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PM IAS JAN 12 NEWS ANALYSIS

January 12, 2023No Comments

Birth Anniversary of Swami Vivekananda

In News

  • Every year 12th January is being celebrated as the National Youth Day in mark of the birth anniversary of Swami Vivekananda.

National Youth Day

  • Origin:
    • In 1984, the Indian Government first declared to celebrate the birthday of Swami Vivekananda as National Youth Day. 
    • Since then the day has been celebrated as National Youth Day all over the country.
  • Theme: This year National Youth festival 2023 has a theme of Viksit Yuva Viksit Bharat which means that if the youth of India is leading on a path of development then only India can be developed.

About Swami Vivekananda 

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  • Birth: 
    • He was born on 12th January 1863 in a Bengali family in Calcutta and was originally named Narendranath Datta. 
    • In his honour, the Government of India in 1984 declared his birthday National Youth Day.
  • Early Life:
    • From a young age, he nurtured an interest in Western philosophy, history, religion, spirituality and theology.
    • He was well-read in many subjects and would meditate in front of the images of Hindu Gods and Goddesses.
    • He met the religious leader Ramakrishna Paramhansa, who later became his Guru and he remained devoted to him until the latter died in 1886.
    • In 1893, he took the name ‘Vivekananda’ after Maharaja Ajit Singh of the Khetri State requested him to do so, changing from ‘Sachidananda’ that he used before.
  • Literary Works:
    • Raja Yoga
    • Jnana Yoga
    • Karma Yoga
  • Death: He attained Mahasamadhi on 4th July 1902.

Contributions and Significance

  • He was one of India’s greatest spiritual leaders and inspired the youth of India to become better, leading a life of purity and setting an example for the world.
    • Netaji Subhas Chandra Bose had called him the “Maker of Modern India”.
  • Focus on Indian Philosophies:
    • He played an important role in introducing the philosophies of Yoga and Vedanta to the West.
      • Yoga is an ancient physical, mental and spiritual practice that originated in India. The word ‘yoga’ is derived from Sanskrit and means to join or to unite, symbolizing the union of body and consciousness.
      • Vedanta is one of the six schools of Hindu philosophy and is based on Upanishads and their interpretation. It aimed to enquire about ‘Brahman’ (Ultimate Reality). It sees Veda as the ultimate source of information and whose authority could not be questioned.
    • He preached ‘neo-Vedanta’, an interpretation of Hinduism through a Western lens and believed in combining spirituality with material progress.
      • Neo-Vedanta is a modern interpretation of Vedanta, with a liberal attitude toward the Vedas. It reconciles dualism and non-dualism and rejects the “universal illusionism” of Shankara.
  • Tour and Lectures:
    • He is best known for his speech at the Parliament of the World’s Religions in Chicago in 1893.
    • He started the speech with the opening remarks, “My brothers and sisters of America” and covered topics including universal acceptance, tolerance and religion.
    • He began delivering lectures at various places in the US and UK and became popular as the ‘Messenger of Indian Wisdom to the Western World’.
  • Establishments:
    • After coming back to India, he formed the Ramakrishna Mission in 1897.
      • It aimed to set in motion machinery that will bring noblest ideas to the doorstep of even the poorest and the meanest.
    • He toured across India and set after educating the masses about ways to improve their economic condition as well as imparting spiritual knowledge.
    • In 1899, he established the Belur Math, which became his permanent abode.
  • New Theory of Ethics:
    • He gave a new theory of ethics and a new principle of morality based on the intrinsic purity and oneness of the Atman.
    • According to him, ethics is a code of conduct that helps a person to be a good citizen.
    • He strove to promote peace and human brotherhood on the spiritual foundation of the Vedantic Oneness of existence.
  • Interpretation of Religion:
    • One of his most significant contributions is his interpretation of religion as a universal experience of transcendent Reality, common to all humanity.
    • This universal conception frees religion from the hold of superstitions, dogmatism, priestcraft and intolerance.
    • Service to man as the visible manifestation of the Godhead was the special form of worship he advocated for the Indians.
  • Interfaith Awareness and Co-existence:
    • He has been credited with raising interfaith awareness and bringing Hinduism to a global platform in the 19th century.
    • He is also known for his deep knowledge of science and religion and his teachings to the Western world demonstrated how the two could co-exist in harmony.
  • Education:
    • He laid the greatest emphasis on education for the regeneration of India and advocated for a character-building education
    • According to him, a nation is advanced in proportion as education is spread among the masses.
    • He was determined to spread education among women and the lower castes.
  • Social Reform:
    • It was a prominent element of Vivekananda’s thought, and he joined the Brahmo Samaj, dedicated to eliminating child marriage and illiteracy.

PM Garib Kalyan Anna Yojana

In Context

  • Recently, the Union government has named its new free foodgrain scheme under the National Food Security Act, 2013, as ‘Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY)’.

More about the scheme

  • About:
    • The new integrated food security scheme for providing free food grains to Antodaya Anna Yojna (AAY) & Primary Household (PHH) beneficiaries, is rolled out from 1st January 2023.
    • The integrated scheme is expected to strengthen the provisions of NFSA, 2013 in terms of accessibility, affordability and availability of foodgrains for the poor.
  • Free foodgrains for 2023:
    • Keeping in view welfare of the beneficiaries and in order to maintain uniformity across the States, free foodgrains will be provided under PMGKAY for the year 2023 to all PHH and AAY beneficiaries, as per entitlement under NFSA. 
  • Ministry:
    • The Ministry of Consumer Affairs, Food and Public Distribution and state-run Food Corporation of India (FCI) along with state governments will look out for smooth roll out of the new scheme.
Different than Centre’s Covid-19 packageThe name of the new scheme is similar to that of the free foodgrain scheme implemented as part of the Centre’s Covid-19 package announced in 2020. Previous scheme:The difference between the two schemes is that about 81 crore NFSA beneficiaries were entitled to get free of cost 5 kg foodgrain per person in a month over and above their monthly entitlements. However, they were required to pay the subsidised rate of foodgrains (Rs 3 per kg rice, Rs 2 per kg wheat and Rs 1 per kg coarse grains) to purchase the quantity for which they were entitled–35 kg per Antyoday Anna Yojana Household and 5kg per person to a Priority Household in a month.New Scheme:In the new scheme, the government has done away with the subsided prices and is providing food grains free of cost for a year. But now the additional quantity, which was available during the Covid pandemic, will not be provided to these beneficiaries. They will receive as much quantity of foodgrains, for which they are entitled under the NFSA.

What is Food security?

  • It is access to enough food by all people at all times for an active and healthy life. 
  • Three Dimensions: 
    • Food availability,  
    • Food accessibility &  
    • Food affordability.

National Food Security Act (NFSA), 2013

  • About:
    • It was enacted in July 2013. 
    • It gives legal entitlement to 67% of the population (75% in rural areas and 50% in urban areas) to receive highly subsidized foodgrains.
      • Under the Targeted Public Distribution System (TPDS), foodgrains were sold at highly subsidized prices of Rs. 1/-, Rs. 2/- and Rs. 3/- per kg for nutri-cereals, wheat and rice respectively.
  • Ministry:
    • The Department of Food and Public Distribution under the Ministry of Consumer Affairs, Food & Public Distribution is the nodal ministry for implementing this Act.
  • Eligibility: 
    • Under sub-section (1) of Section 3 of the Act, the term “eligible households” comprises two categories
      • Priority household category is entitled to 5 kg per person per month.
      • Antyodaya Anna Yojana (AAY) families are entitled to 35 kg per family per month.
  • Issues:
    • Population figures and census:
      • The coverage under the NFSA is still as per the population figures of 2011 census.
      • The Union, in its affidavit, had stated in court that the Act required coverage to be updated as per the latest published census figures.
        • However, the NFSA coverage cannot be determined as the 2021 census has been postponed indefinitely and no date has been notified.
      • Due to the absence of the latest population figures, over 10 crore people were left outside the food security law’s protective umbrella without even ration cards.
Government’s recent efforts to increase coverage under National Food Security Act (NFSA):One Nation One Ration Card (ONORC):It was rolled out by the Ministry of Consumer Affairs, Food and Public Distribution in 2019.Aim: To ensure hassle-free delivery of subsidised food grains to all migratory beneficiaries anywhere in the country through nation-wide portability under National Food Security Act (NFSA).About:It empowers all National Food Security Act (NFSA) migrant beneficiaries to access foodgrains from any Fair Price Shop (FPS) of their choice anywhere in the country by using their same/existing ration card with biometric authentication.A card bearing 10 digit number will be issued to the complaint state’s BPL card holders which will be linked to the Aadhar database.Electronic point of sale:Beneficiaries can get their entitled foodgrains from any electronic point of sale (ePoS) enabled FPS in the country through portability.MERA RATION mobile application: Another dimension under the ONORC plan is the ‘MERA RATION’ mobile application which has been rolled out to take maximum advantage of the ONORC plan.The mobile app is providing a host of useful real time information to the beneficiaries and is available in 13 languages.e-Shram Portal:About: The portal was launched on August 26, 2021 under the Ministry of Labour & Employment. This portal will be a single-point reference to help authorities reach out to and track workers in the informal sector, and offer welfare in times of crisis. Aim: with the aim of creating a national database of unorganised workers (NDUW). e-Shram Card: Workers will be provided with an e-SHRAM card which will have a 12 digit unique number. The details of workers will also be shared by the state government and departments

Multi-state Cooperative Societies

In News

  • Recently, the Union Cabinet gave its approval for the creation of three new multi-state cooperative societies.

Major Highlights

  • About: The Government will set-up three new cooperative bodies under the Multi-State Cooperative Societies (MSCS) Act, 2002 viz.
    • National multi-state cooperative export society, 
    • National multi-state cooperative organic society 
    • National multi-state cooperative seed society 
  • These societies will act as national nodal points for production, procurement, processing, branding, labelling, packaging, storage, marketing and distribution of quality seeds.
  • Key roles of proposed societies:
    • To manage various activities related to the organic sector by providing certified and authentic organic products. 
    • Promotion of seed replacement rate (SRR), variety replacement rate (VRR) and reduce the yield gaps and enhance productivity
    • To conduct strategic research and development(R&D). 
    • To develop a system for preservation and promotion of indigenous natural seeds.

Significance

  • It will help in promoting organic products, seeds and exports. Higher exports will help increase production of goods and services by the cooperatives at various levels, generating more employment. 
  • It will facilitate business by various cooperative societies across the country with support from relevant union ministries.
  • Processing of goods and enhancing the services to match international standards will also generate additional employment. 
  • Increased export of cooperative products would promote “Make in India”, leading to Atmanirbhar Bharat.”

What are Cooperative Societies?

Background:

  • The term cooperative Societies was first used during the farmers’ protest against exorbitant interest rates charged by bankers of Poona and Ahmednagar. 
  • However, it came with structure and shape post British enactment of the Cooperative Credit Societies Act, 1904.
  • It drafted cooperation as a provincial subject and the provinces were authorised to make their own cooperative laws under the Montague-Chelmsford Reforms.
  • This categorization carried on to the Government of India Act, 1935. In 1942, the Government of British India enacted the Multi-Unit Cooperative Societies Act to cover Cooperative Societies with membership from more than one province.
  • Present status:
    • About: After independence cooperatives became an integral part of Five-Year Plans. In 1984, the Parliament of India enacted the Multi-State Cooperative Societies Act to remove the plethora of different laws governing the same types of societies.
    • Multi State cooperative societies: Cooperatives are a state subject, but there are many societies such as those for sugar and milk, banks, milk unions etc whose members and areas of operation are spread across more than one state. 
    • They draw their membership from both states, and they are thus registered under the MSCS Act. Their board of directors has representation from all states they operate in. 
    • Administrative and financial control of these societies is with the central registrar, with the law making it clear that no state government official can wield any control on them.
Constitutional ProvisionsFundamental Rights:Article 19: Right to form cooperatives, Associations or Unions.Directive Principles of State Policy (DPSP) Article 43: The State shall endeavour to promote cottage industries on an individual or co-operative basis in rural areas.
Major committees/reports on Cooperatives1954: All-India Rural Credit Survey Committee Report1990: Chaudhary Brahm Prakash Committee 1996:  Mirdha Committee2000: Jagdish Kapoor Committee 2001: Vikhe Patil Committee 2004: V. S. Vyas Committee 

Way Ahead

  • Multi-state cooperative societies are not restricted to a single state thus, there is a need to support the voluntary establishment and democratic operation of cooperatives. The proposed step is in the right direction to not only aid in their functional autonomy but also advancement of the economic and social well-being of its members.
Multi State Cooperative Society (MSCS) ActAbout:The MSCS Act of 2002 was enacted to consolidate and amend the laws related to cooperative societies. It substituted the Multi State Cooperative Societies Act of 1984. The Act was passed in 2002 with an objective to facilitate the incorporation, functioning, and organization of the cooperative societies that have its jurisdiction in more than one state. The Act ensures voluntary formation and proper operation of the Multi State Cooperative Societies that are member-driven institutions, and they are based on self-help and mutual aid. The Multi-State Co-operative Societies (Amendment) Bill, 2022, was introduced in the Lok Sabha on December 7, 2022.  It amends the Multi-State Co-operative Societies Act, 2002.Definition: “Multistate Cooperative Society” means a society registered or deemed to be registered under this act and includes a national cooperative society and a federal cooperative. Aim & Objectives: To work in the interest and welfare of its members in more than one state. Social and economic betterment of its members by way of self-help and mutual aidTo organize cooperative education programs for its members, employees, and directors. Eligibility: It is not mandatory for society to have branches in more than one state, it may have it limited to one state, and it shall not cease to be a “Multi State Cooperative Society,” as long as it serves the interest of members in more than one state.Right to vote: Every member who is entitled to subscribe the shares of the society are entitled for voting.Conversion into MSCS: A Cooperative Society may extend its jurisdiction by converting into an MSCS by an amendment to its bye-laws, provided such amendment shall be registered by the Central Registrar.

Digital Payments

In News

  • Recently, the Union Government has earmarked ?2,600 crore as incentive for banks to promote digital payments.

About

  • The outlay has been made to promote payments using RuPay cards and the Unified Payments Interface (UPI).
    • There were various complaints from the Reserve Bank of India (RBI) and banks as they were worried about the sustainability of building digital payments infrastructure in the absence of payments needed to scale and maintain them.
  • The fund will be paid to banks in view of the lack of a Merchant Discount Rate (MDR) for UPI and RuPay transactions.
    • MDR is a commission on digital transactions. 
  • The scheme will also promote UPI Lite and UPI 123PAY.

  • Impact of Covid: 
    • During Covid-19, digital payments facilitated functioning of businesses, including small merchants, and helped in maintaining social distancing.
  • Growth in digital Transactions: 
    • As a result of a previous incentive scheme for digital payments in the last financial year, total digital payments transactions have registered a year-on-year growth of 59%, rising from ?5,554 crore in FY 2020-21 to ?8,840 crore in FY 2021-22.

Significance of Digital Payments

  • User friendly: It will provide economical and user-friendly digital payments solutions. It will empower users with affordable payment options accessible anytime and anywhere with convenience.
  • Load reduction: It will  reduce the load on banking networks for small transactions
  • Efficient: It will allow payments over older feature phones
  • Digital society: It is a journey towards a less-cash and less-card society and will enable further deepening of digital payments in the country
  • Global leader: This will reinforce India’s position as the global leader in the digital payments domain.
  • Hike in mobile banking: With the change in customer behaviour towards embracing digital and touchless modes of payments, partly due to the CoVID, there is a spike of 50% in mobile banking users, indicating inclusion of first-time users into the digital fold.
  • Expanding RTGS: RBI will look into the feasibility of expanding RTGS to settle transactions in major trade currencies such as dollar, pound, and euro, too would be explored through bilateral or multilateral arrangements.

Issues/ Challenges

  • Geopolitical risks: The document also talks about ring-fencing of domestic payment systems, including the need to mandate domestic processing of payment transactions, in view of the emerging geopolitical risks.
  • Frauds: with the growing adoption of digital payment modes there will be a rise in digital payment frauds.
  • Domestic storage of payments data: Banks and non-bank PSOs are allowed to process payment transactions abroad subject to certain conditions.
  • Charges on digital payments: The Reserve Bank would also undertake a comprehensive review of all aspects related to charges involved in various channels of digital payments.

Way Ahead

  • The digital payment landscape in India has been transformed and India has emerged as a leader in the creation of digital assets, which can serve as an example to many other nations. 
  • The Government of India needs to make more efforts to help India attain the status of one of the most efficient payments markets in the world. 
  • The emerging Fin-Techs will play a key role in the further growth of digital transactions by enabling transparent, secure, swift and cost-effective mechanisms benefiting the entire digital payments ecosystem.

World Bank’s forecast on Slowdown

In News

  • The World Bank in its latest “Global Economic Prospects” stated that India’s growth is slowing to 6.6% in FY24.

More about the news

  • Forecasts for India:
    • Slowdown:
      • India’s economic growth will slow to 6.6% in the next fiscal year from an expected 6.9% in the current year according to the World Bank.
        • It stated that the slowdown in the global economy and rising uncertainty will weigh on export and investment growth.
      • Beyond the fiscal year ending March 2024, growth in India is likely to slip back towards its potential rate of just over 6%.
    • Expansion:
      • Increased infrastructure spending and “business facilitation measures” will, however, crowd-in private investment and support the expansion of manufacturing capacity.
    • Fastest growing:
      • India is expected to be the fastest-growing economy of the seven largest emerging markets and developing economies, it said. 
  • South Asian region:
    • For the South Asian region, growth in 2023 and 2024 is seen at 3.6% and 4.6% respectively. 
    • This is mainly due to weak growth in Pakistan, the World Bank said.
  • Global position:
    • Globally, the bank is forecasting a sharp, long-lasting slowdown, with global growth declining to 1.7% in 2023 from the 3% expected just six months ago.
      • This reflects synchronous policy tightening aimed at containing very high inflation, worsening financial conditions, and continued disruptions from the Russian Federation’s invasion of Ukraine.
    • Europe, long a major exporter to China, will likely suffer from a weaker Chinese economy.
  • Affecting investments:
    • The World Bank report also noted that rising interest rates in developed economies like the United States and Europe will attract investment capital from poorer countries, thereby depriving them of crucial domestic investment. 
    • At the same time, the report said, those high interest rates will slow growth in developed countries at a time when Russia’s invasion of Ukraine has kept world food prices high.
The recession & the slowdownSlowdown turning into a recession:According to the World Bank, if the ongoing global slowdown turns into a recession, the global economy could end up experiencing large permanent output losses relative to its pre-pandemic trend.Recession:A recession is when the economy stops growing and starts shrinking.It means not only shrinking GDP but also declining incomes, employment, industrial production and retail sales.It happens when the value of goods and services produced in a country known as the gross domestic product declines for two consecutive quarters, or half a year.A recession ends when economic growth returns.Slowdown:A slowdown, on the other hand, means that the pace of the GDP growth has decreased. Countries like India and China are currently faced with an economic slowdown. It means the production and earnings of these economies are not growing at the same pace as, say, last year.An economic downturn is normal after six-seven years of fast-paced growth.

Impacts & threats of recession:

  • Impacts:
    • Unemployment:
      • One of the consequences of recession is unemployment, which tends to increase, especially among the low-skilled workers, due to companies and even government agencies laying off staff as a way of curtailing expenses. 
    • Fall in output:
      • Another result of recession is drop in output and business closures. 
      • Fall in output tends to last until weaker companies are driven out of the market, then output picks up again among the surviving firms. 
    • Pressure on government exchequer:
      • With more people out of work, and families increasingly unable to make ends meet, there will be demands for increased government-funded social schemes. 
      • With drop in government revenues during recession, it becomes difficult to meet the increased demands on the social sector.
    • Global impact:
      • When large economies such as the US, the Eurozone and Japan go into recession, it has a worldwide impact. The countries that depend on these economies to buy their products and services are the worst hit. 
      • As Indian software companies have major clients in the US and in the Eurozone, they will see their top lines shrink as their clients cut down on expenses due to the recession. This, in turn, will adversely impact India’s GDP growth.
  • According to IMF, the threat to India comes from at least four sources:
    • Higher crude oil and fertiliser prices will spike domestic inflation
    • Global slowdown will hurt exports, dragging down domestic growth and worsening the trade deficit.
    • A strong dollar will put pressure on the rupee’s exchange rate, which will likely result in reducing our forex reserves and reducing our capacity to import goods when the going gets tougher.
    • Low demand among most Indians, the government might be forced to spend more towards providing basic relief in the form of food and fertiliser subsidies.
      • This will worsen the government’s financial health.

Possible ways to prevent & way ahead

  • The most popular, or most recommended, policy for any country to dig itself out of recession is expansionary fiscal policy, or fiscal stimulus. This can be usually a two-pronged approach – tax sops and increased government spending.
    • Targeted tax cuts or spending increases on safety net programs like unemployment insurance that kick in automatically to stabilise the economy when it is underperforming.
    • Approving new spending on infrastructure projects in order to stimulate the economy by adding jobs, increasing economic output and boosting productivity.
  • In the prevailing market situation, hybrid funds are best placed to protect the downside for the investor.
  • It is always a good idea to diversify the portfolio with Gold and Foreign reserves to reduce the risk.
  • Creation of an emergency corpus while the jobs are vanishing.
World BankIt traces its origin to the  Bretton Woods Conference, officially known as the United Nations Monetary and Financial Conference, was a gathering of delegates from 44 nations that met from July 1 to 22, 1944 in Bretton Woods, New Hampshire (USA), to agree upon a series of new rules for international financial and monetary order after the conclusion of World War II.The World Bank Group is an international partnership comprising 189 countries and five constituent institutions that works towards eradicating poverty and creating prosperity. The five development institutions under the World Bank Group are:International Bank for Reconstruction and Development (IBRD)International Development Association (IDA)International Finance Corporation (IFC)Multilateral Guarantee Agency (MIGA)International Centre for the Settlement of Investment Disputes (ICSID)Reports and Publication Ease of Doing Business   World Development Report Global Economic Prospects  Global Economic ProspectsGlobal Economic Prospects is a World Bank Group flagship report that examines global economic developments and prospects, with a special focus on emerging markets and developing economies. It is issued twice a year, in January and June. The January edition includes in-depth analyses of topical policy challenges while the June edition contains shorter analytical pieces. 

VSHORAD missile system

In News

The Defence Acquisition Council (DAC) accorded Acceptance of Necessity (AoN) to procure the Very Short Range Air Defence System or VSHORAD (IR Homing) missile system.

VSHORAD missile system

  • It is designed and developed by the Defence Research and Development Organisation (DRDO), among other weapon systems for the Army and Navy at a total cost of Rs 4,276 crore.
    • India has been in talks with Russia since 2018 to procure the Igla-S air defence missiles at a cost of $1.5 billion under the VSHORAD programme in a bid to replace the Russian Igla-M systems which have been in use with the Army.
  • Specifications: Meant to kill low-altitude aerial threats at short ranges,
    • It is a man-portable Air Defence System (MANPAD) .
    • VSHORADS missile incorporates many novel technologies including a miniaturized Reaction Control System (RCS) and integrated avionics, which have been successfully proven during the tests. 
    • The missile, meant for neutralizing low-altitude aerial threats at short ranges is propelled by a dual-thrust solid motor. 
    • The design of the missile including the launcher has been highly optimized to ensure easy portability.
  • Relevance for India:  being man-portable and lightweight compared to the other missile systems in the Army’s armoury, it can be deployed in the mountains close to the LAC at a short notice.
    • When inducted, they will be a critical air defence missile for the forces, even for an all-equipped infantry unit, and will be the best option for mountain warfare.
    • the procurement of VSHORAD, as a robust and quickly deployable system, will strengthen India’s air defence capabilities
  • Expected to be inducted: The AoN is the first step in the long capital procurement process in defence.
    • defence officials estimate the missile systems can be delivered to the forces in another three to four years with industry support if the orders are placed on time.

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