Governments could set whatever local corporate tax rate they want, but if companies pay lower rates in a particular country, their home governments could top-up their taxes to the minimum rate, thus eliminating the advantage of shifting profits.
Also, countries would lose the device used to push policies that suit them once a global minimum rate is put in place.
Impact on India
The decision is likely to benefit India as India has wanted to keep corporate tax rate artificially lower to attract FDI in comparison to tax havens or low taxation countries.
However, world cereal production is on its way to reach a new record.
Reasons for this inflation
Revived demand in some countries.
A backlog of low production
Market and supply disruptions due to restrictions on movement due to COVID-19
Impact of the inflation
Higher inflation will affect poor countries dependent on imports.
Huge Multi-National Companies such as Nestlé and Coca-Cola could pass on increased prices of their raw materials to consumers.
What is inflation?
It measures the average price change in a basket of commodities and services over time.
However, a certain level of inflation is required in the economy to ensure that expenditure is promoted and hoarding money through savings is demotivated.
Important value additions
FPI is released by Food and Agriculture Organisation
It is a measure of the monthly change in international prices of a basket of food commodities.
It consists of the average of five commodity group price indices- cereals, oilseeds, dairy products, meat and sugar.
It is weighted with the average export shares of each of the groups
White goods include large electrical goods used domestically such as refrigerators and washing machines, Air conditioners and LED lights, typically white in colour.
For White Goods
Objective:
To create complete component ecosystems in India
To make India an integral part of the Global supply chains
Duration and funds
Rs. 6,238 crores
From 2021-22 to FY 2028-29
Features
It will offer an incentive of 4 to 6% on incremental sales of goods manufactured in India.
Benefits
Increased investment,production,exports
Create additional 4 lakh direct and indirect jobs
For Telecom sector and Network Equipment
Objective
To make India a global manufacturing hub for Telecom and networking products.
Duration and funds
Rs. 12, 195 crores with 1,000 crore to be allocated for MSMEs
From Fy 2021-22 to FY 2025-26
Features
It is available to both MSMEs and non MSMEs companies.
Also available to Domestic and global companies with minimum investment threshold limits for MSMEs above Rs.10 crore and non MSMEs above Rs. 100 crore.
Benefits
Investment of around Rs. 3,000 crores
Increased production and exports of Rs. 2 lakh crore over five years
Part of: GS Prelims and GS-III – Conservation; Climate change
In news
‘Ecosystem Restoration for people, nature and climate’ report was recently published by the United Nations environment programme (UNEP).
The report has been published in Association with Food and Agriculture Organisation for UN Decade on ecosystem Restoration 2021-2030.
Ecosystem restoration means assisting in the recovery of ecosystems that have been degraded or destroyed, as well as conserving the ecosystems that are still intact.
Key findings of the report
We are using the equivalent of 1.6 Earths to maintain our current way of life and the ecosystem is unable to keep up with our demands.
Every year ecosystem services worth more than 10% of our global economic output are lost.
Around 1/3rd of the world’s farmland is degraded.
About 87% of Inland wetlands worldwide have disappeared since 1700.
1/3rd of commercial fish species are over-exploited.
Degradation is already affecting the well-being of 40% of the world’s population.
Countries need to deliver on their existing commitments to restore 1 billion hectares of degraded land and make similar commitments for Marine and coastal areas.
Restoration is essential for keeping Global temperature is below 2° Celsius
Recommendations
Restoration and avoiding degradation.
Large scale investments in dryland agriculture
Mangrove protection
Water management
Miscellaneous
Asia Pacific economic cooperation (APEC)
APEC Leaders met online to discuss ways to build back the economy better from the pandemic.
APEC is a regional economic forum established in 1989 to take maximum advantage of the growing interdependence of the Asia-Pacific.
It has 21 members.
Aim: To create greater prosperity for the region by promoting balanced, inclusive and sustainable growth.
India is not a member of APEC.
(Mains Focus)
SCIENCE & TECH/ ECONOMY
Topic:
GS-3: Science and Technology- developments and their applications and effects in everyday life.
GS-3: Awareness in the fields of IT, Space, Computers etc.
Context: Nearly two decades since the last supersonic passenger flight, of the British-French airliner Concorde, took off, the planes are set to return to the runways by 2029.
United Airlines of USA has recently announced it was ordering 15 planes (named Overture) with the ability to travel at Mach 1.7, faster than the speed of sound, from the Denver-based startup Boom.
What is a supersonic plane?
Supersonic aircraft are planes that can fly faster than the speed of sound. Usually, supersonic planes can travel at the speed of around 900 kmph, twice the speed of normal aircraft
The technology for supersonic flights is actually over 70 years old, but only recently has been used for commercial flying.
Before 1976, when the first commercial supersonic flight took off, the planes were used entirely for military purposes.
Concorde, the British-French turbojet-powered commercial airliner, was the first aircraft to carry passengers at supersonic speed, but eventually had to discontinue, due to cost and other concerns.
Supersonic vehicles in the past have been flagged for their high use of jet fuels, causing extensive environmental damage.
About Boom’s Overture supersonic plane
Long Range: The Overture aircraft would travel at the speed of Mach 1.7 or 1,805 kmph with a range of 4,250 nautical miles (7871Km). In a single flight, it could carry 65 to 88 passengers and reach an altitude of 60,000 ft. This would enable travel of passengers between busy routes like Paris-New York, Los Angeles to Sydney and San Francisco to Tokyo.
Halves the Travel Time: Overture aircraft can reduce travel time by about half of today’s planes. Travel time from Singapore to Dubai, usually around seven hours, would be reduced to four hours.
Commercial Operations within decade: The company has expressed confidence in getting an “experimental” jet ready by 2022, start rolling out aircraft by 2025 and eventually open them for passengers by 2029.
No Overland Noise: The Overture will also not be noisy as supersonic planes in the past were, Boom claims, as it aims for “zero overland noise.” This essentially means that it will cruise at supersonic speeds only over water, ensuring that no sonic boom or excessive noise reaches the surfaces where people live.
Coastal buffer zones will be created into route planning of the airline, enabling the Overture planes to travel over Mach 1 only after it reaches a “safe” distance from the shore.
Net-Zero Emissions: Boom claims to produce an eco-friendly aircraft with “net-zero carbon emissions”, set to fly with 100 per cent sustainable aviation fuel (SAF) made from biodegradable material
Cost cutting technologies: The company also promises to equip the airliner with advanced aerodynamics and carbon composite materials. Through this, it says, it will be able to cut significant development and maintenance costs in ways which the Concorde planes could not.
Helps recover the sector impacted by Pandemic: The announcement of the new technology comes at the time when the global aviation industry is bearing losses due to the Covid-19 pandemic, and a third of the world’s air routes have been lost since 2020.
Challenges for Supersonic Overture Flights
High Production Costs: The costs of making “sustainable” supersonic planes are extremely high. The very nature of its flying — using excessive amounts of fuel and energy — is likely to have high environmental costs.
Noise Pollution: The very speed of the planes result in producing excessive amounts of noise pollution in the environment. The “Sonic Boom” created by these planes feels like an explosion to the human ear.
Limitations in areas of operation: Noise pollution caused by Sonic boom limits where and when the supersonic planes can fly. They can only reach their actual speed until they are far enough from people and completely over the ocean.
Government Approvals: Regulatory approvals to fly such planes can be unsuccessful, especially for transatlantic flights. Getting clearance from regulators around the world would be a challenging task, since the supersonic planes in the past have already been flagged for these hurdles.
Expensive Fuel: Sustainable aviation fuel is currently very limited in its supply, and is extremely expensive. Moreover, the use of this fuel does not eliminate greenhouse gas emissions altogether.
Safety Concerns: One of reasons for discontinuance of Concorde flights were safety. The July 2000 accident, when an Air France Concorde crashed right after takeoff, killing all 109 people on board and four on ground, brought safety of supersonic flights into limelight.
Accessible only to rich: Lastly, it would not be economically feasible for everyone. Only the very rich can afford supersonic planes, as a ticket is likely to be way more costlier than a first class ticket of a regular plane.
Context: India’s female labour force participation rates have been dismal over the past two decades.
Issues
At 24.5% in 2018-19, its current participation rate is well below the global average of 45%, and is also the lowest in South Asia.
Despite rising GDP, increasing educational attainment, rising household incomes, and declining fertility, women’s participation in the labour market has decreased.
The gender gap in participation is overwhelmingly large and has been widening over the last decade or so
Women’s participation has decreased substantially across all age brackets, especially between 25 to 59 years.
There are considerable variations in the rates of women’s labour force participation between rural and urban areas (26.4% for rural versus 20.4% for urban women).
Available evidence suggests that finding a paid job is much harder for women than men. And once they enter the labour market, women still face limited work options, have fewer learning and career advancement opportunities.
Women are overrepresented in the informal economy, particularly in vulnerable, low skilled and poorly paid jobs that have limited social security.
What factors influence Women to enter labour market & work?
Multiple factors influence women’s decision to enter the labour market, including
Demand and supply-side drivers
Prevailing socio-cultural
Gender norms and attitudes.
Specifically, women’s ability to work is influenced by
Their marital status
Number of children
Caste, religion and ethnicity
Lack of essential education and vocational skills
Labour market discrimination.
Availability of women-friendly jobs.
Does lower participation rate indicate that women work less?
The low participation rates, however, do not indicate that women are working less. Instead, women’s time and efforts are diverted to unpaid care work (such as raising children, caring for sick and elderly) and domestic work.
Women spend disproportionately more time on unpaid care work in India than men, particularly if married. The Time-use Survey of 2019 shows that, on average, a woman spends 19.5% of her time every day in unpaid responsibilities compared to merely 2.5% by a man.
While essential to the welfare of societyand the economy, these activities are not accountedfor in the System of National Accounts and employment, which means that they remain unrecorded and undervalued
As a result, such unpaid essential work finds limited focus in policies and programmes aimed at improving labour market outcomes.
Also, the declining labour force participation is associated with women’s limited involvement in sectors that provide jobs in white-collar services.
Way Ahead
Policymakers should take a holistic and integrated approach to improve women’s labour force participation and their overall labour market outcomes by
Enhancing access to timely and impactful skill development
Adequate maternity benefits and entitlements
Access to affordable childcare facilities, household infrastructure and provision of other family-friendly policies to reduce the burden of unpaid care work
Safe and convenient transportation and public infrastructure.
Providing access to better-paid formal jobs
Support for women-led entrepreneurship opportunities
Investing in public services and women-friendly public spaces
Addressing discriminatory employment practices.
Imparting necessary vocational and technical skills
Invest in robust data and evidence systems to better measure and count women’s unpaid work
Design gender-smart policies and programmes for women’s economic empowerment and overall well-being.
