exceptions that allow developing countries to stockpile agricultural products to protect against food shortages.
India strongly favours extension of higher levels of protection to geographical indications for products like Basmati rice, Darjeeling tea, and Alphonso mangoes at par with that provided to wines and spirits under the Trade-related Aspects of Intellectual Property Rights (TRIPS) agreement.
Developed countries have been putting pressure on inclusion of non-trade issues such as labour standards, environmental protection, human rights, rules on investment, competition policy in the WTO agreements.
India is against any inclusion of non-trade issues that are directed in the long run at enforcing protectionist measures (based on non-trade issues, the developed countries like USA and European Union are trying to ban the imports of some goods like textile, processed food etc.), particularly against developing countries.
World Trade Organization (WTO) Part-3
Topics covered About WTO Ministerial Conferences (MC) Singapore 9-13 December 1996 (MC1) Geneva, Switzerland 18-20 May 1998 (MC2) Seattle, USA November 30 – December 3, 1999 (MC3) Doha, Qatar 9-13 November 2001 (MC4) Cancún, Mexico 10-14 September 2003 (MC5) Hong Kong, 13-18 December 2005 (MC6) Geneva, Switzerland 30 November - 2 December 2009 (MC7) Geneva, Switzerland 15-17 December 2011 (MC8) Bali, Indonesia 3-6 December 2013 (MC9) Nairobi, Kenya 15-19 December 2015 (MC10) Buenos Aires, Argentina 10-13 December 2017 (MC11) The Doha Conference Important developments during MC Nur-Sultan, Kazakhstan, 8-11 June 2020 (MC12)
WTO Ministerial Conferences (MC)
The WTO is run by its member governments.
All major decisions are made by the membership as a whole, either by ministers (who meet at least once every two years) or by their ambassadors or delegates (who meet regularly in Geneva).
Decisions are normally taken by consensus.
In the WTO, power is not delegated to a board of directors or the organization’s head.
The first Ministerial Conference (i.e. MC1) was held in Singapore in 1996 and the last one (MC11) was organised in Buenos Aires in 2017. All these MCs have evolved prevailing current global trading system.
Singapore, 9-13 December 1996 (MC1)
Trade, foreign, finance and agriculture Ministers from more than 120 World Trade Organization Member governments and from those in the process of acceding to the WTO participated.
The following four issues termed as the Singapore issues were first brought up on which the multilateral body could initiate negotiations:
o Trade facilitation
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o Trade and investment o Trade and competition o Transparency in government procurement
Geneva, Switzerland 18-20 May 1998 (MC2)
The Ministerial Declaration included following work programmes: o The future work already provided for under other existing agreements and decisions taken at
Marrakesh; o The issues, including those brought forward by Members, relating to implementation of existing
agreements and decisions; o Priority areas for the next round of comprehensive negotiations on agriculture include Market
access, Export subsidies etc. o Possible future work on the basis of the work programme initiated at Singapore;
Seattle, USA November 30 – December 3, 1999 (MC3)
There were two major issues, o First, whether to start a new comprehensive round of negotiations such as the Uruguay Round or
confine negotiations to the so-called "built in agenda" of agriculture and services mandated at the last Ministerial.
o Secondly, what should the negotiations encompass, more specifically what should be included in the agenda of the meeting.
The deliberations were suspended without agreement on a new round of negotiations and without agreement on a ministerial declaration.
The meeting was unable to resolve both issues, and ended in stalemate. Doha, Qatar 9-13 November 2001 (MC4)
Services: The negotiations on trade in services shall be conducted with a view to promoting the economic growth of all trading partners and the development of developing and least-developed countries.
Agriculture: The special and differential treatment for developing countries shall be an integral part of all elements of the negotiations to enable developing countries to effectively take account of their development needs, including food security and rural development.
It recognizes the work already undertaken in the negotiations, initiated in January 2000 under Article XIX of the General Agreement on Trade in Services (GATS), and the large number of proposals submitted by members on a wide range of sectors and several horizontal issues, as well as on movement of natural persons.
Market access for non-agricultural products: The negotiations shall take fully into account the special needs and interests of developing and least-developed country participants, including through less than full reciprocity in reduction commitments, in accordance with the relevant provisions of Article XXVIII bis of GATT 1994.
Transparency in government procurement: Recognizing the case for a multilateral agreement on transparency in government procurement and the need for enhanced technical assistance and capacity building in this area, it agreed that negotiations would take place on the basis of a decision to be taken, by explicit consensus.
Cancún, Mexico 10-14 September 2003 (MC5)
The main task was to take stock of progress in negotiations and other work under the Doha Development Agenda.
Hong Kong, 13-18 December 2005 (MC6)
The WTO member economies aimed to reach a preliminary agreement on liberalization of farm trade by reducing subsidies, and address other issues at meeting, aiming for a successful conclusion of the Doha Round in 2006.
After an intense talk, WTO Members have produced an interim package for the Doha Round negotiation: o The deadlines for the elimination of agricultural export subsidies (2013) and cotton export
subsidies (2006), o Mandates that duty and quota-free access for at least 97% of products originating from the least
developed countries (LDCS) be provided by 2008.
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o Regarding non-agricultural market access (NAMA), members adopted the "swiss formula" mandating greater cuts in higher tariffs, and decided that modalities for tariff reduction be established by april 30, 2006.
o The swiss formula (by the swiss delegation to the WTO) is a suggested method for reducing tariff on non-agricultural goods (NAMA) by both developed and developing countries.
o It makes different coefficients for developed and developing countries. o Here, tariff-cuts are supposed to be undertaken such that it cuts higher tariffs more steeply than
it cuts lower tariffs.
This meeting could have been the final step of the Doha trade talks launched in 2001. Geneva, Switzerland 30 November - 2 December 2009 (MC7)
The theme of the Conference is “The WTO, the Multilateral Trading System and the Current Global Economic Environment”.
Unlike previous Conferences, this meeting was not a Doha Round negotiating session, but rather a chance for Ministers to reflect on all elements of WTO's work, exchange ideas and extend guidance on the best way forward in the years to come.
Geneva, Switzerland 15-17 December 2011 (MC8)
The Conference approved the accessions of the Russian Federation, Samoa and Montenegro.
It adopted a number of decisions on intellectual property, electronic commerce, small economies, least developed countries’ accession, a services waiver for least developed countries, and trade policy reviews.
It reaffirmed the integrality of special and differential treatment provisions to the WTO agreements and their determination to fulfil the Doha mandate to review them with a view to strengthening them and making them more precise, effective and operational.
Bali, Indonesia 3-6 December 2013 (MC9) The Conference adopted the “Bali Package”, a series of decisions aimed at:
streamlining trade,
allowing developing countries more options for providing food security,
boosting least-developed countries’ trade and helping development more generally.
The Bali Package is a selection of issues from the broader Doha Round negotiations.
The Conference also approved accession of Yemen as a new member of the WTO. Nairobi, Kenya 15-19 December 2015 (MC10)
It culminated in the adoption of the "Nairobi Package", a series of decisions on agriculture, cotton and issues related to least-developed countries (LDCs).
Agriculture: o Special Safeguard Mechanism for Developing Country Members; o Public Stockholding for Food Security Purposes; o Export Competition;
Cotton: Stressing the vital importance of cotton to a number of developing economies and particularly the least-developed amongst them,
o Developed country Members, and developing country Members declaring themselves in a position to do so, shall grant preferential trade arrangements in favour of LDCs, as from 1 January 2016, duty-free and quota-free market access for cotton produced and exported by LDCs.
LDC issues: Preferential Rules of Origin for Least Developed Countries; Implementation of Preferential Treatment in Favour of Services and Service Suppliers of
Least Developed Countries; and Increasing LDC Participation in Services Trade;
The decision in Nairobi builds on the 2013 Bali Ministerial Decision on preferential rules of origin for LDCs.
The “Nairobi Package” pays fitting tribute to the Conference host, Kenya, by delivering commitments that will benefit in particular the organization’s poorest members.
Buenos Aires, Argentina 10-13 December 2017 (MC11)
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The Conference ended with a number of ministerial decisions, including on fisheries subsidies and e-commerce duties, and a commitment to continue negotiations in all areas.
The Doha Round
The Doha Round is the latest round of trade negotiations among the WTO membership. Its aim is to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules.
The Round is also known semi-officially as the Doha Development Agenda as a fundamental objective is to improve the trading prospects of developing countries.
The Round was officially launched at the WTO’s Fourth Ministerial Conference (MC4) in Doha, Qatar, in November 2001.
The Doha Ministerial Declaration provided the mandate for the negotiations, including on following subjects:
o Agriculture: More market access, eliminating export subsidies, reducing distorting domestic support, sorting out a range of developing country issues, and dealing with non-trade concerns such as food security and rural development.
o Non-agricultural market access (NAMA): To reduce or as appropriate eliminate tariffs, including the reduction or elimination of high tariffs, tariff peaks and tariff escalation (higher tariffs protecting processing, lower tariffs on raw materials) as well as non-tariff barriers, in particular on products of export interest to developing countries.
o Services: To improve market access and to strengthen the rules. Each government has the right to decide which sectors it wants to open to foreign companies and to what extent, including any restrictions on foreign ownership. Unlike in agriculture and NAMA, the services negotiations are not based on a “modalities” text. They are being conducted essentially on two tracks:
Bilateral and/or plurilateral (involving only some WTO members) negotiations Multilateral negotiations among all WTO members to establish any necessary rules and
disciplines o Trade facilitation: To ease customs procedures and to facilitate the movement, release and
clearance of goods. o Rules: These cover anti-dumping, subsidies and countervailing measures, fisheries subsidies, and
regional trade agreements. “Clarifying and improving disciplines” under the Anti-Dumping and Subsidies
agreements; And to “clarify and improve WTO disciplines on fisheries subsidies, taking into account
the importance of this sector to developing countries. o The Environment: These are the first significant negotiations on trade and the environment in
the GATT/ WTO. They have two key components: Freer trade in environmental goods – Products that WTO members have proposed
include: wind turbines, carbon capture and storage technologies, solar panels. Environmental agreements – Improving collaboration with the secretariats of
multilateral environmental agreements and establishing more coherence between trade and environmental rules.
o Geographical indications (GI): multilateral register for wines and spirits. Under the TRIPS Agreement, all geographical indications have to be protected at least to avoid misleading the public and to prevent unfair competition (Article 22). This is the only intellectual property issue that is definitely part of the Doha negotiations. The objective is to “facilitate” the protection of wines and spirits in participating countries. The talks began in 1997 and were built into the Doha Round in 2001.
o Other intellectual property issues: Some members want negotiations on two other subjects and to link these to the register for wines and spirits. Other members disagree. Following these two topics are discussed:
GI “extension”- Extending the higher level of protection for geographical indications beyond wines and spirits.
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Biopiracy, benefit sharing and traditional knowledge o Dispute settlement: To improve and clarify the Dispute Settlement Understanding, the WTO
agreement dealing with legal disputes. These negotiations take place in special sessions of the Dispute Settlement Body (DSB). Negotiations continued after the 2008 global financial crisis with low expectations.
Important developments during different MCs The 2013 Ministerial Conference (MC9) in Bali, Indonesia, delivered a significant achievement, the first multilateral agreement since the creation of the WTO.
This was the Trade Facilitation Agreement (TFA), which aims to speed up customs procedures and make trade easier, faster, and cheaper.
2015 Ministerial Conference Nairobi, Kenya (MC10) focused on a selected number of issues that are part of the Doha Development Agenda (DDA). Agreement was reached on following DDA issues:
Stopping the use of subsidies and other schemes unfairly supporting agricultural exports
Ensuring that food aid for developing countries is given in a way which does not distort local markets
Seeking to simplify the conditions that exporters from the poorest countries have to meet, so that their products benefit from trade agreements (so-called rules of origin)
Giving more opportunities for businesses from the poorest countries to provide services in the WTO's 164 member countries
However, for many observers, Nairobi signalled the end of the Doha talks, a sentiment that intensified after the 2016 election of Trump.
President Trump made clear his preference for bilateral trade when he withdrew from the 12-country Trans-Pacific Partnership (TPP) shortly after taking office.
In 2017 Ministerial Conference Buenos Aires (MC11), USA reflected the skepticism toward multilateralism when it blocked agreement on a draft ministerial declaration that would have “reaffirmed the centrality of the multilateral trading system and the development dimension of the organisation’s work.”
Meanwhile, India, which has repeatedly threatened to block WTO agreements (including the Trade Facilitation Agreement) unless WTO members conceded to its demands on public stockholding for food security. India also toughened its stand on new issues including e-commerce and investment facilitation.
In the end, it was a relief to many that the United States did not actively seek to dismantle the WTO—as some had feared. But giving up its traditional leadership role could lead to a similar result, only more slowly.
Nur-Sultan, Kazakhstan, 8-11 June 2020 (MC12)
On 12 March 2020, WTO Director-General Roberto Azevêdo was informed by the Government of Kazakhstan that, in connection with the current situation with COVID-19 and the WHO declaration of a pandemic, it would be appropriate for Members to revisit the decision to hold the 12th Ministerial Conference from 8-11 June in Nur-Sultan.
As a result, the DG communicated to Members that “it is our considered view that holding MC12 as previously agreed from 8-11 June will not be feasible”.
In light of this development, DG Azevêdo and the chair of the General Council will consult with WTO Members, as soon as conditions permit, on how to proceed with revised arrangements for MC12.
Pending the outcome of these consultations, accreditation for MC12 is currently on hold.
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ETHICS
Techonology Ethics
Relevancy G.S. Paper 4 Objective questions-technoethics and its types, UNESCO, biotech ethics, Technological consciousness Subjective questions- ethical theories, developments and significance, challenges and issues
Introduction
Ethics in technology is a sub-field of ethics addressing the ethical questions specific to the Technology Age.
Some prominent works of philosopher Hans Jonas are devoted to ethics of technology.
The subject has also been explored, following the work of Mario Bunge, under the term technoethics. What Is Technoethics?
Technoethics (TE) is an interdisciplinary research area that draws on theories and methods from multiple knowledge domains (such as communications, social sciences information studies, technology studies, applied ethics, and philosophy) to provide insights on ethical dimensions of technological systems and practices for advancing a technological society.
Technoethics views technology and ethics as socially embedded enterprises and focuses on discovering the ethical use of technology, protecting against the misuse of technology, and devising common principles to guide new advances in technological development and application to benefit society.
Technoethics denotes a broad range of ethical issues revolving around technology – from specific areas of focus affecting professionals working with technology to broader social, ethical, and legal issues concerning the role of technology in society and everyday life.
Types Of Technology Ethics
Technology Transparency: clearly explaining how a technology works and what its intentions are
Access rights: access to empowering technology as a right
Privacy: protection of privacy rights
Digital Rights: protecting intellectual property rights and privacy rights
Self Replicating Technology: should self replicating be the norm?
Accountability: decisions made for who is responsible when considering success or harm in technological advancements
Human Judgement: when can decisions be judged by automation and when do they acquire a reasonable human?
Existential Risk: technologies that represent a threat to the global quality of life pertaining to extinction
Terms of Service: ethics related to legal agreements
Environment: how to produce technology that could harm the environment
Health & Safety: health and safety risks that are increased and imposed by technologies
Security: Is due diligence required to ensure information security?
Freedom: technology that is used to control a society raising questions related to freedom and independence
Human Enhancement: human genetic engineering and human-machine integration
Over-Automation: when does automation decrease quality of life and start affecting society?
Precaution Principle: Who decides that developing this new technology is safe for the world? Ethics Theories
Utilitarianism (Bentham) is an ethical theory which attempts to maximize happiness and reduce suffering for the greatest number of people. Utilitarianism focused on results and consequences rather than rules.
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Duty ethics (Kant) notes the obligations that one has to society and follows society's universal rules. It focuses on the rightness of actions instead of the consequences, focusing on what an individual should do.
Virtue ethics is another main perspective in normative ethics. It highlights the role and virtues that an individual's character contains to be able to determine or evaluate ethical behaviour in society. By practicing honing honest and generous behavior, Aristotle, the philosopher of this theory believes that people will then make the right choice when faced with an ethical decision.
Relationship ethics states that care and consideration are both derived from human communication. Therefore, ethical communication is the core substance to maintain healthy relationships.
Technological Consciousness
Technological consciousness is the relationship between humans and technology.
Technology, consciousness and society are intertwined in a relational process of creation that is key to human evolution.
Technology is rooted in the human mind, and is made manifest in the world in the form of new understandings and artifacts.
The process of technological consciousness frames the inquiry into ethical responsibility concerning technology by grounding technology in human life.
The structure of technological consciousness is relational but also situational, organizational, aspectual and integrative.
The aspectual component of technological consciousness recognizes that individuals can only be conscious of aspects of an experience, not the whole thing. For this reason, technology manifests itself in processes that can be shared with others.
Misunderstandings Of Consciousness And Technology
According to Rocci Luppicini, the common misunderstandings about consciousness and technology are listed as
follows.
Consciousness (C) is only a part of the head: C is responsible for the creation of new conscious relations
Technology (T) is not part of C: Humans cannot be separated from technology
T controls society and C: Technology cannot control the mind
Society controls T and C: Society fails to take in account the consideration of society shaping what technology gets developed?
Ethical challenges
Ethical challenges arise in many different situations,
Human knowledge processes
Workplace discrimination
Strained work life balance in technologically enhanced work environments
digital divide: Inequalities in information access for parts of the population
Unequal opportunities for scientific and technological development
Inequality in terms of how scientific and technological knowledge is developed around the globe.
Organizational responsibility and accountability issues
Intellectual property issues
Information overload: which can lead to cognitive overload resulting in loss of information from short term memory
Limit an organization's ability to innovate and respond for change
Knowledge society is intertwined with changing technology requiring new skills of its workforce.
Negative impacts of many scientific and technological innovations have on humans and the environment has led to some skepticism and resistance to increasing dependence on technology within the Knowledge Society.
Scientific and technological innovations that have transformed organizational life within a global economy have also supplanted human autonomy and control in work within a technologically oriented workplace
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Rapidly changing organizational life and the history of unethical business practices have given rise to public debates concerning organizational responsibility and trust.
Artificial Intelligence Future Developments
The studies of e-technology in workplace environments are an evolving trend in technoethics.
With the constant evolution of technology, and innovations coming out daily, technoethics is looking to be a rather promising guiding framework for the ethical assessments of new technologies.
Some of the questions regarding technoethics and the workplace environment that have yet to be examined and treated are listed below:
o Are organizational counter measures not necessary because it invades employee privacy? o Are surveillance cameras and computer monitoring devices invasive methods that can have
ethical repercussions? o Should organizations have the right and power to impose consequences?
Other Important Concepts
Biotech ethics: Biotech ethics concerned with ethical dilemmas surrounding the use of biotechnologies in fields including medical research, health care, and industrial applications. Topics such as cloning ethics, e-health ethics, telemedicine ethics, genetics ethics, neuroethics, and sport and nutrition ethics fall into this category; examples of specific issues include the debates surrounding euthanasia and reproductive rights.
Technoethics and cognition: This area of technoethical inquiry is concerned with technology's relation to the human mind, artificial agents, and society. Topics of study that would fit into this category would be artificial morality and moral agents, technoethical systems and techno-addiction.
Technoethics and society: This field is concerned with the uses of technology to ethically regulate aspects of a society. For example: digital property ethics, social theory, law, science, organizational ethics and global ethics.
Technofeminism: Technoethics has concerned itself with society as a general group and made no distinctions between the genders, but considers technological effects and influences on each gender individually. This is an important consideration as some technologies are created for use by a specific gender, including birth control, abortion, fertility treatments, and Viagra. Feminists have had a significant influence on the prominence and development of reproductive technologies.Technoethical inquiry must examine these technologies' effects on the intended gender while also considering their influence on the other gender.
Media Ethics
Relevancy G.S. Paper 4 The Need for Media Ethics Ethical Issues Attempts To Develop A Universal Code Of Media Ethics Practical Applications And Solutions
Introduction
Media ethics is the best division of applied ethics dealing with the specific ethical principles and standards of media, including broadcast media, film, theatre, the arts, print media and the internet.
Media Ethics defines and deals with ethical questions about how media should use texts and pictures provided by the citizens.
The opinions, attitude, and conduct of persons depend upon the information available to them and upon the images and feeling tones impressed upon them.
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Those who control our means of mass communication not only report current events and history of the world help to make history. We cannot think correctly and clearly about either domestic or world affairs unless we obtain accurate information.
If the sources and the channels of information are tainted or distorted, all people are in a serious danger of being led astray.
Media is considered as “Fourth Pillar” in democratic countries along with Legislature, Executive, and Judiciary.
Its importance in influencing readers can be gauged by the role it played during the freedom struggle, politically educating millions of Indians who joined the leaders in their fight against the British imperialism.
The role of media in Indian democracy has undergone massive changes, from the days of press censorship during Emergency in 1975 to being influential in the 2014 Lok Sabha elections.
The Need for Media Ethics
The issues of paid news, media trial, non-issues being presented as real news while the real issues are sidelined, the news is being doctored and fact distortion for profits and political favour, fake news, yellow journalism are important concerns which are influencing public and impacting national security.
The absence of objective journalism leads to the false presentation of truth in a society which affects the perception and opinions of people.
The chase for sensationalism and higher TRP rates as observed in the coverage of 26/11 terrorist attacks in India risked the internal security of the nation. The sensationalism-driven reporting compromised the identities of rape victims and survivors despite SC guidelines.
Trial by media does not follow the due process of law and can reduce the public trust in institutions of governance like the judiciary.
Paid news and fake news can manipulate public perception and can instigate hatred, violence, and disharmony among the various community within society.
With the advent of social media, technological changes, the reach of media has grown profoundly. Its reach and role in impacting public opinion have made it even more important to ensure its objectivity, non-partisanship calls for the enforcement of journalistic ethics.
Ethical Issues
Online abuse o It is used for defamation and slander to trample the dignity of individual for political and
personal purposes.
Financial frauds o People are becoming victim of online scam through social media.
Addiction o People spent hours and hours on social media. It decreases their productive capacity.
Violation of human rights o Online teasing, cyber bullying, recent blue whale game has resulted into death of innocent
children.
Radicalisation tool o It has been used by terrorist outfits to radicalise populace, particularly youth and recruit them as
terrorist. Lone wolf attack have altered the security aspect significantly in recent years. o The ethical issues like unintended targetting of specific groups by the security agencies and
resulting backlash will involve huge ethical dimension.
Hamper social relationships o Social media lowers social contacts which deters personality development. The lack of social
cohesion comes with other issues as well.
Propaganda tool o Though social media has been a great avenue to engage people in political discourse, the use by
various political parties and organisations in a polarising manner can also cause havoc. o It can be averted by good interventions during education days with proper humanistic education.
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Attempts To Develop A Universal Code Of Media Ethics
One of the core issues in developing a universal code for media ethics is the difficulty of finding a common ground between ethical principles from one culture to another.
Also, such codes may be interpreted differently according to various moral and legal standards.
International Symposium on Information Ethics, Karlsuhe, 2004 o In 2004, the ICIE, or International Center for Information Ethics, organized the first international
symposium on information ethics in Karlsuhe, Germany. o Experts with varying scientific backgrounds such as computer science, information
science, media studies, and economics, gathered from all over the world to discuss the internet from both an ethical and intercultural perspective.
UNESCO Infoethics Congresses o The ethical facet of the global information society has been on the UNESCO (United Nations
Educational, Scientific and Cultural Organization) agenda since 1997, when the organization initiated their first INFOethics Congress.
o The objective of this summit was to spark debate on the ethical dimension of the global information society.
o The UNESCO INFOethics Congresses then met in 1998 and 2000, where specialists coming from a wide range of educational, scientific, and cultural environments addressed the ethical dimensions of global media and information.
Conclusion
In developing countries like India, the media have a great responsibility to fight backward ideas such as casteism and communalism and help the people in their struggle against poverty and other social evils. Hence, having journalistic ethics in place becomes very important.
Government and civil society besides should work together to curb the unethical use of social media in the country so that various tenets which are country upholds should not get violated.
It is important that the media stick to the core principles like truth and accuracy, transparency, independence, fairness and impartiality, responsibility and fair play.
Social media needs to be used in a ethical manner so that problem are solved rather than created.
Education System And Values
Topics covered What is value education? Aims of value education Characteristics of values education Traditional vs values education Principal educational values Values education methodologies
What Is Value Education?
We want to create a more sustainable world, with stable economies and more just and inclusive societies.
A difficult but not unattainable target if we can count on the involvement of governments, institutions, businesses, and, above all, a responsible and committed public.
An exemplary citizen is made, not born. Just as we learn mathematics and languages, we should also become specialists in those lessons that are fundamental to living in harmony and social progress such as respect, empathy, equality, solidarity and critical thinking.
Without these and other ethical principles that define us as human beings, it will be difficult for us to build a better world.
The Aims Of Values Education
This concept is about the educational process that instils moral standards to create more civil and democratic societies.
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Values education therefore promotes tolerance and understanding above and beyond our political, cultural and religious differences, putting special emphasis on the defence of human rights, the protection of ethnic minorities and the most vulnerable groups, and the conservation of the environment.
Values education is the responsibility of us all and not just of schools.
The family, universities, businesses and sport, for example, are all ideal contexts to teach those ethical principles.
Even so, for a number of years now, countries like Australia and the UK have actually been contemplating including values education as part of compulsory education.
Characteristics Of Values Education
Traditional Education vs Values Education
Both traditional education and values education are essential for personal development and they help us to define our objectives in life.
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But whilst the former teaches us about social, scientific and humanistic knowledge, the latter trains us to be good citizens.
As opposed to traditional education, in values education there is no distinction between what happens inside and outside the classroom.
The importance of values education has driven European schools to introduce subjects such as Education for Citizenship.
By 2017 was already part of the national curriculum in all the EU countries analysed by Eurydice, either as a cross-curricular or separate subject, or as part of other programs.
The United Nations Educational, Scientific and Cultural Organization (UNESCO) also undertakes a global assessment — as part of the Sustainable Development Goals (SDGs) — of the level of implementation of Global Citizenship Education (GCED) in national education policies, training plans and programmes, teacher training and student assessment.
Principal Educational Values
Values education covers various topics related to citizenship and ethics, including:
Care for health o We need to minimise health risks by encouraging the right attitudes and tackling health
education from a dynamic, personal and collective point of view.
Equal opportunities o The principle that we are all equal is one of the pillars of democracy, and moreover it fosters
social inclusion and community life.
Empathy o By putting ourselves in other people's shoes both cognitively and emotionally, we improve our
ability to resolve conflicts and understand others' opinions.
Respect for the environment o Values education makes us aware of the consequences of our actions on the planet and instils in
us a respect for nature.
Critical thinking o This way of thinking makes us more analytical and observant, teaches us to recognise quality
information and helps us to solve problems. Values Education Methodologies
There are currently two distinct theories about the nature of values. Traditional teaching covers objective and universal ethical standards that may be acquired through learning and ongoing practice.
But a more innovative approach maintains that morals are relative and depend on the individual, so it is very difficult to teach at the pedagogical level.
The most common strategies in values education include the following: o The rejection of discrimination, enlivening debate on moral matters and promoting collaborative
leadership. o Denouncing harmful attitudes for society as a whole without stigmatising individuals. o Stressing the idea that we can all change and that we deserve a second chance.
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HISTORY AND CULTURE
Classical Languages Of India
Topics covered What is a classical language? Classical languages in india and its criteria Benefits of classical language Classical language in Constitution Special status for sanskrit
What Is A Classical Language?
A classical language is a language with a literature that is classical.
According to UC Berkeley linguist George L. Hart, a classical language "should be ancient, it should be an independent tradition that arose mostly on its own, not as an offshoot of another tradition, and it must have a large and extremely rich body of ancient literature."
Classical languages are typically dead languages, or show a high degree of diglossia, as the spoken varieties of the language diverge further away from the classical written language over time.
Eligibility Criteria Of A Classical Language Stature In India
The idea of Classicism had its origin in Europe. The Government tracks the following criteria to define the eligibility of language to be considered for classification as “classical language”:
Extraordinary antiquity of its early transcripts or verified history over a period of 1500-2000 years.
A body of ancient literature or texts, which is considered a valuable heritage by generations of speakers.
The literary tradition should be unique and not hired from another language community.
The classical language and literature being diverse from modern, there may also be a discontinuity among the classical language and its later forms or its sprouts.
What are ‘Classical’ languages in India?
In 2004, Government of India declared Tamil as the Classical Language of India.
In 2005, right after Tamil, the government declared Sanskrit as Classical Language of India. These two languages are undeniably parental sources for several languages belonging to the Indo-European family and the Dravidian family of language groups.
The government gave the classical language status to Kannada and Telugu in 2008.
Malayalam was declared as a classical language in 2013 and in 2014, Odiya was also given the status of the Classical language.
All the Classical Languages are listed in the Eighth Schedule of the Constitution.
The Ministry of Culture provides the guidelines regarding Classical languages. Benefits Of Classical Language
Two major international awards for scholars who have made significant contributions to Classical Indian Languages are awarded annually.
Central Universities have also been requested to provide grants for Professional Chairs for Classical Languages.
The government has also set up a Center of Excellence for the Study of Classical Languages. Classical language in constitution
According to Article 343, the official language of the India should be Hindi in Devanagari script. As per Eight schedules of the Indian constitution, we have 22 languages. In 2004 it was decided by the Indian Government to proclaim Indian Languages meeting certain requirements as “Classical Language”.
Special Status For Sanksrit In Constitution
Hindi had become a symbol of nationalist feelings during the freedom struggle of India and the leaders encouraged its use.
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The Sanskrit had lost the position of official language of the Union by a casting vote. Article 343 gave Hindi the status of official language of the Union.
For Sanskrit, there is a special status mentioned in article 351, whereby Sanskrit was given a position of the primary source language for many languages including Hindi.
