[Mission 2022] INSIGHTS DAILY CURRENT AFFAIRS + PIB SUMMARY- 13 December 2021

GS Paper 2:

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

Context:

The National Conference (NC) has, in a letter to the Jammu and Kashmir Delimitation Commission (headed by retired Supreme Court Judge Justice Ranjana Prakash Desai), sought details of the agenda of the upcoming meeting with parties from the Union Territory.

Background:

The Jammu and Kashmir Delimitation Commission has said that it will base its final report on the 2011 Census and will also take into account the topography, difficult terrain, means of communication and convenience available for the ongoing delimitation exercise.

• The commission is mandated to carve out seven additional seats for the 83-member Assembly of the Union Territory (UT).

Delimitation exercise in J&K- a timeline:

1. The first delimitation exercise, carving out 25 assembly constituencies in the then state, was carried out by a Delimitation Committee in 1951.
2. The first full-fledged Delimitation Commission was formed in 1981 and it submitted its recommendations in 1995 on the basis of 1981 Census. Since then, there has been no delimitation.
3. In 2020, the Delimitation Commission was constituted to carry out the exercise on the basis of 2011 Census, with a mandate to add seven more seats to the Union Territory’ and grant reservations to SC and ST communities.
4. Now, the total number of seats in Jammu and Kashmir will be raised to 90 from the previous 83. This is apart from 24 seats which have been reserved for areas of PoK and have to be kept vacant in the Assembly.

What is delimitation and why is it needed?

The Delimitation Commission for Jammu and Kashmir was constituted by the Centre on March 6 last year to redraw Lok Sabha and assembly constituencies of the union territory in accordance with the provisions of the Jammu and Kashmir Reorganisation Act, 2019 and Delimitation Act, 2002, passed by the Centre in August 2019 along with other J&K-specific Bills.

What is Delimitation?

Delimitation literally means the process of fixing limits or boundaries of territorial constituencies in a state that has a legislative body.

Who carries out the exercise?

• Delimitation is undertaken by a highly powerful commission. They are formally known as Delimitation Commission or Boundary Commission.
• These bodies are so powerful that its orders have the force of law and they cannot be challenged before any court.

Composition of the Commission:

According to the Delimitation Commission Act, 2002, the Delimitation Commission will have three members: a serving or retired judge of the Supreme Court as the chairperson, and the Chief Election Commissioner or Election Commissioner nominated by the CEC and the State Election Commissioner as ex-officio members.

Constitutional Provisions:

1. Under Article 82, the Parliament enacts a Delimitation Act after every Census.
2. Under Article 170, States also get divided into territorial constituencies as per Delimitation Act after every Census.

Insta Curious:

Did you know that prior to August 5, 2019, carving out of J&K’s Assembly seats was carried out under the J&K Constitution and Jammu and Kashmir Representation of the People Act, 1957?

InstaLinks:

Prelims Link:

1. Previous delimitation commissions- powers and functions.
2. Composition of the commission.
3. Who can set up?
4. Are changes allowed in final orders?
5. Which are the constitution provisions related?

Mains Link:

How and why delimitation of constituencies is carried out? Discuss.

Sources: the Hindu.

GS Paper 2:

Topics Covered: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

Context:

The U.S. State Department spokesperson has said that there will be no “blanket” waiver for India, indicating that even if S-400 Triumf anti-aircraft missile systems deal is not sanctioned, other “significant” military and nuclear transactions between India and Russia could still trigger sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA).

What’s the concern?

There has been unease in Washington ever since 2016 when India announced the deal with Russia, which remains New Delhi’s biggest defence partner.

• Now, the S-400 deal could attract sanctions under US’ CAATSA law. The US has already sanctioned China and Turkey over similar purchases.

What is the S-400 air defence missile system? Why does India need it?

The S-400 Triumf is a mobile, surface-to-air missile system (SAM) designed by Russia.

• It is the most dangerous operationally deployed modern long-range SAM (MLR SAM) in the world, considered much ahead of the US-developed Terminal High Altitude Area Defense system (THAAD).

What is CAATSA, and how did the S-400 deal fall foul of this Act?

• Countering America’s Adversaries through Sanctions Act (CAATSA)‘s core objective is to counter Iran, Russia and North Korea through punitive measures.
• Enacted in 2017.
• Includes sanctions against countries that engage in significant transactions with Russia’s defence and intelligence sectors.

What sanctions will be imposed?

1. prohibition on loans to the sanctioned person.
2. prohibition of Export-Import bank assistance for exports to sanctioned persons.
3. prohibition on procurement by United States Government to procure goods or services from the sanctioned person.
4. denial of visas to persons closely associated with the sanctioned person.

Significance of the deal:

The S-400 decision is a very strong example of how advanced our defence and strategic partnership is, and how strong Indian sovereignty is, to choose its international partners, especially when it comes to issues of national interest and national security.

Insta Curious:

Do you know about the foundational agreements? There are three agreements called foundational agreements. Reference

InstaLinks:

Prelims Link:

1. CAATSA is associated with?
2. Powers of US president under CAATSA.
3. Types of sanctions that can be imposed.
4. Significant defence deals between India and Russia.
5. Overview of Iran Nuclear deal.

Mains Link:

Discuss the features and significance of CAATSA.

Sources: the Hindu.

GS Paper 2:

Topics Covered: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Context:

India is all set to conclude the bilateral logistics agreement with Russia (the Reciprocal Exchange of Logistics Agreement (RELOS)) soon.

About RELOS:

RELOS will be an important step forward in the military sphere as it aims at fostering interoperability and sharing of logistics. The “long overdue” agreement was to have come up for signing in 2019 but that was put off pending finalisation of its terms.

Does India Have Similar Arrangements With Other Countries?

India has logistical exchange agreements with six other countries, including Quadrilateral Security Dialogue, or Quad, partners US, Japan and Australia. Singapore, France and South Korea are the other countries with which similar arrangements have been effected.

What are logistics agreements?

The agreements are administrative arrangements facilitating access to military facilities for exchange of fuel and provisions on mutual agreement simplifying logistical support and increasing operational turnaround of the military when operating away from India.

• India has signed several logistics agreements with all Quad countries, France, Singapore and South Korea beginning with the Logistics Exchange Memorandum of Agreement (LEMOA) with the U.S. in 2016.

Benefits of such logistics agreements:

The Navy has been the biggest beneficiary of these administrative arrangements, signed with several countries, improving operational turnaround and increasing inter-operability on the high seas.

What is LEMOA?

It is a tweaked India-specific version of the Logistics Support Agreement (LSA), which the U.S. has with several countries it has close military to military cooperation. It is also one of the three foundational agreements — as referred to by the U.S.

• LEMOA gives access, to both countries, to designated military facilities on either side for the purpose of refuelling and replenishment.

Insta Curious:

What are the three foundational agreements — as referred to by the U.S? Reference.

InstaLinks:

Prelims Link:

1. About the foundational agreements.
2. What is LEMOA?
3. What are Logistics agreements.

Mains Link:

Discuss the benefits of bilateral logistics agreements.

Sources: the Hindu

GS Paper 2:

Topic covered: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Context:

G7 has sought to present a united front against Russian aggression toward Ukraine.

• This decision was taken at the recent G7 meeting, attended in person by the U.S. Secretary of State Antony Blinken and his counterparts from France, Italy, Germany, Japan and Canada.
• This decision comes amid international concern that Russia could invade Ukraine. However, Russia denies planning any attack.

What’s the issue?

• Ukraine is at the centre of a crisis in East-West relations as it accuses Russia of amassing tens of thousands of troops in preparation for a possible large-scale military offensive.
• Russia accuses Ukraine and the United States of destabilising behaviour, and has said it needs security guarantees for its own protection.

What is G7?

The G7, originally G8, was set up in 1975 as an informal forum bringing together the leaders of the world’s leading industrial nations.

Composition: The summit gathers leaders from the European Union (EU) and the following countries: Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.

The major purpose of the G-7 is to discuss and deliberate on international economic issues. It sometimes acts in concert to help resolve other global problems, with a special focus on economic issues.

How did G7 become G8?

• Russia was formally inducted as a member in the group in 1998, which led G7 to become G8.
• However, Russian President Vladimir Putin’s condemnable act of moving Russian troops into eastern Ukraine and conquering Crimea in 2014 drew heavy criticism from the other G8 nations.
• The other nations of the group decided to suspend Russia from the G8 as a consequence of its actions and the group became G7 again in 2014.

InstaCurious:

Do you know about the Four Asian Tigers? Read Here.

InstaLinks:

Prelims Link:

1. Groups: G7, G8, G10, G15, G20, G24 countries.
2. Geographical location of member countries.

Mains Link:

Discuss the relevance of G7 countries today. What are the reforms necessary to make the grouping more effective?

Sources: the Hindu.

GS Paper 3:

Topics Covered: Issues related to direct and indirect farm subsidies and minimum support prices.

Context:

BJP MP Varun Gandhi has introduced a private bill for Minimum Support Price of crops in Parliament.

Overview of The farmers right to guaranteed minimum support price realization of agri-produce Bill, 2021:

1. It seeks to legally guarantee of MSP with financial outlay of Rs 1 lakh crore.
2. It aims to provide legally guaranteed minimum support price (MSP) for 22 crops that should be set at a profit margin of 50 per cent over the comprehensive cost of production.
3. Any farmer realising a price less than the above declared MSP shall be entitled to a compensation equal to the difference in value between price realised and the guaranteed MSP.
4. It also proposes that payments should be made directly into the accounts of farmers within two days of the transaction.

Significance:

The declaration of guaranteed MSP to farmers shall result in improved farm realization for potentially 93 million agricultural households, leading to a resurgence in the rural economy.

What is MSP?

MSP is the rate at which the government buys grains from farmers. Currently, it fixes MSPs for 23 crops grown in both Kharif and Rabi seasons.

How is it calculated?

The MSP is the rate at which the government purchases crops from farmers, and is based on a calculation of at least one-and-a-half times the cost of production incurred by the farmers.

• The Union Budget for 2018-19 had announced that MSP would be kept at levels of 1.5 the cost of production.
• The MSP is fixed twice a year on the recommendations of the Commission for Agricultural Costs and Prices (CACP), which is a statutory body and submits separate reports recommending prices for kharif and rabi seasons.

Which production costs are taken in fixing the MSPs?

The CACP considers both ‘A2+FL’ and ‘C2’ costs while recommending MSP.

1. A2 costs cover all paid-out expenses, both in cash and kind, incurred by farmers on seeds, fertilisers, chemicals, hired labour, fuel and irrigation, among others.
2. A2+FL covers actual paid-out costs plus an imputed value of unpaid family labour.
3. The C2 costs account for the rentals and interest forgone on owned land and fixed capital assets respectively, on top of A2+FL.

The limitations of MSP:

1. The major problem with the MSP is lack of government machinery for procurement for all crops except wheat and rice, which the Food Corporation of India actively procures under the PDS.
2. As state governments procure the last mile grain, the farmers of states where the grain is procured completely by the government benefit more while those in states that procure less are often affected.
3. The MSP-based procurement system is also dependent on middlemen, commission agents and APMC officials, which smaller farmers find difficult to get access to.

What is the rationale behind the demand for legalisation of MSP?

Farmers receive less than MSP: In most crops grown across much of India, the prices received by farmers, especially during harvest time, are well below the officially-declared MSPs. And since MSPs have no statutory backing, they cannot demand these as a matter of right.

Limited procurement by the Govt: Also, the actual procurement at MSP by the Govt. is confined to only about a third of wheat and rice crops (of which half is bought in Punjab and Haryana alone), and 10%-20% of select pulses and oilseeds. According to the Shanta Kumar Committee’s 2015 report, only 6% of the farm households sell wheat and rice to the government at the MSP rates.

What are the challenges with the legalisation of MSP?

1. Statutory MSP is unsustainable: A policy paper by NITI Aayog’s agricultural economist Ramesh Chand argued against legalising MSP. It reasoned that any fixed pre-determined price will push away private traders whenever production is more than demand, and there is a price slump in the market. This, in turn, will lead to government de-facto becoming the primary buyer of most farm produce for which MSP is declared, which is unsustainable.
2. Huge scope for corruption and recycling/leakage of wheat and rice, from godowns, ration shops or in transit.
3. Disposal problems: While cereals and pulses can be sold through the public distribution system, disposal becomes complicated in the case of niger seed, sesamum or safflower.
4. Inflation: Higher procurement cost would mean increase in prices of foodgrains, leading to inflation, which would eventually affect the poor.
5. It will also impact India’s farm exports, if the MSP is higher than the prevailing rates in the international market. Farm exports account for 11% of the total exports of commodities.
6. With a legally guaranteed higher MSP, India will face stiff opposition at the WTO. The US had successfully won a case against China at the WTO in 2019 which was concerned with China’s domestic support to agriculture in the form of Market Price Support (MPS).
7. It would lead to a huge burden on the exchequer, since the government would have to procure all marketable surplus in the absence of private participation.
8. Demands from other sectors: If the Centre makes a law to guarantee 100% procurement in all the 23 crops where MSP is announced, farmers cultivating fruits and vegetables, spices, and other crops will also demand the same.

InstaCurious:

What is agroforestry? Why does India need to promote this? Reference: 

InstaLinks:

Prelims Link:

1. Composition of CCEA.
2. What is CACP?
3. How many crops are covered under the MSP scheme?
4. Who announces MSP?
5. Difference between Kharif and Rabi crops.

Sources: the Hindu.

GS Paper 3:

Topics Covered: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Context:

The Central government has highlighted the significance of increase in bank deposit insurance cover, in case of problems occurring such as closure, from Rs 1 lakh to Rs 5 lakh. PM Modi is to address the nation on Bank Deposit Insurance.

Background:

Earlier, there used to be a bank deposit insurance cover of Rs 1 lakh for the deposit of the same amount or more under the ‘Deposit Insurance Credit Guarantee Scheme’.

What is deposit insurance? How is it regulated in India?

• Deposit insurance is providing insurance protection to the depositor’s money by receiving a premium.
• The government has set up Deposit Insurance and Credit Guarantee Corporation (DICGC) under RBI to protect depositors if a bank fails.
• DICGC charges 10 paise per ₹100 of deposits held by a bank. The premium paid by the insured banks to the Corporation is paid by the banks and is not to be passed on to depositors.
• DICGC last revised the deposit insurance cover to ₹5 lakh in Feb, 2020, raising it from ₹ 1 lakh since 1993.

Deposit Insurance- Coverage:

• Deposit insurance covers all deposits such as savings, fixed, current, recurring deposits, etc. in all commercial banks, functioning in India.
• Deposits in State, Central and Primary cooperative banks, functioning in States/Union Territories are also covered.

What is the procedure for depositors to claim the money from a failed bank?

• The DICGC does not deal directly with depositors.
• The RBI (or the Registrar), on directing that a bank be liquidated, appoints an official liquidator to oversee the winding up process.
• Under the DICGC Act, the liquidator is supposed to hand over a list of all the insured depositors (with their dues) to the DICGC within three months of taking charge.
• The DICGC is supposed to pay these dues within two months of receiving this list.

The DICGC does not include the following types of deposits:

1. Deposits of foreign governments.
2. Deposits of central/state governments.
3. Inter-bank deposits.
4. Deposits of the state land development banks with the state co-operative bank.
5. Any amount due on account of any deposit received outside India.
6. Any amount specifically exempted by the DICGC with previous approval of RBI.

InstaLinks:

Prelims Link:

1. What is deposit insurance? What is the present limit? Who is not covered?
2. What is DICGC?
3. RRBs vs Urban cooperative banks.
4. BASEL norms- important targets.
5. Where is Basel?
6. CRAR vs Leverage ratio.
7. What is priority sector lending?

Mains Link:

Write a note deposit insurance scheme and discuss its significance.

Sources: the Hindu.

GS Paper 2:

Topics Covered: Bilateral Relations.

Context:

The UK government on January 13, 2022, announced the launch of free trade agreement (FTA) negotiations with India.

• This is being described as a “golden opportunity” to put British businesses at the “front of the queue” of the Indian economy.

Significance:

• It offers huge benefits for British businesses, workers and consumers.
• Scotch whisky, financial services and cutting-edge renewable technology are among some of the key sectors set to benefit.

What is a FTA?

It is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

• The concept of free trade is the opposite of trade protectionism or economic isolationism.

Coverage:

The agreement may cover, among others, services, investment, and economic cooperation.

• FTA normally covers trade in goods (such as agricultural or industrial products) or trade in services (such as banking, construction, trading etc.).
• FTA can also cover other areas such as intellectual property rights (IPRs), investment, government procurement and competition policy, etc.

Why does a trade deal with India matter for the UK?

By 2050, India will be the world’s third-largest economy with a middle class of almost 250 million shoppers.

• The UK wants to unlock this huge new market for the great British producers and manufacturers across numerous industries from food and drinks to services and automotive.
• It has the potential to boost bilateral trade by up to GBP 28 billion a year by 2035 and increase wages by up to GBP 3 billion across the UK.
• A deal with India is also pegged as a “big step forward” in the UK’s post-Brexit strategy to refocus trade on the Indo-Pacific, home to half of the world’s population and 50 per cent of global economic growth.

Significance for India:

Removing duties alone would increase UK exports to India by up to GBP 6.8 billion, with Scotch whisky and cars currently facing enormous duties of 150 per cent and 125 percent respectively.

Insta Curious:

Have you heard about Early harvest agreements? What are the benefits of such agreements? Reference: read this.

Sources: the Hindu.