9 PM Daily Current Affairs Brief – September 23rd, 2021

Mains Oriented Articles 

GS Paper 2

• Let’s rework incentive structures to boost IBC recovery
• Citizen scorecards for better accountability
• Judiciary must reexamine how it has viewed citizenship questions in Assam
• The importance of Quad meeting amidst current geopolitical flux

GS Paper 3

• How new global tax rules may reshape India?
• A flawed calculation of inflation
• Regaining fiscal balance

Prelims Oriented Articles (Factly) 

• Risk to online freedom
• Ozone layer recovery may take several lifetimes. But Montreal Protocol saved the Earth
• These animals and plants of India could have become ‘possibly extinct’ : IUCN
• Sea level rise is certain 
• A time to introspect: On GST Council meeting
• Covid deaths: Centre okays ex-gratia, state funds to cover it
• India, UAE launch CEPA negotiations, look to conclude them by year-end
• IISc researchers find a way to substitute for single-use plastics
• National Single Window System for Investors and Businesses Launched
• WHO says air pollution kills 7 million a year, toughens guidelines
• India’s income divide narrows, wealth divide persists: Survey data
• CSIR-CMERI Solar DC Cooking System- A Step Towards a Green & Pollution Free India
• Creative destruction’ dents inclusion, ups output: Das

Mains Oriented Articles

GS Paper 2

Let’s rework incentive structures to boost IBC recovery

Synopsis: IBC is a landmark reform and its efficiency can be further enhanced by adopting incentive structure.

Introduction

Despite value erosion at disbursal due to poor credit discipline, the IBC has yielded impressive recoveries so far. However, the Code has also been criticized on several other grounds, many of which are questionable.

Why IBC ‘s criticism is not justified?

Number of liquidations: The purpose of any resolution mechanism is not to minimize liquidations, but to maximize recovery.

Bankruptcy laws: IBC is not designed to save companies from liquidation, but to maximize value using market mechanisms.

Global comparison: So far, close to half of all cases under the IBC have ended up in liquidation. This is an abnormally large number that implies its failure. However, according to data from US Courts, twice as many US firms file for liquidation than they do for reorganization. Hence, the proportion of liquidations (50%) under the IBC is not a cause for concern or criticism.

Long resolution times under IBC: For a new bankruptcy law, a lead time of 400 days is not unusual. Till 2005, the average duration in the US was 480 days.

What are the issues still pending?

Lack of focus on efficiency: IBC does not adequately address the fact that the ability to reorganize a business during bankruptcy is a vital driver of recovery values. Corporate bankruptcies are an opportunity for businesses to become leaner and more efficient.

In the US, many firms employ bankruptcies strategically and use it to renegotiate contracts and streamline fixed costs.

Management: Unlike the USA where debtors retain management control of the bankrupt firm, firms under IBC are managed by resolution professionals.

Why USA’s debtor in possession model can not work in India?

Debtor-in-possession provisions: Experts have suggested to introduced it to allow the management to retain control of the bankrupt firm and incentivize them to streamline operations and maximize recovery. However, most firms in India are owned and operated by promoter families, hence debtor-in-possession is a recipe for disaster.

This will also substantially increase the duration of bankruptcies, since promoters with management control will have no incentive for a quick resolution.

What is the way forward?

Firstly, incentivize resolution professionals, since they take charge of a bankrupt firm’s management under the IBC. An incentive fee structure based on a percentage of recovery will also attract talented managers, thereby boosting IBC resolution quality.

Secondly, authorities need to take a broader economic approach to incentivizing reorganization for maximizing recovery.

Citizen scorecards for better accountability

Synopsis: The CAG’s auditing standards highlight the importance of performance audits for promoting transparency and evaluating outcomes.

Introduction

Soon, Parliament is going to celebrate 100 years of establishment of the Public Account Committee in December.

What is the Public accounts Committee (PAC)?

It was set up in 1921 under the Montagu-Chelmsford reforms to conduct audits of the Government or the executive. It is thus the oldest parliamentary committee in India. Post-independence, PAC was established through the Rules of Procedure and Conduct of Business in the Lok Sabha. Similarly, the state PACs are established through their respective Vidhan Sabhas.

It is constituted every year with 15 members from Lok Sabha and 7 members from the Rajya Sabha. Since 1967, a convention has developed that PAC will be headed by an Opposition member from the Lok Sabha.

What is the work of PAC?

Review: It reviews the financial and performance audits which have been conducted by the Comptroller and Auditor General (CAG). The review reports are then presented to the Parliament.

Performance Scorecards: Soon, it is going to develop citizen-centric performance scorecards for various ministries. This will ensure better delivery of public services to citizens. Citizen scorecards developed by PAC can be standardized by the CAG, and can also be replicated by the PACs in state Assemblies.

What are the citizen scorecards?

All government departments and agencies are responsible for providing certain citizen-centric services to the public. These services can be tracked quantitatively through well-defined performance metrics. Using these metrics, a report card or scorecard will be developed.

Example:  Civil Aviation Ministry provides information on passengers flown, flight punctuality, passenger grievances, seat utilisation, pilot licences issued, and so on. These are released on a monthly basis to the public and are tracked closely by the media.

How can the scorecards be made?

The CAG could sign MoUs with various ministries and agencies to establish well-defined citizen scorecards. Once these citizen-facing output metrics are ready, they can be used to conduct high-quality performance audits for each government entity within the CAG’s purview. These citizen scorecards can then be replicated in the state CAGs. The citizen scorecards could be reconciled with the SDGs as well.

How these scorecards will prove beneficial?

These scorecards will bring accountability. Our bureaucracy has become used to putting facts and figures that do not directly relate to citizen’s lives. This scorecard thus reverses the trend and can make the executive more accountable.

Judiciary must reexamine how it has viewed citizenship questions in Assam

Synopsis: NRC was designed to filter out the foreigners in India. However, this seems to be impacting the very right of citizenship of Indians residing in Assam.

Introduction

Recently, Gauhati High Court, while hearing the case of Asor Uddin, gave its view on citizenship. Ason was declared to be a “foreigner” by a Foreigners Tribunal through an ex parte order.

The HC said citizenship, being an important right of a person, should be decided based on merit. It should consider the material evidence that is produced by the person concerned. It should not be cancelled ex-parte or by default.

Why Foreigners Tribunal is in news?

In Assam, any person, including decorated army officers, can be accused of being a “non-citizen”. The Ministry of Home Affairs revealed in Parliament, that from 1985 to February 28, 2019, 63,959 people have been declared “foreigners” through ex parte orders by the Foreigners Tribunal in Assam.

So, effectively 62% of the total people, who have been challenged as foreigners, have been declared as “foreigners” in the state.

What is the Foreigner Act (FA)?

Its roots lie in the Foreigners Ordinance, which was promulgated in 1939 to meet the emergency created by the Second World War. The ordinance was never meant to deal with persons who are considered citizens. Section 2(a) of the 1946 Act defines “foreigner” as a person who is not a citizen of India.

Foreigners Act, 1940: It replaced the said ordinance. Section 7 of the 1940 Act vested the burden of proof upon the foreigner.

Foreigners Act, 1946: It repealed the 1940 Act. But, the burden of proof remained the same. Under it, a person can be stripped of his citizenship if he/she failed to appear before FT when called. He will then be declared a “foreigner’ through an ex parte order.

What was the Supreme Court’s judgement?

The “burden of proof” has been validated by the Supreme Court in the Sarbananda Sonowal case. Sonowal challenged the Illegal Migration (Determination by Tribunals) Act, 1983, (henceforth IMDT), before the SC. IMDT emphasized procedural fairness and the burden of proof was on the state. But IMDT was declared unconstitutional as the apex court found these procedures “extremely difficult, cumbersome and time-consuming”.

Moreover, Supreme Court, based on a 1998 report by former Assam Governor S K Sinha has stated that there are “millions of illegal Bangladeshi nationals in Assam”. But the report was not based on any scientific and empirical data. To add to the complexity, Assam started detaining “declared foreigners” since 2010 to deport to the “country of origin”. But the failure to deport created a situation of indefinite detention.

What should be the way forward?

Given the fact that Citizenship is an important right, it should be given due importance.

The importance of Quad meeting amidst current geopolitical flux

Synopsis: This article explains the previous Quad summit and the performance of Working groups and suggestions to improve Quad further.

Introduction

The leaders of Australia, India, Japan, and the United States will meet for the first-ever in-person Quadrilateral (“Quad”) summit. It is especially significant as it is set against the backdrop of few important recent events.

Such as the withdrawal of the US from Afghanistan, the formation of the AUKUS security alliance and following the release of the European Union’s Indo-Pacific strategy.

About the Development of Quad

The four nations are vibrant democracies and open economies. Three are developed countries and one is an emerging market.

About the previous meeting and its outcome

The Quad leaders met formally but virtually for the first time in March this year, and the joint statement captured the “spirit of the Quad”, stressing democratic values while pledging to strengthen cooperation on the “defining challenges” of the times. Working groups were set up on vaccines, critical and emerging technologies, and climate action.

What is the progress of working groups?

The Working groups (WG) fulfilling the past commitments of Quad countries. For instance,

Progress of WG on Vaccines: The joint vaccine production programme seems to be on track and their distribution first to needy Indo-Pacific countries will begin in early 2022.

Progress of WG on emerging and critical technologies: This group is reporting progress. A principal endeavour of this WG is to leverage the Open Radio Access Network (O-RAN) to derive benefits of interoperability of the 5G technologies offered by different vendors in the west.

Progress of WG on Climate Change: Cooperation on multiple dimensions of the climate challenge is proposed, including finance, emissions reduction, technology and capacity-building.

However, some key issues remain unresolved within this group as India, being a developing nation, is unable to show “more ambitions” regarding its climate goals. But efforts are underway to finalise technology-sharing and other cooperation to meet the challenges of climate change.

What is the significance of Quad for India?

For India, each of the other three countries is a strategic partner, and bilateral and multilateral initiatives have been taken across multiple areas in different fora with each. The Quad syncs with India’s other regional programmes such as the Indo-Pacific Oceans’ Initiative and the Supply Chain Resilience Initiative (SCRI).

What the Quad should focus upon?

Devise a matching strategy against China: With the China challenge now recognised as being both multi-faceted and long-term, the Quad needs to devise a matching strategy.

So, the Quad should consider practical recommendations like, ‘The Quad Economy & Technology Task Force Report: A Time for Concerted Action’ crafted by international experts and published by think tank Gateway House.

Strengthen the economic partnership further: To advance their goals for a free, open and inclusive Indo-Pacific, the Quad must activate business partnerships. This can be done in the following ways.

Joint efforts can be made by all Quad countries to establish alternative manufacturing hubs. This will not only aid SCRI but also make regional supply chains more diversified.

The Quad could consider adding a trade ministers’ interaction to its agenda which may engage in lowering trade barriers and boosting trade linkages

Ensure Quality infrastructure investment: Innovative financing and public-private partnership models between Quad nations can enlarge the space for private industry and support public funds in the endeavour.

India should be cautious: India’s has to consider the initiatives of Quad with a strategic perspective as it is the only Quad power with land borders with China and have proximity to Afghanistan.

GS Paper 3

How new global tax rules may reshape India?

Synopsis: The conventional global tax system is changing, with several countries, including India, imposing a digital service tax and participating in a new global initiative to modernize tax rules.

Why there’s a need for new global tax framework?

The new tax framework seeks to tackle digital economy firms in particular since they do not easily fit into the conventional concept of corporate taxation, which relies on a fixed place of business in a market.

Until now, MNCs could create a registered legal entity in multiple countries and ultimately report a bulk of their revenues in jurisdictions with a very low tax rate.

Since there was no global agreement, individual countries had to compete with each other by lowering corporate tax rates, which is described as “a race to the bottom”. This affected the revenue for most nations.

Further, countries are unable to tax tech companies in jurisdictions where they make their profit.

In this context, OECD, is involved in preparing the blueprint for the new global tax deal. The global solution is aimed to ensure multinational entities pay more taxes in countries where they have customers or users than from where they operate.

How India taxed global giants till now?

India pioneered the concept of digital taxation by levying a unilateral digital service tax called equalization levy in 2016 on online advertisements. This has subsequently been expanded to cover the sale of goods and provision of services through e-platforms.

India’s move to impose an equalization levy has since been followed by several other countries such as France, Austria, Chile and the Czech Republic.

How will it benefit India?

India with a large consumer base will have a bigger share of the pie as compared to the other market jurisdictions

Since these companies would in any case be paying taxes in the markets where the consumers are located, it may encourage them to have physical proximity to their markets by way of having offices to cater to the unique preferences of each geography.

A dent in the appeal of certain low-tax countries could in turn boost India’s attractiveness at a time when India is offering tax incentives for setting up factories locally.

India’s lowest corporation tax is on par with the proposed global minimum tax rate, so it is not likely to impact new investments into India.

What are some issues related with it?

Firstly, India along with other Group of 24 (G24) member nations, has objected to the withdrawal of unilateral measures like the equalisation levy (EL) in one go. They are worried that the proposed global digital tax deal covering only top 100 companies may not lead to sufficient revenue for developing countries.

Secondly, the developing countries grouping also recommended that no less than 30 per cent of tax on non-routine profits of these companies should be allocated to market jurisdictions where they have sales.

Thirdly, India had proposed allocation of profits under fractional apportionment method. Based on this method the entire profit of the group will be apportioned to different countries in which the group operates through a formula, taking into account factors like employees, assets, sales, and users

What is the way ahead?

The major changes in the international tax regimes, offers a unique opportunity for India to attract foreign investment.

With continued policy rationalization, increased focus on ease of doing business and more business-friendly policies, India should regain its status as one of the fastest-growing large economies in the near future.

A flawed calculation of inflation

Synopsis: The current official inflation rate does not correctly measure price rise and it needs modification.

Introduction

Inflation for the last four months has been worryingly high. Wholesale price index (WPI) has been above 10% and consumer price index (CPI) crossed the 6% mark.

Does the official data capture the real picture?

Data issues: Unlock had gradually started in June and July 2020, but normalcy had not returned. Hence, the official inflation figures for these months in 2021 do not reflect the true picture.

The price rise differs for different items of consumption: For WPI, the weights in production are used, for CPI, the consumption basket is used. The consumption basket is vastly different for the poor, the middle classes, and the rich. Hence, the CPI is different for each of these classes and a composite index requires averaging the baskets.

Consumer confidence: RBI data show that consumer confidence fell drastically from 105 in January 2020 to 55.5 by January 2021. That means, even when the economy started to grow officially, consumer confidence had not recovered.

Employment and incomes: they are still down and 230 million slipped below the poverty line. All this implies that the consumption basket for different sections of the population had changed.

Under-representation of services: services are about 55% of the GDP but have no representation in WPI and about 40% in CPI. For instance, health costs shot up during the pandemic, this is not captured in inflation figures.

Why inflation is a cause of worry?

Inflation affects the consumer: If the rate of inflation is 10%, then compared to the previous year a person has to spend 10% more to buy the same number of things.

Impact on the poor: the poor have to curtail essential consumption. In India, 94% work in the unorganised sector and mostly earn low incomes and have little savings.

Impacts on govt’s revenues and the budgetary deficit: inflation puts pressure on the government to cut back budgetary expenditures, especially on the social sector. That aggravates poverty and reduces demand further.

What are the factors contributing to inflation?

Increased taxation of energy to raise resources: Since energy is used for all production, prices of all goods and services tend to rise and push up the rate of inflation. This is an indirect tax, it is regressive and impacts the poor disproportionately more. It also makes the RBI’s task of controlling inflation difficult.

Disrupted supplies: it added to shortages and price rise. Prices of medicines and medical equipment and items of day-to-day consumption also rose. Fruits and vegetable prices collapsed in rural areas but rose sharply in urban areas.

Big business raised prices: in spite of a lower wage bill, they raised prices as reflected in a sharp rise in the profits of the corporate sector.

International factors: Most major economies have recovered and demand for inputs has increased while supplies have remained disrupted (like chips for automobiles). So, commodity and input prices have risen. Also, the weakening of the rupee added to inflation.

Regaining fiscal balance

Synopsis: The advance tax numbers suggest growth in revenue collection continues to remain strong. However, Central government finances would need careful management.

Introduction

In the current financial year, the fiscal position has improved significantly and the recovery in revenue collection has surprised many.

By July-end, the government collected revenue worth over 37% of its Budget Estimate (BE) for the current fiscal year. The comparable number in the last fiscal year was about 11%.

Better than expected revenue collection has also resulted in a lower fiscal deficit so far. The government is targeting to contain the fiscal deficit at 6.8% of gross domestic product in the current year, compared to 9.5% last year.

Why Central government finances would need careful management?

High expenditure to be incurred in Welfare programmes: According to Finance Secretary T V Somanathan, the government is also incurring expenditure above the BE. For instance, the government reintroduced the distribution of free food grains during the second wave, which is likely to cost about Rs 1 trillion.

Decreased revenue from non-tax receipts: The government appears to be cautious on committing additional spending despite higher tax collection because non-tax receipts can be significantly lower than the BE. For instance, it is unlikely to meet the disinvestment target.

What steps need to be taken?

In the present situation, the government can boost spending without creating permanent programmes, such as those involving cash transfers.

Pushing capital expenditure, which has been lagging so far in the current fiscal year, could be one possibility. Since the tax collection is likely to exceed the budget estimate by a significant margin, the government can use the additional fiscal room to push capital expenditure.

GST Council should rationalise tax rates: The end of compensation payment for goods and services tax (GST) shortfall from July next year will increase fiscal risk for many states. Extending the compensation mechanism will not be feasible because the cess collection beyond June 2022 will be used to repay debt raised in the last and current fiscal year to pay compensation. In this context, The GST Council should rationalise rates as soon as possible and take them to the revenue-neutral level.

This will not only improve the fiscal situation for states but also provide greater stability to central government finances and help draw the medium-term consolidation road map.

Prelims Oriented Articles (Factly)

Risk to online freedom

What is the news?

The annual “Freedom on the Net” study is disturbing as it claims free expression has declined for the 11th year in succession.

The study done by Freedom House covers 70 countries with over 88 per cent of the world’s users. The report claims online freedom is under unprecedented strain.

What are the findings of the study?

The study assesses Freedom on the Net across nine key areas in awarding a score. Iceland with 96 is the most free digital nation surveyed, while China is the worst with a score of just 10. Freedom scores have declined even in First World democracies such as Australia and the US. While the worst deteriorations were in Myanmar, Uganda and Belarus, India also has a low freedom score.

At least 56 of the surveyed countries have seen arrests for online speech in 2020-21.

In addition, 38 countries have initiated legal changes designed to give governments more access to user-data, often using the rationale of data sovereignty to insist data be stored in local servers.

Governments continue to tighten their grip on freedom of expression, as well as demanding more access to private personal data.

Moreover, large tech companies are being forced by governments into complying with greater state control and censorship. As a result, the rights of net users continue to be eroded.

Authorities in at least 48 countries have tightened rules for posting of content in the last year, and also exploited genuine concerns about online harassment and cybercrime to demand access to the private data of individuals.

There is a rising trend of users being arrested, or otherwise targeted, for non-violent political, social, or religious speech.

The governments of at least 45 countries are suspected of obtaining and deploying sophisticated spyware, and data-extraction technologies.

India:

India has a score of 49.

It has seen deteriorations in areas like, social media blocks, political/ social /religious content blocked, deliberate disruption of networks (including shutdowns), pro-government manipulation of online media etc.

What are the recommendations?

Governments should draft laws to robustly protect data privacy, restrict surveillance and set up safeguards against indiscriminate surveillance.

They should discourage the wholesale collection of private information by government agencies.

They should encourage encryption, and restrict the commercial sale of surveillance tools.

Laws to rein in big tech should be designed to improve transparency and accountability, and to give users control of their own data, rather than improve government access to such data.

Content moderation should be through fair and transparent processes rather than government fiat or arbitrary means. Unfortunately, the geopolitical trends seem to run entirely in the opposite direction.

Source: This post is based on the article “Risk to online freedom” published in Business Standard on 22nd Sep 2021.

Ozone layer recovery may take several lifetimes. But Montreal Protocol saved the Earth

What is the news?

Sep 16th is celebrated as World Ozone Day every year since 1994 to commemorate the date of the signing of the Montreal Protocol in 1987.

It has been the most successful global environmental treaty so far and the only United Nations environmental agreement to be ratified by every country in the world.

Treaty has been successful in reducing ozone-depleting substances and reactive chlorine and bromine in the stratosphere. As a result, the ozone layer is showing signs of recovery.

The 2019 ozone hole is indeed the smallest it has been since 1982. But the ozone is also influenced by temperature shifts and dynamics in the atmosphere through climate change. 

And in 50 years or so, the stratospheric ozone levels are expected to be back to normal.

However, the final recovery is expected to require several lifetimes. 

What are the other consequences of the ozone depletion? 

First, Ozone depletion affects the climate and changes the spectrum of incoming radiation. 

Second, the ozone layer may produce new molecular species that change the radiation-emitting and absorbing properties of the atmosphere. This may cause the formation of more tropospheric ozone, which will not be desirable. 

Third, in the absence of the ozone layer, the radiations will directly flow to the earth’s surface and change the vertical distribution of molecules in the troposphere and stratosphere. This will change the rate of vertical circulation. 

Source: This post is based on the article “Ozone layer recovery may take several lifetimes. But Montreal Protocol saved the Earth” published in the Down to Earth on 22nd September 2021. 

These animals and plants of India could have become ‘possibly extinct’ : IUCN

What is the news? 

In the latest edition of the IUCN’s Red List of Threatened Species, a number of animals and plants have been listed as ‘possibly extinct’, including many species from India.

What are the findings of report? 

First, among animals, there is the coconut crab, the largest terrestrial arthropod in the world. There are also fish species such as bovany barb, native to the Cauvery River system. 

Second, fishes that declared possibly extinct include the Deolali minnow, the Deccan barb and the Nilgiri mystus. They are found in the Deccan. 

Third, birds include the Pink-headed duck, the Siberian crane, that once famously drew crowds to Keoladeo National Park as well as the Buffy fish-owl or Malay owl. 

Fourth, the Tentacled butterfly ray, a type of ray and the Dwarf sawfish are two other animal species that are feared to be possibly extinct. The Millepora boschmai or fire coral is also possibly extinct. 

Fifth, there are also species that have been marked as ‘Extinct Post-1500’. They include Green peafowl, Cheetah, Hairy-nosed Otter, Banteng etc.  

Sixth, plants that are possibly extinct include: Corypha taliera, a species of palm, Eriocaulon minutum, a species of pipewort, Ilex gardneriana, that is found in the Nilgiris, Vachellia bolei, a coastal stenoendemic legume of southern India, .phorbia mayurnathanii that is endemic to the Palghat Gap. 

Seventh, species whose statuses were changed included the Albacore Tuna that was moved from near threatened to least concern. The Yellowfin Tuna was moved from near threatened to least concern. The Yeracud Day Gecko was moved from least concern to endangered. 

Eighth, the Satara Gecko was moved from vulnerable to critically endangered while the Yellow Monitor was moved from least concern to endangered. 

Source: This post is based on the article “These animals and plants of India could have become ‘possibly extinct’: IUCN” published in the Down to Earth on 22nd Sep 2021. 

Sea level rise is certain

Source: This post is based on the article “Sea level rise is certain” published in The Hindu on 23rd Sep 2021. 

What is the news? 

Recently, Intergovernmental Panel on Climate Change (IPCC) published a report, ‘Climate Change 2021: The Physical Science Basis’.

This report provides scientific reviews on the science and impacts of climate change. It also discusses different shared socio-economic pathways for the future with varying levels of greenhouse gas (GHG) emissions. 

What are the scenarios illustrated by the report? 

The scenarios illustrated are the following:  

First, very low and low GHG emissions, where emissions decline to net zero around or after the middle of the century, beyond which emissions are net negative;  

Second, intermediate GHG emissions; it is extremely likely that average warming will exceed 2 °C near midcentury. 

Third, high and very high emissions where they are double the current levels by 2100 and 2050, respectively.  

Today, the average global temperature is already 1.09 °C higher than preindustrial levels and CO2 concentration in the atmosphere is currently 410 ppm compared to 285 ppm in 1850. 

What are the findings of the report? 

First, sea level rise occurs mainly due to the expansion of warm ocean waters, melting of glaciers on land, and the melting of ice sheets in Greenland and Antarctica. Sea level rise will continue after emissions no longer increase, because oceans respond slowly to warming.  

Second, Global mean sea level (GMSL) rose by 0.2m between 1901 and 2018. Sea level rise in the last century was mainly due to thermal expansion. But glacier and ice sheet melt are now big contributors. Sea level can rise as high as 1.61 m by 2100.  

Third, ice sheets can destabilise rapidly as the water gets warm (marine ice sheet instability or MISI) and ice cliffs can collapse swiftly in a related process, leading to rapid sea level rise; this is marine ice cliff instability (MICI).  

Fourthly, there is uncertainty regarding when high-end scenario will occur. 

What is the situation in India regarding sea level rise? 

Communities along the coast in India are vulnerable to sea level rise and storms. They will be accompanied by storm surges, heavy rain and flooding in case of further increase in sea level.  

What are the recommendations? 

Adaptation to sea level rise must include a range of strict measures, along with coastal regulation. 

The government should not insure or bail out speculators, coastal communities should be alerted in advance and protected during severe weather events.

Natural and other barriers should be considered in a limited manner to protect certain vulnerable areas.

Retreat should be part of the adaptation strategies for some very lowlying areas. 

A time to introspect: On GST Council meeting

What is the news? 

Recently, GST Tax Council held its first physical meeting during the pandemic. It approved various changes.

Concessional tax rates on vital COVID-19 equipment such as oxygen concentrators will lapse on Sep 30, while the lower rates on medicines were extended till December.

As there are no signs the virus and its variants would be extinct on New Year’s Day, it was expected from the council to take a more considerate view on pandemic essentials. 

What were the outcomes of the council meeting? 

First, tax rate modifications were okayed for a range of sectors with long-pending course correction on inverted duty structures for several items, including footwear and textiles.  

Second, clarity was given on the definition of an intermediary as it was hurting several sectors, including IT services exports. Double taxation on the import of leased aircraft goes.  

Third, council dismissed any shift of petroleum products to GST to lower the tax burden 

Fourth, GST cess on automobiles, tobacco and aerated drinks will now be levied till April 2026, not June 2022 as originally envisaged 

Fifth, states requested for an extention of the GST compensation period. But Centre claimed that GST revenue is below expectation. 

What are the recommendations of the council? 

First, food delivery services players shall be made liable to collect and remit taxes instead of the restaurants. 

Second, inc in consumption may lead to inc in private investments. For that, Centre and States must begin talks on rationalising fuel taxes.  

Third, to increase spending, both Centre and states need to give up a little revenue. 

Fourth, two ministerial groups have been tasked to augment revenues using technology and rate rationalisations.  

Fifth, Centre need to discuss States’ compensation concerns, as had been promised.

Source: This post is based on the article “A time to introspect” published in The Hindu on 23rd September 2021. 

Covid deaths: Centre okays ex-gratia, state funds to cover it

Source: This post is based on the following article

• “Covid deaths: Centre okays ex-gratia, state funds to cover it’”published in Indian Express on 23rd September 2021.
• “₹50,000 for each COVID death” published in The Hindu on 23rd September 2021.
• “Government fixes Rs 50,000 ex- gratia for kin of Covid victims” published in TOI on 23rd September 2021.

What is the News?

The government of India has informed the Supreme Court that National Disaster Management Authority (NDMA) has recommended an ex-gratia amount of Rs 50,000 for loss of life due to Covid-19.

Background

The Supreme Court of India had directed the National Disaster Management Authority (NDMA) to recommend guidelines for giving ex gratia assistance to the families of persons who died of COVID-19 as mandated under Section 12 (iii) of the Disaster Management Act of 2005.

Note: Section 12 makes it mandatory for the NDMA to recommend guidelines for the “minimum standards of relief” to be provided to disaster victims. These include ex gratia assistance on account of loss of life.

Since coronavirus disease was declared as a notified disaster under the Disaster Management Act of 2005, the kin of people who died due to Covid would be entitled to ex-gratia compensation.

What are the guidelines prepared by the NDMA?

The NDMA has recommended an ex-gratia amount of Rs 50,000 for loss of life due to Covid-19.

The ex-gratia amount would be given provided that the cause of death is certified as COVID-19.

The amount will be provided by states from the State Disaster Relief Fund (SDRF) and distributed by the District Disaster Management Authority (DDMA) or the district administrations.

The compensation will also be paid for future Covid-related deaths as well.

Grievance Redressal

In case of grievances, it will be handled by district-level committees consisting of Additional District Collector, Chief Medical Officer of Health(CMOH), Additional CMOH or the Principal or Head of Department of Medicine at a Medical College (if one exists in the district) and a subject expert.

The committee will propose necessary remedial measures, including the issuance of amended official documents for COVID-19 death after verifying facts.

In case the decision of the committee is not in favour of the claimant, a clear reason for the same shall be recorded.

India, UAE launch CEPA negotiations, look to conclude them by year-end

Source:  This post is based on the following article

• “Joint Press Statement on the Launch of Negotiations for the India – United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA)” published in PIB on 22nd September 2021.
• “Eyeing a deal by December, India & UAE to start FTA talks today” published in TOI on 23rd September 2021.
• “India, UAE launch CEPA negotiations, look to conclude them by year-end” published in Livemint on 23rd September 2021.

What is the News?

India and the United Arab Emirates (UAE) have launched negotiations for a Comprehensive Economic Partnership Agreement (CEPA) aiming to conclude them by the year-end.

Both countries expected to reach a mutually beneficial economic deal by building on the progress made under the Comprehensive Strategic Partnership signed in 2017.

About India-UAE Bilateral Relations

India and the United Arab Emirates (UAE) established diplomatic relations in 1972. UAE opened its Embassy in Delhi in 1972 & India opened its Embassy in Abu Dhabi in 1973.

About recent Economic relationships  

UAE is currently India’s third-largest trading partner with bilateral trade in 2019/2020 valued at USD 59 billion. 

The UAE is also India’s second-largest export destination after the US, with exports valued at approximately USD 29 billion in 2019-2020. 

India was the UAE’s second-largest trading partner in 2019, with bilateral non-oil trade valued at USD 41 billion. 

The UAE is the eighth-largest investor in India, having invested USD 11 billion between April 2000 and March 2021, while investment by Indian companies in the UAE is estimated to be over USD 85 billion. 

India’s major exports to the UAE include petroleum products, precious metals, stones, gems and jewellery, minerals, food items such as cereals, sugar, fruits and vegetables, tea, meat, and seafood, textiles, engineering and machinery products, and chemicals. 

India’s top imports from the UAE include petroleum and petroleum products, precious metals, stones, gems and jewellery, minerals, chemicals and wood and wood products. India imported USD 10.9 billion of crude oil from the UAE in 2019-2020

IISc researchers find a way to substitute for single-use plastics

Source: This post is based on the article ”IISc researchers find a way to substitute for single-use plastics” published in The Hindu on 18th September 2021.

What is the News?

Researchers at the Indian Institute of Science, Bengaluru (IISc) have found a way to make a substitute for single-use plastic that can help mitigate the problem of accumulating plastic waste in the environment.

What is the new material developed by IISc?

Researchers have developed polymers using non-edible oil and cellulose extracted from agricultural stubble.

These polymers can be moulded into sheets having properties suitable for making bags, cutlery or containers.

The material so made is also biodegradable, leak-proof and non-toxic.

What is the significance of this development?

Alternative to Single-Use Plastic: Due to the harmful impact of single-use plastic on the environment, this material can become a substitute for single-use plastic.

Usage of Agriculture Stubble: Using agriculture stubble for the replacement of single-use plastics will not address the problem of air pollution. But it will generate additional income opportunities for farmers.

Can be used in Healthcare Facilities: As the material is biodegradable and non-toxic, researchers are planning to use the material for healthcare applications also.

Why is there a need to find an alternative to plastic?

According to a report by the Central Pollution Control Board of India, for the year 2018-2019, 3.3 million metric tonnes of plastic waste are generated by Indians.

Another alarming statistic is that of all the plastic waste produced in the world, 79% enters the environment. Only 9% of all plastic waste is recycled.

Accumulation of plastic waste is detrimental to the environment and when this waste finds its way into the sea, there can be major harm to aquatic ecosystems too. Hence, there is a need to find an alternative to substitute the use of plastic.

National Single Window System for Investors and Businesses Launched

Source: This post is based on the article “National Single Window System for Investors and Businesses Launched” published in PIB on 22nd September 2021.

What is the News?

The Union Minister of Commerce and Industry has launched the National Single Window System (NSWS) for investors and businesses.

What is the National Single Window System (NSWS)?

National Single Window System is a one-stop digital platform that aims at allowing investors to apply for various pre-operations approvals required for commencing a business in the country. 

The system aims to make the business registration process easier, allowing the beneficiary to get significant approvals online, without having to run to the government offices for approvals and can avail themselves of services with just a click. 

Currently, the platform hosts approvals across 18 Central Departments & 9 States. Another 14 Central depts & 5 states will be added by December 2021.

What are the services offered by NCWS?

Know Your Approval (KYA) Service: This feature generates a list of approvals that must be obtained before a business may begin operations. It does it by asking the investor a series of questions about their anticipated business operations, and then determining which permissions are required based on the answers.

Common Registration Form: Unified information capturing system and a universal registration form has been intended to guarantee a single point of submission of information and documents across Ministries and States.

State registration form: It allows investors to access the corresponding State Single Window System with a single click.

Applicant dashboard: Provides a single online interface to apply, track and respond to the queries pertaining to approvals and registrations across ministries and States. 

Document repository: An online centralized storage service for investors to enable one-time document submission and use the same across multiple approvals. This eliminates the need to submit documents at multiple portals.

E-Communication module: It enables online response to queries and clarification requests related to applications by Ministries and States.

WHO says air pollution kills 7 million a year, toughens guidelines

Source: This post is based on the following articles

• “Experts welcome stricter air quality norms” published in The Hindu on 23rd September 2021.
• “WHO says air pollution kills 7 million a year, toughens guidelines” published in Livemint on 23rd September 2021.
• “Air pollution one of the biggest environmental threats to human health: WHO”  published in Business standard on 23rd September 2021.
• “WHO raises the bar on clean air” published in Down To Earth on 23rd September 2021.

What is the News?

The World Health Organization(WHO) has released the Global Air Quality Guidelines(AQGs).

What are Global Air Quality Guidelines(AQGs)?

Global Air Quality Guidelines(AQGs) is an annual mean concentration guideline for particulate matter and other pollutants.

The guidelines were last updated in 2005. Since then, there has been a marked increase of evidence that shows how air pollution affects different aspects of health.

Hence, that’s why these new guidelines recommend new air quality levels to protect the health of populations by reducing levels of key air pollutants.

Note: These guidelines are not legally binding. They are an evidence-informed tool for policy-makers to guide legislation and policies.

What are the new guidelines?

The new guidelines recommend air quality levels for six pollutants — particulate matter (PM) 2.5 and PM 10, ozone (O3), nitrogen dioxide (NO2), sulfur dioxide (SO2) and carbon monoxide (CO).

What do these guidelines mean for India?

Questions have been raised regarding the feasibility of implementing the new guidelines, especially in challenging geo-climatic zones like South Asia, including India.

The WHO guidelines have sharpened the difference with India’s ambient air quality standards that are in the intermediate category and require revision over time to finally attain the WHO limit.

For instance, India’s annual average standard for PM2.5 is 40 μg / m3. That is eight times laxer than the new WHO guidelines. The 24-hour standard is 60 μg / m3, which is four times more lenient.

Similarly, the annual average standard for PM10 at 60 μg / m3 is four times more lax and the 24-hour standard of 100 μg / m3 is two times more lax than the WHO guidelines.

India aligns with the WHO guidelines only in the case of ozone and carbon monoxide, as these have not changed. But both NO2 and SO2 guidelines are tighter than the current Indian standard.

India’s income divide narrows, wealth divide persists: Survey data

Source: This post is based on the article “India’s income divide narrows, wealth divide persists: Survey data” published in Business Standard on 23rd September 2021.

What is the News?

National Sample Survey Organisation(NSSO) has released the All India Debt and Investment Survey (AIDIS) for 2018-19. The survey has provided data on the wealth inequality in India.

What are the key highlights from the survey?

Wealth Inequality

In 2018-19, India’s top 10% households held 55.67% of the wealth in urban areas and 50.84% of it in rural areas.

On the other hand, the bottom 50% of the population possessed only 6.2% of assets in the urban region while they owned 10.2% of the total in the rural region. 

This wealth inequality was estimated by assigning a monetary value against all that households own like- land, livestock, buildings, vehicles, deposits in banks, post offices, shares in companies etc.

Moreover, when compared state-wise, the wealth inequality was highest in Delhi and Punjab.

Income Inequality is lower than Wealth Inequality

Income tax data for individuals for the assessment year 2018-19 shows that the top 10% of the taxpayers in the country account for only 38% of the country’s income.

This shows that income inequality is lower than wealth inequality.

Share of bottom 10 per cent in total income has increased

The share of the bottom 10 per cent tax filers in total income has increased from 2.1% in 2012-13 to 3.5% in 2018-19.

I​​n contrast, the total income of the top 10% of individuals doubled during this period.

The difference between the top 10% and bottom 10% is reducing

This is because, between 2012-18, the average value of assets for the top 10% grew by 42% in rural areas. On the other hand, the lowest 10% witnessed an asset growth of 63% during this period. 

In urban areas, asset values jumped nearly ten times for the bottom 10% of households, but only increased marginally for the top 10% of the households.

CSIR-CMERI Solar DC Cooking System- A Step Towards a Green & Pollution Free India

Source: This post is based on the article ”CSIR-CMERI Solar DC Cooking System- A Step Towards a Green & Pollution Free India” published in PIB on 22nd September 2021.

What is the News?

Central Mechanical Engineering Research Institute (also known as CSIR-CMER) has developed a Solar DC Cooking System.

What is the Solar DC Cooking System?

Solar DC Cooking System is a Solar Energy based Cooking System that consists of a solar PV panel, charge controller, battery bank and cooking oven. 

Benefits of this System

Solar DC Cooking System has 20-25% better efficiency and is more Economical in comparison with Conventional Solar based Cooking Systems which loses efficiency owing to AC-DC conversion. 

The system can also substantially curb carbon dioxide emissions, as even LPG usage emits CO2. It may help save 290 million tons of carbon dioxide emissions.

Moreover, its simple design ensures ease of manufacturing and thus provides a substantial economic opportunity to micro-industries.

What are AC and DC?

Alternating Current (AC) is a type of electrical current, in which the direction of the flow of electrons switches back and forth at regular intervals or cycles. Current flowing in power lines and normal household electricity that comes from a wall outlet is alternating current. 

On the other hand, Direct current (DC) is an electrical current that flows consistently in one direction. The current that flows in a flashlight or another appliance running on batteries is a direct current.

Creative destruction’ dents inclusion, ups output: Das

Source:  This post is based on the following article

• “Rising inequality due to Covid pandemic must be bridged: RBI Governor” published in Business Standard on 23rd September 2021.
• “Creative destruction’ dents inclusion, ups output: Das” published in TOI on 23rd September 2021.

What is the News?

The Reserve Bank of India(RBI) Governor has delivered his keynote address at the National Management Convention of the All India Management Association (AIMA).

What are the key highlights of his address?

On Covid-19 Impact

The Covid-19 has impacted the poor relatively more than others. It has affected contact-intensive service sectors, which employ a large number of informal, low-skilled and low-wage workers, 

However, it has also unleashed “creative destruction” which will boost productivity and can alter the course of development.

Note: Creative destruction is the dismantling of long-standing practices in order to make way for innovation, and is seen as a driving force of capitalism.

On Digitisation

Automation and Digitisation can improve productivity, growth and income. But there can also be an emergence of a “digital divide” as digitisation gains speed after the pandemic.

What is the way forward then?

There is a need for increased investment in healthcare education, digital and physical infrastructure to ensure sustainable growth and generate employment opportunities.