1. What rationale do you find behind the decision of the government to allow 100% FDI in e-commerce while FDI in multi brand retail remains below par? critically examine.
Government of India recently approved 100%FDI in E-commerce. the recently released FDI norms came up with standardized rules for e-commerce and secured the interests of offline retailers with the following norms:
Rationale behind the decision to allow 100% FDI in e-commerce.
Responsibility on seller for quality and accreditation of the product.
Restrictions like 25% sale of a vendor in the marketplace, limitations on discounts.
Infrastructural development – Warehousing and logistics demands.
Employment Opportunities – In terms of need for Delivery boys, Courier services
Larger number of platforms for Indian retailers , increasing their earnings, reach and reputation.
Chance for the local art and handicrafts-men to sell their products across the country , without having to travel and setup physical shops.
Competitive pricing and wide variety as a result on large number of players, benefiting the consumers.
Larger number of e-commerce players results in deeper penetration , thereby limiting regional imbalances
the government has permitted 100%FDI in single brand retail, but has capped the FDI in multi brand retail to51%:
The policy, however, does have strings attached. A foreign investor would be permitted only a 51 per cent stake in the Indian multi-brand retailing company post government approval.
it would need to satisfy stringent norms of a minimum investment of $100 million, a 50 per cent investment in backend infrastructure.
A 30 per cent mandatory procurement of products sourced from small industries. Further, a restriction on location of outlets exists, with only cities with a population of one million or more allowed to have FDI-infused multi-brand retail formats.
Write your opinion in brief and conclude.
Department of Industrial Policy and Promotion (DIPP) under Min of Commerce has recently issued guidelines for FDI in E commerce. According to it E Commerce is buying and selling of goods and services over electronic and digital platforms (like TV, Website, Mobile app, extranet etc.)
DIPP has allowed 100 % FDI under automatic route in Business to Business e commerce but not Business to Consumer (B2C) E Commerce.
100% FDI is permitted only for market place e commerce (Entity providing only IT platform and acting as facilitator) but not for inventory based e commerce (where inventory owned by E commerce entity)
Rationale behind the decision of Govt:-
–>Infrastructure development and impetus to manufacturing sector. Growth in the retail sector will further the growth of manufacturing sector and will lead to job creation and growth of economy
–>Enhance Ease of doing business:- Promote healthy competition to boost innovation. Increase in number of E commerce entities and thus will increase the choice of the common buyer.
–>Boost to Make in India and Digital India programme
–>It has also added cap of 25 % on sale from a single vendor for giving level playing field to small vendors
–>For E commerce Companies:- New E commerce companies can enter into market with clear government policy. Existing E commerce ompany already following this model proposed by Govt will be at the winning side
–>For Buyers:-Buyers will have more options for choosing the products from wider market
–>For vendors:- Ensure fair competition. New and small vendors who were earlier hurt by Predatory pricing strategy by big vendors like WS Retail may be at the advantage. This policy will provide more option to the vendors to get profitable E com marketplace which will ensure competition and will benifit both vendors and buyers
–>Physical Shops will gain to from Govt move to control the selling price on E comm platform and will have increment in their business volumes
Negatives and Criticism:-
–>For E commerce- Companies have to change their marketing strategy/ business model according to new govt policy and can thus incur added expenses
–>Dual Effort:- DIPP taking the place of Competition Commission of India to ensure fair competition.
–>For Buyers:- Buyers will not get heavy discounts provided by the E Com websites. Now discount will be prerogative of vendor only
–>Ambigous Interpretation:- Experts claim term like “Directly or indirectly influence the sale price of goods and services” is not clearly defined and open to interpretation.
Every policy have some Pros and Cons and only time will tell about the overall benifit to Indian Economy. Govt is well intentioned to maintain ease of business policy and implementation of the policy with this intention will surely move our economy on the path of growth.
2. Recently, the Enforcement Directorate (ED) has been actively involved as a law enforcing agency in many cases. Can you enumerate the mandate of ED? What importance does it hold for the internal security of India?
Enforcement Directorate comes under Department of Revenue, Ministry of Finance. It is a law enforcement and economic intelligence agency responsible for enforcing economic laws and fighting crime in India. It was in news recently, dealing with cases of money laundering by Vijay Mallya, Chhagan Bhujbal, 2G case, VVIP chopper deal and others.
Mandate of ED:
1) The primary objective of the ED is to execute or implement the FEMA (Foreign Exchange Management Act) and the PMLA (Prevention of Money Laundering) Acts.
2) It has the right and authority of a Civil Court. And acts as a quasi judicial body when dealing with cases related to foreign exchange manipulations and FEMA related issues.
3) It has the powers of super checks, investigation, confiscation of property, and imposition of fines and punishments as per the rules and regulations of PMLA.
4) It has the mandate to intervene in the preventive detention cases of the COFEPOSA (Conservation of Foreign Exchange and Prevention of Smuggling Activities Act).
5) Renders cooperation to foreign countries in matters relating to money laundering and to seek cooperation in such matters.
Role in internal security:
(1) Money laundering not only harms economy by decreasing the tax collection, but is also harmful to internal security as the money involved can be used in financing anti-social, illegal and terror activities. It also acts against the principle of equitable distribution of wealth, thus affecting the social fabric of a country. ED plays an important role to prevent such incidences by acting as a watchdog.
(2) The success of any law depends on the efficiency of the regulatory agencies. ED, being pro-active in conducting its duty, is playing an important role in efficient disposal of laws.
(3) FEMA act manages the foreign exchange, which is extremely volatile and very important in sustainability of a nation’s economy. By ensuring the fair and legal foreign transactions, ED helps to prevent emergency like situation in post liberalisation era, which requires more vigil on such transactions than before.
(4) By controlling P notes it prevents foreign agents from bringing instability in the Indian market like that during the financial crisis of 2008.ED has reduced the P notes from 50% of FI assets in 2008 to 11% in recent times.
(5) It prevents NGOs getting foreign funding which aim at stalling development projects in India.
(6) Confiscation of assets of corrupted individuals generates income to the government, reduces inequality index and counters environment conducive for internal issues like naxalism, insurgencies etc.
Thus ED plays a very important role in the internal security of India but cases like Panama Scandal show that a lot is yet to be achieved in curbing economic crimes . Along with more stringent punitive powers to ED, speedier investigation and trial will also serve as a deterrent to illegal activities.
Best answer: Vajrasattva
The Enforcement Directorate (ED),established in 1956 is a law enforcement agency and economic intelligence agency responsible for enforcing laws related to economy. Recently it is in news due to cases against a Deputy Chief Minister involved in money laundering & a well-known industrialist involved in bad debts.
The Enforcement Directorate is mandated with the task of enforcing the provisions of two special fiscal laws – 1) Foreign Exchange Management Act, 1999 (FEMA) to prevent leakage of foreign exchange and 2) Prevention of Money Laundering Act, 2002 (PMLA) to prevent and control money laundering & to confiscate and seize the property obtained from the laundered money.
ED also undertakes investigations on contraventions of the Acts.
Importance of ED for the internal security:
ED can take actions of attachment and confiscation of property if instances of money laundering are linked to criminal offences like drug trafficking and terrorism (Scheduled Offences under PMLA), and to prosecute the persons involved in the offence of money laundering. Thus it can reduce the criminal Offences.
If money laundering is not stopped, other people may take this route via scheduled offences (like Criminal conspiracy, Kidnapping, Counterfeiting currency etc) to generate wealth, which will pose threat to internal security. ED checks money laundering & indirectly threat also.
It also helps in to control the organized crimes, naxalism etc as it checks illegal acquisition of foreign exchange through hawala.
It also undertakes cases for preventive detention of habitual offender under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974(COFEPOSA),which indirectly reduces trans-national smuggling activities and supply of Arms and ammunition to extremist and other criminals.
Many entities in name of NGO get off the radars and receive money (Funds) from external agencies, which can be used in secessionist movements, policy opposition etc. ED checks this illicit money.
Though ED is a economic law enforcement agency and economic intelligence agency, it has direct and indirect connection with internal security of India.
3. What is the significance of agroforestry for the socio-economic life of a marginalized farmer? Also discuss the features of the National Agroforestry Policy.
Introduction (should cover short definition of Agroforestry)
Agroforestry is an activity that integrates crop farming, tree products and livestock management in the same piece of land thus improving the sustainability of agriculture, livelihood condition, resilient farming and cropping pattern and ecological sustainability. In this type of agriculture practice trees are not chopped down for plain land rather they are grown in parallel with other crops.
Socio-economic benefit to the marginalized farmer (Write any 5)
Agroforestry acts as an instrument for transforming the lives of the rural farming population, protecting ecosystem and ensuring food security through sustainable means.
Diversified agriculture and income opportunities
Ensures employment throughout the year and due to diversification of work, disguised unemployment is also reduced.
Standard of living: Nutrition and Health improves due to increased quality and diversity of food output. Due to increased income education and health care access improves.
Better interaction with extension functionaries, radio, newspaper etc to gain more information on agroforestry for better adoption.
Change in occupation: Many marginalized farmers involved in other odd jobs have completely shifted over to agro forestry seeing the benefits out of it.
Ensures proper utilization of marginalized lands. The village common lands can also be put to use in agroforestry. This ensures community participation, social and economic cohesion in a village community.
With an improvement in income, there can be other social impacts like reduced distress migration, less pressure on urban spaces, improvement in soil quality, nature worship being part of our culture shall also bring in more social cohesion.
Features of National Agroforestry Policy (write any 5)
National level board to coordinate among various ministries and departments at union and state level, under Agriculture Ministry
Simplify and streamline rules and regulations by Forest department, Revenue department and the bodies under Forest rights act (FRA), PESA.
State Governments to settle tenancy rights for farmers, computerization of land records, use satellite imagery to find existing trees in farmland.
National Institute of Agroforestry to be setup in each agro-climatic zones and Give farmers quality seeds, technology and guidance, thus enabling implementation of their research at ground level.
Investing in research, extension and capacity building and related services.
Access to quality planting material; institutional credit and insurance cover to agroforestry practitioners.
Increased participation of industries dealing with agroforestry produce, and strengthening marketing information system for tree products.
The Policy also suggests massive extension programmes in order to broadcast the outcomes of intensive R&D activities in the field of agroforestry.
End with a short conclusion
Overall the concept of agro forestry is a win win situation both for the government and the farmers which will solve problems for both the groups and contribute to every angle associated with life.
Best answer: El Nino
Agroforestry is an activity that combines annual agricultural crop production and pasture by long-term production by trees like timber and other services on the same plot of land. This is obtained either by planting trees on agricultural land or by cropping on forested land.
1.2 billion rural people currently practise agroforestry across the world and has following socio-economic implication on the life of a marginalized farmer:
Increased Income– By selling fruits and timber and subsidiary activities like mat weaving, basket making, bamboo crafts, honey collection etc and increased the number of livestock due availability of cheap fodder, income of farmer substantially increases.
Employment and Migration– Agroforestry ensure employment throughout the year and due to diversification of work, disguised unemployment is also reduced. All this checks migration as well.
Living Standard – Nutrition and Health Improves due to increased quality and diversity of food output. Due to increased income education and health care access improves. Festival celebration and other cultural activities becomes more colorful.
Communication– Better interaction with extension functionaries, radio, newspaper etc to gain more information on agroforestry for better adoption.
India is the first country to come up with National Agroforestry Policy. It will help farmers to gain from agroforestry, with facilitating credit and insurance, besides enhanced market access.
Following are important features of the policy:
Land reform– Firm land right and tenancy right to provide incentive for agroforestry as it may take upto 10 years for trees to fully grow up.
Suitable trees– State governments are required to make list of 20 trees suitable for agroforestry in their area.
Extension service – Setting up of National Institute of Agroforestry with regional centres in each agro-climatic zones to provide farmers quality seeds, technology and guidance.
Loan and insurance– Initially Agroforestry would require some investment. So there is facility of loan from NABARD and other banks and also insurance
Simple rules– Simplification and streamlining of various rules under FRA, PESA etc
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