9 PM Daily Current Affairs Brief – December 7th, 2021

Mains Oriented Articles

GS Paper 2

• Why India will be scrutinised at Summit for Democracy
• A new era in public procurement
• The way to tackle malnutrition
• A docket full of unresolved constitutional cases
• The nine lives of India’s National Family Health Survey

GS Paper 3

• Why the Reserve Bank wants to have its own digital currency
• Fighting together: Only the political leadership can clear the way for joint theatre commands
• The farm laws fiasco offers 7 lessons on how to reform in a democracy
• Proposal to create bad bank for farm loans raises several issues that need careful deliberation
• MSP is no silver bullet to boost farmers’ income
• We’re on a knife’s edge between global reflation and stagflation
• The Goa government’s TReDS adoption is worthy of emulation
• Draft extended producer responsibility policy: How gaps in achieving fundamental goals can be closed
• Basking in reflected glory
• Nagaland killings should prompt a broad rethink

Prelims Oriented Articles (Factly)

• Cleaning of seashore and awareness drive in full swing under ‘Puneet Sagar’ Abhiyan by NCC cadets
• Adapt on climate, not mitigate: Study
• A new report shows worrying growth of the diabetes pandemic
• Launch of the Resource Book on Springshed Management in the Indian Himalayan Region by NITI Aayog
• Issi saaneq: New dinosaur species, which roamed Greenland 214 mn years ago
• Highly invasive snail spotted in Kerala
• Afforestation funds released to States
• Explained: The significance of Raigad fort in Maratha history
• North Eastern Development Finance Corporation Ltd. (NEDFI)- ‘Business cum Entrepreneurs’ Meet organised by NEDFI at its Namchi and Gangtok Branch

Mains Oriented Articles

GS Paper 2

Why India will be scrutinised at Summit for Democracy

News: US will host a virtual “summit for democracy”, which will bring together leaders of 100 countries, civil society and private sector representatives.

The summit will convene around 3 broad themes — defending democracy against authoritarianism, addressing and fighting corruption, and promoting respect for human rights.

Why India is likely to be scrutinised at the democracy summit?

Reports on Indian democracy: The Freedom House’s “Freedoms of the World” index categorises India as only “partly free”; Swedish V-Dem calls India an “electoral autocracy”.

Rights violations in Kashmir, where India made the record for the world’s longest internet ban, etc.

Artists ‘freedom of Speech’ is facing threat, and the institutions are doing very little to protect the same .

There are instances of political dissent being met with the charges of sedition, anti-terrorism laws to silence critics.

Also, usage of controversial laws, like UAPA to silent criticism etc.

What has been India’s response to these criticisms?

Cultural relativism – the Indianness of India’s democracy- India has the tradition of its own kind of democracy since ancient past. So, comparing Indian democracy with the western model is not an appropriate way to go about.

– This also find echo in China’s stand that, there was no “uniform model” of democracy, and that dismissing other forms of democracy different from one’s own is itself undemocratic.

The civil society has been accused of defaming India’s image in the world by selectively raising human rights violations.

Why is democracy seeing a decline all around the world?

The decline is marked by myriad policies of powerful countries like the US and other such countries in Asia.

US policies: The US came to the region of South Asia in the name of human rights, security and the so-called global war on terror. However, it recently left Taliban to capture Afghanistan and destabilize South-Asia.

Their leaders act pragmatically in choosing strategic allies and partners, irrespective of the fact whether they are democrat, autocrat, dictator or kleptocrat.

The paradoxical stand of Asian countries: They talk of cultural relativism in their own matters, to suit their own interests, however the same model is not followed by these Asian countries when they talk about, let’s say, Afghanistan matters. For example, in matters related to gender and minority stand of Taliban.

A new era in public procurement

News: Recently, the Department of Expenditure in the Ministry of Finance, issued a notification on the General Instructions on Procurement and Project Management.

These instructions set out a number of desirable actions in government purchases of works contracts and services. Currently, these are applicable to only Central government entities and Central public sector units.

The recent changes proposed will improve the ease of doing business in India.

What are the key changes notified to address the persisting challenges in public procurement?

– Tough stance taken on delayed payments: It mandates that payments of not less than 75% of eligible running-account bills, shall be made within 10 working days of the submission of a bill.

The remaining payment after final checking of the bill is to be made within 28 working days of submitting the bill. The final bill should also be paid to the contractor within three months of completion of work.

It also stipulates that public authorities may put in place a provision to pay interest in case of delayed payment of bills by more than 30 working days. This is a welcome move for the private sector.

Facility for contractors to track online the status of their bills: All project executing authorities implementing contracts involving aggregate payments of more than Rs 100 crore per annum are instructed to have an online system for monitoring the bills submitted by contractors.

On arbitration and dispute resolution: It instructs that where there is a decision against the government or a public sector enterprise, the decision to appeal should not be taken in a routine manner.

The decision must first be reviewed by a special board or committee before an appeal is filed against an order.

Further, it instructs paying 75% of the arbitral award to the contractor or concessionaire against a bank guarantee (BG) in cases where ministry or a department has challenged an arbitral award.

The rules for selection have been reset: For all consultancy bids, three methods of procurement are already allowed and in place. They are

– QCBS (Quality and Cost-Based Selection)

– LCS (Least Cost System)

– SSS (Single Source Selection)

It now allows for FBS (Fixed Budget Selection) where the price is fixed, and selection is by maximum merit.

Lowest Cost Winner framework is dismantled

For “works and non-consultancy services”, the notification has opened up the QCBS route, which was not generally allowed earlier.

Under QCBS, the maximum weight of the non-financial parameters is to not exceed 30%. So, finally, the much-criticised L1 (Lowest Cost Winner) framework has sought to be dismantled.

Allows single bids

It says that, even when only one bid is submitted, the process should be considered valid. Provided the procurement  had met the following criteria

– Satisfactorily advertised,

– Sufficient time was given for submission of bids,

– Qualification criteria were not unduly restrictive

– The bid was  found to be reasonable.

What are the issues that have not been addressed?

Firstly, the limitation of a maximum 30 per cent weightage for non-financial scores in QCBS shows a lack of boldness in propagating this format.

Secondly, the document is silent on Swiss Challenge as a method of procurement.

Thirdly, escalation formula provided in the contract documents are not suitable to cover non-routine increases in price for basic materials for construction and need to be addressed.

Fourthly, the phenomenon of “irrational bidding” exists where the Indian private sector has not distinguished itself in the past. Mechanisms need to be put in place to eliminate this through statistical measures or enabling discretionary judgement.

Fifthly, the concept of “independent engineers” needs rectification, including who hires and pays them.

Sixthly, the QCBS method needs to be made applicable to purchase of such sophisticated goods also not just works and services. Goods are currently excluded.

Seventhly, the new provisions haven’t addressed the issue of “consequence management.” What happens when public officials do not adhere to these guidelines? More elaboration on this aspect is needed.

Finally, Bureaucrats continue to be worried about post-facto action for decisions. Safeguards on this front should be added in any such procurement reform.

The way to tackle malnutrition

News: Ministry of Health and Family Welfare (MOHFW) has released the National Family Health Survey (NFHS-5). There has been tardy progress in reducing undernutrition, wasting and stunting.

What are the findings of NFHS 5?

What are the lacunae in the system?

Real-time monitoring of PDS is required for ensuring food security. Unfortunately, PDS is a hunger mitigation mechanism and doesn’t ensure nutrition. Further, the government tried to be averse to transparency when results of the Consumer Expenditure Survey 2017-2018 were withheld.

What steps can be adopted to improve the progress?

First, Anganwadi workers, ASHA workers and Auxiliary Nurse Midwives have to monitor the exclusive breastfeeding process till the infant is six months old. They should also record the timely initiation of complementary feeding with soft gruel.

Second, the government should make ensure the regular supply of supplementary nutrition from the Integrated Child Development Service for under-three children.

Third, regular monitoring and capturing the regularity and quantity of dry rations supplied to Anganwadi centres and schools for midday meals.

Fourth, self-help groups of women have to involve in preparing the menu and procuring locally available vegetables, grains and millets to ensure dietary diversification.

Fifth, To know about family earnings, there is a need to monitor the MGNREGA workdays as well as the wages earned in areas where droughts frequently recur, places record mass migration and places have a high prevalence of malnutrition.

What should be the way forward?

Poshan Abhiyan and Pradhan Mantri Garib Kalyan Anna Yojana need to be closely monitored with the help of the community to ensure sustainable nutrition security.

A docket full of unresolved constitutional cases

News: There is a great asymmetry of power between the state and the citizen. Thus, one of the proposals during the making of the constitution was that petitions which challenge the violation of fundamental rights by the state should be decided within one month.

The pendency of critical cases in the judiciary reflects that such proposals should be considered seriously and cases should be resolved as early as possible.

What are the pending issues?

Kashmir: There is a constitutional challenge to the presidential order which diluted Article 370. The question is whether the centre can use Article 356 at a time when there is no elected Government and assembly in the state, given the political impossibility of returning to the pre-2019 situation. Also, whether union legislature has authority to alter state boundaries under Article 3. The case still awaiting a hearing.

Electoral Bonds: The scheme authorizes limitless, anonymous corporate donations to political parties, making election funding both entirely opaque to the people. Thus, impacting not only the integrity of the election process but also the constitutional right of citizens to an informed vote.

However, other than two interim orders, the Supreme Court has refused to accord a full hearing to the constitutional challenge. The case still awaiting a hearing.

Central Bureau of Investigation (CBI) status: In 2013, Gauhati High Court held that the CBI was not established under any statutory authority. This verdict immediately stayed when appealed to the SC. However, later on, it has never been heard. Thus, the CBI continues to function despite a judgment by a constitutional court that has found its very existence to be illegal.

Apart from this, there are several other issues that are also waiting for the final judgment like Citizenship (Amendment) Act (CAA), Section 43(D)(5) of the Unlawful Activities (Prevention) Act which makes the grant of bail effectively impossible and others.

How does judicial evasion damage the judiciary itself?

Court’s inaction has a serious impact on the rule of law. As CJI holds the responsibility for constituting benches and scheduling cases, he should make sure that the important constitutional cases need to be heard soon.

The nine lives of India’s National Family Health Survey

News: The NFHS data evolved much from the Demographic and Health Survey and became a well-structured one.

About the Demographic and Health Survey (DHS)

The declassified Kissinger report of 1974 had feared that an ‘explosion’ in the Third World population would create masses of discontented youth, who would fall prey to communism and undermine US commercial interests globally.

So, the US Agency for International Development (USAID) first started its Demographic and Health Survey (DHS) programme in the 1980s to study fertility behaviour in the developing world.

But, despite criticism from Left activists and India, the first DHS survey was conducted in 1992-93.

About the evolution of NFHS

The Health Ministry in India demanded a sample reverification by an independent team. But, the USAID refused to fund. Finally, the ministry used its own funds for the exercise and decided to publish the results as NFHS.

About the NFHS

Read here: What is National Family Health Survey (NFHS)?

What are the key reasons behind the success of NFHS?

1. The surveys draw on the experience of experts from national and international organisations, besides that of the Government of India, 2. Technical innovation in data collection — NFHS relies on high-end organisational machinery and technically trained personnel to conduct the survey work. NFHS uses a bio-marker questionnaire in which entries are recorded after actual clinical, anthropometric and biochemical testing. 3. Provides a vast range of critical information on the demographic, health, nutrition and socio-economic status of people, including the SDGs and data for the country’s development at the global level.

What are the challenges associated with NFHS data?

1. Sampling error margins, as the survey is not designed to estimate a key population characteristic like sex ratio or even the total population, 2. No clear norms for the selection of households. For instance, the NFHS excludes those living in hostels, workers’ camps or places that predominantly house men, resulting in a high sex ratio.

What lessons did India learn from NFHS?

First, the importance of transparency: NFHS data is available to everyone. This helped to establish NFHS credibility and improved transparency in government. For instance, the NSS unit-level data was opened up only after the NFHS.

Second, Indigenisation of data sets: Nutrition was not the primary focus area of the original DHS programme, but it was the nutritional component of the NFHS that grabbed attention in India.

There is no alternative to an independent, well-designed survey like NFHS. The growing demand for credible data in the world’s largest democracy ensured NFHS survival. Now, India must continue to track its data ecosystem closely on the lines of NFHS.

GS Paper 3

Why the Reserve Bank wants to have its own digital currency

News: The Indian government and the RBI are getting ready to launch a central bank digital currency (CBDC). This is indicated by the scheduled introduction of the Cryptocurrency and Official Digital Currency Bill, 2021, in the winter session of the Parliament.

Further, the government has also received a proposal from the RBI in Oct 2021 to amend the RBI Act, 1934, to include currency in digital form under the definition of a banknote.

Hence, it is important to understand what a CBDC really is and what it isn’t; what it hopes to achieve; the opportunities it might bring and the problems that it is likely to solve.

What are the types of Central bank money?

There are two types:

i) Physical cash

ii) Reserves maintained by commercial banks with the central bank. These reserves are in a digital form and are used by banks to manage interbank payments.

Thus, a CBDC won’t change much at the commercial bank level, as their cash reserves with the RBI are already in digital form. Retail CBDCs will essentially be digital currency issued by the central bank, which will exist alongside physical cash.

How a CBDC payment system will be different from the existing digital payment apps?

– Firstly, the payment infrastructure is created and managed by the central bank.

– Secondly, payments are made using central bank money and not the money created by the banking system.

Why Central Banks want to have their own digital currency?

Preventing centralisation of digital payment infra: Digital transactions have increased over time. But in various countries, a bulk of this new digital payment infrastructure is being managed by a few private companies. For instance, in China, 94% of mobile transactions are supported by Tencent or Alibaba. This creates an increased overall risk in the financial system, with the entire digital payment infrastructure being dependent on a few private companies. It also leads to further problems:

– monopolies

– high entry barriers

– potential misuse of data

– safety and security of technology

Thus, there is a need for central banks to create a new digital payment infrastructure through CBDCs. In the event of serious shocks to the systems of the banks or card companies, a CBDC could be an alternative form of payment.

The threat of a monopoly might not exist in India because of the mass popularity of UPI, owned by NPCI (National Payments Coporation of India) which is further owned majorly by Public Sector Banks (PSBs).

Why India requires a CBDC?

Despite the likelihood of a China-like monopoly being almost non-existent in India, it still needs a CBDC for the following reasons:

– Can simplify the complicated cross-border payments system

– China’s push for CBDC: China wants the digital yuan to gain acceptability as a global currency, like the US Dollar. Once it does, it is a matter of time before it starts flowing into the Indian economy. This issue needs to b addressed by India via developing global protocols for the cross-border usage of CBDCs.

For more: Please go through the following detailed article:

– Introduction of a CBDC or a National Digital Currency in India – Everything you need to know

Fighting together: Only the political leadership can clear the way for joint theatre commands

News: The new navy chief, Admiral R Hari Kumar, recently said that the US military took 50 years to achieve its joint command structure. Although he clarified that he wasn’t implying that it would take a similar amount of time to establish India’s joint theatre commands, his stress was on highlighting the complexities involved.

What India needs to do to effect theaterization?

Services need to shift from their present individual war fighting structure to training their personnel to operate under joint command.

Consolidation of warfighting assets and streamlining of personnel to make the services leaner, better trained and agile.

Reshaping of the current pyramidal command structure: Theatrisation would need both a clear chain of command and some degree of dilution of hierarchies, while dissolving turf boundaries. For instance,

– It’s still not clear whether the political leadership should communicate with the chief of defence staff, service chiefs or the prospective theatre commanders

– There’s also the issue of ownership of assets and their allocation to the joint commands.

What is the way forward?

The political leadership should take a decisive call on operational matters and clearly lay out responsibilities. Otherwise, theatrisation will be mired in inter-services tussles, defeating its very purpose.

The farm laws fiasco offers 7 lessons on how to reform in a democracy

News: The enactment of farm laws, sustained farmer protests against them over the year and the eventual repeal has many takeaways for the future policymakers. Seven such policy lessons are discussed.

Together they form a toolkit for the future reformer.

What are key policy lessons from the farm law fiasco?

Lesson 1: Push for simultaneous elections: There is an inherent mismatch between politics and economics. A reformer seeks long-term prosperity, while a politician’s survival depends on the next election. Clearly, the rollback of the farm laws was influenced by elections in UP and Punjab. The problem, however, is that India is perennially in election mode. Hence, the first lesson is to push for simultaneous elections.

Lesson 2: Get states to enact laws (not the Centre) on state or concurrent list. Govt should have encouraged other states to implement the reform. Once farmers of Punjab and Haryana would see farmers’ incomes rising in the neighbouring states, they would’ve realised the benefits of the laws. This happened with VAT in 2005. When some states refused to implement it, the government allowed them to move at their own pace. Within 18 months, all states fell in line. Learning from GST Council’s success, the PM should employ the National Development Council of CMs to push the reforms.

Lesson 3: Sell the reforms to the public: Margaret Thatcher, the legendary reformer, used to say, “I spend 20% of my time doing the reforms and 80% selling them.”

India still reforms by stealth. People still cannot distinguish between being pro-market and pro-business. Even a reform with obvious benefits needs explaining. Far-reaching reforms need to be sold.

Lesson 4: Reforms require consent of the governed in a democracy. The process of reforming is equally important. The farm laws were introduced as ordinances, then converted to bills in Parliament and passed by a brute majority without debate. They escaped the normal process of deliberation in the standing committee. This was a mistake.

Lesson 5: Reformers need to take a holistic view. The Indian farmer is poor because there are too many people working on the farm. Our only hope is large-scale expansion of low-tech manufacturing to absorb this surplus labour. The farm laws would have provided breathing time for the economy to create these jobs. If this had been explained to farmers, it would have given credibility to the reforms.

Lesson 6: Reforms will hurt few in the short term: Reforms often hurt a small minority while helping the large majority. If the minority is well organised, it can derail the reform. The cartel of arhtiyas who stood to lose when the farmer got the freedom to sell outside the mandi funded the protests. Reformers in future need to incentivise and look after those who lose out.

Lesson 7: Timing of the reforms: It is easier to do reforms during a crisis when people are more accepting of sacrifice and radical action. The 1991 reforms went through because the nation was bankrupt. Similarly, it was smart for the govt to embark on agricultural reform during the Covid crisis. Thus, the timing of the farm laws was not wrong, as many critics have alleged.

Proposal to create bad bank for farm loans raises several issues that need careful deliberation

News: Recently, at a meeting of the Indian Banks’ Association, the idea of floating an asset reconstruction company (ARC) to improve the recovery from bad loans in the agricultural sector was discussed.

As per the RBI’s Financial Stability Report, bad loans for the agricultural sector stood at 9.8% at the end of March 2021.

In comparison, they were at 11.3% and 7.5% for the industry and services sectors, respectively.

What are the arguments in favour of this idea?

Optimising the costs of the recovery: As agricultural markets are dispersed, a single institution, as opposed to multiple banks, would perhaps be more suited to deal with collections and recoveries from farm loans.

Need for creating an effective mechanism for the recovery of dues: Currently, there is an absence of a unified framework to deal with the enforcement of mortgages created on agricultural land.

What are the issues/concerns with a bad bank for farm loans?

Firstly, the government has already set up such a framework (under NARCL) for the resolution of corporate sector loans that have turned bad.

Considering that doubts have been expressed over the effectiveness of this architecture, a more prudent approach would be to assess its experience and then decide.

Moreover, if there is indeed a need to provide for a similar framework for agricultural loans, then the same architecture could be employed.

Secondly, banks have far greater presence on the ground than a single ARC. Hence, local bank officials may be more successful in dealing with hundreds and thousands of these small borrowers than a single ARC.

Thirdly, rural land markets are characterised by lack of clear titles and multiple stakeholders, so recovery will prove to be difficult. Moreover, land is an emotive and political issue.

Fourthly, there is also the possibility that since these issues are state subjects, such an approach could risk being seen as encroaching on the rights of states.

What is the way forward?

There are better ways to help farmers –

First, ensuring timely access to credit on more favourable terms for farmers.

Second, the broader policy framework should facilitate farming becomes a more remunerative occupation.

MSP is no silver bullet to boost farmers’ income

News:  Even as the central government has announced its withdrawal of the three farm laws, farmer unions have persisted in their demand to make the minimum support price (MSP) a legal entitlement.

But, even if it becomes a legal right, the MSP, in its current form, is unlikely to resolve the problems of Indian farmers across the country.

More broad-based measures such as better access to inputs, crop insurance and agro-advisory would be far more beneficial to farmers.

Why legalising MSP cannot resolve India’s farm crisis?

The issue of quantum of price increase: Over the past 10 years, the compounded annual increase in MSP for most major crops, especially wheat and paddy, has barely matched the rate of general increase in prices.

Interstate cost variance: There is a large disparity among states in terms of cost of production of a crop due to factors such as land, labour costs and scale of production. For instance, the projected A2+FL for paddy ranges from ₹759 a quintal in Punjab to ₹2,405 in Maharashtra for the 2021-22 kharif marketing season.

However, a single MSP is declared for the entire country based on a weighted average. Thus, farmers in some states benefit far more than others from MSP, and some may even lose out if they depend on this mechanism.

Read more in the following articles:

– After farm laws repeal, farmer unions want legal guarantee for MSP. Should the govt give in?

– Legalising MSP: Challenges and way forward – Explained, pointwise

We’re on a knife’s edge between global reflation and stagflation

News: Massive stimulus packages, given during the pandemic, could lead to high inflation amid low growth, if global production capacity lags overall demand.

Why the stimulus packages were given?

As the pandemic spread around the world, demand decreased due to fear and lockdowns. Services, travel, tourism, and retail operations took the hardest hits.

Firms around the world reacted with a swift reduction in capacity. Layoffs of employees followed, which decreased disposable income and contributed further to decreasing demand.

In this context, Central banks around the world responded with massive liquidity and monetary support, while governments relied on unprecedented fiscal spending.

What is the consequence?

– Demand pull Inflation: The increase in prices across various goods and services is now among the broadest the world has seen since the 1970s. From oil prices and food staples to semi-conductors and cars, prices have risen sharply.

– Supply Shocks: As demand recovered, this created massive supply bottlenecks, resulting in rising prices.

What are the implications for India?

For India and emerging markets, this environment is an opportunity as well as a challenge.

Opportunity

As one of the world’s fastest growing economies, India will continue to attract capital in a world of low interest rates, thus stabilizing its currency, current account and macro-economy.

This capital can help build on the economic gains of a vibrant startup sector that Indian entrepreneurs have shown a great propensity for.

Challenge

At the same time, without significant reforms in factor markets and material improvements in supply chains and logistics, rising demand will only add to India’s inflationary pressures.

What is the way forward?

Central bankers must remain vigilant on inflation. Sustained inflation disproportionately impacts the poor and vulnerable in any society.

Demand-led growth must prioritize investment instead of consumption. Otherwise, we risk stagflation, a rare but worrisome phenomenon of high inflation with low growth.

The Goa government’s TReDS adoption is worthy of emulation

News: Central Govt has taken various steps to improve working capital (capital to manage day-to-day expenses) situation of small businesses. RBI too had launched TReDS platform to towards this end. However, many govt procurers lie outside the coverage of TReDS.

It’s in this light that an initiative by the Goa govt assumes significance, wherein it registered itself as a buyer on the TReDS platform and in the process became the first state government to do so.

The subsequent improvement in finances of MSMEs, their owners and workers have given a boost to economic activity in Goa.

Why the Goa state govt took this step?

Pandemic effect on cash flows: The economy and people of Goa depend heavily on tourism. However, due to lockdowns and travel restrictions, tourism got severely impacted, resulting in limited cash flows for small businesses.

Delay in payments: Further, many were engaged in work for government agencies, with significant receivables. But payments were delayed because the state government itself was dealing with its own set of problems.

It led to a dip in tax collections in Goa. This created a vicious cycle where the dip in tax collections caused a further shortage of funds for the govt.

This situation prompted the Goa government to take the initiative of registering on TReDS as a buyer.

How registering on TReDS as a buyer helped Goa govt clear MSME dues?

It partnered with Receivables Exchange of India Ltd (RXIL) to get on-boarded as a ‘Buyer’ on this platform.

On the TReDS system, the government used invoice factoring (online bidding of invoice by multiple financiers-factors), that helped in quick realization of trade receivables at competitive market rates and better tenures. Finally, automated repayments to financiers from government are triggered on due dates.

How did this help the MSMEs?

It addresses two issues facing MSMEs.

One, it enables the prompt encashment of receivables.

Two, factors have no recourse to MSMEs if they don’t get paid on the due date. The credit risk is borne by factors.

Goan MSME sellers received the cash flows they needed on time. Moreover, the government, as the buyer, was able to make payments on favourable terms and avail the support of financiers, including banks, to ensure timely payments to MSMEs in need.

Other benefits:

– Being on TReDS, further enables timely settlement of MSME dues without immediate expenditure from the state’s treasury.

– Finally, automated repayments to financiers are triggered on due dates

What are some steps taken by Centre to improve working capital situation of MSMEs?

– The MSME Development (MSMED) Act of 2006, provides for the naming and shaming of large buyers that don’t pay small businesses on time for goods procured or services received.

– MUDRA loans were designed to widen credit availability.

– The Emergency Credit Line Guarantee Scheme (ECLGS) of the Centre  extends new credit to small businesses.

– The government has made it mandatory for companies with a turnover of ₹500 crore or more to get registered on the TReDS platform. The Government’s e-Marketplace (GeM) is automatically linked to TReDS.

Draft extended producer responsibility policy: How gaps in achieving fundamental goals can be closed

News: MoEFCC has released a draft EPR (Extended Producer Responsibility) policy for management of plastic waste in India.

The Plastic Waste Management Rules, 2016 introduced the concept of EPR to manage plastics in India.

It has seen inadequate progress in the last five years as the policy failed to translate into action, due to the lack of accountability of the producers and lack of enforcement from the authorities.

The latest draft rules have managed to take a small step in the right direction. However, the rules lack on certain parameters.

What are the gaps and flaws in draft rules?

Firstly, Plastic waste reduction / minimisation is neglected in rules. The ‘polluter pays’ principle, thus, failed to translate to policy. Though the PWM Rules, 2016, mandate the generators to minimise generation of plastic waste. However, it is not applicable to the PIBOs (Producers and brand owners).

Secondly, compostable or biodegradable plastic is not under the ambit of EPR. India should have an EPR mandate of collection and processing of the same.

– Globally, 1% of the entire plastics produced are from non-fossil sources and are bio-degradable. India generates more than 250 tonnes of compostable and biodegradable plastic every day.

This plastic needs to be sent to industrial composting facilities and not be composted at home or littered in the environment. This doesn’t find mention in the policy document. Also, these facilities itself are not available in India.

Thirdly, no standardised format of how an action plan is to be submitted by PIBOs. It is mandatory for PIBOs to submit an action plan, according to the draft EPR policy. However, due to ambiguity of words, it will result in a non-standardised action plan submitted by various PIBOs, which will not be comparable.

Fourthly, the centralised portal developed by CPCB can only be accessed by the PIBO’s, recyclers, pollution control boards.

– Plastic waste processors are supposed to disclose the total amount of plastic waste handled on their website, while the PIBOs, have not been directed to disclose the amount of plastic they placed in the market.

– This has effectively left PIBO’s on their own to ‘green’ their image in the market.

Fifthly, the informal sector’s waste recycling operations are unlicensed and unregulated, though their waste management operations generate a net profit. It doesn’t find mention in draft rules, too. Even though most of the plastics in India are channelised by the informal sector.

What is the way forward?

EPR policy should encourage the brand owners to diversify packaging material with alternatives such as paper, glass, metals, among other things.

– Offering EPR certificates to the brand owners, who diversify their packaging, will also help the brands to develop a green image.

To promote compostable plastics and its bio-degradation, testing, certification and proper labelling become important.

– India does have standards for compostable plastic (Schedule I of the Plastic Waste Management Rules, 2021). But the certification and labelling mechanism is very weak and needs to be addressed through policy.

A standard template, developed by CPCB in consultation with all the stakeholders, is a must. The standardised data, thus obtained, will be comparable across all the PIBOs. It will also help us verify and avoid duplication of data.

Basking in reflected glory

News: The recent appointment of Parag Agrawal, as the CEO of US-based company ‘Twitter’ started renewed debate on brain drain from India.

What are the reasons for brain drain from India?

It started in the late-1960s when private sector companies were few and there were few good jobs available in public sector undertakings.

Unlike India, the ecosystem of the U.S. helps spot talent and allows people to rise to the top.

Better graduate and post-graduate education in foreign attracts bright candidates from India.

– Many Indian-origin Nobel Laureates in physics, chemistry, medicine and economics pursued their higher education in the U.S. and settled there.

What is the way forward?

India should learn from China. Chinese people did not need to go to the U.S. to rise to the top. They were able to create success stories for themselves, sitting in China.

– Chinese entrepreneurs founded world’s most competitive companies in China.

India should provide a conducive ecosystem that creates world-beating companies and institutions that can produce Nobel Laureates.

Nagaland killings should prompt a broad rethink

News: The army operation resulted in the tragic death of 14 civilians in Nagaland.

What can be the impact of the killings? 

It can stall the ongoing Naga peace process and has the potential to revive the narrative of India versus the Naga people. The incident can be used by the insurgent groups to recruit and even strengthen the positions.

NSCN(I-M), the key Naga group negotiating with the Centre, has already declared the incident as a “black day” for all Nagas. While, Naga National Political Group (NNPG) has blamed the continued implementation of the Armed Forces Special Powers Act (AFSPA), 1958 for such incidents.

What is AFSPA? Why controversies surrounding it?

The law gives security forces sweeping powers of arrest and to continue counterinsurgency operations. Security forces are not charged for their actions because of the shield provided under the AFSPA.

For example, In over 20 years, the Centre has denied prosecution sanctions under AFSPA in all cases recommended by the J&K government against army men. The same law prompted Irom Sharmila to begin her hunger strike because of the tragedies like the Manipur Malom Massacre in 2000.

Why there is a stalemate despite the Framework Agreement (FA)?

Demands: Naga people’s demand a separate constitution and flag, which the centre is not ready to accept. On the other hand, NSCN (I-M) rejected the centre proposals to have a cultural flag instead of a national flag and deal with issues of a constitution after signing the agreement.

Vague wordings: NSCN (I-M) argued that FA states that India and Nagaland would coexist as two entities. This is acceptance of Naga sovereignty, and this consequently of separate flag and constitution. But the centre is clear that there is no question of granting sovereignty to any state within India.

The FA is so vague that it is becoming difficult to arrive at any final agreement. Moreover, since the agreement is with NSCN(I-M), it leaves out many Naga groups.

What is the way forward?

With Myanmar is reverting to a military junta and India in a standoff with China, there is a need that the Centre should probe the incident in an impartial way. It should grant permission to prosecute soldiers if it requires and review the proceedings of AFSPA.

Also, the government should clearly declare what it cannot give and then ask NSCN(I-M) to negotiate on other issues.

Prelims Oriented Articles (Factly)

Cleaning of seashore and awareness drive in full swing under ‘Puneet Sagar’ Abhiyan by NCC cadets

What is the News?

National Cadet Corps (NCC) is carrying out a nationwide campaign named ‘Puneet Sagar’ Campaign.

What is the ‘Puneet Sagar’ Campaign?

Puneet Sagar is a nationwide campaign to free seashores/beaches from plastic & other waste materials and increase awareness about the importance of keeping these clean.

Aim: To propagate the message of ‘Importance of Clean Seashores/Beaches’ amongst the local population and future generation.

Under the campaign, cadets will generate awareness about the conservation and impact of plastic pollution along the sea beaches through nukkad nataks, poetry recitation, signature campaigns, pamphlet distribution amongst others.

National Cadet Corps (NCC)

The NCC was formed in 1948 on the recommendation of H. N. Kunzru Committee [1946]. NCC is the world’s largest uniformed youth volunteer service organization.

The NCC cadets undergo basic military training at various levels and as well as academic curriculum basics related to the Armed forces and their functioning.

Nodal Ministry: ​​ The NCC falls under the purview of the Ministry of Defence and is headed by a Director-General of three-star military rank.

Source: This post is based on the article “Cleaning of seashore and awareness drive in full swing under ‘Puneet Sagar’ Abhiyan by NCC cadets” published in PIB on 6th December 2021.

Adapt on climate, not mitigate: Study

What is the News?

A report titled ‘Decarbonisation and the evolving role of corporate boards’ has been released by KPMG, a global network of professional firms.

What are the key observations made by the report?

The COP26 Summit or the UN Climate Change Conference of the Parties in Glasgow, UK has kept alive the goal of keeping global warming within 1.5 degrees Celsius.

But to achieve the goal, countries and the private sector need to urgently put forth ambitious new climate programmes and policies, including technological advances.

Currently, companies are taking mitigation measures by reporting on emissions alone. Now, they need to move beyond mitigation to adaptation. For instance, how to make supply chains resilient.

Must Read: Basic IPCC terms: Mitigation, Adaptation, tipping point, etc.

However, to adopt adaptation measures companies need to set goals backed by viable actions and stay away from Greenwashing. 

Note: Greenwashing is the process of conveying a false impression or providing misleading information about how a company’s products are more environmentally sound. 

Initiative Related to Climate Action measures by Companies

Science-Based Targets initiative(SBTi)

SBTi is a partnership between United Nations Global Compact, World Resources Institute (WRI), World Wide Fund for Nature (WWF) and CDP, a non-profit organisation.

Aim: To drive ambitious climate action in the private sector by enabling companies to set science-based emissions reduction targets.

Note: Science-based targets provide a clearly-defined pathway for companies to reduce greenhouse gas (GHG) emissions, helping prevent the worst impacts of climate change and future-proof business growth.

Source: This post is based on the article “Adapt on climate, not mitigate: Study ” published in TOI on 7th December 2021.

A new report shows worrying growth of the diabetes pandemic

What is the News?

The 10th edition of the International Diabetes Federation Diabetes Atlas has been released.

About International Diabetes Federation(IDF) Diabetes Atlas

IDF Diabetes Atlas is the authoritative resource on the global impact of diabetes. The atlas was first published in 2000.

The Atlas is produced by the International Diabetes Federation(IDF) in collaboration with a committee of scientific experts.

What are the key findings of IDF Diabetes Atlas?

Diabetes is one of the fastest-growing global health emergencies of the 21st century.

In 2021, one in 10 adults worldwide, which means around 537 million people are now living with diabetes. This is higher than the 463 million adults who lived with the condition in 2019.

Undiagnosed Diabetes: Globally, 88% of adults living with undiagnosed diabetes are in low- and middle-income countries. But even in high-income countries, almost a third of (29%) people with diabetes have not been diagnosed.

Deaths due to Diabetes: Diabetes now ranks among the top 10 causes of global mortality, responsible for an estimated 6.7 million deaths in 2021.

Future Projections on Diabetes: The Atlas projects that 783 million adults will be living with diabetes by 2045. That’s an estimated 46% increase compared to the expected population growth of 20% over the same period.

About Diabetes

Diabetes is a serious chronic condition that occurs when the body cannot produce enough insulin or cannot effectively use the insulin it does produce.

Type 1 diabetes is the major type of diabetes in childhood but can occur at any age. It cannot be prevented. People with type 1 diabetes require insulin to survive.

Type 2 Diabetes accounts for the vast majority (over 90%) of diabetes worldwide. Evidence exists that type 2 diabetes can be prevented or delayed and there is accumulating evidence that remission of type 2 diabetes may sometimes be possible.

Source: This post is based on the article “A new report shows worrying growth of the diabetes pandemic” published in Down To Earth on 7th December 2021.

Launch of the Resource Book on Springshed Management in the Indian Himalayan Region by NITI Aayog

Source: This post is based on the article “Launch of the Resource Book on Springshed Management in the Indian Himalayan Region by NITI Aayog” published in PIB on 7th December 2021.

What is the News?

Niti Aayog has released a Resource Book on Springshed Management in the Indian Himalayan Region(IHR). This Resource Book is a summarised guiding document on best practices in springshed management in the IHR. 

What are Springs?

Springs are groundwater discharge points in the mountains where the water-bearing layers (aquifer) intersect with the ground surface and water seeps out of rock pores, fissures, fractures, or depressions. 

Importance of Springs: Springs are the primary water source for millions of people in the mid-hills of the Hindu Kush Himalayas (HKH) and supply over 90% of water needs for domestic uses. 

Concerns

Over the past decade or so, there has been increasing concern that springs are drying up or becoming seasonal, and their discharge is reducing over the years, even though quantitative evidence is still relatively sparse. 

The seasonal and overall decline in springs has affected both domestic water availability in remote villages as well as agricultural productivity.

However, in recent decades, spring revival efforts using the principles of hydrogeology have become a widely accepted model of springshed management (SM) by several civil society organisations (CSOs) and governmental agencies in the Himalayas.

What are the recommendations given by the report based on best practices?

Formation of National Springs Mission(NSM): A National Mission will facilitate improved coordination, efficient execution and scaling up of springshed management initiatives in India. It can also consolidate and converge the learnings and experiences under one umbrella and help develop national or regional-level decision support systems.

Create a national digital database on spring-related data collected by various agencies. This will improve ease of access and academic research. In addition, the data can be integrated into an online portal and facilitate open access sharing for all stakeholders, including the local communities.

Create support for existing, state and national-level science-policy-practice consortiums. This will facilitate experience sharing, complementary knowledge generation, transfer, and capacity building of all stakeholders.

Issi saaneq: New dinosaur species, which roamed Greenland 214 mn years ago

Source: This post is based on the article “Issi saaneq: New dinosaur species, which roamed Greenland 214 mn years ago” published in Indian Express on 6th December 2021.

What is the News?

Researchers had earlier unearthed two well-preserved dinosaur skulls during an excavation in East Greenland. They have now named this dinosaur species as Issi saaneq.

About Issi saaneq

Issi saaneq is a dinosaur that lived about 214 million years ago in what is now Greenland. 

It was a medium-sized, long-necked herbivore and a predecessor of the sauropods, the largest land animals ever to live.

The name of the new dinosaur pays tribute to Greenland’s Inuit language and means “coldbone”.

What is the significance of the discovery?

Firstly, this is the first evidence of a distinct Greenlandic dinosaur species.

Secondly, this dinosaur species lived during an important time in Earth’s history. It will help the researchers to understand the climatic changes according to that time.

Highly invasive snail spotted in Kerala

Source: This post is based on the article “Highly invasive snail spotted in Kerala” published in The Hindu on 7th December 2021.

What is the News?

Researchers have found a tiny snail species named Physella Acuta also known as acute bladder snail in the Edappally canal in Kochi, Kerala. This snail species is globally branded as a Highly Invasive Species.

About Physella Acuta (acute bladder snail)

Physella acuta is a snail species. It is considered native to North America but is now found in all continents except Antarctica. 

The snail is small in size with a striking, pellucid, golden-yellow shell. It can also easily be identified by its sinistral (left-opening aperture) shell.

Its good looks make this snail a favourite of aquariums. However, special care should be taken while dealing with this snail and it should not be kept in home aquariums.

It was first reported in India in the early 1990s. It has been reported for the first time in Kerala. It is believed to have reached Kerala through the aquarium trade, a major vector for invasive species. 

Why is Physella Acuta considered an Invasive Species?

Physella Acuta plays host to worms that can cause food-borne diseases and skin itches in humans.  Moreover, its rapid growth rate, air-breathing capability, and tolerance to pollution makes the Physella acuta a potential competitor to native fauna.

Afforestation funds released to States

Source: This post is based on the article “Afforestation funds released to States” published in The Hindu on 7th December 2021.

What is the News?

The Compensatory Afforestation Fund Management and Planning Authority (CAMPA) has so far disbursed ₹48,606 crores to 32 States.

Chhattisgarh and Odisha have had the maximum amount transferred to them, followed by Jharkhand and Maharashtra.

What is Compensatory Afforestation?

Compensatory Afforestation (CA) is defined as the process of afforestation, and associated regeneration activities, done to compensate for destroyed forest land that has been diverted to non-forest activities.

Under the Forest Conservation Act 1980, every time forest land is diverted for non-forest purposes such as mining or industry, the project developer is supposed to identify non-forest land of an equal area and also pay for planting forests over this, or when that is not available, on twice the area of degraded forest land. 

About Compensatory Afforestation Fund

The Compensatory Afforestation Fund Act was passed by the centre in 2016 and the related rules were notified in 2018.

The Act was enacted to manage the funds collected for compensatory afforestation, which till then was managed by ad hoc Compensatory Afforestation Fund Management and Planning Authority (CAMPA).

Key Provisions of  Compensatory Afforestation Fund Act,2016

The act established a National Compensatory Afforestation Fund under the Public Account of India and a State Compensatory Afforestation Fund under the Public Account of each state.

These Funds will receive payments for (i) compensatory afforestation, (ii) net present value of forest (NPV), and (iii) other project specific payments. The National Fund will receive 10% of these funds, and the State Funds will receive the remaining 90%.

These Funds will be primarily spent on afforestation to compensate for the loss of forest cover, regeneration of forest ecosystem, wildlife protection and infrastructure development.

The Act also establishes the National and State Compensatory Afforestation Fund Management and Planning Authorities to manage the National and State Funds.

Explained: The significance of Raigad fort in Maratha history

Source: This post is based on the article “Explained: The significance of Raigad fort in Maratha history” published in Indian Express on 7th December 2021.

What is the News?

The President of India is visiting the Raigad Fort, where he will pay tribute to Chhatrapati Shivaji Maharaj.

About Raigad Fort

Raigad is a hill fort situated in the Raigad district in Maharashtra. The British Gazette states the fort was known to early Europeans as the Gibraltar of the East. 

Its decisive feature is a mile and a half flat top, which has adequate room for buildings. In its prime, the fort had 300 stone houses and a garrison of 2,000 men.

Who built the Raigad Fort?

The fort, which was earlier called Rairi, was the seat of the Maratha clan Shirke in the 12th century. 

The fort changed hands a number of times from the dynasty of Bahaminis to the Nizam Shahis and then the Adil Shahis. 

In 1656, Chhatrapati Shivaji captured it. The fort not only helped Shivaji challenge the supremacy of the Adil Shahi dynasty but also opened up the routes towards Konkan for the extension of his power.

Importance of Raigad Fort

Raigad fort had emerged as the seat of Shivaji’s government.

Moreover, Shivaji was coronated at Raigad by Gagabhatt where he took on the title of Chhatrapati. 

Now the Maharashtra Government is also seeking the World Heritage Site tag for Raigad Fort along with 13 other forts from the era of 17th century Maratha king Chhatrapati Shivaji Maharaj on the theme of Maratha Military Architecture in Maharashtra.

North Eastern Development Finance Corporation Ltd. (NEDFI)- ‘Business cum Entrepreneurs’ Meet organised by NEDFI at its Namchi and Gangtok Branch

Source: This post is based on the article “North Eastern Development Finance Corporation Ltd. (NEDFI)- ‘Business cum Entrepreneurs’ Meet organised by NEDFI at its Namchi and Gangtok Branch” published in PIB on 7th December 2021.

What is the News?

North Eastern Development Finance Corporation Ltd. (NEDFI) has organised a Business cum Entrepreneurs Meet to encourage people, mainly youngsters to go in for entering into entrepreneurship by starting up their own business and to generate employment for others 

What is North Eastern Development Finance Corporation Ltd.(NEDFI)?

NEDFi is notified as a Public Financial Institution under Companies Act,1956 and was registered as an NBFC in 2002 with RBI.

Nodal Ministry: Ministry of Development of North Eastern Region (DoNER),

Purpose: To provide financial assistance to micro, small, medium and large enterprises for setting up industrial, infrastructure and agri-allied projects in the North Eastern Region of India and also Microfinance through MFI/NGOs. 

Besides financing, the Corporation offers Consultancy & Advisory services to the state Governments, private sectors and other agencies. 

The corporation is also the designated nodal agency for disbursal of Govt. of India incentives to the industries in the North-East India under North–East Industrial and Investment Promotion Policy 2007(NEIIPP 2007). 

Headquarters: Guwahati, Assam