SECURE SYNOPSIS: 24 May 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: Salient features of Indian society
Introduction :- Alcohol prohibition in India is in force in the states of Gujarat, Bihar and Nagaland; as well as in the Union Territory of Lakshadweep. All other Indian states and union territories permit the sale of alcohol.
The directive principles of state policy in the Constitution of India (article 47) state that “….the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health”.
Alcohol industry is one of the biggest industries in India and it is believed to bring in a lot of money and profits.
The World Health Organization 2014 reveals that around 50% of the alcohol consumed in India is unrecorded and is a part of non commercial activity. Rising alcohol consumption in few states has led to certain social problems. Alcohol abuse has become the most serious social problem in India.
According to the report by WHO, 6.2 % of the male deaths occur due to consumption of alcohol. The time has come to control the issue of alcohol consumption in most parts of the country.
Dry states – The consumption of alcohol is being prohibited in few parts of the country. In India, the prohibition exists in the states of Gujarat, Nagaland, parts of Manipur as well as parts of Lakshadweep. The state of Kerala also started the process of implementation and is on the path to become a dry state.
- Gujarat– The ban on consumption of alcohol in Gujarat is since 1961 as a tribute of Mahatma Gandhi. The ban of alcohol was a severe blow to the state as Gujarat was a developing region and it could have been in a better position after bringing the alcohol. The 16000 long coastline and the rich heritage of the state is unable to attract a lot of tourists with a ban on alcohol.
- Nagaland– The consumption of alcohol was banned in the Nagaland in the year 1989 under the Nagaland Liquor Total Prohibition Act. In 2014, around 500 illegal bars in Dimapur, the largest city of the state, were shut down.
- Manipur– The prohibition on consumption of alcohol was imposed in few parts of the state by R.K Ranbir Singh government. It came into effect from 1 April, 1991. Later on, the state legislative assembly passed the Manipur Liquor Prohibition Bill,2002 which lifted the prohibition in five districts of the state.
- Lakshadweep– The union territory of Lakshadweep has completely banned the consumption and sale of alcohol. The consumption of alcohol is permitted only in the island of Bangaram which is an inhabited island.
- Kerala– On August 21, 2014, the Chief Minister of Kerala announced that the state will implement the consumption of alcohol in the near future. The state will be turned into an alcohol free state within 10 years. Kerala is the India’s largest consumer of alcohol. As the first step towards prohibition, around 418 bars in the state were forced to shut down.
Impact of banning the alcohol
A ban on the consumption of liquor has several impacts on the people as well as the state.
- Decline in Tourism– The ban on alcohol has a great impact on the number of foreigners visiting the country. During the year 2010 – 2011, around 27% foreigners visited Gujarat but it declined drastically by 5% in the year of 2011 – 2012. The tourism sector of Kerala is also largely affected by the ban on alcohol. A lot of corporate conferences which were planned to be organized in the state may be shifted to somewhere else.
- Unemployment– The ban on alcohol has generated the problem of unemployment among the local people. Tourists will not gather unless there is a flow of alcohol in the beach side resorts or shops. The decline in tourism has also left the local people unemployed. Apart from alcohol shops, other small restaurants or beach huts can be developed which can employ the local people. But it is noted that no investor wants to invest in developing a beach unless the prohibition has been lifted.
- Breaking of the Law– Most of the people in the dry states are convicted for breaking the liquor ban law. These people usually fall under the age of 18 – 25 years old. In Gujarat, around 86 – 90% males were convicted for breaking the liquor ban laws. Every year, around 61 to 68% of people held responsible for breaking the liquor ban law were the people of Gujarat.
- Loss of revenue– The sale of alcohol contributes to the economy of the state through the tax directly and through the tourism, indirectly. The State Excise in India is mainly imposed on the sale of liquor, which is commonly known as Liquor tax. The states like Karnataka, Andhra Pradesh and Punjab earn a large portion of their revenue from the State Excise. Because of the ban in consumption of alcohol in dry states, they are regarded as a poor contributor.
- Reducing the number of accidents– Drunken driving and accidents are not so low in any of the dry states. Most of the truck drivers consume the country alcohol which is easily available. Half of the accidents are caused by the drunken drivers due to a lack of careful driving. But with a ban in consumption of alcohol, there has been a decline in the number of accidents. The drivers became more conscious regarding the pay of a large amount as fine if caught under heavy drunken condition.
- Preparation of home made liquor– Due to liquor ban, the people of the dry states were forced to prepare the home made liquor. In the year 2009, around 43 people died in the Western India due to the consumption of the home made liquor. Home made liquor is available in few parts of Kerala which is known as toddy. In Northern or Western parts of India, home made liquor is known as desidaru, which is mixed with pesticides or chemicals to increase the power.
Facts and Figures
- According to WHO, Kerala stands at first position in terms of alcohol consumption in India.
- In Kerala, an average of over 8 liters is being consumed by the individuals above the age of 15.
- Punjab stands at the second position with an average consumption of around 7.9 litres.
- The Manipur Liquor Prohibition Bill,2002 lifted the prohibition from five districts namely Chandel, Churachandpur, Senapati, Tamenglong and Ukhrul.
General Studies – 2
Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
Introduction :- Africa–India relations refers to the historical, political, economic, military,helper and cultural connections between the India and the African continent.
- Historical relations concerned mainly India and Eastern Africa. However, in modern days —and with the expansion of diplomatic and commercial representations,— India has now developed ties with most of the African nations. In 2013 trade between India & Africa stood at US$ 72 billion making India the fourth largest trading partner of Africa.
- In the past three years alone, 25000 Africans have been trained or educated in India. The Pan Africa e-network, which now connects 48 African countries, is becoming the new highway of regional connectivity and human development. India has emerged as a major and rapidly growing source of Foreign Direct Investment in Africa. Indian tourist flow to Africa is also increasing.
- Besides economic growth in India and Africa, trade has also benefited from India’s decision in 2008 to offer duty free access to Indian markets to all Least Developed Countries, in the context of the first India-Africa Forum Summit. 34 African countries are direct beneficiaries of the scheme.
- Our Lines of Credit to Africa, which is cumulatively USD 7.4 billion from the first two IAFS is creating infrastructure in Africa and boosting bilateral trade. Similarly, Africa’s vast resources and availability of arable land can not only power Africa’s prosperity, but can also become a major source of meeting India’s rapidly growing demand.
- Having established its credentials and commitment over time, the Centre is now taking its partnership beyond dollars and cents to a new strategic level. To begin with, India is working on a maritime outreach to extend its Sagarmala programme to the southern coastal African countries with ‘blue economies’; it is also building its International Solar Alliance, which Djibouti, Comoros, Cote d’Ivoire, Somalia and Ghana signed on to on the sidelines of the AfDB project.
- In its efforts, India has tapped other development partners of Africa, including Japan, which sent a major delegation to the AfDB meeting. It has also turned to the United States, with which it has developed dialogues in fields such as peacekeeping training and agricultural support, to work with African countries.
- It is significant that during the recent inter-governmental consultations between India and Germany, both countries brought in their Africa experts to discuss possible cooperation in developmental programmes in that continent. It will take more heavy-lifting to elevate India’s historical anti-colonial ties with Africa to productive economic partnerships.
- But it is clear that at a time when China is showcasing its Belt and Road Initiative as the “project of the century” and also bolstering its position as Africa’s largest donor, a coalition of like-minded countries such as the one India is putting together could provide an effective way to ensure more equitable and transparent development aid to Africa.
Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation
3) It is said that a well-designed loan-waiver programme could enhance the overall well-being of the households by improving their productive investments, as opposed to distorting their loan utilization and repayment patterns. What are the hazards of present designs of farm loan waiver schemes? What should be the ideal design? Discuss. (200 Words)
Introduction :- Recent events — the UP government’s waiver of farmer loans, dramatic protests by Tamil Nadu farmers in Delhi and a warning from the RBI Governor against loan waivers — have once again brought farm loan writeoffs under public glare.
Need for farm loan writeoffs:
Farm loans may be crop loans or investment loans taken to buy equipment. Both farmers and banks reap a good harvest when all is well. But when there is a poor monsoon or natural calamity, farmers may be unable to repay loans. The rural distress in such situations often prompts States or the Centre to offer relief — reduction or complete waiver of loans.
Essentially, the Centre or States take over the liability of farmers and repay the banks. Waivers are usually selective — only certain loan types, categories of farmers or loan sources may qualify.
Why is it important?
Agriculture in India has been facing many issues — fragmented land holding, depleting water table levels, deteriorating soil quality, rising input costs, low productivity. Add to this vagaries of the monsoon. Output prices may not be remunerative. Farmers are often forced to borrow to manage expenses. Also, many small farmers not eligible for bank credit borrow at exorbitant interest rates from private sources.
- When nature rides roughshod over debt-ridden farmers in the form of erratic monsoon and crop failures, they face grim options. Indebtedness is a key reason for the many farmer suicides in the country.
Concerns associated with such moves:
Loan waivers provide some relief to farmers in such situations, but there are debates about the long-term effectiveness of the measure. Critics demand making agriculture sustainable by reducing inefficiencies, increasing income, reducing costs and providing protection through insurance schemes. They point out that farm loan waivers are at best a temporary solution and entail a moral hazard — even those who can afford to pay may not, in the expectation of a waiver. Such measures can erode credit discipline and may make banks wary of lending to farmers in the future. It also makes a sharp dent in the finances of the government that finances the write-off.
- A blanket waiver scheme is detrimental to the development of credit markets. Repeated debt-waiver programmes distort households’ incentive structures, away from productive investments and towards unproductive consumption and wilful defaults. These wilful defaults, in turn, are likely to disrupt the functioning of the entire credit system.
Have such moves helped farmers in the past?
Studies done by the Kolkata based Indian Statistical Institute and the World Bank have showed that loan waiver is not a solution to Indian agriculture mess. The institute’s 2013 study showed increase in loan repayment default after the Central government announced farm loan waiver of Rs 60,000 crore in 2008, a year before general election. Honest farmers repaying the loan also turned defaulters after the waiver.
- A study — The Economic Effects Of A Borrower Bailout: Evidence From An Emerging Market — by Xavier Giné and Martin Kanz of the World Bank said such move can affect agriculture output in medium to long term as banks may get more selective in extending credit.
- A 2015 ICRIER paper said the massive write-off of loans in 2008 took its toll on the banks, increasing the non-performing assets of commercial banks threefold between 2009-10 and 2012-13.
- Arundhati Bhattacharya, State Bank of India chairperson, said recently that the farm loan waiver leads to credit indiscipline for which a privilege motion was moved against her in the Maharashtra assembly.
The real crisis for Indian farmer is that he or she is not in control of the produce, unlike other businesses, and is dependent on cartel of traders to fetch a decent price. The cartel makes money in case of good or bad crop season as their margins remain intact . In fact, in case of a crop failure the trader profit margin rises whereas the farmer is in distress without remunerative price.
- The governments – Centre and states – have repeatedly failed to break the cartelisation and their effort to create farm infrastructure through cold stores has helped the corporate sector more than the farmers.
- Except some farmers in Maharashtra and Punjab, most of the cold stores built with help of the government subsidy are owned by corporates. So, now these corporates are buying produce in farms at cheap rates, keep them in cold stores, repackage them and sell them in malls in cities at thrice the purchase price. Neither the farmer gains nor the consumer.
What needs to be done?
To be sure, the agriculture sector needs government support but loan waivers are not the solution. On the contrary, expenditure on loan waivers will eventually leave less fiscal space for public expenditure in agriculture. India needs massive investment in areas such as irrigation, water conservation, better storage facilities, market connectivity and agricultural research. The problems in Indian agriculture are structural. They need long-term solutions. Loan waivers will only end up complicating the problem. The Indian economy has suffered a lot due to competitive populism in the past. It’s time parties and governments addressed the real issues.
In India where annual agriculture waste is about Rs 96,000 crore, farm loan waiver is just a poll sop with no long term economic gain for farmers in distress. The money waived could be invested for creating infrastructure that makes farmers independent of cartel of traders and help them to reap maximum economic benefit of their produce.
The magic wand of a waiver can offer temporary relief, but long-term solutions are needed to solve farmer woes. There are many dimensions of the present agrarian crisis in India. The search for a solution therefore needs to be comprehensive by taking into consideration all the factors that contribute to the crisis. Furthermore, both short- and long-term measures are required to address the numerous problems associated with the agrarian crisis.
General Studies – 3
Topic: Basics of cybersecurity
WannaCry ransom-ware is a particularly grave type of malware that blocks access to a computer or its data and demands money to release it.
When a computer is infected, the ransom-ware typically contacts a central server for the information it needs to activate, and then begins encrypting files on the infected computer with that information. Once all the files are encrypted, it posts a message asking for payment to decrypt the files – and threatens to destroy the information if it doesn’t get paid, often with a timer attached to ramp up the pressure.
Questions and Issues raised by WannaCry malware-
- The WannaCry has affected Britain’s National Health Service stranding its services for long time. Thus governments need to secure its critical cyber structure to keep it safe from such attacks.
- Such attacks can also undermine the national security and sovereignty of nation. India with its inadequate cyber infrastructure is more prone to such attacks from state and non-state actors of the hostile nation.
- There are many cyber-attacks on a global scale and it stretches credulity to believe that Indian systems are somehow spared. The government wants to promote Digital India and internet companies want Indians to use their services and spend money online. For that, they need to build and keep the public’s trust.
- IT companies-
- The WannaCry attack has shown that despite the best efforts of software companies, their products will have flaws, including security weaknesses. Rigorous testing would prevent many exploits, but it takes too many resources to consider every possibility.
- Some of the IT companies providing cyber-security suddenly rose in demand after the attack. Providing cyber-security could become important business in near future.
- Ordinary citizens/People-
- They were the most adversely affected by the ransom-ware. Majority of the people particularly in countries like India use pirated version of the operating systems which are most vulnerable to such attacks.
- Owing to lack of digital literacy and awareness about cyber space, common people are more likely to fall pray for such attacks.
- Those individuals and organizations that did not apply Microsoft’s update were taking a risk; whether the reasons were cost, lack of attention or negligence, their actions had an impact on others. The reasons for making computer software up to date are the same as vaccinating a population against diseases. Policymakers may want computer owners to take the same approach.
- The WannaCry ransom-ware attack raised perplexing questions, such as who was behind it, how did it get unleashed, and why the code was configured the way it was. The malware exploited vulnerabilities in Windows 7 that the US National Security Agency (NSA) apparently knew about for a few years.
- One curious aspect of WannaCry is that once it enters a computer, it tries to connect to a domain on the internet, and if it succeeds, it stops its activity. An alert cyber-security researcher created that domain and helped slow WannaCry’s spread. Researchers are puzzled why this “killswitch” was left in the code. What’s worrisome is that perhaps a future variant of ransom-ware will try to send contents of the disk to a remote server before locking the computer, thereby stealing sensitive health or financial details, embarrassing photos or vital state secrets.
India is rapidly becoming digitalized in recent time albeit without safe and secure cyber-infrastructure. This makes India an ideal place for cyber-attacks.
Security experts warn of more attacks similar to WannaCry. The old, unpatched operating systems are being attacked by other malware, including a cryptocurrency miner known as Adylkuss, and another ransomware known as UIWIX. EternalRocks is a malware with unknown intent that is using seven of the leaked NSA exploits, while WannaCry used only two.
Topic: Basics of cybersecurity
5) It is argued that to fight modern challenges of cyberthreats, the three-layered Israeli strategy that goes beyond security to build a cyber system that is robust, resilient and has strong defence capabilities could be adopted. Throw more light on this Israeli model. (200 Words)
A regional power devoted to ensuring its own survival, Israel has burgeoned into a high tech epicenter built around Internet security, anti-virus software, and other cyber defense technologies. Much of this is an extension of its self-reliance, and the added fact that since the creation of modern Israel, the nation has faced enemies on its borders.
Israel’s information security ecosystem has many aspects. There are mature companies such as Check Point; there are venture capitalists which focus on cyber such as Jerusalem Venture Partners (JVP) Cyber Labs; and there are research collaborations such as the Deutsche Telekom Innovation Laboratories activity at Ben-Gurion University. This array of expertise has turned heads, worldwide. “Microsoft(“MSFT”) and many other multi-national companies identified that Israel is a cyber-powerhouse with the right talent.
Israel’s cyber-security model-
It is based on three premises viz Robustness, Resilience and Strong Defence Capabilities.
- The capacity of performing without failure. In the cyber context it means to repel and contain cyber threats. For eg The immune system of the body
- Main Cyber security measures that promote Robustness
- The risk management
- Damage control and
- Human factor
- National systemic robustness is based on robustness of the elementary units. For eg Educating for personal hygiene, sanitation and vaccination
- National efforts to enhance organization’s robustness-
- Raising awareness
- ‘Raising the bar’ for cyber security prioritized areas.
- Promoting national preparedness
- Robustness can never guarantee complete security. So resilience denotes systemic capacity to handle threats in order to regain overall normal functioning.
For eg. Hospitals provide second tier of recovery through tailored personal treatment.
- Systemic resilience-
- Event driven actions
- Identify, mitigate and recover from cyber attack
- Minimizing potential damage and maintaining systemic continuity
- Relies on robustness for effectiveness.
- The state has a role in diminishing the spread events
For eg Centres for disease control and prevention.
- Government efforts to improve national resilience-
- Situational awareness
- Analytic capacity
- Secured information sharing
- Handling incidents, denying attacks and assisting in recovery
Strong Defence Capability-
- It is the domain of state action where direct threat to national security is imminent.
- Harnessing national capabilities
- Early warning capability
- Forensics and mitigation capabilities
- Situational awareness of event and indications
- Capabilities outside the cyber domain.
- Effectiveness scales up by Robustness and Resilience.
Topic: Resource mobilization; Liberalization
Key features of GST-
- Levy of GST: The centre will levy Central GST(CGST) and the states will levy State GST (SGST) on the supply of goods and services within a state. The centre will levy IGST in the case of (i) inter-state supply of goods and services, (ii) imports and exports, and (iii) supplies to and from special economic zones.
- Apportionment of IGST revenue: The IGST collected will be apportioned between the centre and the state where the goods or services are consumed. The revenue will be apportioned to the centre at the CGST rate, and the remaining amount will be apportioned to the consuming state.
- Destination-Based Consumption Tax:GST will be a destination-based tax. This implies that all SGST collected will ordinarily accrue to the State where the consumer of the goods or services sold resides.
- Compensation to states on loss of revenue: States will be compensated by the centre for loss of revenue, due to the implementation of GST. Compensation will be provided for a period of five years from when the State GST Act comes into force.
- In order to prevent cascading of taxes, input tax credit (ITC) would be admissible on all goods and services used in the course or furtherance of business, except on a few items listed in the Law.
- In order to ensure a single administrative interface for taxpayers, a provision has been made to authorize officers of the tax administrations of the Centre and the states to exercise the powers conferred under all Acts.
- Goods and Services Tax Network (GSTN): A not-for-profit, Non-Government Company called Goods and Services Tax Network (GSTN), jointly set up by the Central and State Governments will provide shared IT infrastructure and services to the Central and State Governments, tax payers and other stakeholders.
- Administration of GST: Administration of GST will be the responsibility of the GST Council , which will be the apex policy making body of the GST. Members of GST Council comprised of the Central and State ministers in charge of the finance portfolio.
- Registration of taxpayers: Every person with a turnover exceeding Rs 20 lakh will have to register in every state in which he conducts business. This threshold will be Rs 10 lakh for special category states (i.e. Himalayan and North-Eastern states). A person may have multiple registrations for different business verticals in a state.
- Goods and Service Tax Council: The GST Council will be a joint forum of the Centre and the States. The Council will make recommendations to the Union and the States on important issues like tax rates, exemption list, threshold limits, etc. One-half of the total number of Members of the Council will constitute the quorum of GST council.
- Anti-profiteering measure: The central government may by law set up an authority to examine if reduction in tax rate has resulted in commensurate reduction in prices of goods and services. The powers of the authority will be prescribed by the government.
- Compliance rating: Every taxpayer shall be assigned a GST compliance rating score based on his record of compliance with the provisions of this Bill. The compliance rating score will be updated at periodic intervals and be placed in the public domain.
- It moves the tax system from production to consumption. It covers the gross domestic product (GDP) more comprehensively. Because the tax base is now a much wider set of transactions, hopefully the per capita tax incidence will be lower.
- Second, it eliminates a major bane of cascading, i.e. having to pay tax on tax. It will thus increase efficiency of taxation.
- Third, the GST has interlocking incentives for compliance, because your tax incidence, and refund, depends on production of proof of tax paid by your supplier. The paperwork, or rather the computer records, is interlinked in a chain. No one person in the chain can evade tax because it hurts either his vendor or customer. In that respect, the GST’s interlocked incentives look similar to Grameen Bank’s joint liability lending in microfinance. Micro loans are given without any collateral, but if one person defaults, the entire group is blacklisted. This ensures an almost 100% repayment rate. Similarly, the GST too has interlinked incentives for the whole value chain.
- For these three reasons and many more, the GST is expected to bring many benefits to the economy. These are higher GDP growth, lower inflation, buoyant tax collections, wider coverage and less tax evasion, and, most importantly, a truly common economic market across the country. Indeed the slogan for promoting the GST was “One Country One Tax”.
Benefits of GST:-
- Reduction in multiplicity of taxes
- Mitigation of cascading /double taxation.
- More neutralization of taxes especially for exports.
- Development of common national market.
- Simpler tax regime.
- Simpler Tax System
- Broadening of Tax base
- Improved compliance & revenue collections
- Efficient use of resources.
- Automation of compliance procedures to reduce errors and increase efficiency.
The ideal of a low, single rate and comprehensive total GDP coverage, with a fully IT-enabled compliance system, is a destination still far away. However the journey of a hundred miles must begin with the first step. To that extent this historic tax reform has come alive. Along the way it will be tweaked and modified a thousand times to eventually hit the right stride, for that is the genius of India’s democracy.