17 Dec 2021: UPSC Exam Comprehensive News Analysis

CNA 17 Dec 2021:- Download PDF Here

TABLE OF CONTENTS

A. GS 1 Related
HISTORY
1. India marks 50 years of 1971 war
B. GS 2 Related
SOCIAL JUSTICE
1. Cabinet nod to raise girls’ marriage age to 21
C. GS 3 Related
D. GS 4 Related
E. Editorials
SCIENCE AND TECHNOLOGY
1. Reflections on flying blind into the storm
AGRICULTURE
1. The WTO’s challenge to MSP is another frontier to cross
INTERNAL SECURITY
1. Is the Armed Forces (Special Powers) Act past its expiry date?
F. Prelims Facts
1. Super Typhoon Rai hammers Philippines
G. Tidbits
1. Regulation needed for cryptocurrencies: IMF
2. India’s nuclear capacity
3. Revenue from space
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions

Category: AGRICULTURE

1. The WTO’s challenge to MSP is another frontier to cross

Mains: Farm and food subsidies, Important International Institutions.

Context:

• The demand of farmers to provide a legal guarantee for the minimum support price (MSP) for their produce has triggered a debate.
• Can India provide a legal guarantee for MSP without violating its international law obligations enshrined in the Agreement on Agriculture (AoA) of the World Trade Organization (WTO).

How is the MSP determined?

The Minimum Support Price was first introduced by the Government in 1966-67 for Wheat in the wake of the Green Revolution. It was introduced with the aim to save the farmers from depleting profits.

• The Government buys the crops at the MSP if the prices go down after harvest. This helps the farmers indirectly.
• The Government decides the MSP after taking into consideration the recommendations of the CACP, the opinions of the State Governments and all the other relevant Ministries.
• The Price Support Scheme (PSS) for oilseeds and pulses is implemented by the Department of Agriculture and Cooperation through the National Agricultural Cooperative Marketing Federation of India (NAFED).
• NAFED is the nodal procurement agency for oilseeds and pulses. Thus, when the prices of oilseeds, cotton, and pulses fall below the MSP, NAFED purchases it from the farmers at MSP.
• The procurement prices are usually announced at the beginning of the sowing season.
• This way, the CACP tends to have a very wide area of responsibility in the economic affairs of the country.

Critical Analysis of the Legal Backing of MSP:

1. What are the Farmers Demands on MSP?

• MSP calculated using the National Commission for Farmers’ suggested C2+50 percent methodology.
  • C2 is a total cost computation that includes capital assets as well as unused rents and interest on owned property.
• If private purchasers do not buy their crops, the government must be willing to buy the whole surplus at MSP pricing.
• A law that ensures that all farmers receive fair pricing.
• MSP to be extended to fruit and vegetable farmers.

2. Arguments in Favour of the Legal Backing of MSP:

• MSP’s legal status will ensure that all farmers are protected against price rise.
• It will ensure that farmers’ food is purchased at the declared MSP, either directly or through private players.
• MSP will be required to cover all crops and all producers in order to guarantee the Right to MSP.

3. Arguments Against the Legal Backing of MSP:

• “Economic theory as well as experience implies that the price level that is not supported by demand and supply cannot be sustained by legal methods,” writes NITI Aayog’s agricultural economist Ramesh Chand in a policy study.
• If MSP becomes a legal right, procurement will skyrocket in terms of volume.
• It may result in the formation of a vast black market in which small dealers buy grains from farmers in unofficial ways.
• Legalizing MSP will have an influence on the country’s macroeconomic prospects by raising the chance of an unexpected surge in inflation.
• MSP is classified as a bad subsidy by the WTO since it has an impact on the market. India’s subsidising programmes will spark outrage among developed countries.
• The Centre indicates that states are allowed to guarantee MSP rates if they desire, but it also provides two instances of policies that have failed.
  • One example is the sugar industry, where private mills failed to make full payments to farmers, resulting in thousands of crores in unpaid dues that had been accumulating for years.
  • Another example is a 2018 Maharashtra legislation modification that penalizes traders who buy crops below MSP with severe fines and prison sentences.

Subsidy under WTO:

• Mandate of Agreement on Agriculture (AoA): One of the central objectives of the AoA is to cut trade-distorting domestic support that WTO member countries provide to agriculture.
• Mechanism followed: The domestic subsidies are divided into three categories:
  • ‘Green box’ measures: Contain non-market distorting subsidies like income support to farmers de-coupled from production.
  • ‘Blue box’ measures: Subsidies that limit production by means of assigning quotas or other mechanisms like direct payments under production limiting programmes subject to certain conditions.
  • ‘Amber box’ measures: are considered non-trade distorting. It includes the price support provided in the form of procurement of crops at MSP. It is subject to certain limits.
• The Aggregate Measurement of Support (AMS) system: To measure ‘amber box’ support, WTO member countries are required to compute AMS. It is the total of product-specific support (price support to a particular crop) and non-product-specific support (fertilizer subsidy).
  • Under Article 6.4(b) of the AoA, developing countries such as India are allowed to provide a minimal level of product and non-product domestic subsidy.
  • This ‘de minimis limit’ is capped at 10% of the total value of production of the product, in case of a product-specific subsidy; and at 10% of the total value of a country’s agricultural production, in case of non-product subsidy.
  • Subsidies breaching the de minimis cap are trade-distorting. Consequently, they have to be accounted for in the AMS.
• Case with MSP: The procurement at MSP, after comparing it with the fixed external reference price (ERP) — an average price based on the base years 1986-88 — has to be included in AMS.
  • Since the fixed ERP has not been revised in the last several decades at the WTO, the difference between the MSP and fixed ERP has widened enormously due to inflation.
  • For instance, according to the Centre for WTO Studies, India’s ERP for rice, in 1986-88, was $262.51/tonne and the MSP was less than this. However, India’s applied administered price for rice in 2015-16 stood at $323.06/tonne, much more than the 1986-88 ERP.
  • When this difference is accounted for in the AMS, the possibility of overshooting the de minimis limit becomes real.
  • Procuring all the 23 crops at MSP, as against the current practice of procuring largely rice and wheat, will result in India breaching the de minimis limit making it vulnerable to a legal challenge at the WTO.
• Even if the Government does not procure directly but mandates private parties to acquire at a price determined by the Government, as it happens in the case of sugarcane, the de minimis limit of 10% applies.
  • Very recently, a WTO panel in the case, India – Measures Concerning Sugar and Sugarcane, concluded that India breached the de minimis limit in the case of sugarcane by offering guaranteed prices paid by sugar mills to sugarcane farmers.

Issues related to the Peace Clause:

• Peace Clause: – High subsidiesare seen to be distorting global trade. The peace clause protects a developing country’s food procurement programmes against action from WTO members in case subsidy ceilings are breached.
• In the month of April 2020, India informed the World Trade Organisation (WTO) that the value of India’s rice production was $ 43.67 billion in 2018-19 and India had given subsidies worth $ 5 billion.
• India was the first country to invoke the peace clause for breaching the subsidy limit for rice for the marketing year 2018-19. The limit is pegged at 10% of the value of food production (called de minimis) in the case of India and other developing countries.
• European Union (E.U.), United States of America (USA), Japan, Canada, Brazil and Paraguay have questioned India for invoking the World Trade Organization (WTO) peace clause for exceeding the ceiling on the support it can offer its farmers for rice. The European Union has asked India for all the information on the products covered by the public stockholding programme to assure that only rice support exceeded the limits.

Conclusion:

• Therefore, India needs to recalibrate its agricultural support programmes to make use of the flexibilities available in the AoA.
• India can move away from price-based support in the form of MSP to income-based support, which will not be trade-distorting under the AoA provided the income support is not linked to production.
• Thus, the Government needs to engage with the farmers and create an affable environment to convince them of other effective policy interventions, beyond MSP, that are fiscally prudent and WTO compatible.

Category: INTERNAL SECURITY

1. Is the Armed Forces (Special Powers) Act past its expiry date?

Topic: Challenges to internal security, Role of external state and non-state actors in creating challenges to internal security

Prelims: States under AFSPA, Act.

Mains: AFSPA  Significance and Criticism

Context: The recent killing of 14 civilians in Nagaland’s Mon district by the Indian armed forces has put the spotlight back on the efficacy of the Armed Forces (Special Powers) Act (AFSPA) of 1958.

What is AFSPA(Armed Forces (Special Powers) Act (AFSPA))?

• The Act in its original form was promulgated by the British in response to the Quit India movement in 1942. After Independence, the government decided to retain the Act, which was first brought in as ordnance and then notified as an Act in 1958.
• The Act gives powers to the army, state and central police forces to shoot to kill, search houses and destroy any property that is “likely” to be used by insurgents in areas declared as “disturbed” by the home ministry.
• AFSPA is invoked when a case of militancy or insurgency takes place and the territorial integrity of India is at risk.
• Security forces can “arrest a person without a warrant”, who has committed or is even “about to commit a cognizable offence” even based on “reasonable suspicion”.
• It also provides security forces with legal immunity for their actions in disturbed areas.

Where is AFSPA in effect now?

• Currently, AFSPA is in effect in Jammu and Kashmir, Nagaland, Assam, Manipur (excluding seven assembly constituencies of Imphal) and parts of Arunachal Pradesh.
• The Union Ministry of Home Affairs has recently declared the entire Nagaland as a “disturbed area” for six more months till December 31 this year, under the Armed Forces (Special Powers) Act (AFSPA).

Significance of AFSPA

• It is crucial to combat insurgency and protect the country’s boundaries: 
  • The normalisation of the situation in many parts of the country such as in Mizoram; Tripura; the Cachar Hills of Assam was made possible by the armed forces. 
  • Barring a few undesirable incidents, which get investigated, people’s daily lives are largely unaffected by AFSPA. And the situation along the India-Myanmar border is much better now with the use of technology, communication and the forward movement of Assam Rifles posts
• Armed Forces are used in counter-insurgency and counter-terrorist operations when all other state forces are ineffective in handling the situation and bringing the situation under control.
• Although there has been a comparative reduction in incidents of violence, as long as there is no change in the ideology and the factors that aid and support insurgency the removal of enabling legislation like AFSPA may be counterproductive.

Criticism of AFSPA

• Draconian colonial Act: AFSPA has often been criticised as a “ draconian colonial Act” that gives unbridled power to the armed forces and impunity for their actions taken under the law.
• In 1958, when AFSPA was enacted, the country was in no position to understand its periphery. So, to have the military bring in a certain degree of law and order in a conflict situation for a short period would have been acceptable, but the prolonged deployment of the armed forces against its own people is ethically, morally and legally wrong.
• The AFSPA grants blanket immunity to the security forces: Once AFSPA is implemented, “no prosecution shall be instituted except with the previous sanction of the central government, in respect of anything done or purported to be done” under this Act. The government has many times denied permission to prosecute armed forces personnel in cases of alleged fake encounters investigated by the CBI.
• Continuous enforcement of AFSPA can derail the peace process which is currently underway between the Centre and various insurgent groups.
• It is being argued that the act has not succeeded in its mission of containing insurgents as even today in Manipur, there are 32 active militant outfits.
• The Justice Jeevan Reddy Commission set up after widespread protests and outrage against the enforcement of AFSPA recommended that the Act be repealed. The Second Administrative Reforms Commission, headed by Veeerapa Moily, endorsed this recommendation.

Conclusion:

• Although the enactment of AFSPA led to the normalisation of the situation in many parts of the country the prolonged deployment of the armed forces for internal security duties is not desirable.
• The final solution to insurgency or terrorism should not be  military in nature; it should be  political and economical
• It is high time that sincere and concerted efforts are made continuously by the four stakeholders — civil society, the Armed Forces, the States and the Government of India to find a lasting and peaceful solution to the festering problem, with a little consideration from all quarters. 

2. India’s nuclear capacity

• India’s present installed nuclear power capacity is 6,780 MW and the share of nuclear power in the total electricity generation is about 3.1% in the year 2020-21.
• India plans to raise its nuclear power to 22480 MW by 2031.

3. Revenue from space

• India has earned 35 million dollars in foreign exchange revenue from 2019-20 through the commercial launch of foreign satellites onboard Indian vehicles.
• The Indian Space Research Organisation through its commercial arm NewSpace India Limited (NSIL) has been launching satellites belonging to other countries on a commercial basis.

Q1. Consider the following statements:

Q2. With reference to Silverline Rail Project, which of the following statements is/are 
correct?

Q3. Which of the following statements is/are correct with respect to Protection of Children 
from Sexual Offenses (POCSO) Act?

Q4. With respect to National Career Services (NCS) Project, which of the following statements 
is/are correct?

Q5. Which of the following is geographically closest to Great Nicobar?

Read the previous CNA here.

CNA 17 Dec 2021:- Download PDF Here