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Vishnu IAS Academy |UPSC Prelims|UPSC Mains | UPSC Optional ANTHROPOLOGY 2

THE HINDU

GS 2 : Polity, Governance, International Relations

1. Promoting fiscal federalism

Context

States are facing financial constraints in the backdrop of lockdown and consequent dwindling revenue collection. The situation also highlights the issues of fiscal

federalism in India.

Issues facing fiscal federalism in India

1) Issue of 14% compensation

As per the Constitution (One Hundred and First Amendment) Act, compensation on account of the implementation of GST will be available for a period of five years.

14% increment assurance: At the time of introducing the Goods and Services Tax (GST) law assured States a 14% increase in their annual revenue for five years (up to July 1, 2020).

But the Union government has deviated from the statutory promise and has been insisting that States avail themselves of loans.

The future interest liability of these loans should not be placed on the shoulders of the States.

Borrowing limits built into loan: Moreover, the borrowing limit of States, as per the Fiscal Responsibility and Budget Management Act, should not be

built into these loans.

2) Conditional increase in borrowing limit

Last year, the Union government increased the borrowing ceiling of the States from 3% to 5% for FY 2020-21.

But conditions are attached to 1.5% of the 2% of increased ceiling. Attaching conditions for expenditure out of the borrowed amount would clip

the wings of the States and goes against the principle of cooperative

federalism.


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Way forward

Introduce special rate: A special rate could be levied for a specified period in order to raise additional resources to meet the challenges posed by COVID-19 with the approval of the GST Council.

As per Section 4(f) of Article 279A, the Union government can consider introducing any special rate to raise additional resources during the pandemic (any natural calamity or disaster).

The present GST compensation period will end in 2021-22. Increase the period beyond five years: Compensation beyond five years

requires a constitutional amendment. If this period is not increased, it will create serious financial stress to the

States, especially to those which require higher compensation.

Conclusion

There is a need for measures on part of the Central government to consolidate fiscal federalism in the aftermath of pandemic and implementation of the GST regime in

India.

2. Striking down of the 97th Amendment needs to be taken in right spirit

Context

In Union of India vs Rajendra N. Shah, the Supreme Court of India partially struck down the 97th Constitutional Amendment.

Background of the 97th Constitutional Amendment

The 97th Constitutional Amendment came into effect from February 15 2012. The amendment added “cooperative societies” to the protected forms of

association under Article 19(1)(c), elevating it to a fundamental right. It also inserted Part IXB in the Constitution which laid down the terms by

which cooperative societies would be governed, in more granular detail

than was palatable.

Why was the Amendment struck down?

The Constitution can be amended only by the procedure provided in Article 368.

The amendment procedure requires a majority of the total strength of each of the Houses of Parliament and two-thirds majority of those present and voting.


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A proviso to the Article lists out some articles and chapters of the Constitution, which can be amended only by a special procedure.

The special procedure requires that the amendment will also have to be ratified by the legislatures of half of the States.

It is precisely on the grounds of violation of this additional requirement that the 97th Constitutional Amendment was challenged.

The Gujarat High Court struck down the amendment in 2013 on the grounds that it had failed to comply with the requirements under Article 368(2) by virtue of not having been ratified by the States and had also given an additional finding that the 97th Amendment violated the basic structure of the Constitution.

The Union Government challenged the Gujarat High Court judgment before the Supreme Court, arguing that the amendment neither directly nor effectively changed the scheme of distribution of powers between the Centre and the States.

The court took the example of the 73rd and 74th Amendments which were similar in impact on the legislative power of the States, had been passed by

the special procedure involving ratification by State legislatures. Procedural lacuna: The court noted that the procedure had not been followed

in this case. The Supreme Court clarified that the does not go into the question of the

amendment being violative of the basic structure of the Constitution. The judgment makes a distinction between cooperative societies operating in

one State and multi-State cooperative societies and holds that while a ratification by half the State legislatures would have been necessary insofar as

it applies to cooperative societies in one State.

Increasing control of the Union government

Union government has been acquiring incrementally greater control of cooperative societies over the years.

Cooperative banks have been brought under the purview of the Reserve Bank of India.

Union Government recently established Union Ministry for Cooperation.

Issues with Central control over cooperative sector

Domain of States: The idea that the cooperative sector ought to be controlled at the State level and not at the central or Union level goes back all the way to the Government of India Act, 1919 which placed cooperatives in the

provincial list.


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Part of State list: Entry 32 of the State List in the Seventh Schedule of the Constitution confer power on the State legislatures to make laws pertaining to incorporation, regulation and the winding up of cooperative societies.

The cooperative sector has always been in the domain of the States or provinces.

Different organising principles: The organising principles and mechanism of these cooperatives differ from area to area and depend on the industry or crop which forms the fulcrum of the cooperative.

Homogeneity nor require: Homogeneity in this area would only result in the creation of round holes in which square pegs no longer fit.

They also would not really serve to break the control some political interests have taken over cooperatives.

Conclusion

It is best that the Government takes this judgment in the right spirit and stays away from further meddling in the cooperative sector, notwithstanding the creation of the new Ministry.

3. What is Academic Bank of Credit?

On the first anniversary of the National Education Policy (NEP), the Centre plans to officially roll out some initiatives promised in the policy, such as the Academic Bank of Credit

Academic Bank of Credit

Academic Bank of Credit referred to as ABC is a virtual storehouse that will keep records of academic credits secured by a student.

It is drafted on the lines of the National Academic Depository. It will function as a commercial bank where students will be the customers

and ABC will offer several services to these students. Students will have to open an Academic Bank Account and every account

holder would be provided with a unique id and Standard Operating Procedure (SOP).

The academic accounts of students will have credits awarded by higher education Institutes to students for the courses they are pursuing.

However, ABC will not accept any credit course document directly from the

students, and its institutes that will make the deposits in students’ accounts.


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Functions of ABCs

ABC will be responsible for opening, closing, and validating the academic accounts of students.

It will also perform tasks including credit verification, credit accumulation, credit transfer/redemption of students, and promotion of the ABC among the stakeholders.

The courses will also include online and distance mode courses offered through National Schemes like SWAYAM, NPTEL, V-Lab etc.

The validity of these academic credits earned by students will be up to seven years. The validity can also vary based on the subject or discipline. Students can redeem these credits.

For instance, if a student has accumulated 100 credits which are equivalent to say one year and they decide to drop out.

Once they decide to rejoin they can redeem this credit and seek admission directly in the second year at any university. The validity will be up to seven years, hence, students will have to rejoin within seven years.

Benefits for students

The participating HEIs in the ABC scheme will enable students to build their degrees as per their choices.

As per UGC guidelines, the higher education institutes will have to allow students to acquire credits 50-70% of credits assigned to a degree from any institute.

Students, depending upon their needs can take this opportunity. UGC will ensure that students secured the minimum credits to be secured in

the core subject area.

4.US Secretary of State’s Visit to India

Why in News

Recently, in his visit to India, the US Secretary of State mentioned that actions by

India and the US will shape the 21st century.

The visit reciprocates the visit by India’s External Affairs Minister (EAM) to the US in May 2021.

The US Secretary of State and India’s EAM have also had detailed

conversations in the UK (at the G7 meeting) and Italy (at the G20 meeting).


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Key Points

Major Discussions: o Afghanistan:

There is no military solution to the conflict, and that taking over the country by force would not help the Taliban gain the international recognition or legitimacy it desires, including the lifting of sanctions and travel bans against the Taliban leadership.

India mentioned Pakistan was an exception to the consensus for a peaceful political settlement.

An Afghanistan that did not respect the rights of its people, and an Afghanistan that committed atrocities against its own people would not be part of the global community.

Afghanistan has to be inclusive and fully representative

of Afghan people. o Cooperation in the Indo-Pacific:

Both share a vision of free, open, secure and prosperous Indo-

Pacific. Highlighted cooperation in the Indo-Pacific as part of the QUAD

(Quadrilateral Framework) with Japan and Australia, and clarified that QUAD is not a military alliance at all.

o Covid- Vaccination: Discussed the Quad’s initiative to provide Indian-made Covid-

vaccines in the Indo-Pacific region. The US announced a USD 25-million grant for India’s vaccine

programme, and promised to strengthen vaccine supply chains to enhance production.

o Climate Change: Under the US-India Climate and Clean Energy Agenda 2030

Partnership launched in April 2021, the two sides intend to launch a new climate action and finance mobilisation dialogue and relaunch the strategic clean energy partnership.

US’ Stand: o Termed the Indo-US relationship as one of the most important

partnerships in the world. o Both share a commitment to democratic values which is part of the

bedrock of their relationship and reflective of India’s pluralistic

society and history of harmony. Both believe in human dignity, in equality of opportunity, the

rule of law, fundamental freedoms, including freedom of religion and belief.


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People deserve to have a voice in their government and be treated with respect no matter who they are.

o Cited business cooperation, educational engagement, religious and

spiritual ties and ties between millions of families as some of the key pillars of the overall relationship.

o Referred to the rising global threats to democracy and international freedoms and talked about democratic recession (Human Rights

Issues in China), noting that it is vital for India and the US to

continue to stand together in support of these ideals. o Interreligious relations, media freedom, farmers' protests, love 'jihad’

violence and minority rights were part of the discussion that the US Secretary of State had with a group of people, including a representative of the Dalai Lama.

India’s Stand: o India-US bilateral ties have enhanced to a level that enables the two

nations to deal collaboratively with larger issues. o Welcomes US’ strong commitment to strengthen the India-US

strategic partnership that is anchored in shared democratic values and is a force for global good.

o Responded to the US concerns on the issues with a number of points, making it clear that the quest for a more perfect democracy applied to

both the US and India. o India’s policies of the last few years had been to right wrongs done

historically, and that while freedoms are important, they should not

be equated with the lack of governance”.

Current State of India-US Ties

Defence: o India and US inked important defence pacts in the last few years and

also formalised the four nation alliance of QUAD. The alliance is seen as an important counter to China in the Indo-

Pacific. o The Malabar exercise in November 2020 portrayed a high point in

Indo-US strategic ties, it was the first time in 13 years that all four

countries of QUAD came together sending a strong message to China. o India now has access to american bases from Djibouti in Africa to

Guam in the Pacific. It can also access advanced communication technology used in US defence.

o India an US have four foundational defence agreements: Basic Exchange and Cooperation Agreement for Geospatial

Intelligence (BECA). General Security of Military Information Agreement (GSOMIA).


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Logistics Exchange Memorandum of Agreement (LEMOA). Communication Compatibility and Security Agreement

(COMCASA). Trade:

o The previous US government ended India’s special trade status (GSP

withdrawal) and also imposed several bans, India also retaliated with bans on 28 US products.

o Current US government has allowed all the bans by the previous government to expire.

Indian Diaspora: o There is a growing presence of Indian diaspora in all spheres in the

US. For example the current Vice-President (Kamala Harris) of the US has a strong Indian connection.

o There are several Indian origin people holding strong leadership positions in the current US administration.

Covid-Cooperation: o When the US was reeling under a deadly Covid wave last year, India

rushed important medical supplies and eased export restrictions to help the country.

o Initially the US showed hesitancy in returning the favour when India needed it, however the US quickly changed its stance and rushed

supplies to India.

Way Forward

There is a huge potential to boost bilateral trade between the countries especially on account of increasing anti-China sentiment in both the nations.

Thus, the negotiation should focus on the resolution of various non-tariff

barriers and other market access improvements as early as possible. In order to counter China in the maritime domain, India needs to fully

engage with the US and other partners in the Indo-pacific region, in order to preserve the freedom of navigation and the rules-based order.

In international politics, there are no permanent friends and no permanent

enemies, only permanent interests. In such a scenario India must continue to

pursue its foreign policy of strategic hedging.

5. No Parliamentary Immunity for Vandalism: SC

Why in News

Recently, the Supreme Court has rejected Kerala government’s plea to withdraw

criminal cases against its MLAs who were charged in the assembly.


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The ruling Kerala government had appealed, to the Supreme Court, to withdraw a criminal case against their leaders who destroyed public

property and disrupted a Budget speech on the State Assembly floor in 2015.

Key Points

Arguments of the Petitioner: o The Kerala Government had claimed parliamentary privilege, arguing

that the incident occurred inside the Assembly hall. o They had claimed immunity from criminal prosecution. o They had argued that the prior sanction of the Speaker was necessary

before the registration of an FIR by the police. Highlights of the Judgement:

o Parliamentary Privileges are Not Gateways of Immunity: The legislators who indulge in vandalism and general mayhem cannot claim parliamentary privilege and immunity from criminal prosecution.

o Vandalism is Not Essential Legislative Action: Lawmakers possess privileges that are essential for exercising public functions.

Vandalism and destruction inside the House are not essential for exercising legislative function.

o Vandalism and Right to Protest: Vandalism on the Assembly floor

could not be equated with the right to protest by Opposition legislators.

No member of an elected legislature can claim either a privilege or immunity to stand above the sanctions of the criminal law (Prevention of Damage to Public Property Act, 1984), which applies equally to all citizens.

Destruction of public property could not be equated with the exercise of freedom of speech.

o Maintaining Public Trust: Legislators should act within the parameters of the public trust imposed on them to do their duty.

They had taken office swearing true allegiance to the Constitution.

They had to uphold the sovereignty and integrity of India and had to perform the duty imposed on them by the people who elected them.

About Parliamentary Privilege: o Parliamentary privileges are certain rights and immunities enjoyed by

members of Parliament, individually and collectively, so that they can “effectively discharge their functions”.


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When any of these rights and immunities are disregarded, the offence is called a breach of privilege and is punishable under law of Parliament.

o The Constitution (Article 105 for Parliament and Article 194 for State

Assemblies) mentions two privileges, i.e. freedom of speech in Parliament and right of publication of its proceedings.

o Rule No 222 in Chapter 20 of the Lok Sabha Rule Book and correspondingly Rule 187 in Chapter 16 of the Rajya Sabha rulebook governs privilege.

Individualistic Privileges: o Freedom of Speech: The members of Parliament/state assembly enjoy

freedom of speech and expression. No member can be taken to task anywhere outside the four

walls of the House (e.g. court of law) or cannot be discriminated against for expressing his/her views in the House and its Committees.

However, a member has the privilege of freedom of speech in Parliament, he has no right to publish it outside Parliament.

o Freedom from Arrest: No member shall be arrested in a civil case 40 days before and after the adjournment of the House and also when the House is in session.

It also means that no member can be arrested within the

precincts of the Parliament without the permission of the House to which he/she belongs.

o Exemption from Attendance as Witnesses: The members of Parliament/ assemblies also enjoy freedom from attendance as witnesses.

Collective Privileges: o Right to Publish Debates and Proceedings: Parliament/Assembly can

prohibit the press to publish its proceedings, when needed. o Right to exclude strangers: Parliament/Assembly enjoys the right to

exclude strangers (no-members or visitors) from the galleries at any time and to resolve debate with closed doors.

o Right to Punish Members and Outsiders: In India, the Parliament/Assembly has been given punitive powers to punish those who are judged guilty of contempt of the House.


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GS 3 : Economy, Science and Technology,Environment

6. What is National Farmers Database?

The Centre’s new National Farmers Database will only include land-owning farmers for now as it will be linked to digitized land records.

National Farmers Database

The Central government had proposed an Agristack initiative to create a digital database that focuses on farmers and the agricultural sector.

As part of the first step of this initiative, the government has initiated a farmers database that would serve as the core of the Agristack.

The database would be linked to the digital land record management system and would thus only include farmers who were legal owners of agricultural land.

The database would facilitate online single sign-on facilities for universal access and usher in proactive and personalized services to farmers such as DBT, soil and plant health advisories, weather advisories

It would also facilitate seamless credit & insurance, seeds, fertilizers, and

pesticide-related information.

Need for such database

India has 140 million operational farmland holdings. The availability of a database would serve an important role in the

formulation of evidence-based policies for the agricultural sector. Also, the government can make use of the database for targeted service

delivery with higher efficiency and in a focused and time-bound manner. The database could be used to select beneficiaries of government schemes. The availability of data will make it possible to implement digital

technologies like AI/Machine Learning, IoT in the agricultural domain, thus opening up the sector to immense opportunities for improvement in

productivity.


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7. DICGC Bill, 2021

Why in News

Recently, the Union Cabinet has cleared the Deposit Insurance and Credit

Guarantee Corporation (DICGC) Bill, 2021.

The failure of banks such as Punjab and Maharashtra Co-operative (PMC)

Bank, Yes Bank and Lakshmi Vilas Bank reignited the debate on the low

level of insurance against the deposits held by customers in Indian banks.

Note

Deposit Insurance: It is a protection cover against losses accruing to bank deposits if a bank fails financially and has no money to pay its depositors and has to go in for liquidation.

Credit Guarantee: It is the guarantee that often provides for a specific remedy

to the creditor if his debtor does not return his debt.

Key Points

Coverage: o The bill will cover 98.3% of depositors and 50.9% of deposit value in

the banking system, way above the global level of 80% and 20-30%, respectively.

o It will cover all types of banks, which also include regional rural

banks and co-operative banks. o It will cover banks already under moratorium and those that could

come under moratorium. Moratorium is a legally authorized period of delay in the

performance of a legal obligation or the payment of a debt. Insurance Cover:

o It will provide funds up to Rs 5 lakh to an account holder within 90

days in the event of a bank coming under the moratorium imposed by the Reserve Bank of India (RBI).

Earlier, account holders had to wait for years till the liquidation or restructuring of a distressed lender to get their deposits that are insured against default.

The Rs 5-lakh deposit insurance cover was raised from Rs 1 lakh in 2020.


https://www.drishtiias.com/daily-updates/daily-news-editorials/the-yes-bank-crisis

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The Damodaran Committee on ‘Customer Services in Banks’ (2011) had recommended a five-time increase in

the cap to Rs. 5 lakh due to rising income levels and increasing size of individual bank deposits.

o Within the first 45 days of the bank being put under moratorium, the

DICGC would collect all information relating to deposit accounts. In the next 45 days, it will review the information and repay depositors within a maximum of 90 days.

Insurance Premium: o It permits raising the deposit insurance premium by 20%

immediately, and maximum by 50%. The premium is paid by banks to the DICGC. The Insured

banks pay advance insurance premiums to the corporation semi-annually within two months from the beginning of each financial half year, based on their deposits as at the end of previous half year.

o It has been raised from 10 paise for every Rs 100 deposit, to 12 paise

and a limit of 15 paise has been imposed. o This is only an enabling provision and the determination of an

increase in the premium payable would involve consultations with

the RBI and require government approval.

Deposit Insurance and Credit Guarantee Corporation

About: o It came into existence in 1978 after the merger of Deposit Insurance

Corporation (DIC) and Credit Guarantee Corporation of India Ltd. (CGCI) after passing of the Deposit Insurance and Credit Guarantee

Corporation Act, 1961 by the Parliament. o It serves as a deposit insurance and credit guarantee for banks in

India. o It is a fully owned subsidiary of and is governed by the RBI.

Coverage: o Banks, including regional rural banks, local area banks, foreign banks

with branches in India, and cooperative banks, are mandated to take deposit insurance cover with the DICGC.

Types of Deposits Covered: o DICGC insures all bank deposits, such as saving, fixed, current,

recurring, etc. except the following types of deposits: Deposits of foreign Governments. Deposits of Central/State Governments. Inter-bank deposits.


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Deposits of the State Land Development Banks with the State co-operative banks.

Any amount due on account of any deposit received outside India.

Any amount which has been specifically exempted by the

corporation with the previous approval of the RBI. Funds:

o The Corporation maintains the following funds : Deposit Insurance Fund Credit Guarantee Fund General Fund

o The first two are funded respectively by the insurance premia and guarantee fees received and are utilised for settlement of the respective claims.

o The General Fund is utilised for meeting the establishment and

administrative expenses of the Corporation.

THE INDIAN EXPRESS

GS 2 : Polity, Governance, International Relations

1. Juvenile Justice Amendment Bill, 2021

Why in News

Recently, the Juvenile Justice (Care and Protection of Children) Amendment Bill,

2021, was passed in the Rajya Sabha.

The bill seeks to amend the Juvenile Justice Act, 2015.

Key Points

Background: o The National Commission for Protection of Child Rights (NCPCR)

audit of Child Care Institutions (CCIs) in 2020, 90% of which are run by NGOs, found that 39% CCIs were not registered, even after the 2015 amendment was brought in.


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o It also found that less than 20% CCIs, especially for girls, had not

been set up in some states, 26% child welfare officers were not there. o Moreover, three-fifths have no toilets, one-tenth have no drinking

water and 15% of homes don’t have provisions for separate beds or diet plans.

o Rehabilitation of children is not a priority for childcare homes and children are reportedly kept in such institutions to get funds.

Key Amendments Proposed by the Bill: o Serious Offences: Serious offences will also include offences for which

maximum punishment is imprisonment of more than seven years, and minimum punishment is not prescribed or is of less than seven years.

Serious offences are those for which the punishment under the Indian Penal Code or any other law for the time being is imprisonment between three and seven years.

o Non-cognizable Offences: The present Act provides that an offence which is punishable

with imprisonment between three to seven years to be cognizable (where arrest is allowed without warrant) and non-bailable.

The Bill amends this to provide that such offences will be non-cognizable.

o Adoption: Presently, the adoption order issued by the court establishes that the child belongs to the adoptive parents. The Bill provides that instead of the court, the District Magistrate (including Additional District Magistrate) will issue such adoption orders.

o Appeals: The Bill provides that any person aggrieved by an adoption order passed by the District Magistrate may file an appeal before the

Divisional Commissioner, within 30 days from the date of passage of

such order. o Additional Functions of the District Magistrate: These include:

supervising the District Child Protection Unit, and conducting a quarterly review of the functioning of the Child Welfare Committee.

o Designated Court: The Bill proposes that all offences under the earlier Act be tried in children’s court.

o Child Welfare Committees (CWCs): It provides that a person will not eligible to be a member of the CWC if he/she

has any record of violation of human rights or child rights, has been convicted of an offence involving moral turpitude,

has been removed or dismissed from service of the central government, or any state government, or a government undertaking,

is part of the management of a child care institution in a district.


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o Removal of Members: The appointment of any member of the committee shall be terminated by the state government after an

inquiry if they fail to attend the proceedings of the CWCs consecutively for three months without any valid reason or if they fail to attend less than three-fourths of the sittings in a year.

Juvenile Justice (Care and Protection of Children), Act, 2015: o Parliament introduced and passed the Juvenile Justice (Care and

Protection of Children) Act in 2015 to replace the Juvenile Delinquency Law and the Juvenile Justice (Care and Protection of Children Act) 2000.

o The Act offered provisions to allow trials of juveniles in the age

group of 16-18 years as an adult who were found to be in conflict with the law, especially heinous crimes.

o The Act also offered provisions regarding adoption. The Act replaced the Hindu Adoptions and Maintenance Act (1956) and Guardians of the ward Act (1890) with more universally accessible adoption law.

o The Act enabled smooth functioning of adoption procedures for

orphans, surrendered, and abandoned children while making the Central Adoption Resource Authority (CARA) the statutory body for adoption-related matters.

2. SMILE Scheme

The Government has approved a comprehensive scheme named “Support for Marginalised Individuals for Livelihood and Enterprise (SMILE)” which includes a

sub-scheme for Comprehensive Rehabilitation for Welfare of Transgender Persons.

About SMILE Scheme

This scheme is a sub-scheme under the ‘Central Sector Scheme for Comprehensive Rehabilitation of persons engaged in the act of Begging’.

It also focuses on rehabilitation, provision of medical facilities and intervention, counselling, education, skill development, economic linkages to transgender persons.

It covers several comprehensive measures including welfare measures for persons who are engaged in the act of begging.

The focus of the scheme is extensively on rehabilitation, provision of medical facilities, counselling, basic documentation, education, skill development, economic linkages and so on.


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Its implementation

The scheme would be implemented with the support of State/UT Governments/Local Urban Bodies, Voluntary Organizations, Community Based Organizations (CBOs), institutions and others.

The scheme provides for the use of the existing shelter homes available with the State/UT Governments and Urban local bodies for rehabilitation of the persons engaged in the act of Begging.

In case of the non-availability of existing shelter homes, new dedicated shelter homes are to be set up by the implementing agencies.

GS 3 : Economy, Science and Technology,Environment

3. Non-Bank PSPs to Join Centralised Payment System

Why in News

Recently, the Reserve Bank of India (RBI) allowed non-bank Payment System

Providers (PSPs) to participate in Centralised Payment Systems (CPS - RTGS and

NEFT), as direct members.

Key Points

Allowed in a Phased Manner: o In the first phase, PSPs such as Prepaid Payment Instruments (PPIs),

card networks and White Label ATM (WLA) operators will be allowed access.

ATMs set up, owned and operated by non-banks are called WLAs.

o Presently, only banks and select non-banks such as NABARD (National Bank for Agriculture and Rural Development) and Exim

Bank (Export-Import Bank of India) are allowed access to CPS owned by RBI – NEFT and RTGS.

Separate IFSC to Non-Banks: o It means allotment of a separate Indian Financial System Code (IFSC)

to non-banks, opening a current account with the RBI in its core

banking system (e-Kuber) and maintaining a settlement account with the RBI.


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IFSC represents the 11 digit character code that helps identify the individual bank branches that participate in the various online money transfer options like NEFT and RTGS.

Core Banking System is a solution that enables banks to offer a multitude of customer-centric services on a 24x7 basis.

o It will also mean membership of Indian Financial Network

(INFINET) and use of Structured Financial Messaging System

(SFMS) to communicate with CPS. INFINET is a membership-only Closed User Group (CUG)

Network that comprises the RBI, Member Banks and Financial Institutions.

SFMS is India’s backbone for inter-bank financial messaging & CPS.

Significance: o Minimizing risk of payment ecosystem:

Direct access for non-banks to CPS lowers the overall risk in the payments ecosystem.

o Reduction in cost of payments: It also brings advantages to non-banks like reduction in cost of

payments, minimising dependence on banks, reducing the time taken for completing payments.

o Mitigating failure or delay in fund execution: Risk of failure or delay in execution of fund transfers can also be

avoided when the transactions are directly initiated and processed by the non-bank entities.

o Increasing efficiency and better risk management: Non-bank entities shall transfer funds from their Current

Account to RTGS Settlement Account and vice versa during the

operating hours. It will increase efficiency, innovations, improve standards of data

security as well as better risk management.

Centralised & Decentralised Payment Systems

CPS in India are Real Time Gross Settlement (RTGS) and National

Electronic Funds Transfer (NEFT) systems, both owned and operated by the Reserve Bank.

RTGS: It enables real-time transfer of funds to a beneficiary’s account and is primarily meant for large-value transactions.

o Real time means the processing of instructions at the time they are received and gross settlement implies that settlement of funds transfer instructions occurs individually.


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NEFT: It is an electronic fund transfer system in which the transactions received up to a particular time are processed in batches.

o It is generally used for fund transfers of up to Rs. 2 lakh. The decentralised payment systems will include clearing houses managed

by RBI (Cheque Truncation System (CTS) centres) as well as other banks

(Express Cheque Clearing System (ECCS) centres) and any other system as decided by RBI from time to time.

E-Kuber

e-Kuber is the Core Banking Solution of the Reserve Bank of India which was introduced in 2012.

The centralisation thus makes a “one-stop” shop for financial services a

reality. Using CBS, customers can access their accounts from any branch, anywhere, irrespective of where they have physically opened their accounts.

Almost all branches of commercial banks, including the Regional Rural Banks (RRBs), are brought into the core-banking fold.

The e-kuber system can be accessed either through INFINET or Internet.

4. Telangana’s Dalit Bandhu Scheme

Telangana CM has recently informed to spend Rs 80,000 crore to Rs 1 lakh crore for Dalit Bandhu Scheme, touted as the country’s biggest direct benefit transfer scheme,

to empower Dalits across the state.

Dalit Bandhu Scheme

Dalit Bandhu is the latest flagship programme of the Telangana government. It is envisioned as a welfare scheme for empowering Dalit families and enable

entrepreneurship among them through a direct benefit transfer of Rs 10 lakh per family.

This is, once implemented on the ground, going to be the biggest cash transfer scheme in the country.

Apart from monetary assistance, the government plans to create a corpus called the Dalit Security Fund permanently to support the beneficiary in the event of any adversities.

This fund will be managed by the district collector concerned, along with a committee of beneficiaries.

The beneficiary would be issued an identity card with an electronic chip,

which will help the government monitor the progress of the scheme.


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Where is the scheme being implemented?

The CM decided to implement it on a pilot basis in the Huzurabad Assembly constituency.

Based on the experiences of implementation in Huzurabad, the scheme will be rolled out across the state in a phased manner.

Officials were asked to visit Dalit colonies and interact with Dalit families to find out their views and opinions before preparing guidelines for the scheme.

The pilot project will focus on monitoring the implementation of the scheme, evaluating the results, and also creating a safety fund for the beneficiaries with the government’s participation.

How is Dalitha Bandhu being implemented?

The CM has ensured that the Dalit Bandhu is free. The governments in the past came out with some schemes and asked for bank

guarantees. This is not a loan. There is no need to repay it. There is no chance of any

middlemen in this. To promote Dalit entrepreneurship, the government has decided to start a

system of reservation for Dalits in sectors where the government issues licences.

The government will provide reservations for Dalits in issuing licenses for wine shops, medical shops, fertilizer shops, rice mills, etc.

5. How to exit farming risk trap

Context

The farmers’ protest against farm laws brings into focus the factors afflicting agriculture in India.

Issues of Indian agriculture

Some 50 years after the Green Revolution, an all-India agricultural landscape is characterised by relatively low productivity levels that co-exist with high levels of variation in crop yields across our farming districts.

Excessive control: Various government agencies have a say on all aspects of the farmer’s livelihood — the latest count includes 13 central and countless state ministries and agencies.

These agencies oversee rural property rights, land use and land ceilings; commodity prices, input subsidies and taxes, infrastructure, production,


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credit, marketing and procurement, public distribution, research, education, trade policy etc.

Poor policies: The result has been a mix of arbitrary and conflicting policy interventions by both the central and state government agencies.

Poor provision of basic public goods: This, combined with poor and varying levels of provision of basic public goods, including irrigation explains the poor state of Indian agriculture.

Risk-to-return in agriculture

The following figures indicate the median (typical) district-level yield (in tonnes-per-hectare) for four major crops — rice, wheat, maize, and cotton — along with the geographic variability of this yield (risk) across all reporting districts for each year from 1966 to 2018.

Combining these two values — median district yield and its geographic variability across all farming districts — provides us a measure of the all-

India level of risk-to-return, in percentage terms.

Lessons from risk-to-return profile

One, the large gap in rice and wheat yields that opened up between Punjab and Haryana and the farm districts in the rest of the country remains far from being closed.

Limited mobility of ideas: There is severe unevenness in the provision of common goods across districts — irrigation, roads, power, etc.

There is also the absence of well-functioning markets for agricultural land, crops, and inputs, the slow labour reform, and the poor quality of education.

These two factors have worked to reduce overall resource mobility within and across our farming districts.

Most importantly, they have limited the mobility of ideas and technology needed to increase productivity and reduce the variation of yield across districts.

Decentralisation failed: As a result of lack of mobility, the real promise of a decentralised system — of experimentation, of learning from each other, and the adoption of best-practices and policies — has failed to materialise.

Distortion due to subsidies: Various input subsidies and minimum price guarantee procurement schemes provided by the state have worked to worsen the overall levels of productivity and the risk in agriculture, generating adverse effects for all of us, through the degradation of our water

resources, soil, health, and climate.


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At the same time, these policies have tightened the trap our farm households find themselves in.

Thus, as is evident in the next chart, outside of rice and wheat, the risk-to-return levels are even higher in the case of maize and cotton, including for Punjab.

As a result, the farm households of Punjab and Haryana fear both, the loss of state support for rice and wheat and the higher risks implied by a switch to other crops.

Way forward

Minimise risk: The guiding principle for three farm laws must be to create conditions that allow farm households to maximise their income while

minimising the overall level of risk in Indian agriculture. Freedom of choice: Farmers must be made free to determine the best mix of

resources, land, inputs, technology, and organisational forms for their farms. More freedom: Farmers, just as entrepreneurs in the non-farm sector, must be

allowed to enter and exit agriculture, on their own terms and contract with whomever they wish.

Allow entry of corporates: Entry of the large or small private corporates in the Indian agricultural stream will help the Indian farmer, along with the rest

of us, move to a low-risk, high return path of progress.

Conclusion

The more we delay the needed reforms, the more difficult it will prove to be for all of us to extract ourselves out of these risk-laden currents of agriculture.

6. Earth Overshoot Day, 2021

Why in News

According to the World Wide Fund for Nature (WWF), humanity has again used

up all biological resources that our planet regenerates during the entire year by

29th July, 2021.

Humanity currently uses 74% more than what the planet’s ecosystems can

regenerate — or 1.7 Earths. From Earth Overshoot Day until the end of the year, humanity operates on

ecological deficit spending.


pc

Highlight

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Key Points

About: o The day marks the date when humanity’s demand for ecological

resources (fish and forests, for instance) and services in a given year exceeds what the Earth can regenerate in that year.

o The concept of Earth Overshoot Day was first conceived by Andrew

Simms of the UK think tank New Economics Foundation, which partnered with Global Footprint Network in 2006 to launch the first global Earth Overshoot Day campaign.

Global Footprint Network is an international non profit

organization founded in the year 2003. It’s key strategy has been to make available robust Ecological Footprint data.

The Ecological Footprint is a metric that comprehensively compares human demand on nature against nature’s capacity to regenerate.

o Earth Overshoot Day is computed by dividing the planet’s biocapacity (the amount of ecological resources Earth is able to generate that year), by humanity’s Ecological Footprint (humanity’s demand for that year), and multiplying by 365, the number of days in a year:

(Earth’s Biocapacity / Humanity’s Ecological Footprint) x 365 = Earth Overshoot Day

Causes: o The prime driver was the 6.6% increase in the global carbon footprint

in 2020. According to the World Health Organization (WHO), a carbon

footprint is a measure of the impact people's activities have on the amount of carbon dioxide (CO2) produced through the

burning of fossil fuels and is expressed as a weight of CO2 emissions produced in tonnes.

o There was also a 0.5% decrease in ‘global forest biocapacity’ due to a rise in deforestation of the Amazon’s rainforests.

Some 1.1 million hectares of rainforest were lost in Brazil

alone, which is home to the largest swathe of Amazonian rainforest.

Predictions: o Even worse, there would be a 43% year-over-year increase in

deforestation in 2021. o The carbon footprint of transportation will be lower this year than

pre-pandemic levels. CO2 emissions from road transport and domestic air travel will

be 5% below 2019 levels.


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CO2 emissions due to international aviation will be 33% below 2019 levels.

o But global energy-related CO2 emissions will increase 4.8% from last

year as economies try to recover from the impact of Covid-19. o Global coal use is estimated to constitute 40% of the total carbon

footprint. Suggestions:

o A business-as-usual scenario will simply not work if the date for World Overshoot Day is to be pushed behind.

o A number of measures can be taken such as cutting down on food wastage, commercial technologies for buildings, industrial processes and electricity production and cutting down on transportation.

Related Global Initiatives: o The Conference of the Parties (COPs):

For nearly three decades the United Nations (UN) has been bringing together almost every country on earth for global

climate summits called COPs. In that time climate change has gone from being a fringe issue

to a global priority. This year will be the 26th annual summit – giving it the name

COP26 will take place in Glasgow, UK. o Paris Agreement:

It is a legally binding international treaty on climate change. It was adopted by 196 Parties at COP 21 in Paris in December 2015 and entered into force in November 2016.

Its goal is to limit global warming to well below 2, preferably to

1.5 degrees Celsius, compared to pre-industrial levels. Some Indian Initiatives:

o National Clean Air Programme (NCAP) o Bharat Stage-VI (BS-VI) emission norms o UJALA scheme o National Action Plan on Climate Change (NAPCC)


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Prelims Practice Questions

1. With reference to Dholavira, consider the following statements:

1. It is the largest site of the Indus Valley Civilization. 2. It is located on the Tropic of Cancer.

3. It is the first Indus Valley site in India to be included in a world heritage site.

Which of the statements given above are correct?

A 1 only B 2 and 3 only C 3 only D 1, 2 and 3

Answer : B

Explanation

The ancient city of Dholavira is an archaeological site at Kachchh District, in the state of Gujarat, which dates from the 3rd to mid-2nd millennium BCE.

o After Mohen-jo-Daro, Ganweriwala and Harappa in Pakistan and Rakhigarhi in Haryana of India, Dholavira is the fifth largest metropolis of Indus Valley Civilization (IVC). Hence, statement 1 is

not correct. Dholavira’s location is on the Tropic of Cancer. Hence, statement 2 is correct. Recently, UNESCO has announced the Harappan city of Dholavira in

Gujarat as India’s 40th world heritage site. o It is the first site of Indus Valley Civilisation (IVC) in India to be

included on the coveted list. Hence, statement 3 is correct.


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2. With reference to the ‘Making water sensitive cities in Ganga basin’, consider the following statements:

1. The initiative was launched by the National Mission for Clean Ganga (NMCG).

2. This initiative is aimed to ensure convergence of the Namami Gange Mission

with national flagship urban missions.

Which of the statements given above is/are correct?

A 1 only B 2 only C Both 1 and 2 D Neither 1 nor 2

Answer :C

Explanation

Recently, a new capacity building initiative on ‘Making water sensitive cities

in Ganga basin’ was launched by the National Mission for Clean Ganga

(NMCG) in association with Centre for Science and Environment (CSE). Hence, statement 1 is correct.

The aim of the program is capacity building and action research for promoting sustainable urban water management for improved river health in Ganga basin cities.

Key Focus Areas: o Water Sensitive Urban Design and Planning. o Urban Water Efficiency and Conservation. o Decentralized Wastewater Treatment and Local Reuse. o Urban Groundwater Management. o Urban Water Bodies/Lake Management.

Convergence Efforts: This initiative is aimed to ensure convergence of the

Namami Gange Mission with national flagship urban missions. Hence, statement 2 is correct.

o AMRUT, Smart Cities, Swachh Bharat Mission, HRIDAY, NULM. o Atal Bhujal Yojana, Jal Jeevan Mission, Jal Shakti Abhiyan at state/city

level across Ganga basin states.


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3. Recently, a large space laboratory named Nauka has been launched to the International Space Station (ISS). It is launched by which of the following countries?

A Japan B Canada C USA D Russia

Answer : D

Explanation

Recently, the Russian Space Agency Roscosmos, launched its biggest space

laboratory named Nauka to the International Space Station (ISS). Nauka means Science in Russian. This is Russia's most ambitious research

facility in space and is fitted with an oxygen generator, robotic cargo crane, a toilet and a bed for Russian astronauts.

o This was sent into orbit using a Proton rocket (family of rockets in Russia - the most powerful in Russia’s space inventory) and will take eight days to reach the ISS.

Hence, option D is correct.

4. Consider the following statements regarding Gamma Ray Bursts:

1. They are the most powerful events in the universe, detectable across billions of light-years.

2. Long Gamma Ray Bursts are associated with the demise of massive stars.




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Answer :C

Explanation

Gamma-Ray Bursts (GRBs) are the most powerful events in the universe, detectable across billions of light-years. Hence, statement 1 is correct.

o A light-year is the distance a beam of light travels in a single Earth year, or 9.5 trillion kilometers.

Astronomers classify them as long or short based on whether the event lasts for more or less than two seconds.

o Long GRBs are observed in association with the demise of massive stars. Hence, statement 2 is correct.

o Short GRB, on the other hand, forms when pairs of compact objects – such as neutron stars, which also form during stellar collapse – spiral

inward over billions of years and collide.

5. With reference to the 'Exercise INDRA', consider the following statements:

1. It is a joint military exercise between India and Russia. 2. The exercise is conducted under the mandate of the United Nations.



Answer : C

Explanation

The 12th Edition of Indo-Russia joint military Exercise INDRA will be held at Volgograd, Russia in August 2021. Hence, statement 1 is correct.

The INDRA series of exercises began in 2003 and was conducted as a bilateral naval exercise alternately between the two countries. However, the first joint Tri-Services Exercise was conducted in 2017.

Exercise INDRA will entail conduct of counter terror operations under the

United Nations mandate by a joint force against international terror groups. Hence, statement 2 is correct.


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6. Sela Tunnel recently in news is located in which of the Himalayan states?

a. Assam b. Sikkim c. West Bengal d. Arunachal Pradesh

Answer : d

Sela Tunnel

It will be the longest bi-lane road tunnel in the world at an altitude above 13,000 feet, located in Arunachal Pradesh

It will provide all weather connectivity to Tawang.

Mains Practice Questions

1. What is the rationale of Participatory Irrigation Management. Explain its utility in irrigation management in India. (150 words)

Approach

Start your answer by defining Participatory Irrigation Management (PIM). Briefly mention the objectives and necessity of PIM. Highlight the constraints in the implementation of PIM. Enumerate some steps to implement it. Conclude suitably.

2. Civil aviation is the fastest growing sector in India, but faces many challenges on different fronts. In this context, discuss the scope of, and challenges faced by civil aviation sector in India. (250 words)

Approach

In introduction elaborate 1st statement with relevant facts and data. In body discuss the challenges faced by civil aviation sector, discuss scope of

civil aviation sector in India and suggest ways to improve it. In conclusion show its importance while comparing it with other sector.


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july 29.07

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