2023 07 19

Table of Contents:

GS Paper 2:

National Multidimensional Poverty Index

GS Paper 3:

Tax Challenges Arising from the Digitalisation of the Economy
Industrial Concentration in India
Small Modular Reactors (SMRs)

Content for Mains Enrichment

Why are Hollywood’s actors and writers on strike?

Facts for Prelims (FFP)

Bicentenary year of Nawab Wajid Ali Shah
Fusion of rock art at Rudragiri Hillock
Digital time voucher system for political parties
RBI’s SOPs to Banks for Rupee Trade
Steel Slag Roads
93% DPT3 immunisation coverage in 2022: WHO
Cicada species
Gambusia

National Multidimensional Poverty Index

GS Paper 2

Syllabus: Issues Relating to Poverty and Hunger

Source: IE

Context: The NITI Aayog released the ‘National Multidimensional Poverty Index: A Progress Review 2023’.

Key highlights:

India has registered a decline in the number of multidimensionally poor from 24.85% in 2015-16 to 14.96% in 2019-2021.
In absolute terms, ~13.5 crore Indians escaped poverty during the five-year time period.
Still, one in seven Indians is multidimensionally poor.

What is the National Multidimensional Poverty Index (MPI)?

With its first edition released in 2021, the project is aimed at deconstructing the Global MPI and creating a globally aligned and yet customised India MPI.
It seeks to draw up comprehensive Reform Action Plans with the larger goal of improving India’s position in the Global MPI rankings.
NITI Aayog is the nodal agency for the National MPI, ranking States and UTs based on their performance.

Methodology:

It captures overlapping deprivations in health, education and living standards to ascertain multidimensional poverty.
Each of the specific parameters (under 3 broad categories) is assigned a value to calculate what is called a ‘deprivation score’.
The deprivation score is the sum of the weighted status of all the indicators for an individual – if it is more than 0.33, only then an individual is considered multidimensionally poor.
The primary data source to arrive at these figures was National Family Health Survey-5 (NFHS-5).

Highlights of the National MPI Report 2023 (2nd Edition):

Which indicators have reduced India’s multidimensional poverty? Improvements in indicators like access to cooking fuel, sanitation, drinking water, and bank accounts.
Where more improvements are needed? Indicators like nutrition and access to education, where the improvement has only been marginal.

Performance of various states:

BIMARU states: The number of people in poverty in rural areas witnessed the fastest decline (from 32.59 to 19.28%), owing to improvements in states like Bihar, UP, MP, Odisha, and Rajasthan.
Number of states with less than 10% of people living in multidimensional poverty:
Doubled between 2016 and 2021 from 7 (Mizoram, HP, Punjab, Sikkim, TN, Goa, and Kerala) to 14 (Telangana, Andhra Pradesh, Haryana, Karnataka, Maharashtra, Manipur, and Uttarakhand).
Except for Bihar, no other state in India has more than one-third of its population living in multidimensional poverty.

Comparing with Global MPI 2023:

In 2005/2006, about 645 million people were in multidimensional poverty in India, with this number declining to about 370 million in 2015/2016 and 230 million in 2019/2021.
Thus, 415 million poor people moved out of poverty from 2005/2006 to 2019/2021.
Incidence fell from 55.1 to 16.4%.
Deprivation in all indicators declined.

What is keeping Indians multidimensionally poor?

Within the health category, 3 sub-indicators – nutrition, child and adolescent mortality, and maternal health – showed only moderate improvement.
- Lack of proper nutrition contributed close to 30% – the highest – in the overall calculation of India’s MPI.
Other indicators that did not record a significant decline include lack of years of schooling, inadequate access to maternal health services and less-than-desired school attendance.
Within the standard of living category,
- While there has been a significant improvement in access to cooking fuel, ~44% of India’s population is still deprived of it.
- While sanitation numbers have improved, over 30% of the population is deprived when it comes to sanitation services.
- Access to housing also remained to be an indicator where the improvement was only marginal. standard of living criteria.

Government’s flagship programmes:

Health and Nutrition: Poshan Abhiyan and Anaemia Mukt Bharat have contributed to reduced deprivations in health.
Sanitation: Swachh Bharat Mission (SBM) and Jal Jeevan Mission (JJM) have improved sanitation across the country.
Cooking fuel: PM Ujjwala Yojana (PMUY) has positively transformed lives.
Other initiatives: Initiatives like Saubhagya (electricity), PM Awas Yojana (housing), PM Jan Dhan Yojana (banking), and Samagra Shiksha (education).

Conclusion: Consistent implementation across a diverse set of programmes and initiatives that have strong interlinkages will lead to a further reduction in deprivations across multiple indicators.

Insta Links:

Multidimensional Poverty Index

Mains Links:

Though there have been several different estimates of poverty in India, all indicate a reduction in poverty levels over time. Do you agree? Critically examine with reference to urban and rural poverty indicators. (UPSC 2015)

July 19, 2023 /19 July 2023, 19 July CA, Global MPI, GS 2, National Multidimensional Poverty Index (MPI), Niti Aayog., SDG-$., Today's Article, Today’s article, UNDAP

Tax Challenges Arising from the Digitalisation of the Economy

GS Paper 2

Syllabus: Global Agreements involving India and/or affecting India’s interests

Source: OECD

Context: 138 members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) – representing over 90% of global GDP – agreed to an Outcome Statement.

BEPS:

It refers to corporate tax planning strategies used by multinationals to shift profits from higher-tax jurisdictions to lower or no-tax jurisdictions.
The OECD defines BEPS strategies as exploiting gaps and mismatches in tax rules. It erodes the tax base (costing countries USD 100-240 billion in lost revenue annually) of the higher-tax jurisdictions.
As developing countries have a higher reliance on corporate income tax, they suffer from BEPS disproportionately.
Working together within the OECD/G20 Inclusive Framework on BEPS, over 135 countries and jurisdictions are collaborating on –
- The implementation of measures to tackle tax avoidance,
- Improving the coherence of international tax rules and
- Ensuring a more transparent tax environment.

The objective of the Outcome Statement: It delivered a package to further implement the Two‐Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy.

Two‐Pillar Solution/ Global Anti-Base Erosion (GloBE) rules: These rules were agreed upon in 2021 by 137 countries and jurisdictions under the OECD/G20 Inclusive Framework on BEPS.

Significance of 2‐Pillar Solution:

It will define the multinational enterprises (MNEs) within the scope of the minimum tax.
It will set out a mechanism for calculating an MNE’s effective tax rate on a jurisdictional basis.
It will impose the top-up tax on a member of the MNE group in accordance with an agreed rule.
It will provide stability for the international tax system, making it fairer and work better in an increasingly digitalised and globalised world economy.

The Summary of the Outcome Statement:

A text of a Multilateral Convention (MLC) developed by the Inclusive Framework, which allows jurisdictions to reallocate and exercise a domestic taxing right over a portion of MNE residual profits.
A proposed framework for the simplified and streamlined application of the arm’s length principle.
The Subject-to-Tax Rule (STTR) together with its implementation framework, will enable developing countries to update bilateral tax treaties to “tax back” income.
A comprehensive action plan will be prepared by the OECD to support the swift and coordinated implementation of the Two-Pillar Solution.

About OECD:

● It is an intergovernmental organisation with 38 Member countries, founded in 1961 (under the Rome Treaties of 1957) to stimulate economic progress and world trade.

● It is a forum whose member countries describe themselves as committed to democracy and the market economy.

Insta Links:

Base Erosion and Profit Shifting

Prelims Links: UPSC 2016

The term ‘Base Erosion and Profit Shifting’ is sometimes seen in the news in the context of

mining operation by multinational companies in resource-rich but backward areas
curbing of tax evasion by multinational companies
exploitation of genetic resources of a country by multinational companies
lack of consideration of environmental costs in the planning and implementation of developmental projects

Ans: 2

July 19, 2023 /19 July 2023, 19 July CA, GS 2, OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), Today's Article, Today’s article, Two‐Pillar Solution/ Global Anti-Base Erosion (GloBE) rules

Industrial Concentration in India

GS Paper 3

Syllabus: Effects of Liberalisation on the Economy, Changes in Industrial Policy and Their Effects on Industrial Growth

Source: TH

Context: The biggest of India’s big businesses seem to be thriving.

Data regarding India’s big businesses: According to a former RBI Deputy Governor’s report,

The share of assets in the non-financial sectors owned by the Big-5 business groups has risen from 10% to 18% between 1991-2021.
Whereas the share of the next five has fallen from 18% to less than 9%.

What causes this industrial concentration?

Functioning of markets: Given asset-income inequality and differential power among economic agents, markets do not promote competition but concentration and centralisation.

The dangers of such a rapid rise in industrial concentration:

Stifles competition
Contributes to inflation or profiteering, through the manipulation of costs and prices.
Influence institutions of democracy, such as the capture of the media.
Dilutes the role that civil society can play as a countervailing power.
In time, leads to undue corporate influence over political processes and the formulation of policy.
Tendencies of state capture.
Fosters extreme asset and income inequality.

How can this be minimised? By regulating markets to physically prevent the growth of dominant businesses and excessively large conglomerates or even break up those that are seen as too big for comfort.

Challenges towards regulating markets:

The state is not independent of the influence of big businesses: The distance between the state and private capital has narrowed hugely, leading to the current situation in which the state promotes big business rather than regulates or curbs the latter.

Three trends have signalled this narrowing of political distance:

The embrace of neoliberalism by powerful voices within and outside the state.
- This implied the adoption of the view that the role of the state is not to regulate private capital but to facilitate its growth to foster competition and all-around economic progress.
- However, the reverse has happened. Examples are in areas such as telecommunications and civil aviation.
The propagation of the view that the state must help strengthen domestic big business.
- State policy, diplomacy and public resources had to serve as instruments for the purpose.
- While liberalisation opened up Indian markets, and subjected much of Indian business to global competition, state intervention (like subsidies) was modified to protect and promote sections of big business.
The refusal to reduce the influence of money in politics.
- Over time, the policy has been changed to legitimise corporate donations to political parties, including through the infamous electoral bonds scheme.
- Thus, big business has turned out to be a prerequisite for garnering the resources needed to manage elections and win electoral support.

What is frightening in the current situation?

These tendencies have coalesced into a strategy of strengthening Indian business as part of promoting the national interest.
Any dissent against centralisation and concentration is being suppressed by the state in the name of national interest.

Way ahead:

Democracies have battled hard to force governments to maintain some distance from private capital in general and big business in particular.
A broad alliance of diverse classes can push the state to take strong action against monopoly and trustification.
Similar efforts were seen in India immediately after Independence – License-Permit-Quota Raj.

Conclusion: Though License-Permit-Quota Raj of the pre-reform era is not possible in today’s India, what new India needs is the equitable treatment of all businesses (irrespective of their size) to promote national interest in the long term.

Insta Links:

Oxfam inequality report: Taxing the ‘obscenely’ wealthy may not be the right solution

Mains Links:

Examine the impact of liberalisation on companies owned by Indians. Are they competing with the MNCs satisfactorily? Discuss. (UPSC 2013)

July 19, 2023 /18 July CA, 19 July 2023, GS 3, Industrial concentration in India, License-Permit-Quota Raj, neoliberalism, Today's Article, Today’s article

Small Modular Reactors (SMRs)

GS Paper 3

Syllabus: Science and Technology: Nuclear Science

Source: BS

Context: This article discusses India’s shift towards Small Modular Reactors (SMRs) as a strategic move in the nuclear energy sector.

What are SMRs?

They are advanced nuclear reactors with a capacity of up to 300 MW per unit, offering advantages such as simplicity, safety, and cost-effectiveness.

SMRs can be factory-made and transported to a site for installation.
SMRs are economical and time-efficient, and unlike traditional reactors that require refuelling every 1-2 years, SMRs only need refuelling every 3-7 years.

Status of India’s nuclear power:

India has over 22 nuclear reactors in 7 power plants across the country which produce 6780 MW of nuclear power
India aims to raise nuclear power to 10% of its energy mix by 2035.

Global Status of SMRs:

Worldwide over 70 SMR designs are under development in 17 countries e.g., S.’s NuScale Power company, whose 600 MW SMR plant design has been approved by the Nuclear Regulatory Commission.
Russia’s 77 MW SMR, Akademik Lomonosov, was operational as early as 2019.
In the U.K., Rolls-Royce is setting up a manufacturing facility for SMRs.

Why does India need more nuclear power?

Very limited growth potential for hydropower because of conserving biodiversity, the costs of rehabilitating and compensating landowners and the seismological factors in the Himalayas.
India has nearly 210 gigawatts of coal capacity, producing 73% of the electricity of India, which is not environmentally friendly.
Wind and solar powers are intermittent or variable.

India’s strategy:

India’s strategy for nuclear energy transition involves transitioning from larger nuclear power plants to smaller ones, specifically Small Modular Reactors (SMRs). The government aims to engage the private sector through public-private partnerships to set up SMRs across the country. The long-term goal is to raise nuclear power to 10% of India’s energy mix by 2035.

Niti Aayog’s suggestions for SMRs include:

Encouraging private sector participation through public-private partnerships.
Implementing comprehensive regulatory changes to ensure safety standards and monitoring.
Modifying foreign investment policies to attract domestic and foreign companies for SMR development in India.

Way ahead for India:

The nuclear industry should move towards ‘passive safety’ designs (for nuclear reactors). For example, active cooling pumps.
Enforcing nuclear liability, for example, the Civil Liability for Nuclear Damage Act 2010.
Ending the monopoly of the Nuclear Power Corporation of India Limited (NPCIL) in reactor operations. Allow other government companies and private sector

Conclusion:

If India hopes to achieve ‘net zero’ by 2070, it needs ~100 GW of nuclear power by 2050. India needs a portfolio of technologies (including SMRs) to make nuclear power safe and cost-effective (capital cost) over time.

Insta Links:

Nuclear Technology

Mains Links:

Give an account of the growth and development of nuclear science and technology in India. What is the advantage of a fast breeder reactor programme in India? (UPSC 2019)

Prelims Links: UPSC 2016

India is an important member of the ‘International Thermonuclear Experimental Reactor’. If this experiment succeeds, what is the immediate advantage for India?

It can use thorium in place of uranium for power generation
It can attain a global role in satellite navigation
It can drastically improve the efficiency of its fission reactors in power generation
It can build fusion reactors for power generation

Ans: 4

July 19, 2023 /19 July 2023, nuclear power., Small Modular Reactors, Today's Article

Why are Hollywood’s actors and writers on strike?

Content for Mains Enrichment

Source: TH

Hollywood writers and strikes are on strike due to various issues:

Decreasing pay and inadequate compensation compared to rising industry profits.
The use of streaming services has resulted in fewer guaranteed weeks of work
Downsizing traditional writers’ rooms in favour of “mini rooms” limits writers’ involvement in productions.
Concerns about the impact of artificial intelligence (AI) on their profession, including the creation of new content without compensation and consent and the use of their original work to train AI models.
Lack of transparency in streaming platforms’ viewership data.

The strike is the largest labour fight in Hollywood in six decades and marks the first dual strike of writers and actors since 1960.

Usage: You can use this to highlight various ethical issues such as Fair compensation, Transparency and consent, Protecting creative work, and Workers’ rights

July 19, 2023 /19 July 2023, Hollywood’s actors and writers on strike, Today's Article

Bicentenary year of Nawab Wajid Ali Shah

Facts for Prelims (FFP)

Source: TH

July 19, 2023 /19 July 2023, Nawab Wajid Ali Shah, Today's Article

Fusion of rock art at Rudragiri Hillock

Facts for Prelims (FFP)

Source: TH

Context: The Rudragiri hillock in Andhra Pradesh features a unique combination of prehistoric rock paintings from the Mesolithic period and exquisite artwork from the Kakatiya dynasty, dating back to around 1300 AD.

The site includes five naturally formed rock shelters that served as living quarters during the Mesolithic age, around 5000 B.C.
The Kakatiya-era paintings display scenes from the epic Ramayana and are adorned with a variety of colours derived from white kaolin and different pigments.

One of the caves depicts a fierce battle between the Vanara brothers Vali and Sugriva, with Rama shooting arrows at Vali. Another cave features a grand sketch of Hanuman carrying the Sanjivani hill in his right hand, symbolizing his mission to save Lakshmana’s life.

About Kakatiya Dynasty:

Kakatiyas is an Andhra dynasty that flourished in the 12th century CE. The Kakatiya dynasty ruled from Warangal (Telangana) from CE 1083-1323.
They were known for the construction of a network of tanks for irrigation and drinking water and thereby gave a big boost to the overall development of the region.
There are hundreds of Hindu temples built under the patronage of Kakatiya kings like Ganapati Deva, Rudrama Devi and Prataparudra in the Kakatiya dynasty. E.g.,
Thousand Pillar Temple or Rudreshwara Swamy Temple, Telangana. It is a star-shaped, triple shrine (Trikutalayam) dedicated to Vishnu, Shiva and Surya.

July 19, 2023 /19 July 2023, Arts and Culture, Fusion of rock art at Rudragiri hillock, GS1, Kakatiya Dynasty, Today's Article

Digital time voucher system for political parties

Facts for Prelims (FFP)

Source: PIB

Context: The Election Commission of India (ECI) has introduced a digital time voucher system for political parties to access government-owned electronic media, such as Doordarshan and All India Radio, during elections.

What is the Digital time voucher system?

The digital time vouchers serve as permissions or allocations of specific time slots for political parties to broadcast or telecast their campaign messages on these media platforms. This system streamlines the process, eliminates the need for physical collection, and enhances accessibility and convenience for political parties participating in election campaigns.

Significance:

This move reflects the ECI’s commitment to leveraging technology for a smoother electoral process.
The scheme aims to provide equitable access to electronic media for campaigning, with base time allotted to each national and state party, and additional time based on their poll performance.

Rules:

In India, the rules regarding political parties’ access to government-owned electronic media, such as Doordarshan and All India Radio, are governed by the Election Commission of India (ECI) and the Prasar Bharati Act.

Allotment of Airtime: During elections, the ECI mandates that Doordarshan and All India Radio allocate a certain amount of free airtime to recognized political parties for broadcasting their messages.
Time Slots: The ECI determines the time slots for political parties based on factors like their previous electoral performance and representation in the legislature. Parties are allocated fixed time slots for their broadcasts.

Other aspects of rules are mandated under the Representation of the People Act, 1951

July 19, 2023 /19 July 2023, Today's Article

RBI’s SOPs to Banks for Rupee Trade

Facts for Prelims (FFP)

Source: TH

Context: The Reserve Bank of India (RBI) is set to issue a standard operating procedure (SOP) to banks in order to expedite the issuance of proofs of inward remittances for exporters.

Aim: This move aims to address the challenges faced by exporters in the rupee-based trading mechanism for foreign trade.

Issues with FIRC (Foreign Inward Remittance Certificate)?

The issue with Foreign Inward Remittance Certificates (FIRC) arises when the certificate from one bank is not being sent to another, which hampers the generation of electronic bank realisation certificates (e-BRCs). This creates a problem for exporters as e-BRCs serve as proof of payment for their exports and make them eligible for benefits under the Foreign Trade Policy.

For example, if an exporter in India receives a payment for their exports from a foreign buyer through a bank, they require a FIRC from that bank as evidence of the inward remittance. However, if the FIRC is not transmitted to the exporter’s bank, the exporter cannot obtain the necessary e-BRC, which may prevent them from accessing benefits or incentives provided by the government for export transactions.

What is FIRC (Foreign Inward Remittance Certificate)?

FIRC is a document that acts as a testimonial for all the inward remittances entering India.

What is an Electronic Bank Realization Certificate(e-BRC)?

An Electronic Bank Realization Certificate(e-BRC) is a vital digital certificate for export businesses. A bank issues the e-BRC to confirm that the buyer made payment to the exporter against the export of services or goods. The BRC is the proof of realization of payment against exports.

July 19, 2023 /19 July 2023, Electronic Bank Realization Certificate(e-BRC), FIRC (Foreign Inward Remittance Certificate), Today's Article

Steel Slag Roads

Facts for Prelims (FFP)

Source: PIB

Context: India has developed the world’s latest Steel Road technology by using steel slag.

What is Steel Slag Road?

Steel slag is a byproduct of steelmaking, and is produced during the separation of molten steel from impurities in steel-making furnaces. Steel slag roads are roads constructed using steel slag. Instead of discarding this waste material, it is processed and used as an aggregate in road construction. The steel slag is mixed with other materials and technologies to create a durable and sustainable road surface.

Developed by: The technology, pioneered by CSIR-Central Road Research Institute (CRRI), allows for the large-scale utilization of waste steel slag from steel plants in road construction.

Benefits:

It is part of the “Waste to Wealth” initiative and addresses environmental degradation caused by waste steel slag.
Steel slag roads are well-suited to India’s terrain, offering cost savings of 30% and three times the lifespan of traditional roads.
It is resistant to weather conditions.
The success of steel slag roads has been demonstrated in various projects, including in Surat, Arunachal Pradesh, and on National Highway NH-66.

July 19, 2023 /19 July 2023, Steel Slag Roads, Today's Article

93% DPT3 immunisation coverage in 2022: WHO

Facts for Prelims (FFP)

Source: TH

Context: According to the World Health Organization (WHO), India’s coverage rate for the DPT3 vaccine (diphtheria, pertussis, and tetanus) reached an all-time high of 93% in 2022.

This surpassed the pre-pandemic best of 91% in 2019 and showed a significant increase from the 85% recorded in 2021. In the WHO South-East Asia Region, the DPT3 coverage rate also recovered to pre-pandemic levels at 91% in 2022, up from 82% in 2021.

Key Findings:

The region also witnessed improvements in the coverage of the measles vaccine, which rose to 92% in 2022 from 86% in 2021.
The number of zero-dose children (those who haven’t received any dose of the DPT vaccine) halved to 2.3 million in 2022 from 4.6 million in 2021, while the number of partially vaccinated children decreased to 650,000 in 2022 from 1.3 million in 2021.
India and Indonesia were credited for the region’s strong immunization recoveries, as they made significant efforts to improve vaccination rates.
The report highlighted the importance of closing gaps in immunization coverage at the subnational level to prevent outbreaks of vaccine-preventable diseases.

About DTP:

DTP vaccine can prevent diphtheria, tetanus, and pertussis. Diphtheria and pertussis spread from person to person. Tetanus enters the body through cuts or wounds.

DIPHTHERIA (D)can lead to difficulty breathing, heart failure, paralysis, or death.
TETANUS (T)causes painful stiffening of the muscles. Tetanus can lead to serious health problems, including being unable to open the mouth, having trouble swallowing and breathing, or death.
PERTUSSIS (aP), also known as “whooping cough,” can cause uncontrollable, violent coughing that makes it hard to breathe, eat, or drink. Pertussis can be extremely serious especially in babies and young children, causing pneumonia, convulsions, brain damage, or death. In teens and adults, it can cause weight loss, loss of bladder control, passing out, and rib fractures from severe coughing.

July 19, 2023 /19 July 2023, DPT3 immunisation, GS3, health, SCIENCE, Today's Article

Cicada species

Facts for Prelims (FFP)

Source: TH

Context: A cicada species commonly found in several parts of South India has been identified as a new species and named Purana cheeveeda (after its Malayalam name Cheeveedu).

Previously, it was mistaken for Purana tigrina, a species described in Malaysia in 1850. The Association for Advancement in Entomology has corrected this long-standing error in taxonomic identification, distinguishing Purana cheeveeda from the Malaysian species.
The team noticed differences in the structure of the male genitalia and operculum, leading to the reclassification.

July 19, 2023 /19 July 2023, Cicada species, ENVIRONMENT, GS3, Species in news, Today's Article

Gambusia

Facts for Prelims (FFP)

Source: DTE

Context: The Andhra Pradesh government released around 10 million Gambusia fish, also known as mosquitofish, into the state’s water bodies to combat mosquito-borne diseases like malaria and dengue.

The fish is used as a biological agent to control mosquito larvae and has been part of mosquito-control strategies in India since 1928.
Gambusia fish are known for their high breeding capacity and adaptability, allowing them to survive in diverse environments.

July 19, 2023 /19 July 2023, ENVIRONMENT, Gambusia, GS3, Species, Today's Article