PM IAS OCT 10 NEWS ANALYSIS

Poverty in India & Lessons from China

In News

• Recently the World Bank released its latest report on global poverty. 

Report highlights

• Economic upheavals & reversal:
  • Report stated that “economic upheavals brought on by Covid-19 and later the war in Ukraine” had produced “an outright reversal” in poverty reduction across the planet. 
    • The pace of poverty reduction had been slowing down anyway since 2015, thanks to a slowdown in growth rates but the pandemic and war have caused an outright reversal. 
  • The reversal is affecting so much that the “world is unlikely to meet the goal of ending extreme poverty by 2030”.
• India’s case:
  • Estimated poor in India:
    • According to the WB, India is the country with the highest number of poor people.
    • The World Bank used the data from the Centre for Monitoring Indian Economy (CMIE). 
      • It found that the number of people living in abject poverty increased by 56 million (5.6 crore) in 2020. 
    • That’s almost 80% of the total 70 million the world over that the World Bank estimates to have been pushed into poverty in 2020. 
    • In other words, according to this estimate, 8 out of every 10 people in the world who were pushed into poverty during Covid were in India.
  • Poverty & expenditure:
    • India’s problem, however, isn’t just that it has the largest number of people in the world living below the extreme poverty line. 
    • According to the Bank, close to 600 million Indians survive at less than $3.65 (Rs 84) a day level of expenditure.

What is extreme poverty? How is it defined?International poverty line:The World Bank (WB) defines extreme poverty by particular consumption level. This is called the poverty line. The poverty line is pegged at US$2.15. In other words, anyone living on less than $2.15 a day is considered to be living in extreme poverty. About 648 million people globally were living in extreme poverty in 2019.Determining the poverty line:The $2.15 level is based on purchasing power parity (PPP). Simply put, the PPP equivalent of $2.15 is the number of Indian rupees an Indian would need to buy the same basket of goods in India that an American can buy with $2.15 in the US. That equivalent in India is Rs 46. [not Rs 176 – the value we get if we multiply 2.15 by the rupee’s current market exchange rate with the US dollar (around 82)]Reason of this difference:This difference is because the price of the same goods is different in different countries It is quite likely that a dollar in India buys far more of the same commodity (say, an egg or banana) or service (say, a haircut) that it buys in the US.So, the international poverty line of $2.15 implies that any Indian who spends less than Rs 46 a day — in total — is considered to be living in extreme poverty. Revision and evolution of this international poverty line:This international poverty line is revised periodically to account for rising prices of goods and services over time. The very first international poverty line — a dollar a day — was constructed in 1990 using the 1985 prices. It was then raised to $1.08 a day in 1993, $1.25 a day in 2005 and $1.90 a day in 2011. The $2.15 one is based on 2017 prices.

What can India learn from China’s poverty alleviation programme?

• Significance of China:
  • China is not only comparable to India in terms of population size but is also globally recognised to have alleviated poverty at a historically unprecedented speed and scale.
• Progress of China:
  • The World Bank found that between 1978 and 2019, China’s poverty headcount dropped from 770 million to 5.5 million people. 
  • In other words, China lifted 765 million (76.5 crore) people from extreme poverty in the past four decades.
  • It means, on average, every year China pulled 19 million (1.9 crore) poor people out of extreme poverty for the past 40 years. 
  • In doing so, China accounted for almost 75 percent of the global reduction in the number of people living in extreme poverty during this period.
• All round progress:
  • Decades of progress in China are also reflected in substantial improvements in other measures of well-being like life expectancy at birth, education achievements, etc. 
• The main conclusion is that China’s poverty reduction success relied mainly on following pillars:
  • Economic growth:
    • The first pillar was rapid economic growth, supported by broad-based economic transformation, which provided new economic opportunities for the poor and raised average incomes
  • Government policies:
    • The second pillar was government policies to alleviate persistent poverty, which initially targeted areas disadvantaged by geography and a lack of economic opportunities, but subsequently focused on poor households, irrespective of their location.
  • Effective governance:
    • “China’s success benefited from effective governance, which was key to the successful implementation of the growth strategy as well as the evolving set of targeted poverty reduction policies,” states the World Bank. 
  • Human capital:
    • China also benefited from some favourable initial conditions at the time of opening up, such as a relatively high level of human capital, which is widely recognised as a critical input for the population to rapidly benefit from new economic opportunities once market reforms set in.

Way Ahead

• India faces three rather acute and growing problems: 
  • Widespread unemployment, 
  • Widening inequalities and 
  • Deepening poverty
• None of these will be resolved by electoral victories. They require actual policy solutions. Without the right policies, India’s demographic dividend is looking more like a demographic bomb.
• Understanding what China did may provide some clues to Indian policymakers.

UN Peacekeeping Forces Fatalities

Context

• The UN Undersecretary General reported a growing number of fatalities among United Nations Peacekeeping Forces (UNPKF) in direct attacks.

About

• Growing Threat: Two BSF jawans died in a spate of attacks on United Nations Peacekeepers in the Democratic Republic of Congo (DRC) amidst anti­-UN protests.
• UN Peacekeeping fatalities due to malicious acts (not illness or accidents) are rising from 13 in 2020 to 25 in 2021 and to 26 till August 2022. 
• Tour Agenda: The UN Peacekeeping chief has kept the issues of growing fatalities and the lack of clear mandates for the ‘blue helmets’ at the top of the agenda as part of a tour to India, Pakistan, the UAE and Japan. 

Reasons for rising attacks

• Deteriorating political and security environments in which peacekeeping operations are mandated. Such a situation in DRC does not entail the political lead conflict resolution. 
• Terrorist or criminal groups threat: In the big operations in Africa, the efforts to establish peace and stability is threatened by terrorist or criminal groups favoring chaotic environment. 
• Lack of participation in decision making: India having lost 179 peacekeepers over the past 60 years has criticized peacekeeping operations for not giving adequate say to  troops and police contributing countries in the kind of missions they participate in.
• Gap in mandate and practice: The mandate is actually for UN peacekeeping, on the ground in foreign missions the mandate changes to peace enforcing for which the forces are not trained. 
• Peacekeeping limitations: Peacekeeping is neither a war, nor peace enforcement; thereby limiting the scope and potential of peacekeeping operations.

UN Peacekeeping Forces

• Genesis: The first UN peacekeeping mission was established in May 1948. The UN Security Council authorized the deployment of a small number of UN military observers to the Middle East. 
• It was meant to form the United Nations Truce Supervision Organization (UNTSO) and monitor the Armistice Agreement between Israel and its Arab neighbors.
• Strength of numbers: Since its genesis, more than 1 million men and women have served under the UN flag in more than 70 UN peacekeeping operations. 
• Also, more than 1,00,000 military, police and civilian personnel from 125 countries are currently serving in 14 peacekeeping operations.

• A symbol of hope and peace: UN Peacekeepers have been maintaining peace for some of the world’s most vulnerable people. Their service and sacrifice and operation under harsh and dangerous conditions has made the Blue Helmet a symbol of hope to millions of people worldwide.
• A multidimensional role: 

• Initially, UN Peacekeeping’s goals were limited to maintaining ceasefires and stabilizing situations on the ground to aid in the political resolution of the conflict by peaceful means. 
• Those missions consisted of military observers and lightly armed troops with monitoring, reporting and confidence-building roles in support of ceasefires and limited peace agreements. 
• In addition to the above roles, today’s peacekeeping operations also facilitate the political processes, protect civilians, disarm combatants, support elections, protect and promote human rights and restore the rule of law.
• Demography: 

• Most of the peacekeepers are serving in the military or police.
• 14 % are civilians serving as the civilian leadership of the mission, working in the areas of political and civil affairs, human rights, elections, strategic communications, IT, logistics, transport and administration etc.
• Women peacekeepers are playing an increasingly prominent role while serving as police officers, troops, pilots, military observers, and other uniformed and civilian posts, including in command positions.

Way Forward

• The UN should devise a framework to improve the geographical diversity of troops and police contributing countries. 
• Efforts should be stepped up to make peacekeepers better equipped, trained and prepared. 
• There is a need for robust mandates that require proactive peacekeepers with the ability to face and counter armed groups. 
• India’s proposed 10-point plan for more accountability to protect UN peacekeepers should be considered by the UN. 
• Crimes against peacekeepers should be treated as war crimes. 
• The UN should consider India’s suggestion to build a memorial wall to honor the peacekeepers .

Election Commission Freezes Shiv Sena Symbol

In News

• Recently, the Election Commission barred the Shiv Sena factions led by former CM Uddhav Thackeray and current Maharashtra CM Eknath Shinde from using the party name and its election symbol.

About

• Reason for doing this: 
  • In order to place both the rival groups on an even keel and to protect their rights and interests.
  • To cover the purpose of the current Bye-elections and to continue till the final determination of the dispute in the matter.
• Symbols For Now:
  • For the purposes of the current bye-elections, the two groups shall be allotted such different symbols as they may choose from the list of free symbols.

Election Symbols

• About: 
  • The Election Symbols (Reservation and Allotment) Order, 1968 empowers the EC to recognise political parties and allot symbols. 
  • Under Paragraph 15 of the Order, it can decide disputes among rival groups or sections of a recognised political party staking claim to its name and symbol.
  • The legal status of Paragraph 15 :
    • Under Paragraph 15, the EC is the only authority to decide issues on a dispute or a merger. The Supreme Court upheld its validity in Sadiq Ali and another vs. ECI in 1971.
• Types of Symbols:
  • As per the Election Symbols (Reservation and Allotment) (Amendment) Order, 2017, party symbols are either:
  • Reserved: Eight national parties and 64 state parties across the country have “reserved” symbols.
  • Free: The Election Commission also has a pool of nearly 200 “free” symbols that are allotted to the thousands of unrecognised regional parties that pop up before elections.
• Allocation of Symbols to Political Parties:
  • As per the guidelines, to get a symbol allotted:
  • A party/candidate has to provide a list of three symbols from the EC’s free symbols list at the time of filing nomination papers.
  • Among them, one symbol is allotted to the party/candidate on a first-come-first-serve basis.
  • When a recognised political party splits, the Election Commission decides on assigning the symbol.

Rise in Direct Tax Revenues

In News

• India’s net Direct tax collections in 2022-23 have risen to ?7.45 lakh crore, more than half this year’s Budget targets.

More about the news

• Based on provisional data, net personal income tax collections grew 17.35%.
  • It is rising faster than corporate income tax collections that were up 16.29% net of refunds. 
• Securities Transaction Tax (STT) collections combined with personal income tax receipts, grew at a more moderate 16.25%. 
• Underlining that Direct Tax collections continue to register steady growth, the ministry said that tax refunds have jumped 81% over the preceding year to touch ?1.53 lakh crore.

What is Direct Tax?

• Direct tax is paid by a person or an organisation responsible for paying tax directly to the entity that imposed it.
• An individual taxpayer, for example, pays direct taxes to the government for various purposes, including income tax, real property tax, personal property tax, or taxes on assets.
• Direct taxes are based on an economic principle that states that those who have more resources or earn a higher income should bear a greater tax burden. 

What is Tax Buoyancy?Tax buoyancy explains this relationship between the changes in government’s tax revenue growth and the changes in GDP. It refers to the responsiveness of tax revenue growth to changes in GDP. When a tax is buoyant, its revenue increases without increasing the tax rate.There is a strong connection between the government’s tax revenue earnings and economic growth. The simple fact is that as the economy achieves faster growth, the tax revenue of the government also goes up.Benefits of Tax Buoyancy:Government being the beneficiary: The biggest beneficiary of a higher GDP growth rate is the government itself.No need to borrow: The government may not borrow highly to finance the budgetWelfare measures: New schemes and programmes can be lavished because of high revenue growth.GDP growth: If the GDP growth rate registers high, direct income tax collection will accelerate. Generally, direct taxes are more sensitive to GDP growth rate.What is Tax Elasticity?A similar looking concept is tax elasticity. It refers to changes in tax revenue in response to changes in tax rate. For example, how tax revenue changes if the government reduces corporate income tax from 30 per cent to 25 per cent indicates tax elasticity.

Factors responsible in rise in tax collection 

• Stable Government policies:
  • It is the result of the stable policies of the Government focusing on simplification and streamlining of processes and plugging of tax leakage through effective use of technology. 
• Effective filing of income tax returns:
  • There has been a remarkable increase in the speed of processing of income tax returns filed during the current financial year.
  • The IT department has successfully used technology to reach out to assesses in non-intrusive ways; for instance, sending email reminding them to file return if not already. 
• Economic recovery:
  • GST collection increased 28 percent year-on-year to Rs 1.43 trillion on better compliance, revival in consumption, and elevated inflation.
  • The level of economic recovery can also be seen from the value of e-way bills generated which has improved from 16.9 lakh crore in 2021 to 25.7 lakh crore in 2022.
• Corporate tax:
  • Corporate tax as of now is growing about 25-26 percent.
• Efficient assessment of incomes:
  • Intensive and extensive use of data analytics and artificial intelligence has prompted assessments to report people’s income accurately. 

Indirect Taxes – Goods and Service Tax (GST)Goods and Services Tax is an indirect tax used in India on the supply of goods and services.It is a value-added tax levied on most goods and services sold for domestic consumption.It was launched in India in 2017 as a comprehensive indirect tax for the entire country.It is a comprehensive, multistage, destination-based tax- comprehensive because it has subsumed almost all the indirect taxes except a few state taxes. It is paid by the consumers and is remitted to the government by the businesses selling the goods and services.It is of three types i.e. CGST to be levied by the Centre, SGST to be levied by the States and IGST a tax levied on all Inter-State supplies of goods and/or services.  All these taxes are levied at rates mutually agreed upon by the Centre and the States. The GST Council headed by the Union Finance Minister is the governing and key decision-making body for GST.

Programming Languages of Cryptocurrencies

In News

• Programming languages help crypto platforms and protocols run effectively.

Key Points

• The crypto ecosystem sits on top of distributed ledgers, which are broadly called blockchains. 
• Smart Contract: 
  • Apart from recording and verifying transactions, some crypto blockchains like Ethereum let users launch agreements or special actions that execute on their own. 
  • These are known as smart contracts and to create them effectively, programming languages are a must.

Important Programming Languages

• C++:
  • C++ is a programming language commonly associated with Bitcoin. 
  • While the Bitcoin whitepaper explaining the peer-to-peer electronic cash system is written largely in English, the Bitcoin Core software, which makes transactions possible, uses C++. 
  • It is maintained by a community anyone can join by running Bitcoin Core full nodes. 
  • It is also one of the most used programming languages, playing a role in the development of operating systems like MacOS and Windows, gaming devices, search engines, and even machine learning. 
  • C++ is a major influence for many other programming languages in use today.
• Solidity:
  • Solidity is the programming language mainly used on the blockchain platform Ethereum. 
  • Some of its developers are Ethereum co-founders. 
  • The language is influenced by C++, Python, and JavaScript. 
  • It is also known as a ‘curly bracket language’ as it uses the flower bracket special character. 
  • In recent times, with the Ethereum transition to a proof-of-stake model, programming skill in Solidity is expected to be in high demand. 
  • Parts of the Ethereum ecosystem also support several other programming languages such as Python, Ruby, Rust, Java, and more.
• Rust: 
  • Rust has the unique distinction of being called the “perfect programming language” in 2021 by Twitter co-founder Jack Dorsey. 
  • In the crypto world, Rust is commonly associated with the Solana blockchain, which is known for its high speeds and relatively low transaction fees. 
  • The Polkadot blockchain, which helps to better connect blockchains with each other, also uses Rust. 
  • However, developers have complained that Rust is too difficult to learn. 
  • A 2018 survey showed that more than 22% of users did not feel productive using the programming language.
• Python: 
  • Created by Dutch programmer Guido van Rossum, Python is a general-purpose programming language. 
  • Cryptocurrency is just one of its many use cases. 
  • It is used by developers who are interested in the Bitcoin Core as well as non-Bitcoin cryptocurrencies, known as alt coins. 
  • Python’s detailed library and graphic user interface options make it ideal for blockchain developers who are just entering the space to develop dApps. The programme can also be used widely by both Web3 and non-crypto-related app developers. 
• Haskell: 
  • Cardano is a blockchain that takes pride in its academic rigour and scholarly approach to the crypto sector. 
  • Its smart contract programming language is based on Haskell. 
  • The Cardano Foundation itself admits that Haskell is not well-known, and that it is not a popular programming language for beginners. 
  • Haskell is classified as a purely functional programming language, and is hard to learn. But it is said to be well-suited to deliver accurate crypto projects due to its immutability feature.

Significance of Programming Language in Crypto

• Efficiency: Crypto exchanges, decentralised apps (dApps), the automated buying or selling of orders, and even NFT-based games often rely on smart contracts to run smoothly. A smart contract failure can cause platform outages, and exploitation of the codes could devalue the entire ecosystem. 
• Understandability of C++: It is hailed for being an accessible programming language that users of Java, C, and C# can easily learn due to existing similarities.

CryptocurrencyIt is a digital currency that can be used in place of conventional money.In cryptocurrencies, cryptography is used to secure and verify transactions. It is also used to control the supply of cryptocurrencies.It is supported by a decentralized peer-to-peer network called the blockchain.First cryptocurrency: Bitcoin, launched in 2009 by Satoshi Nakamoto.Benefits of CryptocurrencyInherent security:  Use of pseudonyms and ledger systems conceals the identities.Low transaction cost: Very low fees and charges for transactions.Lack of interference from the banking system: Outside ambit of banking systems.Lower Entry Barriers: No entry barriers, unlike conventional banking systems.Universal recognition: Lots of cryptocurrencies and acceptable in many nations.Concerns with CryptocurrencySecurity risks: Cyberattacks on wallets, exchange mechanism (Cryptojacking). Shield to Crime: Used for Illicit Trading, Criminal Activities, & organized crimes. Threat to the Indian rupee: If a large number of investors invest in digital coins rather than rupee-based savings like provident funds, the demand of the latter will fall.Lack of Liquidity and Lower Acceptability: Outside the traditional banking systems.Price Volatility:  Prone to price fluctuations & waste of computing power.Lack of Consumer Protection: No Dispute Settlement Mechanisms and control of Securities and Exchange Board of India (SEBI).

Modhera Sun Temple

In News 

• Prime Minister Narendra Modi visited Modhera which is famous for its Sun Temple. 

About 

• Modhera is known for the Sun temple situated on the bank of the Pushpavati river. 
• The temple was built after 1026-27 CE during the reign of Bhima I of the Chalukya dynasty.
• The remains of the Sun Temples at Modhera are relics of times gone by when reverence of the natural elements fire, air, earth, water and sky were at their peak sharing space with myriad manifestations of Vedic gods.
• It is one of the major tourist destinations in North Gujarat.