UPSC CURRENT AFFAIRS – 20 July 2024

UPSC CURRENT AFFAIRS – 20 July 2024 covers important current affairs of the day, their backward linkages, their relevance for Prelims exam and MCQs on main articles

InstaLinks :  Insta Links help you think beyond the  current affairs issue and help you think multidimensionally to develop depth in your understanding of these issues. These linkages provided in this ‘hint’ format help you frame possible questions in your mind that might arise(or an examiner might imagine) from each current event. InstaLinks also connect every issue to their static or theoretical background.

Table of Contents 

GS Paper 3: (UPSC CURRENT AFFAIRS – 20 July 2024)

1. Telangana Government announced Crop Loan Waiver upto Rs 1 lakh

2. Analysis of Fiscal Responsibility and Budget Management (FRBM) Act

GS Paper 4:

3. GST on essential disability aids

Facts for Prelims (FFP)

1. Foreigners Tribunals

2. International Centre for Audit of Local Governance

3. First overseas Jan Aushadi Kendra

4. KIRTI programme

5. Dual-tower solar thermal plant

Mapping: 

6. Gevra and Kusmunda coal mines (Chhattisgarh)

UPSC CURRENT AFFAIRS – 20 July 2024

GS Paper 3:

Telangana Government announced Crop Loan Waiver upto Rs 1 lakh.

Syllabus: Agriculture/ Government Policies and Interventions

Source: TH

Context: The Telangana government has released ₹31,000 crore for the Crop Loan Waiver Scheme for waiving farmers’ loans. This scheme, aimed at benefiting over 40 lakh farmers by August end, marks the largest loan recovery in the country.

What are Farm loan waivers? 

They are government measures that forgive certain agricultural loans to reduce farmers’ distress, often promised during elections. These waivers involve the government covering the farmers’ debt, providing temporary relief but not solving long-term agrarian issues.

Historical Instances of Farm Loan Waivers:

Benefits of Loan Waiver:

1. For farmers: Farm loan waivers allow farmers to reinvest in agriculture and diversify into activities like poultry, dairy, and horticulture.
2. Political Benefit: A NABARD study (1987-2020) found that only 4 out of 21 state governments lost elections after announcing waivers.

Drawbacks of Loan Waivers:

• Limited Coverage: Example: A 2022 SBI study revealed that only half of the beneficiaries of nine state-announced farm loan waivers since 2014 received write-offs. Maharashtra had a high implementation rate, while Telangana had the poorest.
• Partial Relief: Example: Half of the loans are for non-farm purposes.
• Multiple Loans Per Household: Households with multiple loans receive multiple waivers.
  1. Example: A family with loans in different members’ names gets multiple waivers.
• Exclusion of Agricultural Laborers: Laborers, often more distressed, are left out.
• Erosion of Credit Culture: Encourages non-repayment expectations.
  1. Example: Farmers anticipate future waivers, leading to reduced repayment rates.
• Implementation Errors: Prone to exclusion and inclusion errors.
  1. Example: CAG found ineligible farmers benefited from the 2008 scheme while deserving ones did not.
• Impact on Developmental Expenditure: Diverts funds from other developmental projects.

What needs to be done?

1. Proper identification:For providing immediate relief to the needy farmers, a more inclusive alternative approach is to identify the vulnerable farmers based on certain criteria and give an equal amount of financial relief to the vulnerable and distressed families.
2. Enhance non-farm income:The sustainable solution to indebtedness and agrarian distress is to raise income from agricultural activities and enhance access to non-farm sources of income. The low scale of farms necessitates that some cultivators move from agriculture to non-farm jobs.
3. Improved technology, expansion of irrigation coverage, and crop diversificationtowards high-value crops are appropriate measures for raising productivity and farmers’ income. All these require more public funding and support.
4. Public Investment: Increase the budget for agriculture focusing on irrigation, electricity, storage, and transportation.
5. Direct Income Support: Implement schemes like PM-KISAN and Kisan Credit Card with efficient fund disbursement via DBT.
6. Market Reforms: Improve APMCs to ensure fair pricing for farmers.
7. Farmer Producer Organizations (FPOs): Encourage cooperative societies for bulk purchasing and better marketing.
8. Risk Mitigation: Provide accessible crop insurance schemes to protect against natural calamities.

Observations made by RBI:

As per RBI, loan waivers not only inhibit investment in the farm sector but put pressure on the fiscal of states which undertake farm loan waivers.

In every state election during the last five years, a loan waiver promise is made by one political party or another. Also, loan waivers, as the RBI has repeatedly argued, vitiate the credit culture, and stress the budgets of the waiving state or central government.

Way ahead: 

The magic wand of a waiver can offer temporary relief, but long-term solutions are needed to solve farmer woes. There are many dimensions of the present agrarian crisis in India. The search for a solution therefore needs to be comprehensive by taking into consideration all the factors that contribute to the crisis. Furthermore, both short- and long-term measures are required to address the numerous problems associated with the agrarian crisis.

Mains Link: 

Given the vulnerability of Indian agriculture to vagaries of nature, discuss the need for crop insurance and bring out the salient features of the Pradhan Mantri Fasal Bima Yojana (PMFBY). (UPSC 2016)

Prelims Link: 

Analysis of Fiscal Responsibility and Budget Management (FRBM) Act

Syllabus: Indian Economy – Fiscal Consolidation in India

Source: BS

Context: The Fiscal Responsibility and Budget Management (FRBM) Act of 2003 set a target to reduce the gross fiscal deficit (GFD) to 3% of GDP by 2008. By April 2018, this was replaced with a debt-GDP ratio of 40%, with the GFD of 3% as an operational target.

What is FRBM?

The Fiscal Responsibility and Budget Management (FRBM) Act of 2003 is an Indian law aimed at improving the government’s fiscal management. It sets targets for reducing the gross fiscal deficit (GFD) and the government’s debt-to-GDP ratio, ensuring fiscal discipline, and enhancing transparency in budgeting.

The main objectives of the FRBM Act include:

How was India’s journey towards fiscal consolidation?

FRBM has been successful in achieving fiscal consolidation because:

1. The FRBM Act initially succeeded in reducing the fiscal deficit from 5.8 % of GDP in 2002-03 to 2.6% in 2007-08. The revenue deficit also saw a decline during this period.
2. Fiscal policies on target like FY25, the government estimates the fiscal deficit at 5.1 per cent of the GDP which spiked up due to COVID.
3. Strong accountability due to the mandatory medium-term and strategy statements which are required to be presented annually before Parliament.

However, FRBM is ineffective on various fronts like:

1. Reduced expenditure: While there is a fall in deficits, it has largely been on account of reductions in expenditure in critical sectors such as education, health etc.
   • Eg: Finance ministry report, State’s capex declined by over 7% so far in 2023-24.
2. Budgetary innovations: achieved the deficit targets by manipulating the revenue and expenditure accounts such as curtailing the capital expenditure.
   • Eg: The introduction of an Effective primary deficit indicator has led to the decline of deficit.
3. High Debt to GDP: The government has time and again used escape clauses in FRBM to reset the new targets and miss deadlines.
   • Eg: According to FinMin India Debt to GDP is 81% in FY2022 (significantly above the FRBM Act’s target of 40% for the Centre, 20% for States, and 60% for combined accounts)
4. Divergent state policies: Even though the states have an FRBM limit of 3.5% of State GDP due to populist policy many states are facing revenue deficits.
   • Eg: the 15^th FC report shows that 12 states face a revenue deficit even after the central grant.
5. Hiking macroeconomic indicators: India has a vulnerability in stable prices, CAD and unemployment leading to a lack of fiscal prudence.

India’s fiscal consolidation journey highlights key lessons:

1. Impact of Shocks: Exogenous shocks can disrupt consolidation, stressing the need for ample fiscal space in stable conditions.
2. Tax-GDP Ratio: Improving the tax-GDP ratio is crucial for sustainable consolidation; relying solely on expenditure cuts is insufficient.
3. Rationalizing Expenditure: Efficient expenditure management is necessary to handle future shocks.

Conclusion:

The government should focus on revamping of FRBM Act along the lines of NK Singh’s committee recommendation such as adaptation of the glide path to achieve the target, establishing of independent fiscal council, conscience use of escape clause and coordinating monetary and fiscal policy to achieve the Fiscal consolidation and prudence.

Mains Link:

Public expenditure management is a challenge to the Government of India in the context of budget-making during the post-liberalization period. Clarify it. (UPSC 2019)

Prelims Links:

UPSC CURRENT AFFAIRS – 20 July 2024 GS Paper 4:

Ethical Issues on GST on essential disability aids

Syllabus: Application of Ethics

 Context: GST on essential disability aids like wheelchairs and Braillers is unjustly discriminatory. Since the GST regime began in 2017, disabled individuals must pay an additional 5% tax on these aids, which penalizes their disability.

Issues with tax on disability aid instruments:

Ethical issues with taxing disability aid instruments:

1. Discrimination: Taxing disability aids imposes additional financial burdens on individuals with disabilities, who already face significant challenges.
2. Violation of Equality: violate the principle of equality under Article 14
3. Economic Burden: The additional tax on essential aids like wheelchairs and Braille books exacerbates the economic strain on individuals with disabilities
4. Social Marginalization: Taxes on disability aids reinforce social marginalization by making essential tools for mobility and learning more expensive
5. Indirect Discrimination: GST on disability aids can be considered a form of indirect discrimination, where the tax burden disproportionately affects those with disabilities compared to the able-bodied population.

View of World Ethical Thinkers on Disabled People:

1. Immanuel Kant: Emphasized respect for individuals’ dignity and autonomy, advocating for the equal treatment of disabled people as moral agents deserving of respect.
2. John Stuart Mill: Supported utilitarian principles, which would favour policies that maximize overall well-being, including the fair treatment and inclusion of disabled individuals.
3. Martha Nussbaum: Proposed the Capabilities Approach, focusing on providing all individuals, including the disabled, with the capabilities to lead a flourishing life.

View of Indian Ethical Thinkers on Disabled People:

1. Mahatma Gandhi: Advocated for the upliftment and inclusion of disabled individuals, emphasizing compassion and equal opportunities.
2. R. Ambedkar: Supported social justice and equality, stressing the need for legal and social reforms to ensure the rights and dignity of all, including the disabled.
3. Swami Vivekananda: Highlighted the importance of treating all individuals with respect and ensuring their well-being, including those with disabilities.

What should be done?

Reform tax policies to avoid disproportionate impacts on marginalized groups, including disabled individuals, and enhance legal protections to prevent indirect discrimination and ensure inclusivity and fairness.

UPSC CURRENT AFFAIRS – 20 July 2024 Facts for Prelims (FFP):

Foreigners Tribunals

 Source: TH

Context: The Foreigners Tribunals (FTs) in Assam are quasi-judicial bodies formed under the Foreigners (Tribunals) Order of 1964.

• They are designed to determine whether a person is an Indian citizen or a foreigner.

Formation and Structure:

• Established through the Foreigners (Tribunals) Order of 1964, linked to the Foreigners’ Act of 1946.
• Although 300 FTs are sanctioned, only 100 are currently operational.
• The Assam government has recently instructed the Border police not to refer cases of non-Muslims who entered India before 2014 to the FTs, aligning with the Citizenship (Amendment) Act of 2019.
• This Act offers a citizenship application window for non-Muslims fleeing persecution from Afghanistan, Bangladesh, and Pakistan.

International Centre for Audit of Local Governance

Source: IE

Context: The International Centre for Audit of Local Governance (iCAL) was inaugurated by the Comptroller and Auditor General (CAG) of India.

• iCAL, the first of its kind in India, aims to set global standards for auditing local governance bodies.

Objectives and Functions of iCAL:

• Collaborative Platform: iCAL will bring together policymakers, administrators, and auditors associated with local governments to enhance auditing practices and capacity building.
• Global Standards: The centre aims to set international benchmarks for local governance audits, improving financial performance assessment, service delivery, and data reporting.
• Empowerment and Training: iCAL’s primary goal is to empower auditors, executives, and elected representatives of local governments through training and leadership development.
• Knowledge Hub: The centre will function as a knowledge hub and think tank, addressing governance issues through workshops, knowledge-sharing sessions, and peer exchanges.

Need for iCAL:

• Increased Funding: With significant funds flowing to local bodies, proper auditing is essential to ensure efficient utilization.
• Global Practices: The CAG highlighted the need to adopt global best practices in local government auditing, noting that 40 countries have supreme audit institutions (SAIs) for this purpose.
• Capacity Building: Building the capacity of auditors and local government employees is essential to improve financial management practices and internal controls.
• iCAL will facilitate open communication, data accessibility, and cooperation in addressing audit findings.
• By establishing iCAL, the CAG aims to foster cooperation, enhance auditing standards, and improve financial accountability at the local government level in India.

First overseas Jan Aushadi Kendra

 Source: TH
Context: India’s first overseas Jan Aushadi Kendra was inaugurated in Mauritius.

• This event highlights the strong bilateral cooperation in the health sector between India and Mauritius.
• The Jan Aushadi Kendra aims to provide affordable generic medicines to enhance public healthcare in Mauritius.

KIRTI programme

 Source: TH

Context: The Union Minister of Sports and Youth Affairs inaugurated the second phase of the Khelo India Rising Talent Program (KIRTI).

• This phase focuses on assessing the sporting talent of 20,000 students from Municipal Corporation of Delhi (MCD) schools.

Dual-tower solar thermal plant

 Source: IE

Context: China has introduced the world’s first dual-tower solar thermal power plant in Gansu Province, enhancing energy efficiency by 24%.

• This innovative plant features two 200-meter-tall towers, each surrounded by nearly 30,000 mirrors that concentrate sunlight onto the towers to generate steam and drive turbines for electricity production.

Key Features:

• Dual-Tower Configuration: The plant’s unique design involves two towers and overlapping mirror circles, allowing mirrors to serve either tower, boosting efficiency.
• Molten Salt Storage: Acts as a thermal battery, storing excess heat collected during the day and releasing it at night for continuous power generation.
• High Reflection Efficiency: Mirrors are made from specialized materials achieving a 94% reflection efficiency.
• Sun-Tracking Mirrors: Automatically adjust to follow the sun’s movement, concentrating rays on the eastern tower in the morning and shifting westward in the afternoon.

UPSC CURRENT AFFAIRS – 20 July 2024 Mapping::

Gevra and Kusmunda coal mines (Chhattisgarh)

Source: TOI

Context: Chhattisgarh-based South Eastern Coalfields Limited (SECL), a subsidiary of Coal India, has achieved a significant milestone with its Gevra and Kusmunda coal mines ranking 2nd and 4th among the world’s largest coal mines.

• These mines are located in the Korba district and collectively produce over 100 million tons of coal annually, constituting about 10% of India’s total coal production.

UPSC CURRENT AFFAIRS – 20 July 2024 [PDF]

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