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SECURE SYNOPSIS: 4 February 2020

SECURE SYNOPSIS: 4 February 2020


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.


 

Topic:  population and associated issues, poverty and developmental issues, urbanization, their problems and their remedies.

1.Highlight the challenges associated with Demographic Dividend in India. Discuss the steps taken by the government of India to enhance the capacity of the population and make it more productive.  (250 words)

Reference: Business Today

Why this question:

The question is in the backdrop of the recent initiatives laid out by the Budget to enhance manpower, productivity and employability of the demography in the country.

Key demand of the question:

The answer must discuss the challenges associated with Demographic Dividend in India and brief upon the steps taken by the government to address these challenges.

Directive:

Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction:

Briefly explain what you understand by demographic dividend.

Body:

Explain the fact that India’s demographic dividend could turn out to be a liability if the population is not properly educated, skilled and made employable. A well-educated and healthy population would allow India to read the benefits of its economy. Discuss the challenges it is facing. List out the measures, policies and initiatives that are being taken by the government.

Conclusion:

Conclude with need to recognise the aspects of DD and necessity of harnessing it for a better India in coming future.

Introduction:

Demographic dividend, as defined by the United Nations Population Fund (UNFPA) means, “the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older).”

In other words, it is “a boost in economic productivity that occurs when there are growing numbers of people in the workforce relative to the number of dependents.”

Challenges associated with Demographic Dividend in India:

  • Different section of the population have unequal access to resources like education and technology.
  • Different states have different demographic transition like Kerala and Tamil Nadu are witnessing demographic dividend, Andhra Pradesh and Delhi are opening up the demographic dividend, Bihar and UP are yet to open up.
  • Technological change is making labour partially or wholly redundant in a number of sectors, across the world. Even where labour is still necessary, increasing complexity of production requires labourers to have a minimum skill level that is much higher than the skill level required during the labour-intensive output boom in China and South-East Asia in the past decades.
  • The infrastructure put up in place in cities are not able to handle migration.
  • Dissatisfaction cited are unsecure jobs, low salaries, stressful environment, and mismatch between job and qualification.
  • Social and political problem associated with regional disparity.
  • Female labour force participation has decreased.
  • Educational imbalances: The quality of primary schooling and teachers in India is very poor. ASER reports show the quality of education among children. Moreover, because modern ailments such as obesity are increasing in many developed countries, there is no guarantee that adult longevity will continue to increase perpetually.
  • Employment issues

Government initiatives:

  • Ayushman Bharat with the goal of providing healthcare
  • Pension schemes
  • Scholarships so that students can be nurtured.
  • PM Kisan Samman Nidhi etc.

Way Forward:

To be able to harness the potential of this large working population, which is growing by leaps and bounds, new job generation is a must. The nation needs to create jobs to absorb the addition of young people into the workforce.

  • Improved infrastructure, skill development, access to easy finance, reducing barriers to entrepreneurship and forums for mentorship of emerging entrepreneurs in partnership with corporates are some of measures.
  • Use of technology in all sectors.
  • Need to focus more on pimary and secondary education.
  • Equally important focus on elderly people.
  • The current situation calls for more and better schools, especially in rural areas. It also calls for better transportation links between rural areas and regional urban hubs.
  • Increasing the number of formal jobs in labour intensive, export-oriented sectors such as textiles, leather and footwear, gems and jewellery These sectors also have a higher share of the female workforce.
  • The government must also ensure better quality of jobs with a focus on matching skill-sets and job opportunities.
  • There is a need to look into these qualitative issues of job satisfaction, job profile and skill matching, and the creation of opportunities for entrepreneurship in order to be able to harness the vast potential of human resources.

Conclusion:

It is imperative that policy-makers deal with the situation on multiple fronts. Universal education, value-added skills accretion and massive growth in employment in the formal sectors should be the key focus areas. Unfulfilled aspirations of the youth can quickly turn to frustration, leading to violent outbursts. There is also a need to engage with the youth and create an enabling environment for entrepreneurship. Failure to do so would not just mean a missed opportunity in terms of harnessing the demographic dividend, but the ensuing rise in unemployment and poverty could undermine the advances made on the economic front and foment societal upheaval.

 

Topic:  Government policies and interventions for development in various sectors and issues arising out of their design and implementation. Food Processing and Related Industries in India- Scope’ and Significance, Location, Upstream and Downstream Requirements, Supply Chain Management.

2. Bring out the key highlights of the draft National logistic policy, analyse the benefits and challenges involved in implementing the same. (250 words)

Reference: Live Mint

Why this question:

The upcoming national logistics policy is expected to streamline rules and address supply-side constraints, leading to lower logistics costs and greater competitiveness for Indian products worldwide. Thus the question.

Key demand of the question:

The answer must discuss the key highlights of the draft National logistic policy and bring out the benefits and the challenges in detail.

Directive:

Analyze – When asked to analyse, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary.

Structure of the answer:

Introduction:

Briefly explain that India’s logistics sector has remained fragmented and unregulated, despite its centrality to economic growth.

Body:

  • According to a logistics policy draft released by the commerce ministry in February 2019, the government will create a single point of reference for all logistics and trade facilitation matters, reducing logistics costs, which are now estimated at 13-14% of GDP, to 10%.
  • Discuss the key features of the draft policy.
  • Highlight the concerns/issues involved.
  • Suggest the benefits that can be accrued from it.

Conclusion:

Conclude by reasserting the significance of such a policy in addressing the gaps in the logistics sector of the country.

Introduction:

The upcoming national logistics policy is expected to streamline rules and address supply-side constraints, leading to lower logistics costs and greater competitiveness for Indian products worldwide. The national logistics policy will clarify the roles of the Union government, state governments and key regulators. It will create a single-window e-logistics market and focus on the generation of employment, skills and making medium and small enterprises competitive.”

Key highlights of the draft National logistic policy:

  • Startup acceleration fund by the Logistics Wing: This fund will incubate startups in the logistics sector, enable the adoption of newer technologies and promote innovative practices “that can help in reducing costs and turnaround times.”
  • The policy also states that it will focus on perishable commodities because of the specialised nature of requirements for their packaging, transport and storage. It will also encourage startups working in the “farm to plate” space.
  • Identify, implement and monitor technology based interventions such as e-tolling, electronic document flow, rationalization of checkpoints, digital verification at all checkpoints etc., to decrease wait time, in effect improving the average speed across key corridors.
  • Creating a single point of reference for all logistics and trade facilitation matters in the country which will also function as a knowledge and information sharing platform
  • Optimizing the current modal mix (road-60%, rail-31%, water-9%) in line with international benchmarks (25-30% share of road, 50-55% share of railways, 20-25% share of waterways) and promote development of multimodal infrastructure
  • Improving first mile and last mile connectivity to expand market access of farmers, MSMEs and small businesses
  • Enhancing efficiency across the logistics value chain through increased digitization and technology adoption
  • Supporting the development of the warehousing sector

Benefits of the draft National logistic policy

National Logistics e-marketplace

In August 2018, the Ministry of Commerce said that it was developing an online National Logistics Portal to reduce the cost of moving goods and services across the country and the world from 14% (of India’s GDP) to 10%. The portal was first announced in February 2018.

  • The current draft states that the e-marketplace will be a one stop marketplace for the simplification of documentation for exports/imports and drive transparency through digitization of processes involving Customs, PGAs etc in regulatory, certification and compliance services.
  • “This will bring in greater transparency and faster clearances, thereby reducing logistics costs and making exports competitive, thus improving trade and bolstering economic growth.
  • The portal will also enable improved price discovery, route optimization, in-transit tracking, and timely delivery assurance and… The proposed portal shall be developed keeping in view the advancements in technologies like blockchain, internet of things etc.”

Data analytics center:

  • Creating a data and analytics center for transparency and continuous monitoring of key logistics metrics, enable data driven decision-making for future infrastructure projects.
  • “Performance dashboards will be defined for key logistics metrics across various Central Ministries as well as for respective State Governments.”
  • Data sources like telematics, remote sensing and track and trace data will be incorporated.
  • The data from the hub will be used to facilitate review of logistics performance metrics, on a quarterly basis by an inter-ministerial committee, chaired by the Minister for Commerce and Industry. On a half yearly basis, a review will be conducted by the National Council for Logistics, chaired by the Prime Minister.

Ecommerce logistics:

On E-commerce logistics, the draft states that it would like to promote “cross regional trade on e-commerce platforms by enabling a seamless flow of goods.” The Department of Posts will be “leveraged in formulating seamless first and last mile connectivity” for ecommerce companies within India, to ensure seamless flow of goods. It also states that this will:

  • Reduce transportation and inventory holding costs
  • Increase efficiencies in warehousing, encourage set-up of multi modal logistics hubs
  • Strengthen the air cargo infrastructure, storage infrastructure for railways and improve technology readiness of the Department of Posts

Challenges:

  • The announcement of the proposed logistics policy is welcome as it is likely to delineate the roles of the regulatory agencies at the central and state government level and address issues around predictability of regulations, registration of services providers, regulation of multi-modal transport and performance standards for service delivery,”
  • This policy will categorise each of these services and give minimum threshold requirements for entering the market. For a truck fleet operator, this could be about minimum fleet size, specifications of trucks, axle load and carrying capacity etc
  • The proposed policy also aims to standardize the key elements of a warehouse which will lead to new demand and capacity creation of Grade A warehouses,”
  • The main challenge is while some of the subjects covered under the policy come under the Centre, the rest are controlled by states.

Conclusion:

The development of multi-modal logistics parks, or rules to do with motor vehicle movement, come under states. So, unless there is alignment between the Centre and the states, this policy will be hard to implement,

 

Topic:  Indian Constitution– historical underpinnings, evolution, features, amendments, significant provisions and basic structure.

3. Discuss the constitutional provisions available for the Finance Commission of India and explain its significance. Also, examine the major recommendations of the recently released interim report of the 15th Finance Commission.(250 words)

Reference: The Hindu

Why this question:

The report of the 15th Finance Commission headed by N K Singh was tabled in Parliament. Thus the context of the question.

Key demand of the question:

The question is straightforward and aims to note upon Finance commission and the recently released interim report.

Directive:

Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Examine – When asked to ‘Examine’, we must look into the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications.

Structure of the answer:

Introduction:

Briefly explain the constitutional provisions of FC.

Body:

Start by explaining the working and purpose of the FC; The Finance Commission is a body set up under Article 280 of the Constitution, primarily to recommend measures and methods on how revenues, which the government earns through various taxes, need to be distributed between the Centre and the states. Discuss the related provisions of it in detail.Bring out the highlights of Interim Report of 15th FC.

Conclusion:

Conclude by relevance of the released interim report of the 15th Finance Commission.

Introduction:

The Fifteenth Finance Commission was constituted by a Presidential Order in November, 2017 under the Chairmanship of Shri N. K. Singh to decide the formula for devolution of revenue between Centre and States, for a period of 5 years – April, 2020 to March, 2025.

Finance Commission:

  • The Finance Commission is constituted by the President under article 280 of the Constitution, mainly to give its recommendations on distribution of tax revenues between the Union and the States and amongst the States themselves.
  • Two distinctive features of the Commission’s work involve redressing the vertical imbalances between the taxation powers and expenditure responsibilities of the centre and the States respectively and equalization of all public services across the States.

Constitutional Provisions of Finance Commission India:

A defined frame of constitutional provisions of finance commission India was drafted during the early 1920s. This was drafted with the main motto of maximum exploitation of business opportunity for the British ruler. Further, the British ruler also employed the policy of favoritism towards local Indian rulers to create a wedge of communal difference amongst the dominant religions of India.

Constitutional provisions of finance commission India:

  • The President of India shall, within maximum of two years from the commencement of the draft and thereafter completion of every fifth year or at earlier time (as he deems necessary), by order should constitute a Finance Commission
  • The Finance Commission shall consist of a chairman and four other members, appointed by the President himself
  • The elected parliament may by formulating appropriate law determine the qualifications of such members of the Finance Commission and it may also determine the manner in which the members shall be selected.

The Finance Commission shall entail recommendations to the President of India on:

  • Distribution of the income of the government (including central and provisions governments) as per proportion or according to the contribution made towards such collection of revenues by each such provisions governments or central government
  • Define the grounds on which the government should allocate the grants-in-aid of the revenues of the Indian provisionss out of the consolidated fund of India. The quantum of allocation of such funds need to compliment the requirements of the panchayat and resource of the Consolidated Fund of a provisions
  • The quantum of allocation of such funds need to compliment the requirements of the Municipalities in the provisions and the resources of the Finance Commission of the provisions
  • Any other matter referred to the Commission by the President in the interests of sound finance. The Finance Commission of India shall also determine the operational process and is vested with such powers in the operation as per the provisions enacted by the parliament of India.

Major recommendations of the recently released interim report of the 15th Finance Commission:

  • The Commission has reduced the vertical devolution — the share of tax revenues that the Centre shares with the states — from 42% to 41%.
  • The Commission has said that it intends to set up an expert group to initiate a non-lapsable fund for defence expenditure.

State- wise distribution:

  • Shares of the southern states, except Tamil Nadu, have fallen — with Karnataka losing the most.
  • Shares of states like Maharashtra, Himachal Pradesh and Punjab, along with Tamil Nadu, all of which have fertility rates below the replacement level, have increased slightly.
  • On the other hand, Andhra Pradesh, Kerala, Karnataka, and West Bengal’s shares have fallen, even though their fertility rates are also low.
  • Incidentally, Karnataka, the biggest loser in this exercise, also had the highest tax-GSDP ratio in 2017-18, as per an RBI report on state finances.

Grants-in-aid

In 2020-21, the following grants will be provided to states: (i) revenue deficit grants, (ii) grants to local bodies, and (iii) disaster management grants.  The Commission has also proposed a framework for sector-specific and performance-based grants.  State-specific grants will be provided in the final report.

  • Revenue deficit grants: In 2020-21, 14 states are estimated to have an aggregate revenue deficit of Rs 74,340 crore post-devolution. The Commission recommended revenue deficit grants for these states
  • Special grants: In case of three states, the sum of devolution and revenue deficit grants is estimated to decline in 2020-21 as compared to 2019-20. These states are Karnataka, Mizoram, and Telangana.  The Commission has recommended special grants to these states aggregating to Rs 6,764 crore.
  • Sector-specific grants: The Commission has recommended a grant of Rs 7,375 crore for nutrition in 2020-21.
  • Disaster risk management: The Commission recommended setting up National and State Disaster Management Funds (NDMF and SDMF) for the promotion of local-level mitigation activities.  The Commission has recommended retaining the existing cost-sharing patterns between the centre and states to fund the SDMF (new) and the SDRF (existing).
  • Grants to local bodies: The total grants to local bodies for 2020-21 has been fixed at Rs 90,000 crore, of which Rs 60,750 crore is recommended for rural local bodies (67.5%) and Rs 29,250 crore for urban local bodies (32.5%). This allocation is 4.31% of the divisible pool.

Recommendations on fiscal roadmap

Fiscal deficit and debt levels:

  • The Commission noted that recommending a credible fiscal and debt trajectory roadmap remains problematic due to uncertainty around the economy.
  • It recommended that both central and state governments should focus on debt consolidation and comply with the fiscal deficit and debt levels as per their respective Fiscal Responsibility and Budget Management (FRBM) Acts.

Off-budget borrowings:

  • The Commission observed that financing capital expenditure through off-budget borrowings detracts from compliance with the FRBM Act.
  • It recommended that both the central and state governments should make full disclosure of extra-budgetary borrowings.
  • The outstanding extra-budgetary liabilities should be clearly identified and eliminated in a time-bound manner.

Statutory framework for public financial management:

  • The Commission recommended forming an expert group to draft legislation to provide for a statutory framework for sound public financial management system.
  • It observed that an overarching legal fiscal framework is required which will provide for budgeting, accounting, and audit standards to be followed at all levels of government.

Tax capacity:

  • In 2018-19, the tax revenue of state governments and central government together stood at around 17.5% of GDP.
  • The Commission noted that tax revenue is far below the estimated tax capacity of the country.

Financing of security-related expenditure:

  • The ToR of the Commission required it to examine whether a separate funding mechanism for defence and internal security should be set up and if so, how it can be operationalised.
  • In this regard, the Commission intends to constitute an expert group comprising representatives of the Ministries of Defence, Home Affairs, and Finance.

How revenue has been divided?

  • FC has considered the 2011 population along with forest cover, tax effort, area of the state, and “demographic performance” to arrive at the states’ share in the divisible pool of taxes.
  • In order to reward population control efforts by states, the Commission developed a criterion for demographic effort — which is essentially the ratio of the state’s population in 1971 to its fertility rate in 2011 — with a weight of 12.5%.
  • The total area of states, area under forest cover, and “income distance” were also used by the FC to arrive at the tax-sharing formula.

Criticisms:

  • The population parameter used by the Commission has been criticised by the governments of the southern states.
  • The previous FC used both the 1971 and the 2011 populations to calculate the states’ shares, giving greater weight to the 1971 population (17.5%) as compared to the 2011 population (10%).
  • The use of 2011 population figures has resulted in states with larger populations like UP and Bihar getting larger shares, while smaller states with lower fertility rates have lost out.
  • The combined population of the Bihar, Uttar Pradesh, Madhya Pradesh, Rajasthan and Jharkhand is 47.8 crore.
  • This is over 39.48% of India’s total population, and is spread over 32.4% of the country’s area, as per the 2011 Census.
  • On the other hand, the southern states of Tamil Nadu, Kerala, Karnataka and undivided Andhra Pradesh are home to only 20.75% of the population living in 19.34% of the area, with a 13.89% share of the taxes.
  • This means that the terms decided by the Commission are loaded against the more progressive (and prosperous) southern states.

Conclusion:

The 15th Union Finance Commission, in its interim report, had awarded ₹74,000 crore for the grant to States, but Union Finance Minister in  budget speech had said that the Centre would provide a substantial share in this score and it was whittled down to ₹30,000 crore.

 

Topic:  Challenges to internal security through communication networks, role of media and social networking sites in internal security challenges, basics of cyber security; money-laundering and its prevention.

4. “Communication networks are a part of our critical information infrastructure”, in this context, what are the threats posed by communication networks to the internal security of India? Elucidate. (250 words)

Reference: IDSA

Why this question:

The question is from the static portions of the GS paper III.

Key demand of the question:

The answer must discuss the relevance of Communication networks as a part of our critical information infrastructure; explain the threats posed by them.

Directive:

Elucidate – Give a detailed account as to how and why it occurred, or what is the particular context. You must be defining key terms where ever appropriate, and substantiate with relevant associated facts.

Structure of the answer:

Introduction:

Briefly explain what constitute communication networks.

Body:

  • Discuss how securing the networks are complicated by a number of factors. 
  • Explain in what way threats are posed by communication networks to the internal security of India.
  • Highlight the efforts being made by the country to address these concerns.
  • Suggest solutions to address the challenges.

Conclusion:

Conclude by way forward.  

Introduction:

Communication networks are a part of our critical information infrastructure which was defined in the IT Act, 2000 as “the computer resource, the incapacitation or destruction of which, shall have debilitating impact on national security, economy, public health or safety.” Communications networks are crucial to the connectivity of other critical infrastructure, viz. civil aviation, shipping, railways, power, nuclear, oil and gas, finance, banking, communication, information technology, law enforcement, intelligence agencies, space, defence, and government networks.

Threats posed by communication networks to the internal security of India:

  • Used by terrorists – Due to the easy availability and widespread use of communication networks, most of the terrorists use this medium to achieve their goals. Around 90% of the organized terrorism on the Internet takes place through the social media. The terrorist groups spread their messages through the sites like You Tube, Twitter or Facebook and recruit people via them. For example, the terrorist group of ISIS spreads their messages and activities through the social media.
  • International users – The other national and international users such as the political parties, NGO’s, hackers pose a serious threat using the communication networks. For example, during the civil turmoil in the Arab Spring Uprising, the various governments were threatened through the social media.
  • Communal Violence – With the help of social media, people have started attacking each other’s religion on this platform. Sensitive tweets regarding religion are becoming a common phenomenon. Circulation of certain pictures through communication networks also creates a panic among the masses. This is a threat to the internal security of the nation as it disturbs the communal harmony.
  • Threat to internal security – With the advent of social media, issues like economics, media and science are open to all. Uploading information related to these fields on the social networking sites can be a threat to the internal security.
  • Revolution – Some countries in the world feel threatened by the fact that social media can bring the people together and thus, create a revolution. This in turn can cause political instability.
  • Virtual Community: Popular communication networks websites are another means of attracting potential members and followers. These types of virtual communities are growing increasingly popular all over the world, especially among younger demographics. This can build Anti-national Sentiments among Society.
  • Hacking: Hackers write or use ready-made computer programs to attack the target computer. By using communication networks hackers breach the national security and steal important data of defence or other strategic sectors. This can kneel the whole country without using Arms and Ammunition.

Various measures undertaken to prevent the threats:

National Cyber Security Policy, 2013:

  • The Government of India took the first formalized step towards cyber security in 2013, vide the Ministry of Communication and Information Technology, Department of Electronics and Information Technology’s National Cyber Security Policy, 2013.
  • The Policy is aimed at building a secure and resilient cyberspace for citizens, businesses and the Government.
  • Its mission is to protect cyberspace information and infrastructure, build capabilities to prevent and respond to cyber-attacks, and minimize damages through coordinated efforts of institutional structures, people, processes, and technology.

Strategies adopted by the Policy include:

  • Creating a secure cyber ecosystem through measures such as a national nodal agency, encouraging organisations to designate a member of senior management as the Chief Information Security Officer and develop information security policies.
  • Creating an assurance framework.
  • Encouraging open standards.
  • Strengthening the regulatory framework coupled with periodic reviews, harmonization with international standards, and spreading awareness about the legal framework.
  • Creating mechanisms for security threats and responses to the same through national systems and processes. National Computer Emergency Response Team (CERT-in) functions as the nodal agency for coordination of all cyber security efforts, emergency responses, and crisis management.
  • Securing e-governance by implementing global best practices, and wider use of Public Key Infrastructure.
  • Protection and resilience of critical information infrastructure with the National Critical .Information Infrastructure Protection Centre operating as the nodal agency.
  • To promote cutting edge research and development of cyber security technology.
  • Human Resource Development through education and training programs to build capacity.

Cyber Swachhta Kendra’ (Botnet Cleaning and Malware Analysis Centre)

  • To combat cyber security violations and prevent their increase, Government of India’s Computer Emergency Response Team (CERT-in) in February 2017 launched ‘Cyber Swachhta Kendra’ (Botnet Cleaning and Malware Analysis Centre) a new desktop and mobile security solution for cyber security in India.

Collaboration with industry partners:

  • Development of Public Private Partnerships is an important strategy under the National Cyber Security Policy 2013. Pursuant to this aim, under the aforementioned Cyber Swachhta Kendra initiative, antivirus company Quick Heal is providing a free bot removal Tool.

International Cooperation Initiatives:

  • Information sharing and cooperation is an explicit strategy under the 2013 Policy.
  • Consequently, as and answer to the increasing international nature of cybercrime, the Indian government has entered into cyber security collaborations with countries such as the USA, European Union and Malaysia.
  • The government is drafting guidelines that will bind companies such as Twitter, WhatsApp, YouTube and Facebook to respond to complaints over content in a “few hours” as against the current norm of 36 hours.

Existing regulations on communication networks:

  • In India, social media platforms already come under the purview of the Information Technology (IT) Act, the ‘intermediary’s guidelines’ that were notified under the IT Act in 2011 and the Indian Penal Code.
  • Under existing laws, social media channels are already required to take down content if they are directed to do so by a court or law enforcement.
  • There are also reporting mechanisms on these platforms, where they exercise discretion to ascertain whether a reported post is violating community guidelines and needs to be taken down.
  • These, however, have been reported to be arbitrary – many posts on body positivity and menstruation, for instance, have been taken down in the past while other explicit imagery continues to be allowed.
  • Many of the existing regulations themselves are “dangerously close to censorship and may have a chilling effect on freedom of speech, which is why cases are being fought on those in courts.”
  • Another problem of a lot of regulatory measures is the vagueness of language which is exploited by state agencies to behave in a repressive way.

Conclusion:

Experts have suggested the setting up of a National Cyber Security Agency (NCSA) to address cyber security issues and improve implementation at a national level. Such an agency is suggested to be equipped with staff that is technically proficient in both defensive and offensive cyber operations, to encrypt platforms and collect intelligence. Another proposed measure is setting up of a National Cyber Coordination Centre (NCCC) as a cyber-security and e-surveillance agency, to screen communication metadata and co-ordinate the intelligence gathering activities of other agencies.

 

Topic:  Challenges to internal security through communication networks, role of media and social networking sites in internal security challenges, basics of cyber security; money-laundering and its prevention.

5. What is Money Laundering? How does Money Laundering work? Discuss various steps taken by government of India to prevent money laundering. (250 words)

Reference: Legal Service India

Why this question:

The question is from the static portions of the GS paper III.

Key demand of the question:

The question aims to evaluate in detail about money laundering- definition, purpose, means etc. It also wants us to discuss the available policies such as PMLA to tackle the same.

Directive:

Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction:

Briefly explain what Money Laundering is.

Body:

Write a few lines about the meaning of money laundering- e.g Money laundering is the process of creating the appearance that large amounts of money obtained from criminal activity, such as drug trafficking or terrorist activity, originated from a legitimate source. The money from the illicit activity is considered dirty, and the process “launders” the money to make it look clean.

Discuss the steps in money laundering- Placement-criminally derived funds are introduced in the financial system; Layering-the property is ‘washed’ and its ownership and source is disguised; Integration-‘laundered’ property is re-introduced into the legitimate economy; This three staged definition of money laundering is highly simplistic. The reality is that the so-called stages often overlap and, in some cases, for example in cases of financial crimes, there is no requirement for the proceeds of crime to be ‘placed’. Briefly explain how globalization impacts money laundering. Examine the recent policy efforts taken by the government – India is a full-fledged member of the Financial Action Task Force (FATF), PMLA 2002, and Financial intelligence unit -IND etc.

Conclusion:

Conclude with way forward.  

Introduction:

Money laundering is the process of creating the appearance that large amounts of money obtained from criminal activity, such as drug trafficking or terrorist activity, originated from a legitimate source. The money from the illicit activity is considered dirty, and the process “launders” the money to make it look clean.

How does Money Laundering Work?

A case of Money laundering ostensibly appears to be an above-board financial transaction, however, the criminality underneath is hidden by a three stage process:

  • The first stage is when the crime money is injected into the formal financial System. This is called ‘placement’;
  • In the second stage, money injected into the system is layered and spread over various transactions with a view obfuscate the tainted origin of the money. This process is called ‘layering’;
  • In the third and the final stage, money enters the financial system in such a way that original association with the crime is sought to be obliterated so that the money can then be used by the offender or person receiving as clean money. This is called ‘Integration.

Process_of_money_laundering

Efforts of Government of India to address money laundering:

In India, before the enactment of Prevention of Money Laundering Act, 2002 (PMLA) the major statutes that incorporated measures to address the problem of money laundering were:

PMLA Act:

  • It prescribes obligation of banking companies, financial institutions and intermediaries for verification and maintenance of records of the identity of all its clients and also of all transactions and for furnishing information of such transactions in prescribed form to the Financial Intelligence Unit-India (FIU-IND).
  • It empowers the Director of FIU-IND to impose fine on banking company, financial institution or intermediary if they or any of its officers fails to comply with the provisions of the Act as indicated above.
  • PMLA envisages setting up of an Adjudicating Authority to exercise jurisdiction, power and authority conferred by it essentially to confirm attachment or order confiscation of attached properties.

The Black money (undisclosed foreign income and assets) and Imposition of Tax Act, 2015:

  • To deal with the menace of the black money existing in the form of undisclosed foreign income and assets by setting out the procedure for dealing with such income and assets.

Benami Transactions (Prohibition) Amendment Bill, 2015:

  • It aims to expand the definition of Benami Transactions and specifies the penalty to be imposed on a person entering into a Benami transaction.

Institutional framework:

Enforcement directorate:

  • PMLA empowers certain officers of the Directorate of Enforcement to carry out investigations in cases involving offence of money laundering and also to attach the property involved in money laundering.

Financial Intelligence Unit:

  • It was established in India in 2004 as the central national agency responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions.
  • FIU-IND is also responsible for coordinating and strengthening efforts of national and international intelligence, investigation and enforcement agencies in pursuing the global efforts against money laundering and related crimes.
  • FIU-IND is an independent body reporting directly to the Economic Intelligence Council (EIC) headed by the Finance Minister.

Way forward:

  • Make common people more aware about the problem- The poor and illiterate people, instead of going through lengthy paper work transactions in Banks, prefer the Hawala system which needs to be stopped.
  • Fulfilling the purpose of KYC Norms by doing proper KYC.
  • Establishment of comprehensive enforcement agencies
  • Promote cashless digital transaction

Conclusion:

The Indian government is serious about curbing money laundering so India has to focus on financial literacy education so that people are aware.

 

Topic:  Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections. Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

6. Do you think privatization of health and education sectors in India can bring transformational shift in the current social indicators? Examine with suitable cases. (250 words)

Reference: The Hindu

Why this question:

Recently, As a part of a radical ‘privatization project’, the Health Ministry and the NITI Aayog have developed a framework to let private hospitals run select services within district hospitals, on a 30-year lease. Thus the context of the question.

Key demand of the question:

The answer must discuss the aspects of privatization of health and education sectors in India and in what way it can bring transformational shift in the current social indicators of the country.

Directive:

Examine – When asked to ‘Examine’, we must look into the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications.

Structure of the answer:

Introduction:

Briefly explain the recent ideas proposed to privatize Health and education sectors in India.

Body:

Give a brief introduction about the status of health and education of Indians. Highlight the reasons for such a situation. If you think privatization is needed in these sectors to make transformational changes then argue supporting point’s otherwise present points opposing the move. Suggest suitable measures to be taken in this regard.

Conclusion:

Conclude with a futuristic way ahead.

Introduction:

Finance Minister Nirmala Sitharaman began her speech by saying that the Union Budget was “woven around three prominent themes” — aspirational India, economic development for all and building a caring society. Achieving any of these would require extraordinary efforts on the social sector front starting with allocating additional resources for health, education, nutrition, employment guarantee, and social security schemes.

Status of health and education of India:

Education in India:

  • Only 66% per cent of the Indian people are literate (76% of men and 54% of women).
  • 36 crore (40 per cent) children in the age group of 6-14 years remained out of school as on March 2005, four years after the launch of the Sarva Shiksha Abhiyan.
  • Half of India’s schools have a leaking roof or no water supply, 35% have no blackboard or furniture, and close to 90 per cent have no functioning toilets.

Health in India:

  • India accounts for more than 20% of global maternal and child deaths, and the highest maternal death toll in the world estimated at 138,000.1
  • United Nations calculations show that India’s spending on public health provision, as a share of GDP is the 18th lowest in the world.
  • Nearly 67% of the population in India do not have access to essential medicines.

Need for privatization of health and education sectors:

  • Health and education also did not see any significant increases in allocations this year.
  • The BE for the much publicised Ayushman Bharat Yojana/Pradhan Mantri Jan Arogya Yojana stays at ₹6,400 crore, the same as last year (RE was 50% lower at ₹3,200 crore).
  • The budget for the Prime Minister’s Overarching Scheme for Holistic Nutrition, or POSHAN Abhiyaan, another flagship scheme of this government, sees a meagre increase of ₹300 crore (from ₹3,400 crore to ₹3,700 crore).
  • The funds allocated for the maternity entitlement scheme, Pradhan Mantri Matru Vandana Yojana remains the same as last year — ₹2,500 crore.
  • There is an overall increase of ₹5,000 crore-₹6000 crore each in the overall education and health budgets which are hardly sufficient to cover for inflation.
  • Considering that all these sectors are grossly underfunded in the first place, there is not much hope of seeing anything different in terms of what ultimately reaches people.
  • Highly inadequate spending and an acute paucity of trained manpower.
  • Funds to address the various infrastructural and technological deficiencies are urgently needed.
  • A privatised system can also provide better nursing and allied services.
  • Public healthcare systems across rural and urban areas remain poorly monitored and inadequately standardised.
  • To strengthen rural health care systems.

Privatization of health and education sectors in India can bring transformational shift:

Health sector:

  • Attract private capital through equity and venture funds to build the required infrastructure to world class standards.
  • Private sector will bring best practices in government health care sector.
  • Access to advanced technology in terms of equipment, accessibility, quality of service.
  • Enhance the culture of professionalization in the government health care institutions.

Education sector:

  • Private schools give parents greater freedom of choice to get their children admitted.
  • Many of the private schools have centuries of old traditions behind them and so they are a precious part of our national heritage and culture. They also often have excellent records of academic and sporting achievements.
  • These schools benefit from establishing social contacts which will help them in later life.
  • These schools have the freedom to use experimental methods of schooling.

Negative impacts:

  • Private providers will concentrate on better-off districts, leaving the poor and remote districts for the public sector to manage.
  • This will further worsen inequity in access to health and education facilities.
  • This will weaken the ability of public hospitals to attract and retain trained doctors and health workers.
  • Private providers increase demands on reimbursements and fees
  • This implies that public services are inherently inefficient.
  • Handing over of public assets to for-profit companies represents an abdication of duty by the government.
  • It can lead to even higher costs for the public to pay: Although the goal of the privatization of education is to lower the costs for each community, the opposite impact usually occurs. The only way it can be cheaper is if there are organizations already prepared to step in to take over the process.
  • There can be a decline in the overall service quality: When the privatization of education occurs, then there can be a reduction in the quality of the services and classes that students receive when going to school.

Conclusion:

It is clear that the agenda of the present government for the social sector is for greater privatization and withdrawal of the state. This is reflected not just in the low allocations but also policy pronouncements such as introducing the public-private partnership model for medical colleges and district hospitals or the push. This would be a worrying direction in the current context. A balanced approach between public and private healthcare network remains vital for transforming the socio-economic trajectory of India.

  

Topic:  Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System- objectives, functioning, limitations, revamping; issues of buffer stocks and food security; Technology missions; economics of animal-rearing.

7. In the recent times there has been uproar to review the open ended procurement policy, Discuss what the policy is about? And explain how does the government decide minimum support price for the farmers? (250 words)

Reference: The Hindu

Why this question:

As the debate surrounding the review of open-ended procurement policy has started gaining momentum, following a recommendation by the Commission for Agricultural Costs and Price (CACP) to the Centre government, several farmers and farmers’ bodies in Punjab and Haryana have hinted that any move To stop or limit it would be opposed and resisted.

Key demand of the question:

The answer must discuss in detail the concept of open ended procurement policy and the concerns associated with it, also explain how the government decides upon the MSP.

Directive:

Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Explain – Clarify the topic by giving a detailed account as to how and why it occurred, or what is the particular context. You must be defining key terms where ever appropriate, and substantiate with relevant associated facts.

Structure of the answer:

Introduction:

Briefly explain what open ended procurement policy is.

Body:

  • Under open-ended procurement policy, government agencies buy whatever quantity of wheat and rice is brought by farmers into the mandis (wholesale markets), within the stipulated time and which conforms to fixed quality Parameters for Central pool.
  • Then move onto explain the procedure of forming MSP; CACP submits its recommendations to the government in the form of Price Policy Reports every year, separately for five groups of commodities namely Kharif crops, Rabi crops, Sugarcane, Raw Jute and Copra.
  • Discuss the detailed procedure.
  • Explain the challenges involved and suggest solutions to it.

Conclusion:

Conclude with the need to have a balanced approach.

Introduction:

As the debate surrounding the review of open-ended procurement policy has started gaining momentum, following a recommendation by the Commission for Agricultural Costs and Price (CACP) to the Centre government, several farmers and farmers’ bodies in Punjab and Haryana have hinted that any move to stop or limit it would be opposed and resisted.

Open ended procurement policy:

Under open-ended procurement policy, government agencies buy whatever quantity of wheat and rice is brought by farmers into the mandis (wholesale markets), within the stipulated time and which conforms to fixed quality Parameters for Central pool. The Central Government extends price support to wheat and paddy through FCI and State Agencies. Procurement at MSP is open ended i.e., whatever foodgrains are offered by the farmers ,within the stipulated procurement period and which conforms to the quality specifications prescribed by Government of India, are purchased at MSP (and bonus/incentive ,if any)  by the Government agencies including FCI for central Pool. Some States also declare State bonus on wheat and paddy over and above MSP. Government agencies undertake MSP operation at mandis/ temporary purchase centres/aggregation points. Location and number of purchase centres to be opened are decided in consultation with /by the State governments.

  • With the Food Corporation of India (FCI) sitting on huge stockpiles of food grain, the Commission for Agricultural Costs and Prices (CACP), the central government’s farm price support fixing panel, has again strongly recommended reviewing the open-ended procurement policy.
  • Under the latter, government agencies buy whatever quantity of wheat and rice is brought by farmers into the mandis (wholesale markets), within the stipulated time and which conforms to fixed quality parameters for Central pool.
  • The policy, it says, has led to mounting food stocks and adversely affected crop diversification. “These excess stocks create storage problems and also high storage and financing costs, leading to high subsidy burden,”

Minimum Support Prices:

  • Minimum Support Price is the price at which government purchases crops from the farmers, whatever may be the price for the crops.
  • MSP helps to incentivize the framers and thus ensures adequate food grains production in the country.
  • MSPs are supposed to act as a floor price for private traders, thereby helping avoid distress sales.
  • They are also designed to serve as a price signal to farmers, who tend to shift to crops that come with higher support prices.

Who announces?

The Cabinet Committee of Economic Affairs announces MSP for various crops at the beginning of each sowing season based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). The CACP takes into account demand and supply, the cost of production and price trends in the market among other things when fixing MSPs.

Determination of MSP:

In formulating the recommendations in respect of the level of minimum support prices and other non-price measures, the Commission takes into account, apart from a comprehensive view of the entire structure of the economy of a particular commodity or group of commodities, the following factors:-

  • Cost of production
  • Changes in input prices
  • Input-output price parity
  • Trends in market prices
  • Demand and supply
  • Inter-crop price parity
  • Effect on industrial cost structure
  • Effect on cost of living
  • Effect on general price level
  • International price situation
  • Parity between prices paid and prices received by the farmers.
  • Effect on issue prices and implications for subsidy

The Commission makes use of both micro-level data and aggregates at the level of district, state and the country. The information/data used by the Commission, inter-alia include the following:-

  • Cost of cultivation per hectare and structure of costs in various regions of the country and changes there in;
  • Cost of production per quintal in various regions of the country and changes therein;
  • Prices of various inputs and changes therein;
  • Market prices of products and changes therein;
  • Prices of commodities sold by the farmers and of those purchased by them and changes therein;
  • Supply related information – area, yield and production, imports, exports and domestic availability and stocks with the Government/public agencies or industry;
  • Demand related information – total and per capita consumption, trends and capacity of the processing industry;
  • Prices in the international market and changes therein, demand and supply situation in the world market;
  • Prices of the derivatives of the farm products such as sugar, jaggery, jute goods, edible/non-edible oils and cotton yarn and changes therein;
  • Cost of processing of agricultural products and changes therein;
  • Cost of marketing – storage, transportation, processing, marketing services, taxes/fees and margins retained by market functionaries; and
  • Macro-economic variables such as general level of prices, consumer price indices and those reflecting monetary and fiscal factors.

Concerns / Challenges:

  • Farmer protests across the country could have significant economic and political impact.
  • Farmer protests have forced several states to waive agricultural loans, at a cost of several tens of thousands of crores.
  • India’s price support programme is also promoting cultivation of water intensive crops like paddy and sugarcane even in water deficit regions such as Punjab, Haryana and Maharashtra
  • Farmers keep producing the same varieties as cropping pattern is hardly changed in some regions.
  • Rice and sugarcane occupy 25% of India’s agricultural land but consume more than 60% of its irrigation water.
  • Higher MSPs over-incentivize production leading to supply glut.
  • Rice and wheat are the best examples where the government first incentivises their production and then tries not to let the prices fall by procuring more than one-third of the total produce.
  • Hikes in MSPs also adversely affect exports by making Indian farm goods uncompetitive especially when international market prices are lower.
  • That leads to increase in net domestic supply that further depresses prices forcing the government to raise duties to check imports.
  • Price deficiency payment schemes in MP and Haryana was a failure.
  • Price deficiency payment mechanism, whereby farmers, when they fail to get MSPs, could be directly paid the difference between MSP and prices they receive.

Way Forward:

  • India should now explore alternate models to boost farmers’ income and stop relying on MSPs alone.
  • To improve farm income, the challenge now is to find new markets.
  • NITI Aayog is already working on alternative mechanisms.
  • A non-inflationary way to resolve the agricultural crisis is to raise farm productivity through increased investment in irrigation and post-harvest infrastructure.
  • Procurement system of the government needs to be streamlined.
  • It’s time to consider a transparent, crop neutral and easier to implement income support programme– similar to what Telangana has done.
  • The state government gives a payment of Rs 10,000 per hectare of cultivable land to all farmers irrespective of the crops they raise.
  • Given its relative simplicity and non-market distorting nature, it can be replicated in the whole of India.
  • Agriculture in India needs an innovative solution to free the farmer from excessive government control.

Conclusion:

The current open ended procurement policy should continue in its current form. “The present policy is in the best interest of the country. Wheat and rice are basic food items. The present policy should continue in the interest of Punjab as well as the country,”