SECURE SYNOPSIS: 13 April 2017
NOTE: Please remember that following ‘answers’ are NOT ‘model answers’. They are NOT synopsis too if we go by definition of the term. What we are providing is content that both meets demand of the question and at the same time gives you extra points in the form of background information.
General Studies – 1;
Topic: Poverty and developmental issues
What is ‘Income Inequality’
Income inequality is the unequal distribution of household or individual income across the various participants in an economy. Income inequality is often presented as the percentage of income to a percentage of population. For example, a statistic may indicate that 70% of a country’s income is controlled by 20% of that country’s residents.
Contributing Factors to Income Inequality
- Education is known to affect equality in societies. Certain social-economic groups of people do not have access to quality education in the United States, especially at the secondary school level. In countries that provide higher-quality secondary education across the economic spectrum, there is much less income disparity.
- Competition for talent creates a salary divide. There is much more competition for high-quality executive talent, which has driven salaries for executives higher relative to the level of generated productivity. Big bonuses and other incentives have led to an inflation of executive salaries.
- Stagnant wages play a big role in inequality. The median income for low- to middle- income workers has been mostly flat since 2007, while executive compensation has increased.The diminished influence of labor unions has also led to flat or declining wages among workers.
- Family and social interactions impact earning potential. Social and emotional skills critical to leading a quality life are not sufficiently developed in economically distressed areas with a high percentage of unstable families.
- Increased demand for high-skilled workers adds to a widening wage gap. Companies are investing more heavily in developing a high-skilled workforce, driving wages up for high-skilled workers. This leads to de-emphasizing or automating low-skilled functions, pushing wages for low-skilled workers down.
Extent of inequality and poverty in the world-
- Oxfam’s report, ‘An economy for the 99 percent’, shows that the gap between rich and poor is far greater than had been feared.
- Oxfam has observed that the world’s eight richest people now own as much wealth as the poorest 3.6 billion.
- The Oxfam reportAn Economy for the 1%, shows that the wealth of the poorest half of the world’s population has fallen by a trillion dollars since 2010, a drop of 38 percent. This has occurred despite the global population increasing by around 400 million people during that period. Meanwhile, the wealth of the richest 62 has increased by more than half a trillion dollars to $1.76tr.
- The report also shows how women are disproportionately affected by inequality – of the current ‘62’, 53 are men and just nine are women.
- Credit Suisse’s wealth database suggests that the total wealth of the world’s three richest people exceeds that of all the people in three countries—Angola, Burkina Faso and the Democratic Republic of Congo—which together have a population of 122 million.
- The major component of the world’s income inequality (the global Gini coefficient) is comprised by two groups of countries.
- The first group has 13% of the world’s population and receives 45% of the world’s PPP income. This group includes the United States, Japan, Germany, the United Kingdom, France, Australia and Canada, and comprises 500 million people with an annual income level over 11,500 PPP$.
- The second group has 42% of the world’s population and receives only 9% of the world PPP income. This group includes India, Indonesia and rural China, and comprises 2.1 billion people with an income level under 1,000 PPP$.
Though income inequalities have increased persistently, there also have been reduction in the poverty indicators-
- Great progress on reducing extreme poverty—defined as consumption of less than $1.90 per day—has been achieved in recent decades. In 1981, 42% of the world’s population lived in extreme poverty. By 2013—the last year for which we have comprehensive data—that share had dropped to below 11%. Piecemeal evidence suggests that extreme poverty now stands at just above 9%.
Should inequality & poverty reduction be left to markets and local communities-
- Market Failure: Markets work on the principles of profit. There are certain domains like health, sanitation where due to lack of requisite profits free market fails to provide needed solution and public interest is compromised.
- Free markets are a boon for efficiency but it gets converted into a bane when corruption through crony capitalism and nepotism are inflicted on markets. This leads to inefficient resource distribution, exclusion of many and thereby perpetuating inequality and poverty.
- Though local communities can play important part in bringing economic equality and poverty reduction, they cannot be relied upon completely. Social dynamics and local factors themselves have contributed to the socio-economic inequalities. Thus roles of all tiers of government and civil society groups are equally important for achieving these goals.
The importance of addressing inequality is visible from their inclusion in SDGs and the countries should proactively work towards achieving the targets sets.
General Studies – 2
Topic: Parliament and State Legislatures – structure, functioning, conduct of business, powers & privileges and issues arising out of these.
Standing committee is a committee consisting of Members of Parliament. It is a permanent and regular committee which is constituted from time to time according to the provisions of an Act of Parliament or Rules of Procedure and Conduct of Business. The work done by the Indian Parliament is not only voluminous but also of a complex nature, hence a great deal of its work is carried out in these Parliamentary Committees.
Both Houses of Parliament, Rajya Sabha and Lok Sabha, have similar Committee structures with a few exceptions. Their appointment, terms of office, functions and procedures of conducting business are broadly similar. These standing committees are elected or appointed every year, or periodically by the Chairman of the Rajya Sabha or the Speaker of the Lok Sabha, or as a result of consultation between them.
Should every bill be referred to standing committees of Parliament?
- Parliamentary committees increase the efficiency and expertise of Parliament. Given the volume of work and the limited time at their disposal, legislators are unable to scrutinize every matter in detail on the floor of the House.
- These Committees review proposed laws, oversee activities of the executive branch, and scrutinise government expenditure. Their reports allow for informed debate in Parliament.
- Committees also provide a forum to build consensus across party lines, help develop expertise in subjects, and enable consultation with independent experts and stakeholders.
- Standing committees are the parliament’s principal instrument to ensure executive accountability, which is central in a representative democracy.
- Parliamentary committee system is also designed with the view to enlighten MPs on the whole gamut of governmental activity, including defence, external affairs, industry and commerce, agriculture, health and finance. MPs receive information about parliamentary workings as well as perspective on India’s strengths and weaknesses through the detailed studies undertaken by standing committees. Indian parliamentary committees are a huge reservoirs of information, which are made available to MPs in order to enlighten themselves, and contribute ideas to strengthen the parliamentary system and improve governance. Thus sending all bills to such committees would serve this purpose.
- Sometimes bills, mostly amendment bills that seek to alter an existing Act, may need to be passed urgently to handle a specific situation. In such situations, the chair has to respond to a request coming from the government and allow the bill to be passed without being referred to a standing committee.
- Money bills, such as the Appropriation Bill and Finance Bill, are never referred to a standing committee or any other committee because these need to be passed within a specific time frame.
- Standing committees do not have experts or specialist who deliberate the matter in rational and scientific way.
- There has been a steady decline in the effectiveness of the committees, caused by two main reasons.
- First, MPs are unable to pay attention to the committees as their constituencies make a huge demand on their time. Solving problems in constituency and social interaction takes their most of the time.
- The second reason is that the committee chair’s supervisory role has not proved to be effective. All the committees are under the overall control of presiding officers. So far no mechanism for a regular assessment of the performance of the committee has been put in place.
Though it is desirable that all or most of the bills should undergo scrutiny from the standing committees, there is need to overhaul and reform the standing committees so that they work effectively and efficiently.
- Standing committees should be periodically reviewed. They can elicit public views and call specialist advisors. They may finalize the second reading stage in the Committee.
- If the chairman of the Rajya Sabha and the Speaker of the Lok Sabha meet the chairmen of committees at least once or twice in two months to discuss issues related to the committees, there will be a significant improvement in their functioning.
- Meetings of the standing committees with certain exception be made public to increase their accountability.
- Only those bills where time constraints do not allow it to pass to standing committee should be allowed to pass directly.
Thus standing committees have important role to play in overall improvement in the functioning of the parliament and general governance in the country.
Topic: India and its neighborhood- relations
India-Nepal electricity synergy-
Nepal is short of power and will need to import power for some years to accelerate its economic growth. India has surplus capacity at present. In the years to come, it can fruitfully import flexible hydropower from Nepal to balance its fast growing renewable generation and also provide a market for Nepal’s electricity. With this market, Nepal’s hydro potential can be developed faster.
India and Nepal have been talking about electricity trade and joint projects for many years now, but somehow these talks did not succeed. It was only in 2014 when India and Nepal signed a Power Trade Agreement that the doors opened for Nepal developers/traders to access the Indian power market. At first, Nepal was apprehensive that it would not get a fair deal trading with a large neighbour, but power is now traded in India on exchanges transparently and the price is known to all, thus assuaging some of Nepal’s apprehensions.
What benefits can Nepal get with the energy cooperation with India-
- Due to political uncertainty, the development of Nepal’s hydro potential has been delayed. Out of an economically viable and technically feasible potential of 43.5 GW, only 0.8 GW had been developed by March 2016. Thus, a great opportunity has been missed. By selling power to India, Nepal could have developed its economy at a faster rate. Bhutan has reaped the benefit of power export to India and its per capita income in purchasing power parity adjusted for international dollars increased from $475 in 1980 to $7,860 in 2015. India’s was $5,730 in 2015.
- The prospect of electricity trade with India makes it possible for Nepal to develop its hydropower potential and has important consequences. Even though significant exports to India will begin only from 2025 because domestic capacity development takes time, Nepal could already benefit through larger import of electricity from India. Increased availability of electricity accelerates its economic development. By 2045, Nepal’s GDP becomes 39% larger, its per capita consumption 23% higher and per capita electricity consumption 50% higher than if trade were to continue at its modest current level.
Trade also benefits India. Meeting the evening peak in India when its large solar PV capacity would not be available becomes easier and cheaper. The gains in monetary terms are comparable for both Nepal and India.
An important step in promoting electricity trade between India and Nepal took place on February 14 when Energy Secretary-level talks — known as the joint steering committee (JSC) meeting — concluded in Kathmandu. It was decided to endorse the detailed project report of the 400 kV Butwal-Gorakhpur cross-border transmission line. It follows the guidelines issued by India’s Ministry of Power for cross-border electricity trade on December 5, 2016.
A climate of confidence and trust in the long-term trading relationship between India and Nepal can greatly help Nepal meet its ambitious target and provide an opportunity for Indian investors to invest in Nepal. This could help us smoothen our recently strained relations with Nepal as well as strengthen our historically friendly ties.
Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
4) Recently 130 countries started formal talks on an international treaty to ban nuclear weapons with a goal to declare it illegal for any country to produce, possess, stockpile, deploy, threaten to use, or use nuclear weapons. Why is there a demand for a nuclear weapon-free world? Is this demand justified? Critically comment. (200 Words)
In the last week of March, at the United Nations in New York, history was made as diplomats from about 130 countries started formal talks on an international treaty to ban nuclear weapons. The goal of the meeting was to declare it illegal for any country to produce, possess, stockpile, deploy and threaten to use, or use nuclear weapons.
Why there is demand for nuclear weapon free world?
- The driving force for the demand for a nuclear weapon-free world is a simple humanitarian impulse, the love and compassion for other human beings. Nuclear weapons are the ultimate means of mass destruction and history has shown their use brings immeasurable death and suffering.
- The nuclear race which had begun in the cold war period between USA and USSR, has infected the other countries like China, India, Pakistan, North Korea etc. This has created high level of vulnerability for other nations which do not possess it.
- The nuclear weapons ban talks are the fulfilment of a long-standing demand that all countries deserve equal security. For decades, the world has pressed the handful of countries with nuclear weapons to free humanity from the nuclear danger. The very first resolution at the UN, passed in 1946, called for a plan “for the elimination from national armaments of atomic weapons.”
- The nature of warfare in the modern era has undergone drastic changes. War in any region of the world could encompass major powers of the world leading to another world war which could practically destroy the human civilizations.
- Nuclear weapons in countries like Pakistan are vulnerable to terrorist activities and could create serious threat to other nations in the neighborhood.
This demand is justified because-
- Nuclear weapon free world would save humanity from mass destruction and help it flourish and prosper.
- Instead of giving stability, nuclear weapons have created instability and insecurity. More and more countries are vying to produce nuclear weapons in a quest for futile notion of security.
- Nuclear weapons are produced at huge cost and human resource, often at the cost of socio-economic welfare. If these spending on nuclear weapons are diverted to welfare of citizens, it could create wonders for nations, particularly developing ones.
- This would immediately reduce the tensions between hostile nations like India-Pakistan, South Korea- North Korea, Israel-Islamic countries etc.
- This would end the unfair system of privileged and under-privileged nations created due to possession and non-possession of nuclear weapons.
- This would shift the focus from nuclear weapons to nuclear energy which could be used for peaceful purposes.
However there are some apprehensions among the nuclear weapon states. No nuclear weapons state is ready to reduce its nuclear arsenal unless other nuclear states do it. There is trust deficit among different nations possessing nuclear weapons. Thus to convert this demand into actual reality, it needs global consensus, lead role of nuclear states and determination to create nuclear weapon free world.
General Studies – 3
Topic: Economic growth and development
Increasing privatisation that is profit driven markets in crucial social sectors like health and education can yield good outcomes:-
- Such markets will provide first of all competition and will benefit the people by offering low cost and affordable services
- It will create its own infrastructure that too with high quality and world class standards
- The increased professinalism and quality services delivery will ensure the best services for people
- It will also enhance the transparency and accountability of the working professionals andhence will help in decreasing the corruption in system.
- For goals like universalization of these sectors a greater involvement of private sector is needed owing to the limited capacity of state
- Greater technology transfer occurs especially in field of medical technologies than what the government can afford and transfer of best management practices can be deployed.
- Innovative pedagogy in schools can be introduced and especially facilities to hone extra-curricular skills such as sports, drawing can be provided by private schools as greater infrastructure is needed to build practice sports or cultural activities
However there are hidden costs too:-
- These sectors are mostly coveted by poor which has very limited capacity to pay and state should assume the responsibility of providing them th eservices rather than leaving such crucial sectors to market driven economy.
- Both health care and education have similar properties – asymmetry of information, where the provider of service has greater information than the users, are quintessential for human progress and ensure equality in society, have greater barriers to switching service providers than other commodities like restaurants, etc.
- Good healthcare needs other social institutions and structures such as public trust, enforceable professional ethical codes, public delivery systems and tight regulations which cant be done under market driven model.
Thus, the government has to at least act as a regulator in these sectors. Some of the ways government can limit it’s role and yet make these services accessible and affordable are:
- It can incentivise outreach to rural areas by offering tax breaks or subsidies.
- For the health sector, it can encourage the poor to take up insurance schemes so that they can easily cover up their health care costs, even from the private sector.
- It can encourage setup of hospitals on cross subsidy basis, where the relatively well off will be charged higher and the poor will be served free or at lower prices. But such initiatives should be purely voluntary.
- Price controls in course fees or the cost of surgeries and medicines should be implemented, whenever necessary.
Topic: Employment;Economic growth
Kerala among the Third World’s healthiest, longest-lived, most gender-equitable.Kerala has a wide variety of natural resources. And it has a continuous record of India’s highest literacy rate.But At 7.4 per cent, Kerala has the highest rate of unemployment and least industrialized among the big States in the country, says the Economic Review.
Reasons for unemployment :-
- According to studies by the Centre for Development Studies, Thiruvananthapuram, conspicuous consumption is the hallmark of a Kerala emigrant. The majority of remittances that flowed into Kerala over the past several decades have only been used to build dead investments like palatial houses and owning depreciating assets like automobiles and consumer goods
- Archaic mental behaviour- even after the transition from being low- skilled workers to highly educated professionals; it is hard for these emigrants to give up their showy lifestyle. The windfall gain that it seems due to currency arbitrage, emigrants tend to splurge rather investing productively.
- The opening of too many arts and science colleges and private ITIs, and a preference for salaried (especially government) employment over self-employment is also one of the reason.
- Labour unions: Kerala witnesses a lot of protests and strikes.Labour unions are a common phenomenon in Communist ruled states. This will discourage a lot of investors from putting in their money there.
- Environment concerns: Kerala has earned the title- God’s own country, due to its natural beauty and monsoons Environmentalists would hate the idea of industries ‘polluting’ their state.
Topic: Science and Technology- developments and their applications and effects in everyday life
Bitcoin is a cryptocurrency and an electronic payment system invented by an unidentified programmer, or group of programmers, under the name of Satoshi Nakamoto. Nakamoto introduced bitcoin on 31 October 2008 to a cryptography mailing list, and released as open-source software in 2009. The system is peer-to-peer, and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called the blockchain, which uses bitcoin as its unit of account. Since the system works without a central repository or single administrator, bitcoin is called the first decentralized digital currency. Bitcoin is the largest of its kind in terms of total market value
The basics for a new user
How Bitcoins Work?
As a new user, you can get started with Bitcoin without understanding the technical details. Once you have installed a Bitcoin wallet on your computer or mobile phone, it will generate your first Bitcoin address and you can create more whenever you need one. You can disclose your addresses to your friends so that they can pay you or vice versa. In fact, this is pretty similar to how email works, except that Bitcoin addresses should only be used once.
Balances – block chain
The block chain is a shared public ledger on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain. This way, Bitcoin wallets can calculate their spendable balance and new transactions can be verified to be spending bitcoins that are actually owned by the spender. The integrity and the chronological order of the block chain are enforced with cryptography.
Transactions – private keys
A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Bitcoin wallets keep a secret piece of data called a private key or seed, which is used to sign transactions, providing a mathematical proof that they have come from the owner of the wallet. The signature also prevents the transaction from being altered by anybody once it has been issued. All transactions are broadcast between users and usually begin to be confirmed by the network in the following 10 minutes, through a process called mining.
Processing – mining
Mining is a distributed consensus system that is used to confirm waiting transactions by including them in the block chain. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network. These rules prevent previous blocks from being modified because doing so would invalidate all following blocks. Mining also creates the equivalent of a competitive lottery that prevents any individual from easily adding new blocks consecutively in the block chain. This way, no individuals can control what is included in the block chain or replace parts of the block chain to roll back their own spends.