IAS UPSC Prelims and Mains Exam – 09th February 2019

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(PRELIMS + MAINS FOCUS)

Govt. grants divisional status to Ladakh

Part of: GS Prelims and Mains II – Polity, Governance; Centre-State Relations; devolution of powers and finances up to local levels and challenges therein

In news:

• Jammu and Kashmir Governor granted Ladakh a divisional status, thus creating three administrative units of Jammu, Kashmir and Ladakh in the State.
• There will be a separate administrative and revenue division for Ladakh. It will comprise Leh and Kargil districts, with headquarters at Leh.
• Earlier, Ladakh was a part of the Kashmir division.

Do you know?

• A section in Leh has been demanding Union Territory status.
• The move leaves the Kashmir valley geographically the smallest division at 15,948 sq. km, Jammu division at 26,293 sq. km and Ladakh, the biggest division, at 86,909 sq. km.
• Ladakh’s Kargil and Leh districts already have separate hill development councils for local administrative powers.
• The Governor’s decision has fuelled demands for similar status to Pir Panjal and Chenab Valley regions.

Startups to be listed for angel tax exemption

Part of: GS Prelims and Mains III – Indian Economy and issues related to it

Context:

• We earlier dealt with articles with regard to Angel Tax and how start-ups were troubled by the so-called angel tax.
• For more info, visit – (About Angel Tax, Issue with Angel Tax)
• IT department is free to arbitrarily decide the fair value of a company’s share and tax start-ups if the price at which their new shares are sold to investors is higher than the fair value of these shares. IT officials have a free hand to harass even genuine start-ups looking to raise investments for their growth.
• Unnecessary cost were imposed on the wider start-up community to tackle black money.

Therefore, the government has set up a committee to recommend provisions that make life easier to a certain extent for angel investors and start-ups.

In news:

• The Department for Promotion of Industry and Internal Trade (DPIIT) and the Central Board of Direct Taxes (CBDT) agreed to compile a list of startups eligible for angel tax exemption.
• Startups will be listed for exemption based on their audited financial statements and income tax returns of the previous year.
• The government also decided to raise the maximum time limit below which a firm would be deemed eligible for angel tax exemption to 10 years from the earlier seven.
• The paid-up share capital threshold below which startups would be eligible for an exemption has been set at ₹25 crore. (i.e., For investments below ₹25 crore, no questions would be asked.)

Conservation of Gir Lions:

Part of: GS Prelims and Mains III – Animal conservation; Biodiversity

In news:

• After as many as 23 lions died in Gujarat’s Gir forest since September (especially due to virus infection), the Centre and the Gujarat government have announced a ₹97.85 crore Asiatic Lion Conservation Project.
• A key outcome of the project is to have a dedicated veterinary institute, “lion ambulances”, and back-up stocks of vaccines that may be required.
• The Gujarat government has envisaged a ‘Greater Gir’ that includes, other than the existing Gir National Park, sanctuaries in Girnar, Pania and Mitiyala.
• Key aspects of the conservation project include undertaking “habitat improvement” measures, making more sources of water available, creating a wildlife crime cell, and a task force for the Greater Gir region.

Pic: https://d39gegkjaqduz9.cloudfront.net/TH/2019/02/09/DEL/Delhi/TH/5_05/42f1e303_2722297_101_mr.jpg

Do you know?

• There are close to 600 lions in Gujarat.
• However, there has been no move yet to translocate lions to a location outside Gujarat.
• There is a committee of experts examining the suitability of Madhya Pradesh as a potential lion reserve.
• The Kuno-Palpur Wildlife Sanctuary in Madhya Pradesh was identified to be the most suitable for reintroducing the species.
• The SC in April 2013 had ordered the translocation of some lions from Gujarat to Madhya Pradesh within six months, but this hasn’t happened.

Key facts:

• IUCN Status: Endangered
• The lion is one of five pantherine cats inhabiting India, along with the Bengal tiger, Indian leopard, snow leopard and clouded leopard.
• It was also known as “Indian lion” and “Persian lion”.

Medical devices to be treated as drugs

In news:

• Centre in a notification said that medical devices — all implantable devices, CT Scan, PET and MRI equipment, defibrillators, dialysis machines and bone marrow separators — will be treated as drugs for human beings with effect from April 1, 2020.
• Majority of medical devices are completely unregulated in India. With this move, all implantable devices and some diagnostic equipment will be brought into the regulatory framework.
• Also bringing medical devices into the regulatory framework is important from a patient safety perspective.

(MAINS FOCUS)

ECONOMY

TOPIC: General studies 3

• Economic Development – Indian Economy and Issues relating to growth and development.
• Inclusive growth and issues arising from it.
  

Surveying India’s unemployment numbers

Key pointers:

• India is a signatory to IMF’s Special Data Dissemination Standard (SDDS).
• SDDS was established in 1996 to help countries access the international capital markets by providing adequate economic and financial information publicly.
• Monthly measurement of the unemployment rate is one of the requirements of the SDDS, which India has to comply.
• However, India has taken an exception with respect to the measurement of unemployment.

Do you know?

• Government of India does not produce any measure of monthly unemployment rate, nor does it have any plans to do so.
• Its official plans to measure unemployment at an annual and quarterly frequency is in a state of total disorder.
• This does not befit India’s claims to be the fastest growing economy and as the biggest beneficiary of a famed demographic dividend.

CMIE and CPHS

• The Centre for Monitoring India Economy (CMIE), a private enterprise, has demonstrated over the past three years that fast frequency measures of unemployment can be made.
• CMIE has succeeded in generating fast frequency measures of household well-being since 2014.
• In its household survey, called the Consumer Pyramids Household Survey (CPHS), the sample size was larger than the official National Sample Survey Organisation (NSSO).
• The CPHS is comprehensive, surveying its entire sample every four months.

The CMIE’s CPHS thus has a much larger sample and is conducted at a much higher frequency than the NSSO’s.

Further, CPHS used intense validation systems and conducted face-to-face interviews necessarily using GPS-enabled smartphones or tablets. Thus, it ensures high fidelity/accuracy of data capture.

Its data capture machinery ensures delivery of high quality data in real time. Once the data is collected and validated in real-time, it is automatically deployed for estimations without any human intervention.

Difference between CPHS and NSSO surveys

1. Status of employment –

• NSSO tries to capture the status of employment for an entire year and for a week.
• CPHS captures the status of employment as on the day of the survey.
• Status of employment can be one of 4 factors – employed; unemployed willing to work and actively looking for a job; unemployed willing to work but not actively looking for a job, and unemployed but neither willing nor looking for a job.

2. Sample size –

• Sample size of CPHS is larger than the official National Sample Survey Organisation (NSSO).

3. Recall period –

• Recall period in the CPHS is of the day of the survey (or the immediate preceding day in the case of daily wage labourers)
• CPHS has been able to capture the status fairly accurately with no challenges of the respondent’s ability to recall or interpret the status.
• In contrast, the NSSO’s system is quite complex.

4. Fast-frequency measures –

• CMIE has succeeded in generating fast frequency measures of household well-being since 2014.
• The large CPHS sample is distributed evenly across rural and urban regions for every week of the execution cycle of 16 weeks of a wave.
• It is this machinery that enables to understand the Indian labour market with fast-frequency measures.

Key findings by CMIE’s CPHS

• India’s labour participation rate is very low by world standards and that even this low participation rate fell very sharply after demonetisation.
• The average labour participation rate was 47% during January-October 2016. The world average is about 66%.
• Immediately after demonetisation in November 2016, India’s labour participation rate fell to 45% and about 2% of the working age population, i.e. about 13 million, moved out of labour markets.
• The data showed that it was largely the unemployed who lost jobs, as they lost hope of finding jobs in the aftermath of demonetisation.
• As more and more unemployed left the labour market, the unemployment rate fell.
• India’s female labour participation rate is very low and falling.
• Researchers have shown that this fall is because of rising household incomes that reduce the need for women to join the labour force; increased enrolment in higher education by women which delays their entry into the labour force, and cultural and security factors that keep women away from the labour market in India. Further, it is evident that employers are also biased against hiring women.
• However, the CPHS shows that the situation with respect to women’s participation in the labour force is extremely poor — much poorer than what the official agencies tell us.
• The entire brunt of demonetisation was borne by women. Their labour participation fell sharply while that of men did not.

Impact of GST

After the demonetisation jolt came the Goods and Services Tax shock.

• It drove away small enterprises which could not compete in a tax-compliant environment out of business. This caused a substantial loss of jobs.
• Employment shrunk by 11 million in 2018.
• The brunt of this was again borne largely by women. But men too were also impacted.
• Urban female labour participation rates fell faster than rural female participation.
• Both Male labour participation rate and female labour participation dropped.
• The unemployment rate for men was 4.9% in 2018 and that for women in the same year was much higher — 14.9%. (Indicates bias against employing women.)

Conclusion:

Drawing women into the labour force by removing the impediments they face to at least bring their participation levels close to global standards is critically important for India to gain from the demographic dividend opportunity it has.

By not using a good data monitoring machinery, the Indian government is keeping both itself and the citizenry in the dark.

Connecting the dots:

• Why unemployment will be the biggest challenge for policy makers in the next decade? Analyse. Also discuss the implications of inefficient data monitoring machinery.

WELFARE/ECONOMY

TOPIC: General studies 2

• Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
• Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections
  

General studies 3 

• Issues related to direct and indirect farm subsidies and minimum support prices
• Inclusive growth and issues arising from it.
  

Analysis of PM-KISAN: Will the Rs6,000 farmer payout help?

Context:

• The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, which was announced in the Interim Budget 2019-20.
• Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of 6,000 per year.
• This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal instalments of Rs. 2,000 each.
• This programme will be funded by Government of India.
• Around 12 crore small and marginal farmer families are expected to benefit from this.
• PM-KISAN is expected to pave the way for the farmers to earn and live a respectable living.

Need of the Scheme:

1. To address issues of fragmented land holding

• According to the 10th Agriculture Census 2015-16, the small and marginal farmers till 47.34% of agriculture land but are 86.21 % of the labour force.
• Moreover farms got more fragmented between 2010-11 and 2015-16, which is a major limitation to reap the benefits of economies of scale and led to low marketable surplus which further resulted into low farmer income.

2. To improve farmers income

• According to Ashok Dalwai Committee, average monthly farmer income is Rs 6,246 and their average monthly expenditure is Rs 6,223, which leads to inadequate saving and resulted in low investment in farm sectors.
• It is important to keep in mind that the average annual income of small and marginal farmers is well below the average income of all farmers.
• Hence the benefit being given to small and marginal farmers through PM-KISAN will provide them assured supplemental income and also meet their emergent expenses, especially immediately after harvest.
• The scheme is also sustainable and will increase the confidence of small and marginal farmers.

3. To check increasing indebtedness

• Due to low income, and high input cost, indebtedness in farmers, (particularly marginal and small) is increasing.
• Debt income ratio of marginal farmers is 1.42 while for small farmer stands at 0.9.
• Around 50% of small and marginal farmers debt comes from money lenders.

4. To bring farmers into the fold of institutional credit

• By direct cash transfers, the scheme will bring small and marginal farmers (who are most vulnerable to informal credit) into the fold of institutional credits so that they can reap the benefits of Kisan Credit Card (KCC) regime.

Challenges to the Scheme:

1. Meagre Fund Transfer

• The amount to be transferred to farmers is lower than the income support being given by some of the States which already implemented similar schemes: Telangana’s Rythu Bandhu scheme gives farmers 10,000 per acre per year, and Odisha’s KALIA scheme, gives 10,000 per household per year to small landholders as well as landless tenant farmers.
• According to agricultural economist Ashok Gulati, “This is too little. At Rs 500 per month, it will amount to less than 1/15th of an average household’s income.

2. Landless labour is not included

• Scheme does not include landless, sharecropper and tenants, moreover the Budget outlay for MGNREGA has also been slashed to only Rs. 60000 crores from 61000 crores in 2018-19, where the required allocation is minimum Rs 85,000 crores.

3. Land Record Issues

• Land records are not sorted out in rural India and without land settlement it is difficult to ensure the advantage of PM-KISAN.

Way Forward:

• The smaller the land holding are in the greater the need for financial support, hence PM-Kisan is a right step.
• However, PM-KISAN should not shadow the real issues of agrarian crisis. Even though record food grain production in last three years, farmers were unable to get good prices for their produce.
• Hence government’s focus on doubling farmer income, by providing remunerative prices for farmers, raising productivity, supporting agricultural land policy to solve the problem of land fragmentation and providing relief measure through agricultural insurance and credit surety should not be diluted.

Connecting the dots:

• Pradhan Mantri Kisan Samman Nidhi is seen as a game changer to address farmer’s distress. Critically analyze the effectiveness of targeted cash transfers?

(TEST YOUR KNOWLEDGE)

Model questions: (You can now post your answers in comment section)

Note:

• Featured Comments and comments Up-voted by IASbaba are the “correct answers”.
• IASbaba App users – Team IASbaba will provide correct answers in comment section. Kindly refer to it and update your answers.

Q.1) Consider the following statements:

1. ‘Asiatic Lion Conservation Project’ was launched by alliance of conservation organisations – Lion Family, International Fund for Animal Welfare (IFAW), IUCN Netherlands, Wildlife Trust of India and World Land Trust.
2. Asiatic Lions are listed as ‘Endangered’ under the IUCN Red List.
3. The concept of Greater Gir has been adopted through which additional suitable habitat for lion is being developed for the habitation of lion.

Which of the statements given above is/are correct?

1. 1 and 2 only
2. 2 only
3. 2 and 3 only
4. 1, 2 and 3

Q.2) Kuno-Palpur Wildlife Sanctuary is located in –

1. Gujarat
2. Madhya Pradesh
3. Thailand
4. Kenya

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