9 PM Daily Brief – September 9th, 2020

Good evening dear reader.

Here is our 9pm current affairs brief for you today

9 PM for Mains examination

GS-2

1. India’s democracy
2. Issues with implementation of schemes – Farmer
3. NAM and India’s present alignment

GS-3

4. Consolidation of land holdings
5. RBI-Government Tango

9 PM for Preliminary examination

FACTLy

1.India’s democracy

Source- The Hindu

Syllabus- GS 2- Parliament and State legislatures—structure, functioning, conduct of business, powers & privileges and issues arising out of these.

Context- Issues of the present Indian democracy.

Indian anti-corruption movement, 2011– A series of demonstrations and protests across India to establish a strong legislative regime against perceived endemic political corruption.

Movement Lead by – Anna Hazare.

Aim and demand of the Anna Hazare movement–

• The movement aimed to alleviate corruption in the Indian government through introduction of the Jan Lokpal Bill.
• Repatriation of black money from foreign banks.
• Electoral reforms and decentralization of power were essential.

Nation’s attention has moved away from weaknesses in institutions of governance to other major issue such as –

1. Threats from china on the nation’s borders.
2. To global problems caused by COVID-19 pandemic.

Current electoral democracies issues-

1. Money power in politics– The rise of illegitimate expenditure on vote-buying has become a matter of great concern as it is making only the rich to be more qualified.
2. Paid Advertisement-To influence vote-choice through election advertisement campaigns on social media and other propagandas has led to issue of paid advertisement.
3. Alignment of views– Too many parties and too many contradictory points of view are accommodated within a coalition, in the long run there can be break down in coalition and governance.
4. Internal democratic– If political parties are not internally democratic, they become means for self-aggrandizing politicians to amass power and wealth, and democratic nations suffer.

Flaws in presidential and parliamentary system-

1.Parliamentary system-

1. 1. Unstable government.
   2. Dictatorship of the Cabinet– When the ruling party enjoys absolute majority in the Parliament, the Cabinet becomes autocratic and exercises nearly unlimited powers.
   3. Against separation of powers– The legislature and the executive are together and inseparable.

2.Presidential system–

1. 1. Conflict between legislature and executive.
   2. Non- responsible government.
   3. May lead to autocracy.
   4. Narrow representation

Possible solutions-

1. Resolving issues with reasons– Complex issues, where many interests collide, must be resolved by reason, not settled by the numbers.
2. Strong local governance– Locals know bests how to balance local affairs democratically, so strengthening local governance structures such as Panchayati raj and municipalities.

Way forward-

Electoral funding must be cleaned up, and democracy within political parties improved to make representative democracy work better. Citizens must appreciate that they have to be the source of solutions, and not become only the source of problems for governments and experts to solve for them. Those with the most needs in the community must be enabled to participate, alongside the most endowed, in finding solutions for all.

2.Issues with implementation of schemes – Farmer

Source: The Indian Express

Syllabus: GS-2- Governance

Context: Issues with the implementation of the poverty alleviation programmes.

The gap between policy and impact on the rural economy

• The PM Kisan scheme: under this scheme, each landowning farmer (landless are excluded) receives Rs 6,000 annually.
• A farmer growing a combination of paddy and wheat utilises about 50 litres of diesel per acreaccording to a Punjab Agriculture University study.
• Currently, each litre of diesel gets taxed at about Rs 45and the average country-wide diesel usage per acre to 60 per cent is 30 litres.
• The government is virtually collecting a tax of Rs 1,200 per acre from farmersand a small five-acre farmer could be paying about Rs 6,000 as diesel tax, which is the same amount this scheme offers.
• The single-tax regime: farmers are now paying GST on purchase of inputs like seeds, pesticides, fertilisers, tractors and implements.Farmers unlike other industries cannot claim input credit for this.
• The Ujwala scheme: the under privileged were paying Rs 503for the subsidised cylinder when international crude price was at $60 per barrel in July 2019.
• The crude prices fell to stabilise at about two-thirds the price at $40 during the pandemic but the price of the subsidised cylinder increased by nearly a fourth to Rs 611 in July 2020.
• The government is collecting more per cylinder from the poorest sections of society when it is popularly perceived to be providing increased financial support to them.
• Minimum support price: The CACP reportprojected an increase of 5.1 per cent in the composite input price index for 2020-21 over 2019-20, indicating a higher cost of cultivation.
• The MSP for paddy was increased by 2.9 per cent during the COVID lockdown.
• The government generously raised MSP for paddy by 12.9 per cent in 2018.However, the increases in MSP have been minuscule at 3.7 per cent in 2019 and 2.9 per cent in 2020.
• The MSP has changed from being the minimum support price to becoming the maximum selling price.
• Subduing farm gate prices: If a consumer can afford to eat a more expensive dal or a more expensive non-essential produce (say, onions), then they don’t need to be subsidised by subduing farm gate prices.
• For instance, 75 per cent of the dal consumed in India is chana and arhar and both are selling below MSP,import duties on masoor dal were reduced by two-thirds to 10 per cent because there was a demand for it in one part of India.

Way forward

• Instead of focussing on the urban consumer from becoming restless and find a common cause for protest, the government should focus on the poor farmers and solve the problem of subduing farm gate prices as a reset in approach to mitigating inflation is a must.

3.NAM and India’s present alignment

Source- The Hindu

Syllabus- GS 2- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

Context- From last few years, non-alignment has not been projected by the policymakers as a tenet of India’s foreign policy.

Non- Alignment Movement (NAM)

• Establishment– It was established in 1961 through an initiative of the Indian Prime Minister Jawaharlal Nehru and some leaders of different nations formed during the cold war to retain autonomy of policy between two politico- military blocs.
• Members – Presently, 120 developing world nations are its members.
• Objective – It is to ensure the national independence, sovereignty, territorial integrity and security of non-aligned countries in their struggle against imperialism, colonialism, neo-colonialism, racism, and all forms of foreign aggression, occupation, domination, interference or hegemony as well as against great power and bloc politics.
• Panchsheel principles– It was based on the five principles, which were:

1. 1. Mutual respect for each other’s territorial integrity and sovereignty.
   2. Mutual non-aggression.
   3. Mutual non-interference in domestic affairs.
   4. Equality and mutual benefit
   5. Peaceful co-existence

Successive foreign policies

Indian policymakers have not yet found a universally accepted successor as a signature tune for the foreign policy. Successive formulations have been coined and rejected. Such as-

India’s present foreign policy options

1. Alliance strategy-

• In the wake of the current stand-off with China, there have been calls for India’s foreign policy to shed its inhibitions and make a decisive shift towards the United States, as the only viable option to counter China.
• However, the government has been ambiguous in its approach. The External Affairs Minister clarified that a rejection of non-alignment does not mean a rush to alignment: India will not join an alliance system.

2. Geo- strategy-

• It drives from both geography and politics. While politics is dynamic, geography is immutable.
• Two major imperatives flow from India’s geography:
  1. Economic and security interests in the Indo-Pacific space– It has inspired the Act East policy of bilateral and multilateral engagements in Southeast Asia and East Asia and the Pacific.
  2. The strategic importance of the continental landmass to its north and west– Shared India-U.S. interests in dealing with the challenge from China in the maritime domain have been a strategic underpinning of the bilateral partnership since the early 2000s.

Way Forward

In today’s world order, India should see tie with U.S. and other potential nations as a joint venture in which they could pursue shared objectives to mutual benefit through bilateral relations.

4.Consolidation of land holdings

Source: Indian Express

Syllabus: Gs3: Land Reforms in India

Context: In the last three decades, the issue of land and consequently land reforms was an important topic.

The elements of land reforms:

• The abolition of intermediaries.
• Regulation and stability of the tenurial system
• Ceiling on land holding.
• Consolidation of land holdings.

Background of land reforms:

• After Independence, compulsory consolidationwas replaced by voluntary consolidation in almost all states. However, considering its utility, the National Commission of Agriculture recommended that consolidation schemes should be made compulsory across the country.
• Land consolidation:
  • As much as 120 lakh Ha had been consolidated by the end of the Fourth Plan, while 440 lakh Ha of land was consolidated by the end of the Fifth Plan.
  • Punjab and Haryana have almost completed the work of consolidation of landholdings.
  • The Sixth Five Year Plan had targeted the completion of consolidation in 10 years. During its period, only 64.75 lakh hectare of land was consolidated. Progress was not uniform across the states.
  • Rajasthan, Andhra Pradesh, Kerala and Tamil Nadu and other southern states have not even begun the task.
• Now, structure and composition of the economy changed, the importance of agriculture and consequently of land-related matters went down.
• In the last 15 years, land acquisition and computerisation of land records have become more important issue than land reforms.

Current scenario:

• Farmer crisis: for instance, Rural debt waivers, farmers’ agitations, farmers’ suicides, migration and reverse migration in the wake of COVID-19.
• Fragmentation of land: The average holding size in 1970-71 was 2.28 hectares (Ha), which has come down to 1.08 Ha in 2015-16. The holdings are much smaller in densely populated states like Bihar, West Bengal and Kerala.
• Uneven and skewed distribution:Nagaland has the largest average farm size, Punjab and Haryana rank second and third respectively.
• Rise in number of holdings:the number of holdings is rising at almost the same pace as the population. These holdings are not in one chunk but in multiple sub-parcels located at different places in a village.

Implications:

• Poor investment: fragmentation of land leaves no incentive for the farmer to invest in the farm land due to lack of productivity.
• Subsistence farming:Farmers are unable to raise plantations because the size is not substantial for them to invest in ancillary works like drip or appoint a caretaker.
• Difficult to dispose of such fragmented land:As there are number of landholders, that’s why buyers do find it attractive to buy. It is difficult to deal with so many landholders and to arrange necessary infrastructure like road, water supply and electricity.
• Fragmentation of land and difficulty in disposing of such land leads to poor investment in rural areas.

Significance of land consolidation:

• It helps farmers to make investments, enabled roads and irrigation channels to be laid.
• Reduced litigation.
• Allows farmers to formalise informal partitions
• Reduced inequity in landholdings to some extent.
• Enhance farmer’s autonomy.
• Increased production and productivity.
• Promote rural investment.

Way forward:

• Non-farm sector employment contributes about 60 per cent to the household income in rural areas. Therefore, policies conducive for the promotion of sectors such as small industries, education, health and other service enterprises need to be made.
• Encourage land consolidation:consolidated holdings would make it easy for the government or private enterprises to acquire land, and for public agencies to lay the road, pipeline or electric supply.
• Land leasing: It is also proposed by NITI ayog. It should be adopted on a large scale to enable landholders with unviable holdings to lease out land for investment, thereby enabling greater income and employment generation in rural areas.
• Promote use of technology: information technology, drone technology, and land record digitisation can be used to consolidate land.

5.RBI-Government Tango

Source: Indian Express

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

Context: In the wake of pandemic there is need of Coordinated inequilibrium strategy between RBI and govt as most effective policy response.

More on news:

• As the pandemic continues to ravage India, there is renewed discussion in policy circles on kick-starting the economy.
• There is a clear divide on when to unleash the second round of policy support.

Need of policy inequilibrium : India’s recovery during 1957 shows that a coordinated in equilibrium strategy between the RBI and the government is the most effective policy response in the current pandemic.

Options available:

• Both the government and the RBI have two options between them — either a contraction or an expansion.
• Four policy options that can result in a Nash Equilibrium.A Nash equilibrium occurs when neither the government nor the RBI can increase its payoff by unilaterally changing its action.
• There are four options:
  • A fiscal policy expansion and a monetary policy contraction.
  • A fiscal policy expansion and monetary policy expansion.
  • A fiscal policy contraction and a monetary policy contraction.
  • A fiscal policy contraction and a monetary policy expansion.

The payoff scenarios:

• The government is assumed to favour an expansionary policyand gets maximum payoffs from a fiscal expansion, either with monetary expansion or contraction (the payoff is obviously maximum when the RBI also expands).
• The monetary authority (RBI) ideally wants to contract the economyto fight inflation and gets maximum payoffs from a monetary contraction, either with a fiscal contraction or expansion (the payoff is obviously maximum when government also contracts).

What needs to be done:

• Echoing “procedural rationality”: To promote fiscal expansion and a monetary expansion is the desirable outcome.
  • “procedural rationality”:the current pandemic is resulting in behavioural changes of individuals in terms of risk-taking. In the Indian context too, there is a massive jump in health insurance in the current fiscal, indicating behavioural changes in terms of risk-taking. In FY20, the behavioural change was to build up retirement products as households deleveraged.
  • People are now preferring small and medium size compact cars to avoid public transport.
  • For instance, many of the current companies were also born during the financial crisis, like Uber (2009), Microsoft (1975), Disney (1923), General Motors (1908) and General Electric (1890).
• Effective communication by both the RBI and the government:Government should manage market expectations with coordinated communication and leave matters of financing the fiscal deficit, through measures like monetisation, to the RBI.

9 PM for Preliminary examination

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