9 PM Daily Current Affairs Brief – April 4th, 2023

Mains Oriented Articles

GS PAPER - 2

Shock & Awful – Poorly installed & maintained high-power cables kill thousands every year, but official apathy continues

Source: The post is based on the article “Shock & Awful – Poorly installed & maintained high-power cables kill thousands every year, but official apathy continues” published in The Times of India on 4^th April 2023.

Syllabus: GS 2 – Governance

Relevance: death caused by electrocution.

News: A British tourist has died in Himachal Pradesh from electrocution. The low-hanging high-voltage cable was installed by a major public sector undertaking – NHPC. Despite complaints to remove the cable, NHPC has not yet responded.

What are the concerns airing from the low-hanging high-voltage cables?

High power cables are often poorly installed close to houses with improper maintenance, especially in the urban areas.

Discoms hardly take any note of it and they are also little accountable to the death caused by those wires.

As per the National Crime Records Bureau (NCRB) 2021 report, electrocution accounted for over 12,500 casualties, including 650 children aged below 14. This implies 34 people dying daily from electrocution.

These deaths are classified as accidents by NCRB. However, these deaths are the result of administrative negligence and apathy.

Further, election promises have led to unauthorized urban growth, making the problem more complex for cities.

What are some of the steps taken to prevent such deaths?

Kerala high court recently directed municipalities to remove such cables. Some towns have undertaken projects to underground electricity lines, but the speed of work has been inconsistent.

Despite these attempts, the issue is worsening due to a lack of planning for cities and towns.

Economic winds favour an India-UK trade agreement

Source- The post is based on the article “Economic winds favour an India-UK trade agreement” published in the “Live Mint” on 4th April 2023.

Syllabus: GS 2 – Bilateral groupings and agreements

Relevance– Trade and economic relationship between India and UK

News– The eighth round of India-UK free trade agreement (FTA) discussions will take place soon.

What is the significance of a trade deal between the India and UK?

Both countries are top exporters and importers of merchandise and services. Through the agreement, the UK wants wider access to the Indian market for its export items such as Scotch whisky premium cars and legal services.

India is the third-largest services exporter to the UK. A trade deal would only widen market access for Indian service firms.

Further, the two countries trade in similar but distinct products. Freer import of luxury cars from the UK does not present any significant threat to domestic car manufacturers. They primarily cater to middle-class buyers.

In 2018, the top export industry between the UK and India was ‘computer programming, consultancy, and related activities’ for both countries. The two countries have different and possibly complementary capabilities within the same industry.

What is the scope of trade deals for India and UK?

India is likely to sign a trade deal that would lower tariffs on key products, subject to compliance with rules of origin. The UK may insist on relaxed regulations on customs procedures and easier regulations on doing business.

This may have wider benefits for India. It will make the country an attractive investment destination for other developed nations too.

A trade deal is likely to boost the drugs and pharmaceutical industries of both. But, it will depend on mutually acceptable recognition of intellectual property rights.

What are the areas in the deal that need greater attention?

The trade deal should look after the Indian economy’s expanding needs.

There is a greater focus on students getting work experience and technical training in the New Education Policy. India should negotiate better terms for students to get such training in the UK.

The two countries need to recognize the educational qualifications of their counterparts. The Skill India programme could benefit from the UK framework of Vocational Technical Courses.

An agreement on the mutual recognition of qualifications would help India-educated workers to become globally competitive. This will allow greater movement of skilled workers between both economies.

Green technology presents another avenue for mutual gains between India and the UK. The Indian government has launched several programmes to boost domestic tourism.

However, with increasing tourism in Indian natural hotspots comes a need for environment-friendly initiatives to reduce waste generation in our rivers and mountains. This presents an opportunity for investment in green technology.

We should worry about use of defamation law, beyond Rahul Gandhi case

Source- The post is based on the article “We should worry about use of defamation law, beyond Rahul Gandhi case” published in “The Indian Express” on 4th April 2023.

Syllabus: GS2- India Polity

Relevance– Issues related to freedom of speech and expression

News– Recently, Rahul Gandhi was convicted for two years in a defamation case that led to his disqualification from Parliament.

How freedom of speech is under threat in India?

As per a recent report by Common Cause and Lokniti-CSDS, nearly two out of three respondents are scared to post their political or social opinions. They fear legal action.

Political parties continue to use the colonial era law as a weapon against their opponents and journalists.

What are legal aspects related to defamation?

The criminal offence of defamation is contained under Section 499 of the Indian Penal Code, 1860 and the civil law that provides for damages.

In 2016, the defamation law was challenged before the Supreme Court. But it held that the right to reputation is no less important than the right to freedom of speech.

What are the issues with legal aspects of defamation?

Civil defamation cases are prone to abuse. These cases are impacted by long case pendency in the judicial system and exaggerated claims for damages.

Civil law is scattered across judgments and not properly codified. This creates more uncertainty and results in the pendency.

Sometimes, a reluctant apology is extracted to achieve a settlement. This does not serve the cause of justice.

What are the reasons behind the continuation of defamation laws in the legal system?

There were no serious or sustained efforts towards the repeal of defamation laws. Sustained political advocacy on issues of free expression is absent.

Political parties across the spectrum have failed to articulate popular narratives. They have not built constituencies of support for the repeal of colonial laws.

Concerns associated with World Happiness Report: Their Blindness To Our Happiness

Source: The post is based on the article “Their Blindness To Our Happiness” published in The Times of India on 4th April 2023.

Syllabus: GS – 2: Important International institutions, agencies and fora- their structure, mandate.

Relevance: About concerns associated with World Happiness Report.

News: The World Happiness Report was released recently. It has ranked India 126 out of 137 countries.

What are the key highlights of the World Happiness Report?

Read here: World Happiness Report: Finland happiest country in the world, India ranked 126th: U.N. report

What are the concerns associated with World Happiness Report and India’s ranking in it?

Sustainable Development Solutions Network’s (SDSN) capacity: SDSN is a relatively small organisation, with an annual revenue of around $11 million, mainly in grants.

Defining happiness is not feasible: Happiness is a big, emotive word, just like hunger.

Note: Global Hunger Index ranked India at 107 out of 121 countries, behind North Korea, Ethiopia, Sudan, Rwanda, Nigeria and Congo.

The criteria are depended more on Gallup World Poll. The poll asks people about where they currently are in life (on a scale of 1 to 10) versus where they could best possibly be (which would be a full 10 score). If the respondent gives a low rating, then the country is considered not happy.

The main issue with this poll is that if the persons have higher aspirations, then they are considered as unhappy.

Limited polling: The poll asks the above questions to 500-2,000 people per country. So, 2,000 people’s view is used to decide the global happiness rank of a nation having 1.4 billion people.

Tilted to rich countries: The report also has factors which favour rich countries. Such as a) per capita income – favouring rich countries and assuming being richer the happier, b) charity – rich countries give more, c) Level of corruption – low in developed countries, d) social welfare benefits – Rich countries have more and e) How independently a person is making decisions – individualistic western societies will score well, and collectivist society like India will not.

Issues with Finland’s ranking: Finland is ranked as the happiest country in the world for six years in a row. However, its ranking has raised certain questions. Such as, a) The country is near the North Pole and parts of which have temperatures below -40 °C in the winter and the sun does not rise for nearly two months during parts of the year. Thus, there is a permanent dark for 50 days and 50 nights, b) Finnish people, at least as per stereotype, are silent and do not talk much.

Despite that, Finland is ranked as the happiest place on Earth.

Does not measure the required aspects: The report does not include a) Celebration of festivals, b) Depression rates around the world, c) Divorce rates, d) Time period in which old people meet their kids, e) The closeness of grandparents to grandchildren, f) The peace people feel due to their relationship with God.

Overall, the report needs some rework, especially with a focus towards developing countries like India.

GS PAPER - 3

The case for an inequality boom in India is greatly exaggerated

Source: The post is based on the article “The case for an inequality boom in India is greatly exaggerated” published in Mint on 4^th April 2023.

Syllabus: GS 3 – Inclusive Growth

Relevance: arguments against rising inequality

News: Income-tax data has been placed before the Parliament. Data provides that inequality in India has increased due to the pandemic, GST, etc. The article provides a counter argument against it.

What are the views against increasing inequality?

First, Individuals whose taxable income is less than ₹2.5 lakh are not required to file tax returns, unless they need a refund of any tax which may have been deducted at source.

Thus, any changes observed in the pattern of the tax base in the ‘Under ₹5 lakh’ group cannot be used to measure the impact of the pandemic or other policies on the most vulnerable sections of Indian society.

Second, there has been a significant increase (13%) in the number of taxpayers in the lower-income group from 2016-17 to 2018-19. Another 11% increase was witnessed in 2018-19.

This increase was caused due to the use of GST data, a crackdown on black-money post demonetization and the adoption of sophisticated technology by the income tax department.

Therefore, if there would have been impact of GST and demonetization, the taxpayers would have decreased instead of increasing.

Recommendations of the 7th pay commission were also implemented in 2016-17. This caused increase in the number of government employees and pensioners in the overall taxpayer base.

Third, growth in the low-income group of taxpayers declined in 2019-20 and dropped further in 2020-21.

It is argued that decline was caused due to the demonetization and GST. However, it was more due to an economic slowdown caused by stress in non-banking finance companies in 2019-20.

Further, the drop of over 7% in the ‘Under ₹5 lakh’ category in 2019-20 could have also been due to some changes in the individual tax regime. 

For instance, A new provision of tax rebate of 100% tax for those earning below ₹5 lakh with standard deduction of ₹50,000 was introduced in 2018-19.

All these changes may have had a spillover effect in 2020-21.

Fourth, the decline in the number of taxpayers in the lower-income group in 2020-21 should not be seen in isolation, i.e., all the changes need not mean taxpayers fell below the taxable income threshold.

They may have shifted to the next slab of ₹5-10 lakh which saw a 20% growth to 3 million despite the pandemic.

Fifth, the Gini coefficient for Brazil falls when fiscal transfers such as health and education assistance are taken into consideration. Similarly, it also falls for the US when federal taxes and transfers are included.

Therefore, India’s social security net is vast and expanding. When the Gini coefficient for India is calculated, it is likely to yield a lower estimate of income inequality.

Must Read: Tackle The Four Trojan Horses Of Inequality

                                                        

  Source: Mint

Time to put a price on carbon emissions

Source- The post is based on the article “Time to put a price on carbon emissions” published in “The Hindu” on 4th April 2023.

Syllabus: GS3- Environment

Relevance– Issues related to climate change

News– The article explains the pricing carbon strategy to fight climate change.

What are the different ways of pricing carbon?

The establishment of a carbon tax domestically. Examples are Korea and Singapore.

The use of an emissions trading system. It is prevalent in the European Union and China.

The application of an import tariff on the carbon content. The EU is proposing it.

Why has the carbon tax not been successful in fighting climate change?

Around 46 countries price carbon at an average price of only $6 a ton of carbon. It covers only 30% of global greenhouse gas emissions, and a fraction of the estimated harm from the pollution.

The IMF has proposed price floors of $75, $50, and $25 a ton of carbon for the United States, China, and India, respectively. It believes this could help achieve a 23% reduction in global emissions by 2030.

What are the benefits of carbon pricing?

The economy­wide benefits of carbon pricing generally are more than the cost it imposed on individual industries in the EU, British Columbia, Canada, and Sweden.

Carbon pricing makes investment in renewable energy such as solar and wind more attractive.

What is the scenario of implementation of carbon tax in India?

Carbon tax is a good option for India. It can directly discourage fossil fuels. It will lead to generation of more revenue which can be invested in cleaner sources of energy.

It can replace the petroleum taxes which are not directly aimed at emissions.

In India, fiscal policy has established the basic structures needed to implement a carbon tax. For example, they can be integrated into road fuel taxes. India could start with the IMF figure of $25 a ton.

What are challenges in implementation of carbon tax and how to manage them?

Industrial firms can lose their competitive advantage to exporters from countries with a lower carbon price.

Therefore, Companies can be allowed to use high-quality international carbon credits to offset up to a certain percentage of their taxable emissions. The EU excludes transport. Singapore provides vouchers for consumers hit by the utility price rise.

Enterprises that emit high emissions can be exempted from the carbon tax. But output ­based exemptions will be the right strategy for doing the same.

Carbon pricing will face political opposition. Australia repealed the 2012 carbon tax just two years after it was instituted.

Recent months have revealed the political pressures on decarbonization in the EU. It had to sell millions of emission permits, causing a 10% drop in carbon prices.

Therefore, communicating the idea of its advantages at the societal level will be important. It will manage the political opposition.

What is the way forward for a carbon tax to fight climate change?

A high enough carbon tax across China, the U.S, India, Russia, and Japan alone could have a notable effect on global warming. it will lead to the establishment of decarbonization as a winning development formula.

India, as president at the G­20 summit this September, can play a lead role by advocating global carbon pricing in the fight against climate change.

India’s New Foreign Trade Policy (FTP) and its significance – Explained, pointwise

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Introduction

The new Foreign Trade Policy (FTP) document for India was just released. It focuses on improving certain processes and procedures to increase exports and lower transaction costs. The new FTP also emphasises a move towards processes that make trade easier and a focus on infrastructure for both manufacturing and services. However, there are some issues that must be addressed before deploying the new FTP.  

What are the salient features of India’s new FTP?

Must read: Foreign Trade Policy 2023 announced

What is the significance of the new FTP? 

Shift from incentives to remissions: The new FTP marks a shift from industry-specific subsidies to trade facilitation processes, focusing on infrastructure for manufacturing and services.  

Compliance with WTO rules: The new FTP focuses on WTO-compliant export support schemes like RoDTEP, while incentives linked to level of exports are being phased out.  

E-commerce exports: The new FTP raises the consignment cap on e-commerce exports, but questions remain unanswered regarding the tariff treatment of such exports globally and data sharing principles.  

MSMEs and towns of excellence: The new FTP reduces transaction fees for MSMEs and creates towns of excellence to boost their manufacturing and agricultural activities.  

Overlooks structural changes post-Covid: The new FTP does not take into account the structural changes in the global export order post-Covid, and overlooks the structure of imports and the role of FTAs.  

Read more: RoDTEP Scheme and Export competitiveness – Explained, pointwise

What are the expected benefits of the new FTP?  

Boost in exports: The new FTP aims to promote exports by reducing transaction costs, enhancing trade facilitation processes, and offering remissions on duties and taxes on export products.

For example, RoDTEP scheme will help reduce the cost of exports and make Indian products more competitive in the global market.  

Encourage MSMEs: The reduction in transaction fees for MSMEs and the creation of towns of excellence will help MSMEs to expand their business and increase their exports. For example, with reduced transaction fees, MSMEs can invest more in product development and marketing.  

Facilitate decentralization of manufacturing and agriculture: The new FTP promotes a decentralized approach to manufacturing and agriculture with the principle of ‘one district, one product.’ This will help promote local products, create jobs, and reduce regional imbalances.

For example, the promotion of local handicrafts from a particular district can help to create employment opportunities and encourage the growth of the handicrafts sector in that region.  

Improving e-commerce exports: Raising the consignment cap on e-commerce exports will benefit small businesses and startups. For example, small businesses can take advantage of the new policy to reach a global audience through online marketplaces, leading to increased exports and growth of the e-commerce sector.  

Enhancing competitiveness: The new FTP aims to provide a level playing field for domestic businesses by phasing out industry-specific subsidies and focusing on infrastructure development. This will help improve the competitiveness of Indian businesses in the global market.

For example, the development of efficient ports and logistics infrastructure will help businesses reduce the cost of exporting and become more competitive.  

International compliance: The emphasis on WTO-compliant schemes like RoDTEP and elimination of industry-specific subsidies is expected to improve India’s standing in international trade.  

Universal focus on infrastructure: The shift towards a universal focus on infrastructure for manufacturing and services is expected to have long-term benefits.  

Read more: Long on intent: On India’s Foreign Trade Policy

What are the challenges in implementing the new FTP?  

WTO compliance: India needs to ensure that all its export promotion schemes comply with WTO rules, as it has faced criticism and even lost disputes in the past.

For instance, the WTO struck down India’s export subsidy schemes last year, leading to a shift from ‘incentives’ to ‘remissions’ in the new FTP.  

Implementation and coordination: Implementation of the new FTP will require coordination between multiple stakeholders, including government agencies, industry bodies, and exporters.

For example, the effective implementation of RoDTEP scheme, the flagship export support scheme, will require coordination between the customs department and the commerce ministry.  

Infrastructure and logistics: India’s poor infrastructure and logistics have been a long-standing challenge for exporters, leading to higher transaction costs and delays.

For instance, the high cost of transportation and poor connectivity has led to perishable goods like vegetables and fruits getting spoiled in transit, hurting exports.  

Global trade dynamics: The global trade environment is constantly evolving, with geopolitical tensions and protectionist measures posing challenges for exporters.

For example, the ongoing trade war between the US and China has disrupted global supply chains, affecting Indian exporters who source raw materials or sell them to these countries.  

Digital infrastructure: With the rise of e-commerce and digital exports, India needs to improve its digital infrastructure to enable seamless online transactions and data sharing.

For instance, the new FTP raises the consignment cap on e-commerce exports, but questions remain about the tariff treatment of such exports globally and the principles of data sharing that underlie it.  

Structural Changes in Global Export Order: The FTP has not taken into account the structural changes in the global export order post-Covid, which could impact the effectiveness of the policy.

Lack of Focus on Imports: The new FTP has overlooked the structure of imports altogether, which could create imbalances in India’s trade balance.  

Limited Focus on Services Exports: The new FTP does not delve much into services exports, which are becoming increasingly important for India’s economy.  

What should be done? 

Incorporate macroeconomic analysis: The new FTP should include a SWOT analysis and macroeconomic analysis to provide a comprehensive view of the impact of the policy on the economy.  

Note: SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is a framework to help assess and understand the internal and external forces that may create opportunities or risks for an organization.  

Mainstreaming gender into the new FTP: Research by the World Trade Organisation (WTO) and World Bank has recently proven that trade and trade policy affect men and women differently — in terms of wages, consumption, welfare and in the quality of jobs created. Therefore, it is vital to include the intent and specific provisions for enabling women in the policies that have an impact on the speed and direction of the country’s trade growth.  

Focus on infrastructure: The new FTP should focus on creating a robust infrastructure for manufacturing and services, which will help in boosting exports. For instance, the government can invest in developing industrial parks, improving connectivity and logistics, and upgrading technology.  

Promotion of innovation: The new FTP should promote innovation in exports by providing incentives and support to exporters who are developing new products and technologies. For instance, the government can provide grants and tax incentives to start-ups and MSMEs involved in research and development.  

Need regular review: The new FTP should be reviewed regularly to assess its effectiveness and make necessary changes to ensure its objectives are met. For example, the government can conduct a periodic review of the impact of the RoDTEP scheme and make necessary modifications to improve its effectiveness.  

Address structural changes in the global export order: The new FTP should consider the structural changes that have occurred in the global export order post-Covid to ensure that it remains relevant.  

Need holistic approach: The government should adopt a more holistic approach while formulating the new FTP by taking into account the structural changes post-Covid in the global export order, the role of FTAs, and services exports. For example, the government can explore the possibility of negotiating more FTAs with countries that have a demand for Indian goods and services. 

Sources: The Hindu, Livemint (Article 1 and Article 2), Indian Express, The Hindu Business Line and Economic Times.

Syllabus: GS 3: Economic development – Changes in industrial policy and their effects on industrial growth.

Slower pace of state capex raises questions over extent to which public sector can drive economic momentum

Source: The post is based on the article “Slower pace of state capex raises questions over extent to which public sector can drive economic momentum” published in the Indian Express on 4th April 2023.

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

Relevance: About data on government finances.

News: Recently, the Controller General of Accounts released a report on the data on government finances.

What are the key highlights in the data on government finances?

Fiscal deficit of Centre: The Centre’s fiscal deficit for 2022-23 is supposed to significantly exceed the revised estimates presented in the recent Union budget.

Data on tax collection: The Centre’s gross tax collections have touched Rs 25.4 lakh crore. This is about a 12% increase over the same period last year. This is only marginally lower than the growth assumed in the revised estimates for the full financial year.

Some other data mentioned include a) Direct tax collections have grown at a considerably faster pace than indirect taxes, b) Provisional direct tax collections (net of the refunds) have exceeded the revised estimates by 0.69%, c) Growth in income tax has so far (April-February) outpaced corporate tax collections, d) Overall tax collections have grown at a slower pace than nominal GDP growth.

Data on disinvestment: The data highlighted disinvestment as a matter of concern. This is because, against a target of Rs 60,000 crore, collections at the end of February stood at Rs 38,640 (including the proceeds from the monetisation of national highways).

Read more: Fiscal constraints – On Capital Expenditure of Government

Data on the expenditure side: Overall central government spending for the year (April-February) grew by around 11%, marginally higher than what was factored in the revised estimates.

Capital expenditure: This received a significantly higher pace of 21% increase so far. However, to achieve the target for the full year the spending will have to grow by 28% in March.

Capital expenditure by state governments: As per a report, 15 states had spent only 54% of their capital expenditure targets for 2022-23 during the first 10 months. So, to meet their targets, states would have to raise their spending by 76% in February and March.

Read more: States have a large role in ensuring capital formation

Why Capital expenditure of state governments is essential?

States’ slower pace on capex raises questions about the public sector’s ability to drive economic momentum. Further, their failure to meet this year’s targets will also raise questions over their ability to achieve the scaled-up targets in 2023-24.

States account for a significant share of overall public sector investments. Hence, their spending is critical for driving investment activity and it should be speeded up.

Read more: State budgets may be too optimistic about their capital expenditure

Prelims Oriented Articles (Factly)

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