04 Mar 2021: UPSC Exam Comprehensive News Analysis

CNA March 04th 2021:- Download PDF Here

TABLE OF CONTENTS

A. GS 1 Related
B. GS 2 Related
POLITY AND GOVERNANCE
1. Voicing dissent against govt. is not sedition: SC
INTERNATIONAL RELATIONS
1. India, 17 countries face U.S. anti-dumping tax
C. GS 3 Related
D. GS 4 Related
E. Editorials
POLITY AND GOVERNANCE
1. Rape and marriage
ECONOMY
1. The distress sale of national assets is unwise
2. Despite arbitration tug of war, mutual settlement is key
ENVIRONMENT AND ECOLOGY
1. Climate and consciousness
F. Prelims Facts
1. 14 Trojans found in servers, says Minister
G. Tidbits
1. U.S. thinktank report classifies India as ‘partly free’
2. ‘Govt. can cut excise on fuels by ₹8.5 sans revenue impact’
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions

Category: INTERNATIONAL RELATIONS

1. India, 17 countries face U.S. anti-dumping tax

Context:

The U.S. Department of Commerce is preparing to tax aluminium sheet exporters from 18 countries after determining that they had benefited from subsidies and dumping.

Details:

• According to a department statement, the US International Trade Commission (ITC), an independent body, must approve the final decision to impose anti-dumping or countervailing duties.
• The investigation, launched under the Donald Trump administration, had been requested by nearly a dozen U.S. aluminium alloy manufacturers, including Arconic and Aleris Rolled products.
• They felt that they were being harmed by competing imports at lower prices.
• President Joe Biden’s administration determined that imports from Germany in particular ($287 million in 2019) benefited from dumping, ranging from 40% to 242%.
• Imports from India ($123 million in 2019) have benefited from subsidies for 35% to 89%.

Category: ECONOMY

1. The distress sale of national assets is unwise

The editorial argues against the selling of government assets through outright privatisation of India’s public sector undertakings (PSUs).

Context:

• The Prime Minister of India has been pushing for privatisation, asserting that the government has no business being in business.
• The Finance Minister, in the Budget speech for 2021-22, announced a new policy for central public sector enterprises (CPSEs). The policy would serve as a roadmap for the disinvestment of government-owned firms across sectors.

Read more on India’s new disinvestment policy covered in the 21^st February 2021 Comprehensive News analysis.

Criticisms:

Loss of public wealth:

• It is argued that the government has explicitly embraced privatisation instead of disinvestment, cautioning that the short-term gains through distress sale of national assets could lead to long-term loss of public wealth.

Impact on social justice:

• PSUs have historically played an active role in developing backward regions. Importantly, through reservations, PSUs have ensured high-quality jobs for Dalits, Adivasis and Other Backward Classes.
• Once PSUs are privatised or disinvested to below 50% government ownership, reservations for these historically marginalised sections will become history.
• Also, with privatisation, PSU employees would have to face lay-offs that will inevitably follow. This is a concern considering the prevailing massive job losses and unemployment.

Impact on the banking sector:

• In the banking sector, there has been an exponential rise in non-performing assets (NPAs).
• There is a considerable number of wilful defaults.
• India’s experience with Yes Bank and other private sector banks hardly suggests that privatisation will eliminate greed and corruption in banking.
• Also, it is argued that it is the resilience of nationalised banks that helped save us from the worst effects of the global recession in 2008-09.
• Public sector banks have been central to expanding financial inclusion to the unbanked in India over the last five decades.
• Private banks with profit-maximizing motives might not be as efficient in serving a public purpose.
• Besides, the Reserve Bank of India is reversing its principled, long-standing opposition to ownership of banks by industrial houses.
  • Such a move will only lead to further concentration of the economy in a few hands, heighten conflict of interest and risk diversion of funds.

Way Forward:

• Many of our PSUs and public sector banks are profitable institutions that aid crucial developmental outcomes. Others require a realignment of incentives or an infusion of capital for a profitable turnaround.
• To derive maximum value from PSUs for the exchequer, the government should calibrate an appropriate strategy on a case to case basis.
• Disinvestment, executed carefully and strategically can generate resources for the government, set the right incentives for their managements, and reward the investing public.
• A middle path would be to divest only non-core, non-strategic public sector enterprises.
• Transparency, accountability and appropriate valuation are needed in the process of valuation of the government assets to be sold and in the entire privatisation process.

2. Despite arbitration tug of war, mutual settlement is key

Issue:

• International decisions against the Government of India in the cases of Cairn Energy and Vodafone in the final quarter of 2020, and the decision by India to appeal against these awards, have had an adverse effect on investor trust and India’s promise to honour its commitments to foreign investors under bilateral investment treaties (BITs).
• Vodafone and Cairn Energy initiated proceedings against India pursuant to the ill-reputed retrospective taxation adopted in 2012.

This topic has been covered in 22^nd February 2021  and 26^th September 2020 Comprehensive News Analysis.

Way Forward:

• Since the inception of the dispute, the Government of India has fervently defended its sovereign taxation powers.
• It is important for the Government of India to reflect upon its international legal responsibility to uphold treaty obligations.
• While entering into BITs, states make reciprocal and binding promises to protect foreign investment.
• In cases such as that of Cairn, sovereign powers that are legal under national laws may not hold water before sovereign commitments under international law.
• The Government of India may not be permitted to quote the permissibility of retrospective taxation under the Indian Constitution, to escape responsibility under the India-United Kingdom BIT.
• However, India could use international public policy against tax avoidance, and the sovereignty of a state to determine what transactions can or cannot be taxable as a defence.

Mutual Settlement:

• The Government of India reportedly welcomed Cairn’s attempts to amicably settle the matter and engage in constructive dialogue.
• The Government of India has reportedly offered options for dispute resolution under existing Indian laws.
• One such possible option is the payment of 50% of the principal amount, and waiver of interest and penalty, under the ‘Vivad se Vishwas’ tax amnesty scheme.
• However, this can be possible if it is considered to be applicable to decisions made by international tribunals in favour of the tax-payer under bilateral investment treaties.
• Re-computation of tax liability on a long term capital gains basis has also been reportedly offered.

Way Forward:

• India boasts of being among the top 12 recipients of FDI globally.
• The increased FDI inflows in India over the years are a testament to the attractive investment opportunities available for foreign investors in India.
• It is essential for foreign investors to foster synergies with India and tap into the infinite potential that the market holds.
• It is important for parties to be open to dialogue with investors and explore alternatives that lead to the road of settlement.
• It may not be conducive to weave a web of litigation entangling stakeholders and closing exit routes.

Category: ENVIRONMENT AND ECOLOGY

1. Climate and consciousness

It is common to hear policymakers and the public refer to natural disasters, such as this year’s Himalayan glacier flooding that overwhelmed Uttarakhand, or the cold snap that paralysed Texas, as acts of God. But what precipitated both events was human-made global warming.

Impact of Global Warming and Climate Change:

India:

• The melting of the Himalayan glaciers that prompted the floods and landslides in Uttarakhand have the fingerprints of global warming.
• In 2013, glacial flooding caused over 6,000 deaths in Uttarakhand during the monsoon months.
• As glacier cover is replaced by water or land, the amount of light reflected decreases, aggravating warming.
• Such global warming is a contributor to the sweltering heat in cities like Delhi and Hyderabad, or the epic floods in Chennai or Kerala.
• Studies had flagged ice loss across the Himalayas, and the dangers to densely populated catchments, but policy response has been lacking.
• Similarly, Kerala ignored a landmark study calling for regulation of mining, quarrying and dam construction in ecologically sensitive places, which contributed to the massive floods and landslides in 2018 and 2019.
• Catastrophes like Uttarakhand will become more frequent due to the accumulated carbon emissions in the atmosphere.

World:

• The United States has already witnessed many deadly avalanches since the beginning of 2021.
• The extreme cold weather in Texas, the double-digit negative temperatures seen in Germany earlier this year, are connected to Arctic-peninsula warming, at a rate almost twice the global average.
• Usually, there is a collection of winds around the Arctic keeping the cold locked far to the north. But global warming has caused gaps in these protective winds, allowing intensely cold air to move south.

Concerns:

• The stakes are laid out in alarming reports. It shows that India is particularly vulnerable.
• While HSBC ranks India at the top among 67 nations in climate vulnerability (2018), Germanwatch ranks India fifth among 181 nations in terms of climate risks (2020).
• India’s public spending does not reflect these perils.
• Uttarakhand government and the Centre have been diluting, instead of strengthening, climate safeguards for hydroelectric and road projects.
• Development must not lead to environmental degradation.

Need to consider climate change as the culprit:

• When the cause and effect are connected, responses are usually swift. But global warming is still seen as a danger that lies over the horizon.
• While COVID-19 triggered the mobilisation of trillions of dollars in financing, the equally frightening climate scenario has not.

Way Forward:

• Climate adaptation needs to be a priority.
• India’s Central and State governments must increase allocations for risk reduction, such as better defences against floods, or agricultural innovations to withstand droughts.
• For India, the third-largest carbon emitter after China and the United States, a decisive switch is needed from highly polluting coal and petroleum to cleaner and renewable power sources.
  • China has announced carbon neutrality by 2060, Japan and South Korea by 2050.
  • India is yet to announce a target.
• The acceleration of hazards of nature should prompt countries to advance those targets, ideally by a decade.
• Policies for climate mitigation must be explicitly included in the government budget, along with energy, roads, health and education.
• Growth targets should include timelines for switching to cleaner energy.
• The government needs to launch a major campaign to mobilise climate finance.

Conclusion:

Sustainable growth depends on timely climate action. For that to happen, policymaking needs to connect the dots between carbon emissions, atmospheric warming, melting glaciers, extreme floods and storms.

2. ‘Govt. can cut excise on fuels by ₹8.5 sans revenue impact’

What’s in News?

According to analysts, the Centre has room to cut excise duty on petrol and diesel by up to ₹8.5 per litre without impacting its target for revenue from the tax on the two fuels.

Background:

• Petrol and diesel prices are at a historic high following a continuous increase in rates over the past nine months.
• Excise duty was raised by ₹13 and ₹16 per litre on petrol and diesel between March and May 2020, and now stands at ₹31.8 on diesel and ₹32.9 per litre on petrol.
• There have been calls by opposition parties as well as sections of society to reduce excise duty to ease consumer pain.

Q1. Consider the following statements with respect to Convention on International Trade 
in Endangered Species of Wild Fauna and Flora (CITES):

Q2. Consider the following statements with respect to Lake Natron:

Q3. Consider the following statements:

Q4. Consider the following statements with respect to National Population Register:

I. UPSC Mains Practice Questions

1. Unless climate change is tagged as a primary culprit of extreme weather events and natural disasters, climate action will continue to falter. Elucidate.(15 Marks, 250 Words) [GS-3, Environment and Ecology]
2. Given the increasing flow of Foreign Direct Investment to India and its significance in the economic development, discuss the measures that need to be taken to protect investor trust. (15 Marks, 250 Words) [GS-3, Environment and Ecology]

Read the previous CNA here.

CNA March 4th 2021:- Download PDF Here